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Financial planning
FINANCIAL PLANNING FOR PROPERTY INVESTMENT. You can download the PDF for this page by clicking here.

Financial planning for property investment

The starting point for successful property investment is the creation and implementation of a plan. Without a plan we drift along in life and leave our future to chance. The end result in financial terms is normally the same: failure to reach financial independence. The old proverb that "Most people don’t plan to fail; they just fail to plan" reminds us of the importance of planning. However, even the best laid plans are only good intentions unless they are acted upon.

Personal qualities required for successful property investment

Financial plans are also dependent on personal qualities. To be successful in property investment the following personal qualities are required:

  • Pro-active: Take conscious control over your life, set goals and work to achieve them. Instead of reacting to events and waiting for opportunities, go out and create them.
  • Confidence: Many investors suffer from the paralysis of fear. Successful investors act when others dither, enabling them to benefit from some of the best investment opportunities. Confidence is enhanced by good preparation, planning and a sense of optimism. Conversely, negative thinking and pessimism undermines performance and limits progress in achieving your goals.
  • Decision making: In order to make progress and act upon opportunities, it is necessary to make decisions and not procrastinate. Successful property investors have and will continue to make mistakes but succeed overall as their good decisions out number their bad ones. Learning from your decisions both good and bad is called experience!
  • Perseverance: Once you have formulated and embarked upon your plan it is imperative that you stick with it.

Investment is cyclical, booms and busts will always occur. The important thing once you know you have made a sound investment is to stick with it, especially when markets become volatile.

What should a property investment plan consist of?

A property investment plan should consist of a set of goals and an overall strategy. A simple way to differentiate between the two is to remember that:

  • A goal is about what you want to achieve or avoid.

e.g. I want to have an income of £30,000 per year (which rises with inflation), by the time that I am 60 years old for the duration of my retirement.

  •  A strategy is how will you go about achieving your desired goal.

e.g. I plan to build a buy-to-let property portfolio as the means to provide my financial security in retirement


Goals and their purpose

A goal is a tangible result that is unambiguous and measurable. If required they can be broken into the short, medium and long-term.

Benefits of goals and what they provide:

  • A call to action.
  • Clarification in decision making in what to accept or reject.
  • A method to measure your efforts and results.
  • Motivation and confidence when objectives are met.
  • A roadmap to help you arrive at your ultimate destination.
  • To achieve the desired result for goal setting, it is important that in their formulation you are clear and honest about what you are trying to achieve. 

Goal setting and prioritisation:

  • Determine your short, medium and long-term goals.
  • Make your goals specific. They should be concrete and measurable. For example, “I want to be rich when I retire” could become, “I want to receive a retirement income of £30,000 per annum when I am 65 years old.”
  • Make your goals actionable. What specific steps will you take to achieve your goal? For example, “I will make an initial investment of £40,000 to build my buy-to-let portfolio.” Whatever your goal may be, it needs an action plan to make it a reality.
  • Take action immediately. Even by just making a phone call or looking up information, your goals will feel more real and reachable.
  • List your goals and review them. Constant reinforcement and support are invaluable to achieving your goals.
  • Don’t give up. If things don’t happen as you originally planned, then just redefine your goal or action plan.

 Short-term goal (less than 1 year)

Short-term goals relate to immediate lifestyle commitments and therefore feel most important to us. The problem with short-term goals is that people often set too many. It is important to prioritise and manage short-term property investment goals in order to progress medium and long-term goals.


I will invest £30,000 (from existing savings or via equity release from an existing property), to purchase a buy-to-let property within the next two months. The property will be a minimum of 10 per cent below the market value and will achieve an annual rental income of 6 - 8 per cent.

 Medium-term goals (1 to 3 years)

Medium-term goals relate to items which cannot be afforded at the outset and will have to be budgeted for over a period of time. Where appropriate, a degree of borrowing can help meet medium-term goals. In property investment terms this would relate to using a buy-to-let mortgage and equity release to help fund the purchase.


I will grow my buy-to-let property portfolio to a minimum of four properties within three years of starting my property investment plan. Each property will have a minimum annual rental income of 6 per cent and will provide a total rental income of £50,000 per year. I will use a mixture of rental income, equity withdrawal from existing buy-to-let properties and any additional savings that have been made to help fund the purchases.

Long-Term Goals (5 years or more)

Most people neglect or only give scant thought to long-term goals often as a result of the long duration in time before they will be met. Long-term goals are important as they normally relate to lifestyle changes such as retirement or other events of significance. For example:

  • Paying for children’s university education.
  • Funding a long and active retirement.

Realisation of such ambitions requires disciplined commitment. The distant prospect of far-off retirement becomes a reality and unless appropriate financial planning has been made and followed, retirement will not provide the lifestyle that you had envisaged.


I will grow my buy-to-let property portfolio to a minimum of eight properties from fi ve years of starting my property investment plan. Each property will have a minimum rental income of 6 per cent and will provide a total rental income of £80,000 per year. I will use a mixture of rental income, equity withdrawal from existing buy-to-let properties and any additional savings that have been made to help fund the purchases.

Finance to help meet your goals

Once you’ve identified your goals the first step is to see what finances you have available to put towards them. It is important to manage your existing income and expenditure to enable you to focus on the most effective use of your assets and liabilities.

Existing funds may help you meet one or more of your goals, however many investors usually borrow to enable them to build or enlarge their property portfolio. One of the main benefits of investing in property is that unlike investment in many other asset classes, it is possible to obtain funding (via a buy-to-let mortgage) to assist with the purchase of the asset. Buy-to-let mortgages typically lend 75 per cent of a property’s value. Equity release from an existing property can assist investors in making the required deposit.


Once you have decided your goals (tactics), it is imperative to formulate your strategy. The folly of creating a set of goals without a strategy has long been understood. Sun Tzu, the famous military strategist who had a significant impact on Chinese and Asian history and culture said “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

If you have decided that your strategy is to create wealth by investing in property, the below checklist will help you consider some of the aspects in its creation.

Checklist for your strategy:

  • Clearly identify and set out your goals.
  • Prepare a budget and a business plan that match identified goals. This is often best done with the professional assistance.
  • Check that goals are realistic and properly set out. Professional assistance will help you ensure that they are.
  • What income is required to hit my yearly goals?
  • What type of property investment matches the level of risk that I am comfortable with?
  • Will my property investments be sector or value specific?
  • Do you want to be actively involved in your investments or an ‘arm chair’ investor with minimal direct involvement. If you do wish to be actively involved in your investments, have you set a suitable amount of time aside?
  • Have you thought about suitable times pans in which to measure and monitor you goals? Will external professional help assist you in this matter?

Benjamin Franklin’s - one of the Founding Fathers of the United States of America - well know phrase that "In this world nothing can be said to be certain, except death and taxes" is a reminder of the few certainties that exist in life.

Although the formation of a property investment plan with carefully considered goals, strategy and its adherence, does not guarantee success, the likelihood of creating wealth and achieving financial security is much greater than if no plan is made.

The next step?

Creating and implementing a property investment plan can be a daunting task for many. It can be simplified however by having a free consultation with one of our property investment advisors.

At Propertyinvestment.co.uk our advisors help formulate and monitor property investment financial planning which is appropriate to our clients needs. We will discuss with you what want you want to achieve financially and ensure that goals are realistic. Furthermore, we will provide you with on-going support in measuring and reviewing your property investment plan.

Propertyinvestment.co.uk secures property on behalf of our clients which can be discounted by up to 30 per cent below normal market prices, generating rental yields (incomes) of between 6 - 10 per cent. Contact us today to start profiting from property investment.


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