In Part 3 of our Property Investment Series we’ll take a more focused look at real estate investment strategy.
Previously, we’ve looked at making your first real estate investment purchase, and the essentials of a business plan. By this point, you’ve determined your goals. If we were pirates, you’ve created the “X” that marks the treasure, now we will develop a strategy to efficiently and effectively navigate to that goal. In real estate, there are many ways to create the revenues required to make ends meet and finance future growth. How you specifically go about it will depend on your SWOT analysis we discussed in Part 1 of this series.
Strategy is a mix of the market analysis, revenue, differentiation, and finance. Strategy has components that can lead to rapid change and other variables can remain stagnant. It is likely that your strategy will deviate from your original plan before other categories. There is a wealth of information available to research the various income possibilities, but there are fewer that will offer just the right mix for your plan. You surely know your starting strategy at this point, but you should project your vision into the future in order to create sufficient growth and avoid stagnation as you execute your plan and things change.
Opening your mind to new ideas, technological evolutions, and social changes will be a huge benefit when focusing on strategy adaptation. There are many examples of companies that seemed “too big to fail” which disappeared due to their inability or unwillingness to adapt. Sears, Blockbuster, and Circuit City are just a few of the casualties created by this complacency-based failure. There will always be a new idea, your role as an investor/business owner is to insure that you aren’t a victim of its implementation.
In the next part, we will look at the characteristics of real estate and learn more about how to create a system of investing that is profitable and repeatable. This is the step where the rubber meets the road, and we start putting our due diligence to use.