‘Property’. The word in itself conjures a whole host of conversations, thoughts and opinions. Whether it makes you think of where you live, where you want to live or even familiar TV shows, there is some degree of property exposure for everyone. If you then add the word, ‘investing’ into the mix and context of property seems to change drastically in people’s perception.
About 4 years ago I was between in privately rented accommodation and my parents. I had no understanding of any form of investing and my main goal was to work out a way to save a deposit for my own house before I ‘ran out of time’ to get the right mortgage term, which was staff room fodder which I now appreciate as tosh.
I had zero experience of any investment, zero inclination to find out more and zero confidence that I would ever be a person who could understand anything related to business/maths/money/entrepreneurship. And here lies mistake number one.
Taking yourself out of the game before you even start is rooted in fear. Understanding those fears will help you move forward. Are you incapable or do you not have experience yet? Do you not understand it or have you shut down the opportunity to learn more? Nobody knows everything before they start, they just start; learn more and build from there. Starting is the only difference.
If anyone had told me back then that fast forward to today; we would have started a business, own a portfolio of rental properties and work with investors…I wouldn’t have known how to believe you. But through widening the content I was reading, learning through property education and actually getting started, it was baby steps that lead here.
Too Big Too Soon
Once you start to understand the concepts of property investing, your eyes widen to the possibilities around you and it’s exciting. All of a sudden everything is a possibility. One of the biggest mistakes is going too big too soon, chasing the big money deals with limited understanding. If you’re lucky you may fluke it and it may pay off, but more often than not, this type of high risk strategy will more than likely leave you exposed, people will and have lost a lot of money. Like with anything else, start with the foundations and build your way up.
We minimise our risk and our investors risk by buying properties at the right price, in the right areas with the right demand. We don’t chase shiny pennies. As we grow our business our investors grow with us. We have a business plan for expansion and that’s the right pace for us.
Stay In Your Own Lane
Similarly to chasing those shiny pennies; comparison will also throw you off track. What other people are doing may well suit them, they will have a different level of experience, knowledge, financial position, (the list goes on) and you will only ever know part of it. Usually just the part people are happy to share on social media. So stay in your own lane with your focus on your own goals and your own investment opportunities.
Strategy and Area
Get this right and build from there. Learning our area took time, effort and actual action. It is too easy to follow the crowd to where it looks like it works because everyone else is there too. Equally, when you do this properly once, it’s too tempting to cut this out when you try something new. Complacency will bite you. You need the same (actually you need more) level of effort and action to build and grow, don’t rest on the work you did last year, to do this years work. There are no shortcuts.
We know when a deal works because we know our area, the street, rental potential and demand before we buy it. This knowledge was built from feet on the ground. We made the mistake once in trying a new area for a new strategy without this level of detail, we just lost time.
“See things as they are, not worse than they are, not better than they are” I took this from unleash the power within with Tony Robbins. Do the numbers. Don’t escalate them out of a sense of urgency or lack to make them better than they are and don’t shut yourself out of the deal by negativity. Do your homework and run the numbers, do they work? You will never control the future and as with anything else, markets change. You protect yourself by buying the properties that work, not by fudging the figures or leaving yourself exposed by being over leveraged. Have patience to wait for the right deals.
Property investing isn’t a one man show. There are lots of people in the team that get it over the line. From your solicitors during the purchase, estate agents, letting agents, builders, tenants, buyers, investors. It is more than just a building. Investing in property is as much about people as it is about the house. Build strong teams and relationships. When you forget you are working in a bigger team, you run the risk of dropping the ball somewhere.
Don’t Get Complacent
I can not tell you the amount of properties we have been in, which are currently rented out in such states, I wouldn’t want any being living there. Rental income can make you money, but don’t lose your morals and your standards in the process. There is a lot of negative press surrounding landlords, but there are lots of us getting it right. We have an ethos we purchase property by, if we wouldn’t let our mums live there, then we wont buy.
But we can all do the shiny refurbs and make them look pretty at the start, it is the on going maintenance and care that is needed to benefit the tenants and also protect your assets for the future. Don’t be lazy and remember, the responsibility always lies with you.