Choosing Your Investment Strategy

May 6, 2021 6:38 am





Choosing Your Investment Strategy

The investment strategy you choose is incredibly important. Each strategy offers its own advantages and disadvantages, therefore, you must determine which strategy is most applicable to you. Which one will bring benefits to your property investment portfolio and which strategy will your portfolio be able to weather the disadvantages of.


There are an array of options available when it comes to selecting an investment strategy, meaning opportunities are rarely lacking. An investor with a clear vision and plan who has outlined their objectives will easily be able to commit to a strategy that suits them.



Location

Many factors contribute to the final selection of a property investment strategy, location is a major one. Location is a determining factor for most decisions when it comes to selecting a property. The location of a property acts as a USP for a variety of reasons. The area surrounding a property can influence its asking price, deciding the profit an investor will experience.


Buyers will be influenced by location to make a purchase decision. Different aspects of a location appeal to different markets, therefore, further influencing your strategy choice. Families will make a decision based upon surrounding schools and access to leisure facilities as they will buy with their children in mind. Young professionals may seek property with good transport links to major surrounding cities, easing their work commute. Meanwhile, elderly buyers potentially look for a property with great shopping access as they wish to limit their travelling.


Each of these markets will also be seeking different property types - buy-to-lets, purchasing a home or serviced accommodation - making it essential an investor considers each of these when choosing a property and its strategy.



Property

The property you choose will also contribute to determining what strategy is selected. A great sized property with an ideal location will potentially be best suited as a buy-to-let or a flip, depending on its condition.


Meanwhile, a smaller property in a location surrounded by businesses, access to a hospital or close to leisure facilities may be useful as serviced accommodation.


Each of these strategies have pros and cons, therefore, it is important to consider which suits your portfolio and budget best. Buy-to-let investments are a fantastic way of earning a side income, however, there is more demand required on an investor as they become a landlord. A flip property is a huge financial commitment, but its benefits can potentially bring an investor great profit. With a serviced accommodation strategy, an investor can maximise their monthly income, however, there is the possibility of more financial commitments with the need for management, furnishing and cleaning.






Market

Your strategy will act as an influence to who your market becomes. Each property has aspects that attract different markets, and consequently, each strategy appeals to different markets. This is important to keep in mind as you opt for a certain strategy as this will contribute to your objectives and portfolio diversity.



Objectives

Keeping your objectives in mind when selecting a property strategy to add to your portfolio is crucial. Your objectives can ultimately lead to the success of your property portfolio as these outline your path of what you aim to achieve.


With your objectives outlined you can envision which strategy will contribute to your goals, attracting your desired market, becoming a great addition to your portfolio by diversifying.



Conclusion

Buying a property and determining which strategy to apply is crucial in the success of your property investment. There are multiple factors which influence the decision of which strategy to select, meaning each must be analysed and considered carefully.


Location is a greatly determining factor against which investment strategy an investor will opt for as this is also a major influencer to an investors’ market.


The size of a property will impact the strategy decision of an investor as this will influence the appeal of a property to an investors’ market.


The market an investor aims to attract will help determine which strategy is chosen as this form of strategy will appeal to the desires of the investors’ target market.


Throughout the decision making process it is essential for an investor to keep their objectives at the forefront of their mind as this will ultimately be the strategy decision.


Disclaimer: This is information based on our knowledge gained throughout years of experience, education and learnings. This information is open to interpretation, therefore, you must carry out your own due diligence regarding the subject.

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