B Invested

5 WAYS TO REKINDLE YOUR LOVE OF PROPERTY INVESMENT

Sometimes property investing doesn’t turn out the way you expected it to. Poorly performing properties, problem tenants and unexpected costs can bring major headaches – making many wonder whether it is worth all the stress.

Just like a relationship, property investing has its good moments and its stormy periods.

In order to rekindle your love for property investing, it is important to stay focused on your end-goal and examine the reasons behind your loss of love.

Daniel Young, co-founder of Binvested, shares his tips below.

 

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MAKE SURE YOU HAVE REALISTIC EXPECTATIONS

Some investors lose their drive after buying a few properties. Fear of debt begins to creep back in, properties don’t appear to be doing anything and the investor asks, why haven’t I reached financial freedom yet?

Daniel says, it is important to have realistic expectations. Most investors would need to buy more than two or three properties in order to achieve their goals.

In order to reach financial freedom through property, it is important to keep pushing on until you have achieved your end-goal. There is no point getting one quarter, or even half of the way through, if you are going to pull out before the end of the race.

And, although you haven’t reached your goal yet, remind yourself that you are on the right path to get there. Keep moving forward and stay motivated.

 

KEEP YOUR MOTIVATION FRESH

The best way to stay in love with property investing, no matter what it throws at you, is to be clear on your end-goal, says Daniel. Be specific about how much passive income you want to achieve. Visualise the type of lifestyle you will have when this happens.

If you can keep this fresh in your mind while you are working hard to achieve your goal, you will stay motivated and keep pushing on until you get there.

 

COMMON PROBLEMS THAT CAN DAMPEN THE FIRE

The following are some common reasons why investors fall out of love with property, as well as Daniel’s tip for working through them.

 

1) POORLY PERFORMING PROPERTY BRINGS NO GROWTH OR TURNS NEGATIVE

Sometimes, we make poor choices. Even the most diligent investor can occasionally fail to buy a good growth property. The market is affected by global economic trends that can slow down growth unexpectedly.

On the other hand, buying properties that turn negative can often be prevented by researching the market before buying, steering clear of overpriced deals.

How to work through it:
Unfortunately, the market is out of our control. The best way to deal with a poorly performing property is to speak with a property investment expert. They should be able to assess your situation and help you figure out the best way forward.

 

2) PROBLEM TENANTS CEASE PAYING RENT OR CAUSE DAMAGE

Lengthy arrears, paying for expensive repairs and undergoing legal action to recover lost rent – it’s not fun. It’s no wonder problem tenants bring so many investors to lose hope in their wealth creation journey.

Luckily, most tenants aren’t that bad. If you do have a run in with a bad one, it’s likely that it won’t happen again. Not only because of the odds, but, also because you will probably learn from your (or your property manager’s) mistake.

How to work through it:
The first thing you should do with a problem tenant is to get rid of them, says Daniel. When it comes to choosing a new one, he says, it pays to be a bit more selective. Asking your property manager what their gut feeling is about the tenant will help you decide.

A good property manager should conduct thorough checks on a candidate to see if they have ever been in arrears. They should rate the tenant’s affordability as well as assess how they present themselves. Some agents will even do a social media check to see if the tenant is a party animal or in the middle of huge domestic blow-up.

3) THE CASH FLOW TURNS NEGATIVE

Some investors feel the financial burden of a neutral cash flow property that has turned negative. Unexpected repairs, underinsurance and special strata levies can all do nasty things cash flow.

How to work through it:
There is a light at the end of the tunnel, says Daniel. Costs can come and go, and rents do go up in time.

It is important to factor a buffer into every purchase. Keeping three months of rent aside in case of emergencies can help relieve the financial strain of holding onto a property with extra expenses.

 

4) MANAGING PROPERTY PAPERWORK TAKES TOO MUCH TIME

It is common for property investors to feel snowed under by all of their paperwork. Unless you have a real thing for data entry and filing systems, chances are, you will put off doing your paperwork until tax time.

This inevitably means spending all of your spare time retrieving documents (some of which may be lost) and filling out spreadsheets to give to your accountant.

How to work through it:
Daniel says, if you find bookkeeping is taking too much time, then consider outsourcing it. Enlist the services of a bookkeeper, or better yet, use My Property Tracker.

 

5) HAVING A NEGATIVE EXPERIENCE DURING THE PURCHASE

Sometimes complications can arise during the purchase. Pest and building reports can uncover costly problems, the property may not settle on time, there could be delays or problems with your loan – there could be a whole range of issues that make buying an investment property a pain in the …

Often if one or more of these things occur, it is only natural that the buyer feels stressed. Just because something goes wrong, however, it doesn’t mean you should give up on property altogether. Just think of all the stress parenthood causes, yet most parents continue to do the best they possibly can to raise their children.

How to work through it:
Daniel says it is important to distinguish between mistakes that are unavoidable and those that could have been prevented.

If the mistake has been caused by a member of your team, reassess to ensure you have the best professionals on board to help you on your journey. You don’t want incompetence to get in the way of your carefully laid plans.

On the other hand, if incompetence was not to blame, then having thick skin and a cool attitude should help you through unexpected and unavoidable complications.

 

C’EST LA VIE

It has often been said that anything worth doing in life is not going to be easy. All things have their ups and downs – including property. That’s life. Celebrate the good when it happens, and stay calm throughout the bad. Think about your end-goal every time something goes wrong. If you want it bad enough, you will keep fighting until you get it.

 

 

How Healthy Is Your Portfolio? Find Out. 

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