The importance of the pivot

The importance of the pivot

Like any journey, it’s important to identify the starting point, decide on your destination and define the best path for getting there.

So, it goes with real estate investment. Smart investors will begin with the end in mind, and then plot a route to reach their ultimate goal, hoping that their expedition will run as smooth as possible.

But like the best-laid plans of mice and men, things oft go astray.

It’s with this as a foundation that I want to discuss the importance of the pivot in property investment.

Why pivot?

Having an unwavering mindset that takes you from intention to success is admirable. Driven individuals are respected in this world. They focus on what they want to achieve and follow a step-by-step process to make it happen.

However, this approach can be risky if you aren’t prepared to adapt and change. If something unexpected occurs, you must be ready to take on the new information and react accordingly.

This is the pivot and it happens for both good and bad reasons.

Negative events could be something like the loss of a job, or an unexpected illness. Some pivots need to happen because your portfolio is underperforming, or there’s a change in economic circumstances like a rise in interest rates.

Negative occurrences have the potential to entirely derail your investment plans if you fail to divert your process and address them.

On the other hand, there are positive events that can require a change in your intentions too. Perhaps you get a substantial increase in your wage, or your portfolio’s performance exceeds expectation. You might also be presented with an investment opportunity that’s too good to refuse. These events mean you need to vary plans and make hay while the sun shines.

Being able to pivot is a great way to mitigate the downsides while boosting the upsides.

Pivoting to your advantage

There are a number of ways you can reduce risks and be prepared for opportunities when they arise.

1.     Asset selection

Without a doubt, the number one move is to ensure you’re selecting the right assets in the first place.

Before a buying decision, review your strategy and re-look at the outcomes. Focus on what you want to achieve, and consider the implications for you and your finances over the short, medium and long term.

Growing a portfolio from the start with properties that suit your criteria is essential. Seeking those with high capital growth potential and a balanced income means you’re building buffers in quickly. These will position you to take advantage if new opportunities arise sooner than expected, or have a safety net in the event of an unforeseen problem.

2.     Regular review

Review your portfolio regularly to ensure you’re moving forward as expected. On the property investment journey, it’s better to make minor, ongoing adjustment to the steering wheel rather than wrench at it quickly and violent because things have veered so far off course.

I believe you should be conducting a review at least once a year. This will allow you to pivot as needed around your holdings, finance and lifestyle.

For example, your personal circumstances may change (I can guarantee they will in some capacity) so a review allows you to make adjustments to the plan and ensure your portfolio continues to support your goals.

3.     Trusted advice

When it comes to making an important decision about a property, you need to have a specialist professional on board. Someone who understands what you’re setting out to achieve and can provide independent advice on how to get there.

A professional will be ready to help you identify ways to take advantage of new opportunities through refinancing or dispose of an asset if necessary to offset an unexpected problem.

Experts also help in selecting the right properties for your portfolio.

Being agile in your investment journey is key to reaching your goals. Ensure you have the drive to get to your destination, but don’t become so fixed in your path that you miss opportunities or, worse still, drive off a cliff because you refuse to turn the wheel.

Be prepared to pivot when necessary and you’ll discover greater success on your investment journey.

In these uncertain times, now more than ever you should access your circumstances and review with a qualified professional. Our network of independent, advisors is available to book video sessions to assist you with a review of your portfolio.

Richard Crabb | MD ASPIRE Network | PIPA Board Member
Author: Richard Crabb | MD ASPIRE Network | PIPA Board Member

QPIA® - Qualified Property Investment Advisor | Licensed Real Estate Agent - VIC: 082760L - SA: RLA 292544 - QLD: 3579879 |Diploma of Financial Planning |Active Property Investor | Board member of PIPA - Property Investment Professionals of Australia. Richard is the Founder and Managing Director of the ASPIRE Advisor Network. After an extensive career in corporate finance and through his personal investing experience, Richard identified the need to create a system and framework that supports ethical, independent property investment advisors who operate in the new property market. The ASPIRE Advisor Network now supports independent property advisors across Australia by providing their business engine and acquisition process, designed around concepts of future compliance in the brand new property sector. Richard together with the ASPIRE team has also developed a complete end to end software platform, which is leading the way to deliver property investment advice in the new property space. Our goal is to work with investors to implement their goals and objectives buying investment properties across Australia, utilising a structure and information-rich end to end experience.

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