The key to any investment success – property, shares or any other asset – is to maintain a degree of discipline. Yes, use your gut instinct from time to time but an ability to look at the cold hard facts in isolation, and remove any emotion, bodes well for the future. So, what are the habits of successful property investors?
Positive mental attitude
As in any area of life, you will have good days and not so good days when it comes to property investment. Sometimes things will flow exceptionally smoothly while other transactions may hit the rocks at the last minute. The ability to rein in the excesses on the upside and the excesses on the downside, maintaining a steady positive mental attitude, are undervalued. Stay focused, stay calm and maintain a positive mental attitude going forward.
Surround yourself with smart people
When the famous Steve Jobs said “I hire people for them to tell me what to do, not for me to tell them what to do” many people missed the point. Surrounding yourself with smart people who can fill in the skills and experience gaps you may have can be priceless. Surrounding yourself with “yes people”, who look for your leadership all the time, is tiring and nowhere near as productive as when people actually “think for themselves”.
So, surround yourself with smart people who have particular skills and experience and you might even learn a thing or two. Those who maintain an ego with an unwillingness to learn will never feel the full benefit of others.
Listen to what people say and what they don’t say
It may seem a little bizarre to suggest that there is a skill in listening to what people say while also acknowledging what they don’t say. You will no doubt of come across a potential property investment which looks good on paper, indeed sometimes too good to be true, and you can’t find the downside. In many ways it is the ability to pick up on issues which people don’t discuss as well as those which they do mention which will set you in good stead.
Human nature suggests that we will all be positive when looking to sell a property, often ignoring the downside. But if you ask a straightforward question this should prompt a straightforward answer. So, sometimes it is up to the investor to ask the correct questions to coax out the truth.
Buy on cold hard statistics
In a perfect world we would all like to buy property which we can sell tomorrow for a huge capital gain. In the real world this does not happen therefore those investors who “buy on yield” are the ones who are very often the more successful. In theory a rental yield of 5% should be more than enough to cover your mortgage payments and create a self-financing asset. This ignores the potential for long-term capital gain and just focuses on the ability to cover mortgage payments.
While it may take some time, after 20 or 25 years your mortgage could be repaid in full and you have a fully paid-up debt free asset. Replicate this twice, three times, 10 times or 20 times, and you can start to see the picture. This is why many people use property assets as their pension fund of the future.
While you should never say never if a property is steadily increasing in value, and produces a strong rental income stream, there is an argument for maintaining the investment in the long term. History is littered with individuals who took short-term gambles to lock in relatively small profits only to see their assets crash and burn with one bad hit. The idea of trading property assets in the short to medium term for a profit is feasible. However, very often the more beneficial strategy will be to buy quality assets with strong income streams and hold for the long term.
The underlying key to a strong and successful career in property investment is to maintain a positive mental attitude in the good times and the not so good times. Maintaining a steady emotional state when it comes to property investment can be a game changer. Yes, enjoy the good times but don’t get carried away. When the not so good times arrive, focus on the longer term and keep looking forward. Looking backwards at property deals which got away from you, perhaps you sold too early or too late, is a waste of time. You can’t change the past but you can change the future…………successful property investors already know this.