The reality is that investing in property is not an easy journey. As they say, if it were easy everyone would be doing it. Less than 1.5% of investors own more than four investment properties and 87% own only one investment property. However, depending on where you invest, you would need to own five properties outright to replace a $62,000 income per year.

Here I share the three main challenges we have experienced on our property investment journey.

1. Not being able to sell a property.

This experience has caused me to lose the most sleep. We made some mistakes a couple of years ago. We purchased two properties that offered cialis shelf life great development opportunities. One of the properties was suitable for an eight-unit residential development. The other was the last piece of large commercial land in a booming town, right in the heart of town. We purchased both properties at a good price before the height of the boom in the town.

The value of both the properties was the land. One property had an old house on it, however we generated very little income on the two properties. This meant we had to cover the loan repayments out of our own cash, rather than rental income. This would not have been a problem if we completed the development project and converted the land into eight residential units and a commercial precinct, as intended.

However, we are buy and hold passive long-term investors, not developers. As we found, passive investors, with full-time jobs, no expertise, no contacts and limited time do not make for great property developers.

We held the properties for a period of time, and then made the decision to sell them and use the money to buy our ideal type of property.

This is when the sleepless nights started. One property took two years to sell. The market changed, developers pulled out of the market and there was no demand for development land.

The lesson was we broke our investing rules. We were excited by the potential of being developers. As passive buy and hold investors, the rules we must follow are:

– buy property in an area with high potential for capital growth, and
– manage cash flow well so we can afford to hold a property portfolio over the long term, without the need to sell.

The positive of this story is because we bought at a good price before the boom, we still made money, however it is not a strategy I would chose to repeat.

2. Not feeling in control.

The process of buying a property is easy. You are in control, however when selling a property you lose some aspects of control. Suddenly the market is in control. When buying a property, you control the terms. You decide what you want to buy, what price you are willing to pay, where you want to buy, the conditions on the contract, etc. If the seller is not willing to accept your terms, you look for another property until you find a property that meets all your requirements.

You are in less control when selling a property. You are no longer the buyer setting all the terms and conditions. If the buyer doesn’t agree with the price you want, they can walk away and look for another property, whilst your property still sits on the market.

3. The ability to manage cashflow.

The two events that have caused challenges for our cashflow were properties taking a long time to sell and interest rate rises. The reality is these situations will occur. Given Silagra you can’t Cialis Jelly control when they will happen or for how long, you need to be prepared.

Our cashflow protection is to always have a financial buffer. This means we had access to funds to keep us going whilst we waited for the property to sell. Your finance structure should provide you with surplus funds to enable you to get through the tough times.

Author Bio: Suzie Crawford works with people who are tired of working for others and want expert guidance on how to make money through property. Register here for free 8-week online Training Program PLUS receive bonuses to the value of $162. http://www.youcan.com.au

Category: Finance/Real Estate/Buying
Keywords: investment properties,property investor,property investors,invest property,investments property