Recession proofing your property business – part 1

Seven tips

1) Become clear on what is important

When embarking on starting or expanding your property business, an essential question which you should ask yourself is: “How can you manage and preserve your time, energy and money so you are spending them on the things that will bring you closer to your goals?” Asking yourself this question will ensure that these precious intangible resources are only being spent on activities that benefit your business and, more importantly, do not distract you.

2) Stay focused

Webster’s dictionary defines focus as ‘close or narrow attention’ and is a fundamental to any business. In property, it is important to define your short (1-2 years), medium (3-8 years) and long-term (8-10 years) strategy to managing your portfolio and boosting your returns.

3) Create corporate habits that work

Being disciplined via creating systems will enable your property business to run more smoothly. Contact info@propertysolvers.co.uk for some free useful property management spreadsheets and calculators. If property investment is complementing employment or other business interests you may find it useful to employ administration staff or explore armchair investing.

4) Persistence (ride the downturn)

It is fair to say that the next few years will see further drops in housing values and the days of large capital gains we have witnessed in recent years will be quite some time way off. Understand the market, watch the news and adapt your decisions accordingly. A buy to sell strategy, for example, is a lot more difficult in a dip – most investors would therefore be looking to buy and hold. Remember whilst cash flow is a subjective term, it’s never really a good idea to take on a low yielding property even if you have negotiated a good discount. Similarly, when choosing your mortgage products be sure to take a long-term view towards the investment remembering the occasional volatile nature of interest rates.

5) Take ownership and responsibility

It is important to take control of your goals within your property business and not to become another professional ‘course attender’. Taking continual steps in developing your existing knowledge (such as visiting the forums and networking with industry professionals). It is also ever important to have a firm grasp of tax (CGT, income, inheritance), business administration as well as effective due diligence techniques. Define your success by taking action. Indeed, successful people often understand that nothing comes easily and they can always correct something that is not working. The more involved you become and the more you develop a ‘can do’ attitude the more successful you will be.

6) Measure your progress

Once the goals have been defined, you should figure out ways to create the results you want to achieve which you can use to measure and analyses your progress. This can range from giving yourself weekly targets to fulfil (for example researching a minimum of 5 property deals; going to a networking event; logging into forums) right through to giving yourself medium/long term objectives to focus on.

7) Develop your people skills

There are a number of books and sources of business and property professionals which can advise you on good negotiation techniques which you should take some time to study. Property is very much a people’s business and it is more likely that you will be successful if you develop the necessary skills to be able to communicate effectively, understand the needs of the vendor and potentially come to a win-win solution.