How To Measure Your Success as a Property Investor?
There is no one true measure of success when it comes to property investing. Yield, growth, cash return, more properties, more income, more satisfaction… The list goes on.
How you choose to measure your own success as a property investor is really up to you, and hopefully, at least one part is that you get some real satisfaction or joy or excitement out of it.
But the serious side is money.
We invest in property to live our dream life sooner. We want out of the rat race. We want a shorter working week and a longer weekend. We want nice homes, luxury holidays and time off with our friends and family. And that all takes money.
To measure your success in terms of money there are two key factors to keep track of.
YIELD
To work out your yield, divide your annual rent by the value of the property to end up with a percentage amount.
As successful property investors, we are aiming for a minimum of 5% i.e. the return based on the value of the purchase price.
So, if you buy a property for $500,000 and get $25,000 rent, that’s a 5% return.
Learn more about yield and how to calculate yours here.
CAPITAL GROWTH
Watching your property increase in value over time can be a great measure of success.
Not only can you withdraw the amount you invested, freeing up that cash for another deposit or back into your pocket, it will give you solid proof that you did your due diligence and bought the right property, in the right area, at the right time.
Properties in areas of poor infrastructure, far away from great lifestyle and liveability factors, don’t grow in capital the way others do.
If your property is increasing in value, even if it’s slow and steady, it’s a big win.
Obviously, if you’re losing money and cash out of your own pocket is draining out to sustain a property, you may have made a wrong turn somewhere and made a bad purchase.
In this case, there may come a time when you need to cut your losses and move on from a property.
But, with the right advice, guidance and tools, you should avoid ever being in that situation.
And the expert team of coaches and mentors at Positive Real Estate can help.
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By Jason Whitton
Group CEO Positive Real Estate
