The turn of the century has made tremendous changes in the global real estate industry, which was further rattled by the biggest disruption in the 21st century, among which are advanced medicine, health, and technology, and of course, the Coronavirus pandemic.
While these disruptions have greatly affected the real estate industry, it was able to make its way back into the mainstream market and on its way to face the new beginnings and challenges in the next 10 years.
The real estate industry all over the globe continue to thrive and has heeded the call to adapt to the changing times and has proven itself that it can survive and continue to thrive despite the many challenges and difficulties it went through.
How would such disruptions impact your real estate goals?
If one ever panics because of these global disruptions and consider changing their business goals, hold on.
You may want to re-assess your short-term targets, but don’t change your long-term goals especially in the real estate industry. The industry has gracefully adapted to the disruption and leveraged technological resources and focused on tried and proven best practices to survive and thrive.
Yes, there’s light at the end of this proverbial tunnel and holds a lot of promise for the real estate industry in the next decade.
Re-imagine your investment goals
When it comes to your investments, planning for the long term based on exhaustive data and statistics will provide a good picture of how you traverse your business journey and achieve your long-term goals, rather than just sit around and rely on fortune and gut feeling to navigate your course.
It does not matter if you are relatively new to the industry or an experienced one, being able to set your own short and long-term goals are critical to your success as a real estate agent.
For those who have been in the business for quite some time, the sooner you review and analyse your real estate business directions and goals, the better.
Below are some scenarios to help in re-assessing your strategies, rather than revamp your goals.
Established and experienced investors
If you have one or more real estate investment portfolios that exist for some time now, you may consider how you can consolidate your liabilities and obligations that you can manage or sustain throughout the next ten years.
While some investors can be too preoccupied with accumulating and expanding their investment assets, they could miss out on their accumulating obligations and liabilities, especially loans that need to be paid up and serviced.
Regardless if you are an agent or investor, keeping track of your assets and ensuring that your resources are enough to keep it all afloat and guarantee your finances sustainability.
For instance, since current market forces are seeing a drop in interest rates, reviewing your debt and considering restructuring your loans, when possible, can help optimise the value of your acquired assets and remain fluid.
With the potentially favourable low-interest environment, both new or experienced investors or agents could practically take advantage of this situation to help manage their finances better.
Additionally, take note that this could also trigger a change in your investor mindset and help you determine which of your availed loans are tax-deductible.
In reducing your obligations on investment loans, you improve your cash flow and use it for savings such as considering changing your lifestyle or work status to pursue part-time employment rather than seeking a full-time job.
Those savings can be used to pay up your mortgage or add to your investment loan repayments.
Another strategy is re-assessing your spending habits, which could include insurance premiums, club memberships, or monthly subscriptions to reduce your regular spending.
New investors
As tempting as it may be, it may not be wise to go on a buying spree and amass investment properties every time one comes up.
While it may be a great idea 10 or 20 years ago, but it may not be so in current times. For instance, your portfolio may give you more achievable results by purchasing three or four assets in the next ten years that you could focus on, rather than have 10 or 15 properties which you may have a hard time managing.
Consider your opportunities such as purchasing a property located within the capital cities like Melbourne, Perth, Sydney, or Adelaide. These are areas that continue to provide steady market activity and ensure better cash flow.
Also, you can consider enhancing your cash flow with smaller yet profitable undertakings or investing in commercial assets and factor them into your goals for the first five years.
The second five can be reserved for implementing your business vision, marketing strategies, and debt consolidation that includes small developments or renovations for additional cash flow and capital growth.
Sleeping assets
There’s no doubt there are assets either sitting and collecting dust or do not just get the attention it deserves, especially when market forces tend to slide down. There are several reasons for this such as compulsively taking a good bargain but only ending up as a non-performing asset and becoming more worthless over time.
To avoid this situation, always conduct due diligence by doing your research before making a major buying decision. While a good offer or bargain may be practical, not everything can be beneficial especially when you have not planned or determined how to use or what to do with it.
When you are stuck in such a situation, you can try to get out of it to explore options, whether to sell it or find another use for it as an additional income stream. You may not expect to get a lot from it as originally intended, but it would be worth considering such options so you can have it moving or earning money for you.
With today’s lending environment, you might get a good opportunity to source funds to undertake a small development to get that property or investment asset going.
At this time, being smart about your investments is something you need to seriously consider, such as focusing on your profitable and revenue-generating assets to improve your cash flow and capital growth, then consider letting go of assets that negatively impacts your investment and financial standing so you can continue to tread the path of your long-term business goals.