Knowledge and research are two major factors behind the success of most property investors, and as property investment educators and advisors, we spend a lot of time detailing the finer points of property investment through our guides and resources. Usually, when someone makes a poor investment decision it's because they haven’t accessed or read all of the necessary information at the time of their purchase. One poor investment choice can go on to have an effect on your capacity for further portfolio development, so it pays to know as much as you can, but can too much information cause property investment paralysis?
Learning something new depends on how you like to approach things. Do you like to read as much as you can about a topic before you act, preferring education to experience? Or do you prefer to get a basic understanding and then plunge in, figuring that you can always work out any mistakes later? Everyone learns differently, especially when it comes to property investment, but sometimes people learn and learn and learn and then… don’t actually do anything about investing!
With property investment, you can read as much as you want, but until you actually get out there and buy something (making you a property investor, not a property procrastinator) you won’t know exactly what it’s like to own investment properties, and to build your property portfolio. Our aim is to arm people with the right knowledge and information so they can get started in property investment just as soon as they are able. Even though we advocate education highly, we also know there’s a time for action in every property investor’s life!
So what are some of the common causes of property procrastination, given that there’s a huge amount of knowledge and information out there?
Listening to non-investors
Property, it seems, is one of Australia’s favourite conversation starters and pretty much every man and his dog has an opinion on property investment - where to buy or not buy and where's going to boom or fall into a slump. Much of the time these are just opinions regurgitated from something that someone’s read in the paper, and it's not based on any kind of in-depth research. Of course, if you know that your friend/family member has done their research, then by all means, listen (maybe they are a good mentor!). The problem is that sometimes the people doling out advice are your family and friends – and these people, although you trust them, might not be the expert they think they are, and thus not necessarily the right person to trust in this particular instance.
When they exclaim in horror about your idea to purchase in Brisbane, just stop and think about all the research you've done and how sure you are. If you've taken the time, done your due diligence and are pretty sure the property is going to do well, but your friend/family member nixes the idea, you just have to trust yourself and have faith that you're doing the right thing. You, after all the research you’ve done, could in fact be more of an expert than them! The bottom line is: If you've done your research and feel confident, then stick to your guns, and maybe think about bouncing your ideas off a buyers advocate in a free consultation.
Ruminating on the negatives
With property investment, what can possibly go wrong? Well, if you look at it objectively there is plenty that could go wrong - and if you fixate on the negatives, these possibilities can paralyse you with fear and stop you from acting. The reality is that like with any investment, there's always something that can go wrong - bad tenants, vacant periods with dwellings, interest rate hikes, damage or repairs... You could ruminate on the possible negatives all day, but the reality is that the positives will still outweigh them- you just need a plan in place and a buffer of money that is sufficient to protect you for as long as you need to feel comfortable for. That way you don't need to worry about unexpected changes because you’ve educated yourself and are have already planned ahead as much as you can't predict them.
Some people have the belief that they need to have a lot of money to invest in property but the facts are that with the right strategy and planning, property investment in Australia is a very attainable goal, and you don't need to have buckets of cash. A deposit or even the equity in your own home is sufficient. From there it's simply a matter of relying on the research that you've done and following a property investment plan to secure your finance.
To all the procrastinators out there, if there's one thing to take away from this: In order to be a property investor you actually have to invest in property and buy something! In the property investment world there are a lot of chronic procrastinators who spend heaps of time reading the magazines, attending the seminars and engaging mentors, but the reality is that they still haven't bought something. Whether it's for one of the reasons above or because they don't have a great team of people around them, the fact is that they are property procrastinators. Don't let doubts rule your head - get ahead with information and education and start your property investment journey today.
And don’t forget if you've been reading and educating yourself for a while now but still haven't bought anything, it might be time to engage a professional who can map our your property wealth strategy and kick start your portfolio.
Jason Paetow is the Managing Director of AllianceCorp, a buyer's advocacy and property investment company. Jason has over 15 years of experience in the property industry and is an expert at property investment strategy, and in coaching and working with clients to optimise their success through education and support. He is a qualified Financial Planner, Mortgage Broker, REIV Licensed Real Estate Agent and a Licensed Builder. To find out more, please visit www.alliancecorp.com.au.
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.