When you decide to get involved in property investment, it is very much like running your own business where there is always have a unforeseen rainy day. If you failed to have a contingency plan, the last thing you would see is a 0 balance or a negative in your bank account.
In this time, you are bound to start having resentments: questioning your objectives, your strategies and even blame on your partner or your loved ones. To be honest, regardless of how profitable that investment is, there always comes with some risks that you can’t even sense of it.
If you talk with the business entrepreneurs, you will get to know that no one can succeed at first time and they may have a number of experiences of failures. You need to know that, the higher the return you get, the higher the risk you need to be faced. This is real reality, even though you are an expert and know how to calculate the risks, but there are bound to be certain events that you can’t expect to occur or you don’t even know existed in the first place.
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So, you may wonder that almost everything has its risk, then why we always encourage people to investing. Well, in fact, you can’t control the risks but you can mange the risks and the solution is your budgeting. When designing your investment portfolio, you’ll need to come out with a contingency plan too and your budgeting is paramount. Most of the successful people come from organized life, organized money and organized planning. People, the best way to do this budgeting is to open another bank account for your contingency plan and set aside at least 3 month expenses into this account.
Always preempt this as you can’t except yourself to be 100% in control. Let’s take a few examples of the setbacks that most property investors face; sudden unexpected high vacancy rates, tenants problems or even flash flood. Even though your property is protected by insurance companies, but having a contingency plan just gives you the extra assurance for the mind and of course, any extras left over will become bonus savings a the end of the year.
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