By now you will have heard a lot about how the market has well and truly warmed up and in some cases heated up. You may have read many stories of how many people have succcessfully profited from property leading up to this point in the market, and you have thought to yourself, “wouldn’t it be great if I could do that, too?”
So, you started looking into ways you could either enter into the property market, or perhaps increase the profits on your already existing property portfolio, but you just haven’t been able to get traction or momentum, and you are worried about missing out.
You procrastinate about taking action, perhaps there are things you are fearful of that are stopping you from taking the steps towards getting results. If this sounds familiar, you are not alone. Fear and procrastination are big hurdles that block many people from achieving their investment goals.
There are ways to easily overcome these hurdles, and safely help you reach your goals. These methods will assist anyone in getting started in property investment or creating some real momentum within their existing property portfolios:
1. List your fears
It can be hard to get over your fears unless you are actually clear on exactly what your fears are. Make a list of exactly what it is that you think is scaring you or stopping you from moving forward. Be as honest with yourself as possible and be as specific as possible, for example:
- I am scared
- I don’t understand the property market enough
- I am scared of purchasing an investment property and not being able to rent it out
You are only able to overcome your fears if you are clear on exactly what they are.
2. Understand there is a solution to fear
It will help to understand that there is a solution to fear. Fear is usually caused by ‘not knowing’, thus the more you ‘know’ the less scared you become.
So, after you have worked out what it is you are really scared of, research that topic, and write down what information you will need to ‘know’ to help you overcome that fear. If you understand your fears more, you may find they become so much easier to overcome.
So, for example, if you are scared of purchasing an investment property because you are worried about not being able to rent out the property and being stuck with a mortgage, then you need to increase your knowledge about the demand for rental properties in your area of choice.
Call local real estate agents and find out their sentiments of the rental market in the area. Go to www.yourinvestmentpropertymag.com.au for details about the vacancy rates for the area to help you assess the demand for property there.
If the vacancy rates are at 3%, this will represent a balanced market; however, if the rates are below 3%, this will mean that there is a shortage of supply of property in that market compared with demand, and thus it is likely you will not have much trouble renting out your property. Understanding this beforehand will assist you in overcoming your fear.
3. Understand research does not equal risk
Too many people allow their fears to immobilise them, so much so that they even stop themselves from doing their research.
You should understand that carrying out research and speaking to experts will help you avoid getting yourself into property transactions where you could lose. There are so many avenues of research that cost very little, if not nothing at all, so make the most of this. You can get this from your real estate agents and a lot of free information from council websites.
4. List all the reasons why it is important for you to achieve your goals
When overcoming your fears, you need a reason to do so, otherwise it is all too easy to always be scared and avoid what it is that you are scared of, rather than break through.
Make a list of all the reasons why it is important to you to reach your goals. Not just the goals that you want to reach, but the specific things that will happen if you reach them, or even the consequences if you don’t.
So, for example, it may be important for you to reach your goals so you can retire comfortably knowing you have a property portfolio working for you and you are not reliant on a pension to survive.
Or, perhaps it is important that you are able to create profits from property so you are able to have a debt-free home to live in within a certain period of time.
On the other hand, it may be important to reach your goals because if you don’t, it will mean you will not be able to take the time to travel the world as you hoped to, or you may not be able to afford to take time off work to spend with your kids.
Whatever it is for you, make sure you write this down and you are clear on your reasons for achieving your goals. You must make sure you have more reasons to achieve your goals than you do fears. So keep writing until your reasons outweigh the fears you have listed.
5. Have a plan of action
Most people will procrastinate when the task at hand seems all too much. Write out a simple plan made up of baby steps that are simple and easy to complete.
It may be as simple as:
- List my fears
- List solutions to my fears
- List my goals and reasons for achieving my goals
- Call five real estate agents in the local area and discuss the current rental market
Make sure the plan of action is specific, and that each task only has one step in it so that it makes it easier to follow and stick to. You may even want to note how long it will take you to do each task so that it may be simpler than what it seems, eg, listing goals will only take 10 minutes.
6. Set aside regular 'property profit' time
Schedule specific time you will use to invest in your property profits future. Make sure that the time period is not too daunting for you to complete.
Choose to do this on lazy nights when your favourite TV shows are not playing or perhaps the nights that you know you will be home. You can start off with as little as one hour a week to get things done.
If, for example, you choose to do your property research at 7pm on a Monday, don’t worry too much if businesses will not be open to take your calls when you are doing your research. Find solutions for this; you can email them and merely await their reply the next day. Do not give yourself an excuse not to commit that time to your property research.
7. Have a system to select your deals
Once you have tackled what you think is holding you back and what it is that you want to achieve, it’s now time for you to take a step towards entering the property market and this is where some people can get stuck again.
To avoid the traps of procrastination and fear, have a system to objectify the property selection process, and eliminate any emotion getting involved. I use what I like to call a funnel system in finding deals, and this helps me to avoid spending hours (if not days) of searching online for a nice “property” and instead I focus on finding the deals which are likely to be most profitable.
Here is the system that I use:
- Focus on only three areas to start with
- Choose the best three streets in those areas (according to proximity to convenience)
- Select the one to two blocks or so surrounding those streets, and specify these as your highlighted area
- Within your highlighted area, choose the kind of properties for sale that are most appropriate and in demand. You can get this information from council websites
Though the council, find the main demographics of the area and if it’s made up mainly of families, it’s appropriate to assume that larger dwellings such as houses are in most demand. If the population is predominantly singles and couples without children, then apartments may be the way to go.
Use this strategy to simplify the property research and selection process.
8. Get professional assistance and research
The most expensive advice is free advice from someone who has not got the results you want. Often, there could be people close to us with good intentions influencing us by their opinions or experiences, yet they may not have the results that you want.
Be careful not to take on the fears and opinions of these people. You can choose to work with professionals who have results and experience, and they can help you get the same results for yourself while eliminating the mistakes they have already gone through and replicating the successes they already have.
Be selective of who you work with, and make sure it is someone you feel you can communicate well with, and more importantly have personally experienced creating similar results to those that you want for yourself.
This goes for all the professionals that you will need to work with in your property investment future, ie, solicitors, lenders or finance brokers, accountants etc. You can also do courses on property investment and/or work with property research professionals, to help take you step by step through your property investment journey, which will also help save you time and reduce procrastination.
9. Enlist a friend who can hold you accountable
It can be a good idea to team up with a friend. You may either work on the same project together or perhaps you will have your own individual projects. But you can hold each other accountable for completing set tasks each week.
If you do work on the same project together, it makes it easier for you to counter check each other’s work, and you can get more done with more manpower. It can be less risky working with someone else and also a whole lot more fun. Set rewards for each other for when you are able to complete each of your tasks, and celebrate together after each milestone is achieved.
10. Don’t think too much. Just decide and start
Do not get so caught up in getting everything perfect before you start. Just get started. Remember that when it comes to property, you are never locked in or at risk of losing money unless you sign an unconditional contract of sale to purchase, thus, there should be nothing else stopping you from getting everything else done. So just start.
When you are satisfied that you have done everything to set yourself up for a profitable property deal, and you know exactly how you are going to afford the property and where you will get the money from to do it, this will be the only time that you will lock yourself into any contract. No matter how much you have prepared yourself for investing (particularly if it is your first), to some degree, it may still feel like you are taking a leap of faith; so make the decision to get over it, then… just start!
Yza Canja is a successful property investor who started investing when she was 22 and has grown a multi-million dollar profitable property portfolio.She personally coaches others to achieve high profits from their their investments using creative strategies.
This feature is from the September issue of Your Investment Property Magazine. Download the issue to read more.
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