Investing in residential property can be incredibly simple yet complex at the same time.
Most of us understand it on a conceptual level. Usually, the goal is to have it generate income and appreciate over time. Then you can sell it for a profit, use it for retirement income or pass it down to future generations.
However, buying a property and being an investor that strategically builds a portfolio is quite different, especially if you want to get it right. The road to success is not an easy one, and there are multiple strategies and paths to choose from, understanding some of the challenges and different approaches will help you a great deal.
But, before that, it can be useful to look at some of the key attributes and tactics used by successful investors. Reflecting on them will help you figure out if property investing is for you, and applying them will significantly increase the chances of success on your investment journey.
Having a Plan
Property investing is a business, and you need to approach it as one. A solid plan helps you see the bigger picture and how to get there. It will keep you in check and help maintain your focus when setbacks happen. The road of a property investor can be a complicated and demanding one, and a good business plan will keep you organised and on track.
A Willingness to Learn
Nothing beats knowledge. The most successful investors I have met always know more than the others around them and have an in-depth understanding of their selected market. When investing, you need to know the market and what drives it. That means learning how to time market cycles, and the changes in economic conditions to look out for, also, understanding changes in the market will allow you to take advantage of great opportunities when they arise.
Very often, investing in property is viewed as an easy way to get rich without much effort. While it is true that it offers one of the most effective ways to generate vast amounts of wealth, there are elements of risk that are important to understand. Not only in terms of property you are buying, but also the legal implications, potential currency exposure, and day to day management of the asset.
Knowing Your Limitations
Knowing your skill-set and focusing on what you do best is one of the greatest skills you can develop. Just because you think you know how to do something, doesn’t mean you should. Trying to manage every part of the process can be a slow and painful road of frustration. It can be hard to let go of control but knowing when to hire a professional is one of the best skills you can develop as an investor. It will also free up your time and mental bandwidth to find other investments or do the things you enjoy.
Dealing With Challenges
Challenges will arise when you invest in property. It’s part of the process—knowing that at the beginning allows you to prepare are, and having a well thought out plan will help you avoid most of them and deal with the others. The important thing is how you manage yourself when issues appear. Successful investors know that nothing is permanent, and there are lessons to be learnt in every failure. Having a balanced perspective and controlling your emotional reaction can make even the worst situations a lot easier to manage.
Patience is a virtue when it comes to property investing. Very often, there can be pressure on you to move fast or risk missing out on a deal. That is why you must master it. New investors often get led to believe that property is an easy way to turn a quick profit. However, rushing into the market will likely result in making mistakes or losing money. Property investment is not a get rich quick scheme, and successful investors know that building a portfolio takes time and a lot of patience.
Being efficient means you will be capable of achieving results without wasting time and resources, time and energy are finite, and you should use them wisely. If you have set up your business to run efficiently, it will produce the result you want quicker and easier. If not, you will be unable to deal with the things that matter.
Your ability to stay focused is of vital importance. Not letting obstacles that appear in your way distract you can be challenging. It’s common for investors to get pulled in many different directions, and that can make you lose sight of your vision and slow momentum. Your ability to regularly review your strategy and stick to your investment plan will ultimately dictate your success.
So, is property investing for you?
Perhaps, investing or managing a property portfolio night not be your idea of fun, or maybe you don’t have time or aren’t interested in getting too heavily involved. If so, don’t be put off. There are many great companies out there that can help manage the process or different approaches that don’t require you to be so engaged. Meaning you get all the upside property has to offer without the hassle.
If you like these ideas, but don’t have the time or know where to start, speak to someone from our team. We will be happy to share how we have helped clients access great investments without the hard work or headaches.
Contact us here.
Article by: Rory van den Berg