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Hold or fold? Why every property investor needs an exit strategy

hold or foldExit strategies are not just for entrepreneurs. They are for any type of investor and are especially important in property investment. Any successful investor will advise you to decide how you are going to get out before you even buy your first property.

A well thought out investment strategy can provide wealth and income; it is a question of timing, planning and understanding the market. If you stay focussed on your end game and your means of getting there, you will achieve your goals, as long as you know what your goals are.

The first thing you need to consider is how do you want your portfolio to perform? Are you investing for the short, medium or long term? Are you looking for long-term wealth building, high monthly income or a combination of both?

Some PCG Investors like to have a mix of short, medium and long-term investments and plan their investments to give them both a good income stream and growth.
Your age is a factor that can influence your exit strategy. Younger investors might have a different attitude about how they want their portfolio to perform compared to older investors.

A younger investor might more interested in wealth building and buying properties that bring in a good net yield with better potential for long-term capital growth. It may be that you plan to keep building your investment throughout your life, and as you get older the profile of your portfolio might change to reflect your income and capital goals.

In your middle years your strategy might be entirely different; many people want to supplement their income. High net yield investments offer fantastic opportunities for a passive income to complement their salary, or enable them to stop working altogether.

An older investor may be keen to invest some of their pension in high net yield income producing properties for a short period of time, especially in up and coming areas that offer both high net yields and good capital growth.

It is key to set both growth and income targets. If you do not, you won’t know whether you have invested your money in the right asset. You won’t know whether you should sell up or retire now, or whether you should buy more properties or even if you should be cashing in.

As investment guru Steven Covey said: “Start with the end in mind.”