In our last article, we explored some myths that are still prevalent regarding property investment. Today, we're going to explore in more detail where you can get the best information, and more importantly what sort of information you should be looking for.
As we mentioned last time – gaining an understanding of property investment is challenging, not because of the lack of information, but because there is too much misinformation.
Let's talk about what you need to know, and the first thing is getting clear on your plan. You see, there is no such thing as a "good" property or a "bad" property, all have their advantages and disadvantages, and while some may be good for nothing other than storing equipment, that makes them useful to someone. So, the first step is to determine exactly what you want to achieve, before you even begin to consider how you are going to achieve it. You wouldn't be happy if your doctor prescribed you medication without first evaluating your symptoms, and property is the same – there is no magic pill, and each diagnosis should be based on individual requirements.
Once you have a strategy in place, it's time to research. You'll need to know the right areas, types of houses, costs and so on and this can seem incredibly daunting. The trick is, to take each opportunity based on its merits, and have good advisers around you – but where do you go for that advice?
Always ask a potential advisor what they have done the past and why you should listen to them. If you are looking online for input, be sure to Google the person and ensure they are a good fit.
Impartial third parties, such as government entities and online statistics bureaus, are a great source of relevant information. However, hard figures should not be used in isolation, and there is often hidden opportunity behind the numbers. Importantly, if someone is offering their advice for free as an impartial third party, be sure to ask what they have done, and evaluate their suitability.
The last thing you want, is to end up in a situation where you are forced to liquidate your property because you didn't have contingencies or a strategy for dealing with unfavorable circumstances. Good accountants and financial advisers with relevant property experience will offer you advice based on the numbers as week as the potential downsides. When going into any investment, you should be aware of both the potential opportunities and have structures in place to deal with the unexpected.
Without a strategy, the investment journey is encumbered from the start. But with a robust plan in place, and contingencies should something go wrong, you are setting yourself up for success.
Likewise, having a strategy for the type of advice you will take on board and from whom is crucial to avoid misinformation or well-intentioned but incorrect intelligence.