As in any other forms of investment, you must have clearly established the goals of your investment strategy at the onset; whether you want to focus on increasing your capital or improving your cash flow. In simpler terms: short-term or long-term.
Short term investment strategy involves buying undervalued property. After renovation, a sub-division, additional improvements, the property has now earned the investor capital growth upon selling same. Those who choose this goal usually are seeking the maximum possible capital gain within a certain period.
Other investors looking to invest in a long-term strategy have set their goal on improving their cash flow. The investor can now concentrate on the rental value of the property. A positive cash flow is the ultimate goal when it comes to long-term investments. Any profit could be channeled to lowering the mortgage as the rent increase over the years. This could result in a monthly income for the investor.
Whether short or long term, an investment plan strategized from the beginning has more chances of reaching the intended financial goal.
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