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Are You Stuck in a Traffic Jam

Are You Stuck in a Traffic Jam?

Have you thought about changing property investment strategies?

By and large successful people don’t achieve their success by accident.  They often set out with a clear focus and direction in mind and stick doggedly to their plan to achieve the success they seek.

At the same time there are others who are able to recognise, and seize upon, an opportunity when it presents itself.  Typically these people have a more entrepreneurial streak within them.

This is all well and good but life sometimes throws up the odd ‘curve ball’ or two and presents us with a ‘little’ challenge we need to overcome.  This challenge can take many forms and may arrive at our door step in the form of a personal, family, career, health or financial matter.

Let me explain our little ‘curve ball’.

Up until the birth of Eos we had followed a property investment strategy which had the appearance of being solid and successful and would enable us to build a large portfolio.  And to some extent we have achieved this by simply following the traffic flow while riding the waves of easy credit and a rapidly moving property market.

But time has now moved on and the last property purchase my wife and I made was over 4 years ago.

Since then we have been pouring a not insignificant sum of money into our negatively geared portfolio while watching the portfolio go nowhere.  Combine this with a general tightening of credit which has meant we have been locked in a traffic jam with no foreseeable way forward unless we changed tack.

But simply changing tack is not always an easy step to make.

By extension it could sometimes implies mistakes have been made along the way. This is not always the case. Certainly our decision to change tack is driven by changing market conditions and a realisation that some flexibility is required if we are to continue to build upon our existing property portfolio.

Our initial plan was to ‘never sell’ our properties, hold onto them for the duration, eventually handing the properties onto the kids. Well, times have changed and we needed to change too if we were to take advantage of the investment opportunities that surround us.

With this in mind my wife and I have identified a few properties, with less than satisfactory returns, which have been placed on the market.  Included in our ‘sale’ are a couple of properties we are prepared to sell at a loss.

The thought of selling something at a loss may confront or disturb some of our readers. We have realised that our existing portfolio is now holding us back and if we are to keep moving forward then we will need to reverse out of our current traffic jam, slip around the back streets for a while, modify our thought processes before getting back onto a property pathway, albeit a slightly different one to the one we envisaged all those years ago.

In effect we will be taking a short term hit by selling at a loss but the funds released will enable us to continue to build our portfolio albeit with a different strategy to the one used over the last 10 years.  This is the key to our debate – if we sold at a loss and then sat on the sidelines our losses would be crystalised. If we sell at a loss and reinvest in more profitable strategies the losses will be negated and we can continue our property journey.

As I stated earlier – for us it is time for a review, back track and reorientation.

There are a number of Eos clients who may have been caught in the same traffic jam we have been caught up in. Maybe, like us, it is time to reverse a little and take a different approach to your property plans.