Determining your risk profile: In the process of creating a detailed property plan you will come to understand your own tolerance for risk. This is crucial element of self-discovery when making any property decision because the general rule is the greater the risk, the greater the potential reward. Are you looking to take on the stress of hare-like higher risk property, or are you more tortoise-paced slow and safe?
Faster decision making: When you have a detailed property plan you’ll be able to assess opportunities quickly and move fast to make a ‘yes’ or ‘no’ decision. Property plans take away some guess work, and that means critical time savings on the buying process.
Greater certainty: A property plan will give you direction and provide a mental safety net when you’re feeling overwhelmed. It’s your Sherpa on the Everest of first home buying, helping to guide and remind you to take one step at a time towards your goals.
Keeping track: What gets measured, gets managed. The plan allows you to measure your success, monitor your progress and manage the situation if things change.
Contingencies: While a blue-sky outcome is always best, reality will kick in where a surprising setback could spell trouble. A plan allows you to expect the unexpected. The loss of a partner, the loss of employment, the end of a marriage are all things we hope won’t happen to us, but for some they do. Pretending they won’t is risky. By having a plan your plan won’t be derailed.
Remove emotion: A property plan will stop you making one of the most common mistakes – too much heart, not enough head. At some point, as you’re building your portfolio, you’ll want to make a decision based on feeling good about a potential holding. That’s fine, but if the numbers don’t support your intuitive ticker then mental red lights should be flashing. You need a plan to avoid costly mistakes that can come from decisions driven purely by instinct, emotion, intuition, or your horoscope.
Stop short-term failure: Short-term thinking is a big no-no for most successful real estate buyers. Buy-in and sell-out costs are just one reason why pivoting between a long-term and short-term approach is a recipe for ruin. Long-term gains make sense. Plans give you security so as to avoid the knee-jerk reaction of short-term selling.
Buying your first home is a journey and like any trek worth taking, you must set your path and stay the course. For those who do, success awaits. For those who ‘wing it’, I can only wish them luck… they’ll need it!