The property market press tends to focus upon success stories, buoyant markets and portraying a feelgood factor which can infect everybody. Those who have ever invested in property will be well aware things are never as simple as they look and many challenges lay ahead. The simple fact is that you will learn much more from your property investment mistakes that you will from your property investment successes.
Head not heart
When you look at so many possible property investments it is difficult not to “fall in love” with that dream property which you can improve, turnaround and bank a nice profit. Indeed many people have acquired property from an investment point of view only to decide it would make a dream home for them in the future. There is nothing wrong with having some emotion when looking at property investments but you need to let your head rule and not your heart.
The best way to do this is to think of property assets as boxes which you are basically buying, improving and then selling on. Never get too emotionally attached to property investments, remember why you bought them, why you started investing and keep your personal property assets separate from your commercial assets.
You will never sell at the top
As Lord Rothschild once said “the reason why I’m so rich is because I always sold too early”. This may seem a bizarre statement but you ask investors who have tried to sell at the top of the property market only to hang on for too long and see the price of their property plummet. Whether we like it or not property investment goes in cycles, markets are in vogue and then suddenly investors look elsewhere and prices fall. Very often these price falls from artificially high levels to more sensible levels but this does not stop many people, who joined the party late, from finding themselves in a loss-making situation.
You will only ever be able to sell a property if there are competitive buyers and the market is still “on the way up”. Once the market has peaked, influential investors are selling then the investment lemmings will follow suit and competition for property will fall. The market will then be flooded with sellers. How do you crystallise the best price in a race to the bottom?
Learn from your mistakes
Whether you are investing in stocks and shares, antiques, old cars or property you will make mistakes and you will lose money. The key is to limit your downside while expanding your experience and just because you made a mistake once do not let this put you off trying a similar but more refined investment strategy in the future. Those who are afraid to make mistakes are the ones who will at best make a living but they will never reach for the stars.
Do you think the likes of Donald Trump, Richard Branson and other celebrity entrepreneurs never made mistakes? Well, Donald Trump has been bankrupt numerous times, Richard Branson was on his uppers before he got his first break and many more will tell you similar stories. Learn from your mistakes, dust yourself down and come back fitter and stronger with more experience.