I have always found the most overlooked concept in property investment is the fact that property moves in largely predefined and perfectly predictable cycles.
I call it the property cycle, and everyone should seek investment education on it!
When you start out as a property investor this is often overlooked because so many other things are going on and you can be forgiven for this. In fact I specifically designed our 1,2 STOP Strategy to focus you on what's important during your first couple of properties and the property cycle isn't that important at this stage, building your base level of education and emotional intelligence is.
This obviously depends on your cash position, but regardless once you have your first two properties you will need to consider the cash flow dynamic of the property cycle.
Disregard this at your peril…
The challenge I have seen of late is the disregard to cash flow while interest rates have been low. This is the very time in the cycle were you should be using the additional cash flow to build up your provision account, pay down consumer debts, mortgage cost average but not increase lifestyle expenses.
Make no mistake the interest rates will be rising and when they do you had better be ready with the cash in your provision account and your debts paid off otherwise you could be in a problematic situation with little equity to help you out.
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You see prior to the downturn you probably had equity to pull out should you need to cash flow through but now you need the cash flow from the low interest rates to build that provision and buffer.
If you want a plan on how to get this working in your property portfolio then give the team a call on +44 (0)207 923 6100 or directly on their mobiles.
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