What is a property investment plan?

So, what is a property investment plan? In this blog, we’ll explore what one is, why you need one and the key components that are needed to create one. 

In most cases, property investment is a personal choice, so it may seem strange to treat it like a business but doing so can be a great way of making sure you reach your investment goals and don’t get lost along the way. 

At Harvey Homes, we have a long history of working with property and we are well-versed at what makes a property investment plan a successful one. 

What is a property investment business plan and why is it useful?

In a nutshell, a property investment plan is a record of what your investment goal is, what the journey will look like and how you intend to make a profit. 

Successful investors are always known for their in-depth plans and their step-by-step tactics on how they are going to achieve their goals. 

Sitting down and formalising your plans can be a great way to get your thoughts in order. Having a document like this that you can refer to quickly when a new investment opportunity crops up is very helpful when deciding whether it is the right opportunity for you. It means you can operate quickly and efficiently when you need to.

Of course, the main benefit of creating a business plan is that it will help you to protect your current finances and your future financial prospects. 

How do you create a property investment plan?

It may seem daunting when you first start thinking about your property investment plan, but there are certain questions you can ask yourself to help you on your way:

• Where are you now with your finances?
• What do you want to achieve with your investments?
• When do you want to reach your goal?
• What actions are you able to take to get there?
• How much money do you currently have to invest?
• Where is your money coming from?
• What money do you expect to be able to invest in the future?
• How much time do you have to dedicate to your investments?
• Do you have the skills to manage a property portfolio?
• Do you need a set income from your investment?
• Are you most interested in capital gains or a monthly yield?

Key features of a property investment business plan

There are several components that you should make sure you include in your property investment plan. These are:

1.     Determine your goal

Establish what your goal is, and this will give you clarity on what you want to achieve. It needs to be more defined than ‘I want to make money’ so try and look deeper into your reasons for investing in property. 

Some of the most common goals are:

• Saving for retirement
• Saving for a significant life event
• A desire to protect younger family members
• Increasing your disposable income

2.     How much time do you have?

This is an important part of your plan as it will help to determine what kind of property you buy. 

Do you want to be a hands-on investor and spend a lot of time managing property renovations and tenants? Do you want to trust in the professionals and simply own a portfolio but not have to deal with day-to-day management? Do you have the time to look after an investment or are you comfortable trusting a specialist?

3.     Make a ‘to-do’ list

Ensure you have a checklist of all the aspects you need to consider as part of your property investment strategy. Keeping organised and on-track of everything will make the whole process seem more manageable. 

This checklist could include: 

• Resources you want to research
• Opportunities you want to explore
• Financial checks you need to carry out
• Goals you want to reach 
• Milestones you need to hit
• Find a trusted mortgage adviser

4.     Keep it simple

While a ‘property investment plan’ may sound very formal, the plan itself doesn’t need to be a ring-bound heavy document with a contents page and index!

A simply written and systematic plan that you can refer to easily and regularly is perfect and keeping it somewhere safe where you can store all your research together is essential.

Property investment strategy

Once you have formulated your plan, it is time to move on to the more complex aspect of the actual strategy. 

Hopefully, your comprehensive plan will mean you know whether your property investment ambitions lie with commercial, residential, rental, off-plan, city-centre, UK or even overseas opportunities. It is also important that you consider the current property market and how it is trending.

Researching and understanding the investment property market must be an essential part of your strategy. This includes looking at relevant legislation, as well as educating yourself on general property opportunities and ways to invest. 

Be diligent and don’t let details go awry that get in the way later down the line. As part of your research, it may also be wise to talk to other property investors to learn from their knowledge. Their experiences won’t match your own, but it is always good to learn from others.

There is certainly no ‘standard’ way of making money from property and a strategy that suits one investor will not be right for another. It is a personal blueprint that takes into account your financial situation, long-term ambitions, short-term goals, approach to risk, experience and skills.