One strategy per purchase

One strategy per purchase

In the first article of this 4 part series on strategy,  we explored the importance of identifying a clear investment strategy which takes into consideration your personal situation and ultimate goals. In this installment, we will look at the advantage of adopting one strategy per purchase.   While a serious investor might pivot direction across their entire property investment career, making a number of individual property purchases along their way, keeping focus by implementing one strategy for each individual project will help ensure you achieve your desired outcomes.  

By adopting one core strategy per purchase, we are able to analyse the property regarding what its potential is against the goals and outcomes you are seeking. It’s easy enough to simply say we want the investment to provide an increase in long-term net worth or increased retirement possibilities, it’s much harder to pinpoint exactly how each property will achieve it. Granted you’ll almost certainly end up deploying a variety of strategies across individual purchases to set yourself up for the overall future you have in mind, but limiting yourself to one core approach per project is essential.

In effect, each individual investment will be acquired at different times in your life. It may be when you are just starting out and looking at a series of initial cash flow deals to generate income to transition into higher capital growth deals with lower rental yields. It may be made later in life as a- renovate-for- profit or development strategy where equity that has been built up over years can be leveraged.

The idea is that it shouldn’t matter which stage of your lifecycle you are in, the job of your strategy is to align as many internal resources and external factors as possible in one clearly defined direction. The minute you muddy the waters by pursuing multiple, possibly conflicting agendas you instantly lower your overall chances of achieving your goals. The temptation will be there on future projects so remain clear: one strategy per purchase at all times. 

What’s important to understand is that there is no point in purchasing a property just because on paper it looks like a wise investment but in no way aligned to your personal strategy. By developing the discipline to focus on one strategy at a time, you’ll benefit from increased clarity and focus and an ability to swiftly execute all areas of your plan. In the context of individual projects where it’s very easy to get derailed and start doubting various details of your own mission, these are fantastic qualities to cultivate.

 

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