When property is your passion, nothing else will do.

So when should you commit to a property strategy?  When you can afford to!  I’m not just talking about the financial commitment; I’m also talking about the time and emotional commitment – yes, that’s right, I said ‘emotional’ commitment.

Unfortunately, I have seen too many investors embark on their property portfolio plan, only to end up 12 months later regretting ever setting off down that pathway.  So how do you prepare yourself for this journey?

1. Be financially prepared
2. Be aware
3. Be patient
4. Be flexible
5. Be diligent

For each property transaction, you will need to be financially prepared; by that I mean get your finances in order before you choose a property.  This means obtaining pre-approval from your financial lending institution.  There is nothing more stressful than signing a contract and waiting for a bank to provide the approval.

Be aware of the extra costs, such as: Mortgage Insurance, Stamp Duty, Legal Costs, Insurances and holding costs.  Include them in your budget so that there are no unpleasant surprises.

Also, be aware of the ongoing costs.  If you are expecting to cover the holding costs from a tax refund, then make sure that you can handle the month to month holding costs while you wait for your end of tax year pay day.  Alternatively, talk to your accountant about a tax variation, which could help you with your monthly budget.

Be patient, the property market rarely moves quickly, and if it has already built up a head of steam then be prepared for a long period of slow growth.  Similarly, if you are intending on buying rental properties, unless they are rented before you settle, be patient and find the best tenant.  It is so important to avoid the costs associated with poor tenant selection.

Be flexible; you may have chosen the well-worn path of renovating and flipping , with a view of a quick spit and polish and then a quick sell for a profit.  If the market declines and it’s not profitable to sell, be flexible and adjust your plan to a ‘renovate and hold’ strategy.

Do your due diligence and don’t be rushed into a buying decision.  Also, try to control your emotional attachment to the property, and focus on the financial performance instead.  We spend hours on due diligence for our clients, ensuring the financial performance (including growth prospect), match up to our client’s long term financial goals.

Most importantly, never stick your neck out too far that you can’t afford to hold onto your properties.  Unfortunately, this is where I see many investors come unstuck, when they have to hold a fire sale and sell of their assets.