The path to property investment success
I hope my top ten tips for investing in property inspired many Life@Home readers to consider becoming a property investor. For those who already have one or two investment properties, perhaps you have been motivated to amplify your property goals and achieve greater financial success in the long term.
You can make serious money from property investments, but like anything, the process to success is a journey with ups and downs along the way. To be successful on your journey you will need to make a mental shift that could take many years.
I started investing in property when I was 22 but it wasn’t until I reached my thirties that I began to see how I could transform my life by investing in property.
I have learned a lot of lessons on my property investment journey. I believe the following five lessons are the most important points for anyone looking to succeed in the property market to consider:
- ‘Don’t fear the gear’ is one of my mantras. Most people are afraid of debt and leverage, as they perceive it as dangerous. However, debt can increase your return and shorten the time it takes to get the return. Debt does increase your risk during a downturn, so every investor needs to do know how much debt they are comfortable carrying.
- Go against the grain. 95 per cent of the population retires poor. If your goal is to retire wealthy then you need to do the opposite of what everyone else is doing. Good investors buy when everyone else sells and sell when everyone else is buying. Yes, it can be difficult to maintain your confidence when everyone tells you you’re doing the wrong thing at the wrong time, so you need to develop your mind to block negative comments which can come from friends, relatives and the media.
- Stick to your strategy. Every investor should have their own strategy that reflects their circumstances and adversity to risk. Figure out what works for you and, once you’ve found your strategy, stick with it. You do need to be aware of other opportunities and get other advice, but often these can be distractions. A good strategy doesn't have to complicated - it's often the simple things that work.
- It's time in the market, not timing the market that counts. The real secret to wealth is compounding your investments. You need to change your mindset from trying to be a millionaire overnight to aiming for consistency. This can be very frustrating when you first start out as your wealth won’t increase much. But once you’ve got the critical mass of properties, your wealth will grow.
- Don't retire on property rents. Most people think you've got to pay property off as quickly as possible and then retire on rents. But often it's the capital growth that makes the real money. Change your mindset and be less emotional about it - look at the numbers and make your decisions based on that.