When we hear the words budget and property investment in the UK, we often find our eyebrows clashing into each other like sumo wrestlers in a deadlock. It’s a challenge and a difficult one at that but we’re not saying it’s impossible. Need help? You’re in luck because here are some tips.
- Identify your needs. – Recognize what needs to be spent on and how much resources will be necessary alongside where such funds will be taken from. There’s no point in making a budget without all these factors put together. Remember: needs, funds and sources.
- Find a system that works for you. – We all have unique needs and different reasons for acquiring a property investment. This is why copying someone else’s budget isn’t going to cut it. Using it as a benchmark may do but be sure to attune it to the situation at hand. Make your own in accordance to your needs. There are various programs, apps and software to help you with this so you won’t necessarily be starting blind.
- Make it a point to prioritize. – It is important to recognize that cash is a depleting resource. Add to that the fact that it’s hard to come by. Plus, expenses and requirements will have varying timing and values and so you might find it hard to provide for everything at once. This is why prioritizing your expenses is necessary. You need to determine which has to go first, which may be delayed or what can be foregone or cut back.
- Be realistic and challenging at the same time. – A budget needs to be effective and to do so it has to remain realistic. Setting the bar too high to the point that it’s unachievable only ends in frustration. But that doesn’t mean that budgets should be loose. It has to be challenging too so as to discourage slack and wastage.
- Use accurate data. – A property investment budget will remain futile if the values in it are inaccurate or were sourced incorrectly. Make it a point to research and check. Make use of up to date documents and information. This is no time to do some guesswork.
- Work with three timelines. – When acquiring a property investment, one has to budget for expenses that will be spent prior, during and after the acquisition. Pre-purchase costs like research expenses, professional fees, security deposit and down payment should be prepared for as much as the principal. While post-acquisition costs like repairs and maintenance are crucial in identifying if the asset is worth it and doesn’t cost an arm and leg in the long run.