No one wakes up one day and is instantly an expert in anything.
It usually takes years of practice to perfect any endeavour or skill.
This is one of the reasons why I struggle with the concept that property investing is seemingly “easy”.
Sure, buying a property might seem relatively simple on a transactional basis, but understanding which properties will grow at wealth producing rates of return is not.
Remember…most properties currently on the market are not what I’d call “investment grade.”
I’m not ashamed to admit it took me years to become an expert property investment, with plenty of learning fees paid along the way.
So, to help you better understand the typical journey from novice to expert, here are the three stages in the life of a property investor.
1. The beginner
Most investors start out either thinking they know not much at all, or thinking they know too much!
The thing is it’s better to be the first incarnation because you have the opportunity to soak up new information like a property sponge.
First-timers should devote plenty of time on education in not just property but also they need to understand the world of finance, tax and the economy.
The smartest novices also start developing a team of experts whose knowledge and experience that can tap into, which will ultimately mean superior asset and location selection as well less chance of failure.
2. The builder
The builder phase is when an investor might have one or two properties in their portfolio.
They are learning more along every step of the way, but hopefully not from too many major mistakes.
Moving through this stage that will ultimately make the difference between creating wealth in the future or not.
Unfortunately most investors never get past their first property.
Usually because they bought in the wrong location or perhaps even the wrong type of dwelling, such as an off-the-plan apartment, which has resulted in next to no capital growth.
They will be unable to keep growing their portfolio because they won’t have enough equity to draw upon and their rents which they need to service their mortgages, won’t grow either.
Instead, what’s likely to happen is they wind up being one of the 1.5 million investors who never get past their first property.
3. The expert
Unfortunately few investors reach this stage.
To me an expert is someone who not only has a vast knowledge of property but someone who has used their knowledge to build their own significant property portfolio.
The thing is, there are plenty of so-called experts out there who suggest a specific strategy as being the Holy Grail of property investment, but they don’t follow that strategy themselves.
Why don’t they put their money where their mouth is?
Quite simply, it’s because it’s not an investment strategy at all.
It’s just a vehicle to make money from unsuspecting and uneducated beginners.
However, a real expert follows the exact same strategy as they recommend to their clients.
At the end of the day, there might be three stages in the life of a property investor, but most people next get past the first two.
Those who do reach expert status are the ones who have been investing for years across a number of different market cycles.
The pretenders are the ones whose knowledge and experience are limited – if you only know to scratch below the surface to see for yourself.
Kate Forbes is a National Director at Metropole Property Strategists. She has 15 years of investment experience in financial markets in two continents, is qualified in multiple disciplines and is also a chartered financial analyst (CFA).
She is a regular commentator for
She is a regular commentator forMichael Yardney’s Property Update
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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.