When questioned on their motives, most investors sight financial freedom as one of the major goals behind their investment property acquisition.
However, looking at the ‘bigger picture’ is crucial in ensuring you don’t wind up investing more time then the property is worth.
It’s crucial to ensure you treat your investment like a business.
A Business Should Be An Attractive Buy
Why did you acquire the property in the very first place? It is no use putting your hard-earned money into a property that will be difficult to leave when the time comes.
- What is it that makes people want to live here?
- What is the demand for properties in the area?
- How many days are they on market? Etc
Any of these questions could lead to red flags and, most likely, an investment decision that may come to bite you later on. Ensure you always use foresight and apply calculated analysis during your purchase.
A Business Should Have Growth Potential
There is no point getting into a business if it just going to stand still turning over a minor profit. Every element of a business needs to be able to cover it’s expenses and your investment property is no different.
To be able to scale you need to be able to leverage other people’s resources, like rental income, tax benefits and any other income that allows you to minimize the risk in your investment and grow.
A Business Should be Able to Run Independently of You
You have a job and not a great paying one at that if your financial investments can’t work without you.
You definitely need to have your financial investments running like clockwork without the need for you to manage every decision or it simply isn’t worth it and you won’t be able to scale.
You need to be able to work rest and play without worrying over your financial investments. When you understand time is worth more than cash, you are really wealthy.