Investment strategies 101: Key steps to mastering the first year of your portfolio
Whether you’re a first-time investor or refining your strategy for the upcoming decade, resetting your portfolio is essential. Here are expert strategies focusing on the critical first 0–1 year of investing.
In a recent episode of Property Investing Insights with Right Property Group, Victor Kumar, Reshmi Kumar, and Phil Tarrant shared key strategies for beginner investors and those looking to reset their portfolios, focusing on the first 0-1 year of investing.
According to the experts, the first year of property investment is crucial as it sets the foundation for future success, with decisions made during this time impacting the outcome of the next decade.
“The first year is usually the hardest because you’ve got so many decisions to make that will impact not only that specific time but also be ongoing,” Reshmi Kumar said.
To ensure a successful portfolio, the Right Property Group duo advised that new investors should not skip the pre-planning phase, as it ensures that strategic planning considers both short-term and long-term goals.
“What I do is you look at your age and current life, then you map out a timeline about you and your goals, including by when you want all these goals to be achieved,” Reshmi shared.
She said investors need to ensure all their goals align with their long-term financial goals, as not all are equally important.
“Are all the goals on that list really important, or are they just nice things to have? What are you willing to sacrifice if you don’t have the money to make those things possible? “ Reshmi said.
Once investors’ short- and long-term goals align, Victor Kumar said the next crucial step is determining which strategy to aim for.
In a launching a rocket analogy, Victor describes the importance of planning the trajectory, fuelling the rocket, and ensuring a strong structure before making any property investment decisions.
“There are a lot of things that we need to do beforehand, before we even consider buying – we need to make sure that we’ve got the fuel right and that the portfolio structure will be holding up.”
“Most new investors make the mistake of approaching their investments on a ready-fire-aim strategy as opposed to ready-aim-fire,” Victor said.
Following the ready-aim-fire strategy, Victor said that getting “finance right” from the get-go is essential for investors who wish to scale their portfolio over time.
According to the experts, investors must understand their relationship with money and debt, and how to leverage finance to support their portfolio growth.
Victor suggested that investors adjust their loan structures by switching to interest-only loans and finding efficiencies in expenses, such as consolidating debts, reducing holding costs, and making property investments more manageable without sacrificing lifestyle.
Additionally, the trio recommended that newcomers build a mentorship network with more experienced investors and surround themselves with a team of industry experts who can provide advice, guidance, and support.
“You’ve got to get your stakeholders right early during this period,” Tarrant said.
“You also need to be aware that the people you start with in years zero to one might not necessarily be the people you’re turning to for advice moving forward.”
The expert also discussed the importance of the “first-year learning curve”, where investors start to deal with real-world challenges.
Whether it’s navigating market trends, dealing with tenant issues, or managing costs, the early years are packed with lessons that will shape your future approach.
The trio emphasises that mistakes and missteps are inevitable but valuable as they provide insights into better managing investments going forward as investors gain hands-on experience, which cannot be replicated through theory alone.
“The first property is crucial; it builds the foundations for the next decade,” Victor concluded.
For more insights into the first year of property investment, listen to the full conversation here.