Regret is part and parcel of everyday life.
We all have a list of things we wish we had and hadn't done throughout our life journey.
Sometimes you might wish you'd taken another career path, travelled more or taken advantage of an opportunity presented to you.
Many people, when faced with a crossroad, are plagued with questions of 'what if' and 'if only'.
And interestingly, the bulk of regret comes from things we didn't do rather than regrets about the things we did do.
When it comes to property, regrets are rife.
But for property investors, some regrets are bigger and have more repercussions than others.
Poor decisions produce greater regret when it is harder to justify those decisions in retrospect.
And regrets tend to be strongest for lost opportunities.
1. Moving too slowly
Perhaps it's because you're waiting for the perfect property, or for the perfect timing.
Either way, delaying the start of a property investment journey is one of the biggest regrets that investors (and buyers) have when it comes to the property market.
After all, excuses make us feel better about not doing what we know we should have done because we don't want to look like a fool.
When it comes to property investment, many buyers and investors become obsessed with the idea of timing their property purchase with the view that buying at the bottom of the market for the cheapest price is a formula for property success.
Fear of a boom or downturn, political uncertainty, COVID-19 uncertainty, interest rate anxiety and even fear of the myth of the mortgage cliff might put you on edge, but the reality is that sitting on the sidelines means you'll miss out on significant gains.
That's because the property market is cyclical.
There is never a perfect time to get into the market.
No matter what point of the property cycle you get in at, time in the market is going to be the key to success.
2. Not buying enough
Buyer's remorse is also rife for property investors, even if they are successful.
In the longer term, many investors regret not buying more properties.
In other words, the opportunity to buy was there, but it wasn't taken.
3. Not doing enough research
Understanding the real estate market is crucial for making informed decisions.
Factors to consider will change depending on where and what you're buying.
Researching recent comparable sales, property values, local supply and demand, and potential future developments can help you determine the fair market value of a property and guide your negotiation strategy.
The problem is, that so many investors are excited by the idea of property, but skip the boring but vital step of doing research and due diligence (or don't do enough of it) to make a sound investment decision.
And then they regret it….
It might cause them to overstretch financially, misunderstand projected growth or rental returns, or even miss a significant development proposal for the area which will affect the property or even the suburb value as a whole.
Sometimes, poor research sees investors fall down the rabbit hole of shiny off-the-plan investments that falsely promise guaranteed rent and failsafe price growth, without realising these 'opportunities' are often overpriced at best.
4. Not getting (the right) advice
Poor investment choices are another key regret of property investors.
It's also the reason so many property investors never get past the hurdle of their first investment property.
From poor advice to not understanding the advice received or even just going it alone, many property investors without a strategy or the right team find themselves making poor investment choices, which means they end up buying an underperforming property that doesn't achieve the rental or capital growth they need to grow their portfolio.
This not only derails their future portfolio-growth ambitions but erodes their confidence in the property investing game.
I have found sophisticated investors to pay for their address while investor gets their advice for free over the Internet, or from salespeople disguised as advisers.
The most expensive advice you can get is free advice that is wrong.
The key lessons to avoid falling victim to regret
There are a couple of key lessons to learn when looking at the largest property-buying regrets.
1. DON'T TRY TO TIME THE MARKET - REMEMBER TIME IN THE MARKET IS MUCH MORE IMPORTANT
Sophisticated property investors begin with the strategy and then implement that by purchasing buy investment grade properties in "investment grade" locations whenever the time is right for them
The important part of that statement is that they always buy "investment grade" properties because this type of real estate is proven to do well in all market conditions compared to other properties.
Smart investors buy when they have their finances ready, or perhaps they have built up enough equity in their portfolio to purchase another property.
And they buy " time" by having financial buffers to ride out any temporary market fluctuations because there will always be price ups and downs during your property investment journey.
But they recognise that time in the market is always more important than trying to time the market.
Too many investors try to time the market by looking for the "perfect time" to buy.
But it doesn't exist and while they wait for a mythical moment in time, they may miss out on investment-grade properties that will grow in value while everyone else is sitting on their hands.
2. RESEARCH, RESEARCH, RESEARCH
Make sure you do your research and due diligence on the location, the property itself, the environment around it, your finances and any legalities.
Failure to research results in buying the wrong property or in the wrong location.
In the long run, that will only cost you in time and money.
3. GET GOOD ADVICE… AND FOLLOW IT
Attaining wealth through property doesn't just happen, it's the result of a well-executed plan.
Planning is bringing the future into the present, so you can do something about it now!
Just to make things clear...buying an investment property is NOT a strategy!
It's important to start with the end game in mind and understand what you need and what you want to achieve.
And then you have to build a plan, a strategy to get there.
The property you eventually buy will be the physical manifestation of a whole lot of decisions that you will make, and they must be made in the right order
That's because property investment is a process, not an event.
If you're a beginner looking for a time-tested property investment strategy or an established investor who's stuck or maybe you just want an objective second opinion about your situation, I suggest you allow the team at Metropole to build you a personalised, customised Strategic Property Plan.
When you have a Strategic Property Plan you're more likely to achieve the financial freedom you desire because we'll help you:
- Define your financial goals;
- See whether your goals are realistic, especially for your timeline;
- Measure your progress towards your goals - whether your property portfolio is working for you, or if you're working for it;
- Find ways to maximise your wealth creation through property;
- Identify risks you hadn't thought of.
And the real benefit is you'll be able to grow your wealth through your property portfolio faster and more safely than the average investor.
Your Strategic Property Plan should contain the following components:
- An asset accumulation strategy
- A manufacturing capital growth strategy
- A rental growth strategy
- An asset protection and tax minimisation strategy
- A finance strategy including long-term debt reduction and…
- A living off your property portfolio strategy
