As a property advisor I help a lot of investors move forward and take the first step in buying a property. I see other investors who find it all too hard. Read on and see what may be holding you back. The type of decision maker you are can determine your future success in property as a means to create wealth.
The Emotional Fence Sitters
Investors can sit on the fence for months or years and never get started. They start looking for property but get bogged down in the detail trying to decide which property is best. They focus on the look, the design, the features, the colours, and whether they “like” the property and could live in it. Emotions and investment property do not mix well . It may be impossible to ever find a property that meets your personal criteria.
If an investor is into research, they can do so much research on different areas or suburbs that they cannot make up their mind which area is best. They gather details from so many websites, reports, magazines and statistics , a lot of it conflicting , so that they cannot narrow down their search area and never make a purchase. They just keep researching and end up with even more information without the experience to be able to interpret it.
There are investors who worry about everything. They worry whether the market is at the right time in the cycle, whether they will find a tenant , whether interest rates will change, or the world will collapse and the sky may fall in. They focus on all the negative news headlines, rather than quality information and advice. If they do find an area where the time is right to buy, then they worry over which property to buy and stay stuck. I have seen many an investor miss great opportunities because they worried so much that they could not make up their mind.
The Stop-Start Investor
These are on again off again investors. They are hot to buy something and then go cold. They like to ask everybody’s opinion to reassure themselves that they have made a good decision. Unfortunately many of the people they ask can only give uninformed and often negative opinions which shake their confidence. They ask the wrong people and then are too scared to act.
The Impulse Buyers
Whilst impulse buyers take action quickly and are decisive, they can run the risk of being a panic buyer. I have spoken to many an investor who has been told to buy a property before the end of the financial year, for tax benefits. Whilst I am all for claiming tax benefits on property to help cash flow, that should not be the main reason for buying a property. Panic buying may lead to buying the first property that comes along and regret it later when it does not perform.
How do Smart Investors Make Decisions
Instead of sitting on the fence, using emotional criteria, over researching, getting stuck in the detail, worrying about everything in the news, asking everyone’s opinion, getting scared, or panic buying the first thing they see, smart investors have learnt a few simple guidelines to help them come to a decision more easily.
- They don’t try and reinvent the wheel and find someone experienced and successful to get help and advice
- They know their borrowing capacity first and know their price range before they start looking
- They know their strategy and which narrows down what properties and areas they need to look at
- They know their criteria for selecting a property . No need to look everywhere or worry about emotions.
- They know the numbers for the property and do a holding cost – cashflow estimation on the property first. If it does not meet their desired outcome they do not buy no matter how much they like the view!
To find out how you rate as a decision maker, go to the Rocket website and complete a Readiness to Invest checklist, and I will email you my easy Property Holding Cost Estimator . It could make the difference for your next property purchase.
Lindy Lear is a successful property investor who had a late start into investing, yet has grown her portfolio to eight properties in three years. She is a qualified property advisor and general manager of Rocket Property Group, and she won the Reader’s Choice Award in 2009 for Property Investment Advisor of the Year. Lindy is passionate about helping others realise their goals through investing in property, and can be contacted at 02 8012 9669 or visit www.rocketpropertygroup.com.au
To read more Expert Advice articles by Lindy, click here
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.