{"id":2547,"date":"2022-05-11T05:06:12","date_gmt":"2022-05-11T05:06:12","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/eight-signs-youre-not-a-real-property-investor\/"},"modified":"2022-05-11T05:06:12","modified_gmt":"2022-05-11T05:06:12","slug":"eight-signs-youre-not-a-real-property-investor","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/eight-signs-youre-not-a-real-property-investor\/","title":{"rendered":"Eight Signs You\u2019re not a Real Property Investor"},"content":{"rendered":"

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A lot of people think they\u2019re property investors, but they\u2019re kidding themselves. <\/strong><\/p>\n

Instead, they\u2019re playing<\/em> at being investors.<\/p>\n

I see this a lot with the self-employed, too.\u00a0\"foreign<\/p>\n

They like to think they\u2019re in business, but again, their processes, their mindset, and their inability to scale their operations show they\u2019re just \u2018playing pretend\u2019.<\/p>\n

Anyone who\u2019s taken the time to understand the property and its incredible power to create wealth knows that for most of us, it represents the best chance of delivering an early retirement (or at the very least, a comfortable<\/em> one).<\/p>\n

Such is the proliferation of information out there; it\u2019s easy to think that investing is a quick ticket to prosperity and a life of tropical holidays, expensive dinners, and a garage full of Italian thoroughbreds.<\/p>\n

Well, it isn\u2019t.<\/p>\n

Yes, it can<\/em> provide you with the lifestyle you\u2019ve dreamed about, but it isn\u2019t quick, and it\u2019s far from easy.<\/p>\n

Simple; yes.<\/p>\n

But easy – no.<\/p>\n

The reason it isn\u2019t easy is that human beings have a tendency to follow the path of least resistance.<\/p>\n

We\u2019re impatient, ignorant, and quick to assume things we don\u2019t fully understand.<\/strong><\/p>\n

That’s a dangerous combination, and it\u2019s one that plays out time and again in the world of investing.\u00a0\u00a0<\/p>\n

Property spruikers and self-styled gurus know this so they pray on these characteristics all the time.<\/p>\n

Sadly, thousands of people looking for an easy road forget their intelligent reasoning and fall for their teachings every year – and they pay dearly for it.<\/p>\n

For decades now, I\u2019ve advocated a simple principle.<\/strong><\/p>\n

If you want to succeed at something, look to those who already have demonstrable success doing that thing, then I follow them.<\/p>\n

Seek their counsel and if necessary, pay them for the privilege.<\/p>\n

If they\u2019re unable to do this, ignore them.<\/p>\n

So how do you know if you\u2019re failing as an investor?<\/p>\n

How do you know if you\u2019re faking it instead of doing<\/em> it?<\/p>\n

Here are some clues.<\/h4>\n

If you\u2019ve fallen into any of these traps, there\u2019s a good chance you\u2019re doing it wrong, and some course correction is required.<\/p>\n

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  1. You believe that just about any property, over the long term, is an investment.<\/strong> This is simply not true. There are so many ways you can go wrong here; it\u2019s little wonder most would-be investors do this. Would it surprise you to learn that fewer than 10% of properties qualify as investment grade? Most apartments, new suburbs, regional centers, and single-industry towns fall into this category. \"property<\/li>\n
  2. You\u2019re constantly looking for the next \u2018hot spot\u2019.<\/strong> If you devour property magazines, TV shows, and seminars delivered by newly minted gurus, you\u2019re chasing rainbows and unicorns.<\/li>\n
  3. You\u2019re targeting high-yield properties so you can one day live off the rents.<\/strong> The number one goal of property investment is capital growth – not rental yields. The number of properties you need to create a long-term income stream is substantially less if you pursue capital growth over rents. The flow-on effects are massive, too. You have fewer maintenance issues, simpler management, a significantly smaller tax burden, and a shorter timeframe towards your goals.<\/li>\n
  4. You think you can set yourself up in just a year or two.<\/strong> The right properties take time to accumulate. Capital growth takes time to build. Redevelopment or enhancement (the act of \u2018manufacturing\u2019 capital growth) takes time to plan and execute. Unless you\u2019re sitting on a very large chunk of equity and\/or savings, it takes quite a few years to build your long-term \u2018cash machine\u2019. \"calculator<\/li>\n
  5. You only buy property in areas you like or only ones you\u2019d live in yourself.<\/strong> That’s simplistic and nonsensical. Property investment is a vehicle used to achieve a financial outcome. If it makes sense as an investment, your personal preferences have no place in the decision-making process.<\/li>\n
  6. You try to time the market.<\/strong> Yes, there are<\/em> cycles in property investment but while mainstream news trumpets one or two of these, the truth is, there are hundreds<\/em> of cycles all over the country. Median prices are also misleading. It\u2019s very common for the median price<\/span> in a suburb to be say, $500k, but one street might have a median price<\/span> of $350k and another, $800k. Effective property investment needs to consider the information at a granular level before it can accurately inform an investment decision.<\/li>\n
  7. You leave no buffer in your capacity to service the debt.<\/strong> What if your partner loses his or her job? What if you\u2019re blessed with an \"43388369_ml\"unexpected pregnancy? What if your tenant trashes one of your properties and you have to evict them and repair the damage? What if one of your parents becomes ill and they require assisted care? What if interest rates go up? Failing to leave adequate buffers in place is an unwarranted cause of stress and a common cause of \u2018fire\u2019 sales.<\/li>\n
  8. You think you can do it alone.<\/strong> There\u2019s an old saying I often use, \u201cWhat you don\u2019t know will kill you.\u201d Not knowing what you don\u2019t know<\/em> is a recipe for disaster and with something as resource-intensive as real estate, ignorance can bring you unstuck very quickly. No man or woman is an island and behind all great successes, you\u2019ll find a team of trusted advisors and coaches guiding and supporting the investor. Don\u2019t try to reinvent the wheel so that you can stand back and proclaim what a smart guy you are. If you truly want to succeed, engage the wisdom and experience of those who\u2019ve gone before you.<\/li>\n<\/ol>\n

    As I\u2019ve said at the beginning of this article, property investment can<\/em> deliver the life you seek, but plenty of traps exist for the unwary, impatient, or stubbornly ignorant.<\/strong>\"research<\/p>\n

    You only have one life, and you don\u2019t have enough time to make all the mistakes on your own.<\/p>\n

    You simply won\u2019t live long enough to make them all.<\/p>\n

    If you\u2019re going to make it as an investor, make sure you\u2019re not committing any of these \u2018sins\u2019 and if you are<\/em>, start doing something about it.<\/p>\n

    ALSO READ: <\/strong><\/span>The climate risk of property investing<\/a><\/p>\n