Property investing can be a minefield and IS hard work, particularly when you’re first starting out.
It’s a myth to think that making big bucks is easy from just buying a house and sitting on it with you reaping the rewards of capital gains over time.
So let me ask you this:
- Do you have a strategy that will see you through hard times if there’s another GFC that doesn’t leave you in the position of having to sell off some or all of your portfolio?
- Do you currently have all your eggs in one basket? For example, do you have or intend to have all your borrowing with one bank? Is your risk all tied up in one property or have you spread it out?
- Are you sure of your obligations around profits and tax?
- How do you know if the people around you really know what they are talking about?
The good news though, is you can prosper from investing in property provided you treat it as a business. And that requires discipline, knowledge, action and support.
Here’s a few of what we think are essential steps in laying the foundation of your property business.
Step 1: Knowledge is power
This is perhaps the single most important tip for newbies, because purchasing any old property is likely to result in a failed investment.
Step 2: Take action
Many people get to Step 1 and that’s as far as they get because they become overwhelmed with the amount of knowledge they know they need and haven’t got. At some point, the doing has to start though. Those that take action will also come to realise that there is so much learning from taking action.
Step 3: Know your market
This has two parts to it (i) understanding the market fundamentals of where you are planning to buy and critiquing that to ensure the fundamentals stack up. The most basic of these is supply and demand, and (ii) knowing what property values are doing today and in the future; not three or six months ago. I love this one as agents often quote old sales. Nine times out of ten the market will have shifted one way or another – agents are rightly attempting to get the most for their vendor and so naturally they want to give you the good news and talk you up.
Step 4: Stick to your buying rules
There are a few things that I think distinguish professional investors from speculators and one of those is buying rules. Investors don’t get caught up in the hype of the moment. Investors don’t get blindsided by greed – the stick like glue to their buying rules. Get help with developing your own buying rules at PropertyBootcamp.
Step 5: Don’t follow the flock
This is another difference between property speculators and investors – that is, the most successful investors I know stick to their knitting and are counter-cyclical in their strategy.
The list is long and the experience is wide so fast-track your business by joining our community.