Every profitable property that an investor owns will add to their bottom line and increase their ability to expand their portfolio. However, Goslett says it is important to know when to expand and when to hold back and maintain.
As with owning a business, a property investor needs to capitalise on opportunities in the market and - more importantly - minimise their potential for making costly mistakes, says Adrian Goslett, Regional Director and CEO of RE/MAX of South Africa.
Goslett says there are certain mistakes that property investors could make that would be more detrimental than others, so it is important to understand what they are and how to stay clear. “When it comes to property investment, it is far better to learn from other’s mistakes than make them yourself,” he says.
“An incorrect investment decision could potentially be devastating, affecting the investor’s financial well-being both now and in the future. Those who are new to the real estate investment landscape should learn from savvy, seasoned investors and avoid possibly dangerous business mistakes.”
Goslett provides a few mistakes that property investors should watch out for:
There are few things that are worth more than the people the property investor chooses to work with. While an investor may buy and sell many different properties over the span of their real estate investment career, he says the best investors will have the foresight to understand that their network and relationships with the right people can net them more profits than any one property deal.
“Property investment is not just about bricks and mortar, it is a people business. It is important not to focus only on the bottom line and neglect the people that made the deal possible,” says Goslett. “Building and nurturing the right relationships is one of the key elements to real estate investment success. A good rapport with people can propel any business to the next level. It is vital to work with property professionals who are reputable, experienced and well connected.”
“It is never good to assume that all will fall into place without complications. Those who have more than one plan to rely on will have a higher inclination towards success. Never be content with having everything riding on one method or system.”
Every profitable property that an investor owns will add to their bottom line and increase their ability to expand their portfolio. However, Goslett says it is important to know when to expand and when to hold back and maintain.
“While expansion is good, growing too quickly can run the investor at the risk of expanding beyond their means. This will essentially set the investor back, rather than propelling them forward,” he says.
“A property investor should continuously be aware of the market and take cautious steps when looking at expanding their portfolio. An interest hike, for example, has financial implications for a homeowner who owns a primary residence - how much greater will the impact be on an investor with several properties in their stable?” Goslett says it is vital that investors understand their capacity for growth as well as their limitations. “Growing and managing a successful investment portfolio requires merging the right plans, the right people and latest the technology,” he says. “Investors need to work with people who can contribute to their growth, implement plans that can repeat successful results and utilise technology that will maximise their efficiency.”