Property Investing

I have found no single secret to being a property investor.  Knowledge, experience, funding and luck all play their part when investing in property.  However, I do believe there are behaviours and attributes that good investors display and here are five of the top pieces of advice I can share.

Be Prepared To Walk Away

We have all been in a position where we have bid on an item in an online auction and our desperation to secure the item means we end up paying more for it than we wanted to.  If you let that happen in property, you won’t be successful.  When negotiating prices, be prepared to walk away if a deal doesn’t make you the amount of money that you want.  It takes self-discipline and a hard negotiating strategy but I have backed out of many an agreement as whilst it may be a great deal for someone, it is not a great deal for me.

Manage Your Money

It sounds obvious, but I have met property investors who don’t seem to have a tight grasp on their financial position.  Manage your income from rents, keep a close eye on your finance costs, make realistic budgets for void periods, repairs and maintenance and don’t overestimate potential future capital values.

Your property portfolio should be considered a business.  If you run your own business you keep a close eye on the finances and so it should be the same with your property holdings.

Have A Plan

Most investors buy one or two properties as they have some surplus cash to invest and like the idea of property as an investment.  That’s fine – I started in the same way.  Once you start to build a portfolio, however, it is vital that you have a business plan so as to avoid investing for investing’s sake.

What’s your ultimate intention – capital growth, income, or both? What’s the money for – your retirement, your children’s education or their eventual inheritance?  When do you plan to dispose of the properties?

Having a plan and an exit strategy is crucial.

Research and Homework

Investing in property is, for many, a full time occupation and their one main income source.  In the same way as lawyers or accountants undertake ‘continued professional development’ to further their knowledge, you should do the same.  Property is my business and so I spend considerable time learning about the subject.  Improving my knowledge of property through a property investment course, seminar or reading books on property has helped me enormously in my career.

Learn From Your Mistakes And From Others

I knew a little bit about investing in property when I bought my first house.  Since then, I have made errors along the way and have learned about the mistakes of others at the numerous property investment courses and events I have attended.

If I hadn’t learned from my mistakes I’d still be a small, novice property investor.  As it is, I have changed my practices, tactics and business plans through experience and knowledge and I am now a successful property professional.  It is worth remembering the old adage “Winners don’t do different things, they just do things differently.”