Our biggest advice to beginner property investors, is to treat your property like a business. Why? Because when you shift your perspective towards being a business owner, you will take ownership.
We know that a business or company's goal is to "maximise shareholder value" or basically to make profit. Which is basically "Revenue - Costs = Profit"
Once you have the mindset that your property portfolio is your business, you'll start to focus your time, money and efforts towards maximizing your profits. Here's how you can break it down.
RUNNING MY BUSINESS
Every business seeks to grow its revenue, and likewise you should seek to grow yours too. Your revenue could either represent the rental you're getting every month, or the current/ future value of your property. Which is technically "price"
And if you have basic knowledge of economics, price is essentially a result of supply and demand. If you want to maximise revenue (price) you will need to increase the demand for your property.
Let me illustrate,
Which of the properties do you think will attract most buyers or tenants first? (Left or Right?)
If you are like most people, you would've said right.
Why? Because it looks cleaner, newer, has better interior designing...etc the list goes on. So as a home owner or property investor, it is crucial to keep your property well-maintained and presentably clean.
The other half of the profit equation is costs. Managing your costs extends more than just business but to personal life as well. A successful business, and successful property investor, knows when and where to spend their money.
For example, most average investors try to save money on beautifying their unit before marketing, and refuse to spend on small costs such as painting the unit.
BUT spending money to paint the house before marketing is an important investment cost. It will allow you to market your property more effectively as a result.
Lousy investors have this common mistake, they "Major the minor, and minor the major". They prioritise small things over the big picture.
3. YOUR CUSTOMERS
Treat your tenants as your customers. This is important as a property investor. If you can keep your property in good order and your current tenants satisfied, you’ll save yourself the time and money it takes to find new tenants. Many businesses run on the idea that it costs far more to acquire a new customer than it does to retain an existing one and if you’re one to agree with this, the same principle should be applied to your tenants.
4. HAVE A BUSINESS PLAN
One of the most important things a business invests time and energy in is a strategic plan. Businesses develop long-term and short-term objectives, and create plans to meet these goals. And as property investors you need to do this with your property portfolio.
And remember to always include an exit strategy in your plan, as we have mentioned previously.
Changing your perspective of your property portfolio and investments will make you a better investor. This is merely the tip of the iceberg when it comes to being a successful property investor, but its a start.
We at TeoDuoProperty, believe in an open sharing culture, that hopes to empower all our clients to become better property investors.
If you are reading this, and you are still unsure about your property investment strategy, or maybe you are just starting out with property investing....
We have the solution for you.
Today you have the opportunity to learn more and reach out to us at TeoDuoProperty. Using our knowledge and expertise, we have carefully and systematically planned exit strategies for our clients to optimize their property portfolio!
Contact us today for a non-obligatory, FREE assessment of your portfolio.
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