Have you ever heard of property investors referred to as ‘One Percenters’?
This nation has an obsession with home ownership, but it’s still rare to own more than several.
So, when your goal is to build a big portfolio, you will be in the extreme minority. It will take smarts, dedication, a calm head and hard work, though your reward will be achieving your financial goals.
Friends and family
When you swim against the tide, you will come across plenty of naysayers. They can’t imagine doing what you’re doing, they wouldn’t feel comfortable with it. So they project their doubts and self-limitations onto you.
Your friends and family can be your greatest supporters, but can also hold you back. They may be happy for you when you purchase your first one or two properties, but they will often change their tune when you go further. You may hear comments like “You’re taking on too much debt”, “What happens when there’s a market crash?”.
Often, their concern comes from a good place because they care about you, but they are not qualified to give you sound investment advice.
So don’t let them be the reason for your own doubt.
Many concerns family and friends share are based on things they remember from the past. “You’re better off with a high interest savings account or a term deposit”, for example.
That might have been true in the past when interest rates were in double digits, but nowadays you’d be hard up finding a term deposit that returned 1%, so why would you put your money there?
Remember, most people only buy or sell property a few times in their life and apart from that have no up to date interest or knowledge about real estate markets, so if you are currently active in researching and doing due diligence, you know more than all of them!
Single bad experiences
Some people latch onto one-off examples of negativity. Say they know someone whose tenants trashed their investment property, or stopped paying rent and refused to leave and it ended up costing the owners a stack of money.
These things do happen and it’s good to be prepared by having the right insurances in place. But someone else’s bad experience shouldn’t put a stop to your dreams.
Boom, crash and the media
These days, the media needs web traffic and subscriptions to stay viable, so you will find provocative headlines and stories about how the property market has “plummeted” or “plunged” when there’s been a 2% value fall over a quarter. Then, you get a lot of commentators that sell their books based on bold claims like values will fall by 30% or more. They say it year after year, but it hasn’t happened yet.
Markets do rise and fall, but if you pay attention, they tend to follow a repetitive pattern: A growth period, a plateau, a correction or slight fall, a recovery, and another growth period.
If you are on the ball, you can turn this to your advantage by purchasing during negative periods or plateaus and making capital gains during growth periods.
When it comes to actually purchasing a property, yes it will be daunting. You will be signing on for a big debt, you will run the risk of tenant vacancy periods and there’s a chance interest rates will rise in the future. It’s natural to feel nervous and have self-doubt, but if you don’t put faith in your strategy and take the plunge, you probably never will.
Pull your head in and keep it on straight
On the flipside, it’s important you don’t get arrogant or cut corners. Because if you let your guard down, you can get burned. It could be as simple as skipping a building and pest inspection because the property seems just as good as the others you have purchased, only to find out it’s full of termites. Or it could be buying in a town that has had major recent growth, just before the single major employer relocates elsewhere, or a mine closes down.
You should stay disciplined.
Think of it as if you were a professional athlete.
Usain Bolt didn’t stop training once he became the fastest runner in the world. To be the best, and stay the best, you must keep training, keep learning and keep improving.