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This is the first and probably the most basic strategy you will start with. It is used for those who do not have enough experience of shopping in the market.
In a nutshell it works like this: Once you are in a position to invest just buy one or two properties and then stop. One or two properties will allow you to experience buying, finding tenants, dealing with agents, arranging mortgages and every other aspect of the property process.
It is important to have someone on hand during this entire process who can answer all your questions and guide you through the entire process. But the real strength of this strategy isn’t in the practical side of investing, important though it is. It lies in the ability to allow you to grow mentally and emotionally or to accept that you are now a homeowner, an investor.
I had a client who paid off his property a long time ago, he was earning around £20,000 a year so he never thought he could build a significant portfolio. Over the years his house doubled, then doubled, and doubled again. This left him with a considerable amount of equity which he was not utilising.
Speaking to me for the first time, he explained that for a long time he knew he had to do something, but for years he lived in fear of using his equity, worrying that if he invested and couldn’t find a tenant , then asset prices will fall. and all other early investor issues.
These fears were born due to lack of proper education. The important thing, therefore, is to replace the old obsolete beliefs with new conforming beliefs. The reason we stop after two is to get your emotional state in sync with your portfolio. If you keep building a portfolio, you will always falter or the stress will be too much.
Now the only thing to consider is how long to stay. It totally depends on you. Don’t continue investing until you are ready. Having said that, if you are below one year running and haven’t started then you may be resting in your comfort zone. This is where the assistance of an experienced portfolio manager can ensure that you move on to the next step.
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