Property investing can be an intimidating task – you may not know where to start or how much time and money you need. Whether you should be chasing high rent cash flow or capital gain. The good news is there are a few key principles used by successful property investors when buying rental property that will help you. These principles will guide your decisions so you’re less likely to fail while building the property portfolio you want.
Property Investing Secret Weapon #1: Focus.
So first off: focus! Property investors need a plan for what they intend on doing with their investment properties; they need to serve some kind of purpose either as rental income or capital gains growth strategies etcetera… Secondly, we should all slow down from our busy lives because patience has its benefits too!
You might think that being a property investor is hard, but one thing you should never do is quit. Building up your portfolio will take some time and effort. It’s not impossible like many people make it out to be. There are plenty of opportunities for those who want them!
Succeeding in property investment requires dedication.
They forget that all it takes is dedicating 15 to 20 minutes – five times a week. It’s like when we go for our annual physical and the doctor says “keep up with your running or else.” If you want to be in shape and have a good body then there are three things: exercise (exercise), diet (diet) and sleep! Fit people have less trouble maintaining their fitness because they’re consistent. Consistency might take some time to get used to; I know from experience, but is always worth it.
That’s right. Successful property investors know they need discipline and focus in learning about investing. They put the time in reading up on how to do deals, networking with potential partners, and assessing properties. Yet they do not let it consume their life.
Property investing goes on around their life, and it is a part of their life, but it’s not their whole life. They make small sacrifices like instead of watching a movie on a Wednesday night, they’ll jump on New Zealand real estate websites like TradeMe or realestate.co.nz to look at properties. They come to enjoy analyzing properties and seeing how the market’s going. It is enjoyable to read property analysts’ reports to find out what’s going on. Becoming well read, well educated and knowledgable is a great pleasure.
Who struggles to invest in property?
The people that struggle in property investment are the ones that don’t know where to invest in property, don’t know what investment property to buy and don’t know when to buy into the property market. They forget why they’re dedicating time to property investing. The years go by and they still haven’t bought any properties or done any deals!
So you’ve got to make property investing a part of your life and you can’t stop talking about it. If there’s no one in your family or amongst friends who are keen on the idea, then go find them! It all comes down to delaying gratification. Successful investors know how long they’re going to have their money tied up for at any given time, they’re able to plan better than anyone else. This plan lets them see their future plan for their capital gains and rental income so they know roughly when they can enjoy their income and capital gain from the property market. So firstly they don’t just do an investment, they make investing a part of their life, they become “property investors”. Secondly, they become comfortable with and even enjoy delayed gratification. They love watching their property value increase over time.
Property Investing Secret Weapon #1: Delayed Gratification.
Successful people don’t just blow all their money on fancy things. They recycle the money they earn into other investments, like businesses and investment properties that will make them more profit in the long run!
Instead of taking $100,000 and blowing it. For example, a lot of my friends have had big weddings costing upwards of $30,000, which means they’re not buying an investment property because they can’t afford to. My fiance Katie and I, don’t care about getting married, we care about buying more properties.
We’ll get married when the time’s right. But right now we are happy to delay gratification and a big wedding while our asset base increases. My parents are an example of that. They made the decision five years (after being in business for 30 years) ago that acquiring another business was better than getting a new boat. They wanted their investment portfolio to grow instead of shrinking.
When they first acquired the new business it was expensive but later it sold for an even higher multiple. What that meant was the five years of waiting, that ended up building their wealth and now they’ve got the boat plus investment returns.
Owning an investment property doesn’t mean you can’t enjoy life!
They don’t have to worry about money. You can have your cake and eat it too but you’ll have to wait until you can afford it. 2021 should be focused on learning, making sure that you are becoming a property investor, not just investing in a property. Build a portfolio up for yourself – build momentum. Balance out life, instead of dropping $70,000 on a boat why not get a second-hand boat for $10,000 while building your portfolio. Wait 4 or 5 years then upgrade the boat.
I’ve seen heaps of people that have got the boat, the batch, the car and the big mortgage, but they don’t have the properties. Then on the flip side, the people that have a bunch of properties are walking around in old jandals. They’re wearing a hat with holes in it but they’ve got heaps of money just pouring into their bank accounts without any effort at all. And they’re still thinking, “Oh, I’ll keep growing this portfolio.”
If you want the nice things, get the assets that generate your cash flows first. Focus on the big wins in life, become a property investor, embrace delayed gratification, watch your residential portfolio grow and supplement your household income.