Expert Advice with Ian Hosking Richards.
I’ll let you into a little investing secret. Once you have found a successful property formula, it will probably serve you well for many, many years to come. The fundamentals of my property investment strategy have not really changed in 20 years. What worked for me in 1999 works equally well for me in 2019. Because it is a sound and proven strategy, it is not really subject to the outside influences that many less experienced investors might assume. It is not influenced by the tabloid press. It does not rely on interest rates being at a certain level. And it certainly has nothing to do with who may or may not win the next election.
Once you have the fundamentals in place, these outside factors become less and less relevant. There are always short-term, fleeting distractions that can lead to procrastination, and ultimately lost opportunities. For example, let’s take negative gearing. For as long as I have been investing, this has been a hot topic. Politicians regularly pontificate at length on the shortcomings and inequality of the current system, and demand change. However, interestingly, over the past 20 years, there have been no sweeping changes, and certainly nothing that has prevented me from continuing to invest successfully. And by the way, there are millions of property investors all over the globe who have been highly successful without the unique negative gearing benefits that we in Australia continue to enjoy.
Once you have found a successful property formula, it will probably serve you well for many, many years to come
So, if you have already started investing and have not achieved the results that you were expecting, it is time to review your portfolio and revisit exactly how you made the purchase decision. What was important to you when you made the initial decision, and what considerations were less important? What have you learned by going through the process of purchasing an investment property? Is there anything that you would do differently today?
Going through the process is a fantastic way to gain experience. I have often said that reading about investing can only take you so far, no matter how intelligent or numerate you happen to be. But beginner investors are often on a steep learning curve, and experience can come at a great cost, financial and otherwise.
So what is important? For my strategy, an in-depth understanding of the supply–demand dynamics in my area of interest is vital. How much land is available and how quickly can it be brought to market? How large is the population and how diverse the economy? How will these factors play out and influence the property market in the coming years? Will this area add to the geographic diversity of my portfolio and therefore derisk it further?
I have written in depth on this topic many times previously, so if you would like to explore it further, please contact me at firstname.lastname@example.org for more information.
Ian Hosking Richards is a successful property investor with a portfolio of over 30 properties. He is the CEO and founder of Rocket Property Group, a leading independent real estate agency that helps hundreds of people each year enter the property market or grow their existing portfolios.
For further information or assistance, please visit www.rocketpropertygroup.com.au or call 1300 850 038.
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.