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ALEXA TRAFFIC & RANK BY COUNTRY
Many investor 'leaders' and seminar hosts talk about the glamour of property investing and portray pictures of financial freedom without working, early retirement and using property investing to get out of a dreaded J.O.B!
While all this may be the eventual reality of a successful property investor, initial hard work, continual education and attitude is the hallmark for a successful investor.
Most people work from 9am to 5pm, five to six days a week in a job they are disgruntled with, they go home, have dinner, watch TV and then go to bed. They see or read about a course or seminar on property investing and attend it because they want to leave their job.
Whilst all the intentions are good, their greatest undoing is that they do not take the time to implement the strategies that they were taught and only focus on how much money the course or seminar cost them. Unfortunately, some, acting out of desperation or lack of knowledge, buy an over-priced property disguised as an investment from developers or the marketers for developers. Others buy properties at the top of the market after watching other people make money from real estate. In the meantime they continue their every day routine.
No-where in this process do they take the time to improve their knowledge and skills nor do they set realistic and attainable goals for themselves.
Recreational investors have a "advise me where to invest" attitude. They are always asking about the 'best' suburb as if there was some infallible suburb that they should be running to. They are always interested in the strategies that everyone else is using, not realizing that there is more than one sure way to make money in real estate. They are focused more on the latest scheme and why the 'spruikers' of these functions can't be trusted rather than concentrating on techniques to implement good concepts.
Recreational investors want speedy results because they do not have the attitude or incentive to put in the necessary effort and most importantly they are quick to blame others for their lack of success instead of taking FULL RESPONSIBILITY!
Being a successful and accomplished investor, one who has used real estate to substitute their income is like being a world class athlete and just like being a world class athlete it takes more effort than merely just joining a gym. Being a successful property investor takes more effort than attending a seminar or course and expecting to know everything.
The truth is that no one can tell you where and how to invest. It is all up to YOU. Attending seminars, courses and workshops as well as reading books certainly does help but what other people can offer you is just words. These words are only effective if they stimulate thoughts leading to ideas, which in turn lead to specific action towards achieving goals. This process can only happen in the mind of a successful person. Having a success-oriented attitude is the number one key to being a great property investor.
Some categories for discussion are:
1. Don't worry about interest rates or the economy.
How often have you heard people whining about government policy, the building industry, rising interest rates etc. How often have you found yourself discussing and debating whether the economy is poised for growth or slipping toward a recession, whether interest rates are moving up or down, or whether there is inflation or deflation? Have you ever done anything about it?
STOP... and give yourself a break. Don't continue to waste your time and energy analysing the economy OR assuming where or what the economy will be, thus buying property to fit neatly into that grand assumption.
This in my opinion is foolish thinking.
Firstly, no-one has economic predictive
powers and secondly, if you buy your investment to suit a particular economic environment, you could be destined for failure.
Time is more wisely spent, locating and owning investment properties wisely and profitably bought with the ability to profit in any economic environment rather than buying property using a guru's work.
2. Buy a business NOT a 'Love Nest'
Before you start arguing that a property is not a business, STOP. An investment property is a business and must be treated as such. Once you have got your mind around treating your investment property like a business and that you have decided to invest in this business, once this decision is made it cannot be changed.
Further more you have to hold this investment for ten years. Ultimately the wealth generated from this business ownership will support you in your retirement. Now, what will you think about, prior to investing in this business?
No doubt your mind will be racing with stacks of questions, initially creating massive confusion. However if I were given the same situation I would methodically begin with making a list of all the things that I would need to discover about the business - such as:
1. Business Disciplines
- Do I understand the business?
- Has the business got a consistent operating history?
- Does the business have terrific long-term prospects?
2. Management Disciplines
- Is the management professional or do I need to manage this business personally?
- Is management honest with me?
- Does management resist the 'lemming-like' behaviour?
3. Financial Disciplines
- Calculating Nett Annual Return
- Look for properties with high profit margins
- Focus on your return on capital
4. Market Disciplines
- Demand for the business product
- Value of the business
- Risk and changing risk
- Comparative sales
