We have heard a lot of excuses over the years at Binvested. Clients have backed out of deals left, right and centre due to fear, emotions and listening to the wrong advice.
Unfortunately for these people, they have missed out on countless great opportunities because these excuses have been used as reasons not to invest in property.
In order to prevent others from making the same mistakes, we decided to compile some of the more common excuses in order to see what was really driving them.
Emotion – the silent killer.
We talk about emotion a lot at Binvested. Not that we share lots of mushy moments together or anything, but we see how easily investors get done by them.
So many people make the wrong decisions when it comes to buying property because they listen to their emotions. Or, they fail to act on a great deal because they are scared they will make the wrong choice.
“Emotion is where people get killed, nine times out of ten,” says Nathan Birch, co-founder of Binvested.
For Nathan, successful investing starts by understanding all of the parameters involved. Once you know it’s a good deal, he says, then you can take action.
My uncle Larry told me not to buy that property.
Wrong advice is another big killer when it comes to property investing. So many people decide not to take action on a purchase because their friends and family have warned them not too.
This happens despite the people receiving advice from those in the know about why it is a good deal.
How education can help.
The more you know about something, the more confidently you can make decisions.
If you know how the economy works and what is driving the property market at any given time, then you will be able to question every bit of advice you are given.
You’ll also be able to question the excuses you are making as to why you shouldn’t take action.
Here are some of the most common excuses we hear at Binvested HQ.
I don’t have enough money saved for a deposit.
While some people may not have any savings, others have got a sizeable amount that they could invest with right now.
We often get people who have $60,000 or so in savings, but they want to save $200,000 before buying a property.
The thing is, it would take them several years to do this. By this stage, they may find that prices have gone up higher than what they can afford.
It is possible to buy affordable properties in good growth areas with a $60,000 deposit, rather than wait till you have more.
Buying now will mean you already have an asset that is subject to inflation under your belt. This will help you with your next purchase – more than extra savings would have done.
I just want to wait a bit longer. There has been talk of a crash on the news recently.
It can be difficult to pull the trigger on your investing when you keep hearing that the property market will crash, but will it?
There have been countless doom and gloom stories in the media over the past couple of years – but none of them came true. Only now has the market slowed down, and it is certainly not crashing.
Nathan says, if he had believed every prediction that was made over the last 15 years, he would have never become as successful as he has.
It’s better to do your own research and talk to a range of experts before deciding whether to buy or wait.
Because, all those who have decided to wait over the past few years have lost hundreds of thousands in opportunity costs. And, many would find it more difficult now to get a loan than they would have back then.
My friend/family/colleague told me not to.
We often get clients who are reluctant to go ahead with certain deals because someone else has told them not to.
Nathan himself experienced this at the start of his investing career. He had countless friends and relatives tell him not to buy in this area, or not to buy anymore properties, and that he would lose his money, etc.
None of them were right – which is why Nathan continued doing his thing. You see, he had researched the market and he had developed a strategy that minimised risk at every step of the way.
While your friends and relatives love you and are just looking out for you, they may not be experts on the matter.
Before taking on board advice, ask yourself this: has this person achieved what I would like to? Have they achieved financial freedom through property investing? Do I want to live the same sort of life as them? This sort of reasoning will help you decide whether they are speaking from experience, or from fear.
That property is too ugly/old/cheap.
Okay, so maybe you wouldn’t live there yourself – but would others? A lot of people don’t want to buy properties that they think are too old or unattractive, even though there is a strong demand from renters in the area.
The fact of the matter is that if its affordable, in a good growth location with a strong demographic of renters – looks or age doesn’t really matter that much.
As plenty of us know, if 30 groups of renters come to see a property that is good value for money, those renters will be fighting it out come application time – whether it has a wallpapered kitchen or not.
That suburb/type of property won’t go up in value.
Many people think that apartments don’t go up in value, or that certain suburbs never experience growth.
A lot of people have said no to the western Sydney suburb of Mt Druitt, but this is where Nathan kick-started his career as an investor.
If you let go of your preconceptions and look at the growth stats and numbers involved you will know whether an area or property is worth buying into.
Cheaper areas do tend to experience growth, because there is always demand for affordable housing.
The same can be said of apartments and semi-detached dwellings.
And, as more and more people get priced out of buying their own home, it is the cheaper suburbs and properties that will gain the most interest in the market.
Be a businessperson.
Anyone can tell you reasons not to invest in property.
If you want to make it as an investor, it is essential to be a businessperson. Look at the numbers and the market before gauging what is possible. See excuses for what they really are. Whether they are made from fear, emotion or lack of education, don’t let them get in the way of your financial success.
And don’t be afraid to work hard along the way!
Have you signed up to the latest webinar in and RAW and UNCUT series? RAW and UNCUT is a FREE live webinar with Nathan.“