As a property professional I’m constantly learning.
I learn from my experiences – both good or bad, as well as those of my clients at Metropole.
Today I’d like to share two property investment tips and two success tips I would have liked to learn earlier in life.
Two property tips
1. Take the emotion out of your investment decisions
When purchasing a home where you’ll raise your family a large part of your purchasing decision will come from emotion and this is understandable.
However in property investment your purchasing decision should be based on strategy, statistics and logic.
Your due diligence should include analytical research to ensure that you are selecting the right location and the right investment grade asset within that location.
This is not easy and requires perspective that only comes from years of experience.
Ask yourself the following questions:
- Is it the highest and best use of my funds?
- Is the location a stable market with the right affluent demographics of buyers?
- Will this location property provide wealth building rates of growth?
- Does the property have owner occupier appeal to ensure I am targeting the right demographic?
- Can I purchase the property at or below its intrinsic value?
- Does the property have a “twist” that will make it unique compared to other properties in the area?
- Does the property have potential for value added via a renovation or development?
2. Avoid speculative investing
While it can be very tempting to buy a property in a location that is expected to be ‘the next best thing’, it is also incredibly risky.
‘Hotspotting’ is common in this industry because it appeals to those who are chasing quick returns however in most cases this year’s ‘hotspots’ tend to be next year’s ‘not spots’.
These also have the potential to be very costly mistakes.
It is important to only buy in locations that have shown long term historical evidence of growth and also the correct demographics and socio-economics to ensure future long term growth.
If the location has not been proven, then the potential for growth is simply a speculation – which is another word for gambling.
Property investment is not a get rich quick scheme and those who have been successful in property investment adhere to a proven strategy and work with three core fundamentals:
- Leverage – using other people’s money (the banks) to help build an asset base
- Compounding – focusing on high growth assets that grow faster the longer you leave them
- Time – the more time you have the more compounding can occur
Two success tips
1. If you want something you’ve never had, you have to do something you’ve never done.
The biggest obstacle to success and happiness that most people face is fear.
Amazing things happen outside of our comfort zones and this requires us to do things that we may not have done and make us feel uncomfortable.
2. It does not matter how slowly you go as long as you do not stop.
Everyone has heard the story of the tortoise and the hare – spoiler alert…..the tortoise wins.
This applies to all areas of our lives including exercise, relationships, career, money and investing.
Winston Churchill famously said: “Never give in, never give in, never, never, never, never-in nothing, great or small, large or petty – never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy….”