Yep I’m another newbie so here goes with another basic question that’s probably answered somewhere else.
I’m after information from everyone on how they design their Exit Strategy when planning a purchase of a property. What sort of things do you consider and how do you structure it in order to minimise any risks associated with exiting a deal at any point in the ownership period.
For the record my wife and I are in the planning stages for our first couple of IP’s and want to make sure we get them right.
Hi Rod,
I see the notion of an ‘exit strategy’ has two aspects.
Initially I look at how I am going to use the property to sustain me in my post ‘working life’. For some people it is a choice to use pure rental income, whereas others will sell all/some of their properties and use the growth component and yet others may choose to use the increased equity to borrow additional sums of money for an income.
This aspect of your decision making will determine what sort of property you need to buy and hence, for me, has relevance as the exit strategy at the end of the investment period – whenever that may be.
Another aspect of an exit strategy is what do you do when ‘times get tough’. Obviously selling is a possibility and if times ever got that tough then that is an option for consideration.
I also prefer to build a buffer up in case times do get tough – these I tend to call ‘protection strategies’. In my case I have sufficient equity available in a redraw/equity loan and line of credits to sustain my repayment for some length of time.
Derek
[email protected]Property Investment Support Available.
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