When executed as a long-term strategy, investing in real estate is a proven method for growing your own personal wealth. However, not everyone who builds a property portfolio will enjoy a profitable outcome – and there’s one primary reason behind this.
It’s not the property’s location. Purchasing in a sought after, tightly held street, suburb or town will definitely give your investment the edge and allow you to leverage your profits sooner, but investors all over Australia have success with properties situated in various locations – some better than others. Location will help you on your journey, but it’s not going to make or break your success.
It’s not the property’s attributes. You don’t have to own the nicest home in the most prestigious street to profit from property; indeed, some investors base their entire strategy around purchasing ugly ducklings, with the belief that owning “the worst house in the best street” is an ideal opportunity to tap into capital growth.
It’s not timing the market, either. Buying at the bottom of a property cycle is obviously desirable, but with enough time in the market, most investors stand to make a solid profit.
What is this one specific quality, then, that separates those who are seriously successful in real estate, and those who fail to progress past one or two property deals?
Put simply, it's stamina.
The reality is that many people are excited about the idea of investing in property, but they’re not prepared to deal with the hard work involved in buying, owning and managing their investments.
To be successful as a property investor, you must have stamina and a staying power that crushes ‘investor fatigue’ when it threatens to overwhelm you. You also have to be willing and prepared to ride out the tough times in order to enjoy the upshots of investing.
Experienced investors understand this, because they’ve generally survived a few stressful situations and they’ve made it to the other side. If you’ve yet to weather your own investing setbacks, here are a few strategies that can help you draw from your reserves of stamina and avoid throwing in the towel prematurely:
1. Focus on the bigger picture
What do you want to achieve as a property investor? Is it early retirement, an income to prop up your pension, or the opportunity to grow your wealth beyond your wildest dreams? Whatever your goals, you need to keep them front and centre as you navigate through the process of researching, buying and managing your property investment. If and when a stressful situation emerges, stay focused on the bigger picture as you work to find a solution.
2. Minimise financial stress
It’s going to be difficult to invest with peace of mind if you’re in debt up to your eyeballs and you’re struggling to make ends meet. Make sure you don’t over-extend yourself and keep a cash savings account topped up with enough funds to help you deal with emergency expenses. Working with a trusted, experienced mentor or investment specialist will help you to invest in a financially responsible way.
3. Don’t panic
For many first-time investors, the moment that the situation becomes difficult – such as when a tenant does a runner and leaves them with a $2,000 repair bill – note that it only happens if you are not insured!, or their insurance premium doubles after an unexpected weather event – they panic, and decide they want out. This is a fear-based reaction and will take you five steps backwards, undoing all of the hard work you’ve done to reach this point.
There’s a reason why many consider investing in property as “another job”: it’s because, just as with your career, it can take an investment of time and energy to reap the rewards. If you stay focused on your long-term goals (and you have strategies in place to deal with financial emergencies), you’ll learn not to be disheartened by short-term setbacks as you work towards creating wealth through property investing.
Come see Philippe and his team at the biggest property event of the year: The Property Buyer Expo in Sydney 30th October to 1st November. Click here to claim your free ticket to the event, and be sure not to miss Philippe's daily seminar, "How to set up a strategy that works for you!"
Philippe Brach is CEO of Multifocus Properties and FinanceDisclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property
