Can’t sing? Then you probably wouldn’t audition for The Voice.
Nobody wants to set themselves up for failure, and yet property investors do it every day.
Time-poor, unskilled investors with limited finances, regularly take on renovations. Novice investors sabotage their wealth by taking on developments without any experience. Superfunds are spent on non-compliant property transactions, and the list goes on!
Investors tend to make property investing much harder than it needs to be. Over the years I’ve made this mistake myself by taking on a range of investment strategies that each required a specialised set of skills, many requiring far more time and money than I first thought, leaving me disappointed or out of pocket.
Do You Really Need More Work and Stress?
Today I’d describe myself as a ‘lazy investor’. I spend long hours researching the Australian property market, but I do that because I love it. However, I’ve designed my property portfolio, so it requires less than one hour per month of my time.
I’m not looking for another job; I’d rather spend all my spare time with my family. My expectation is for the property to go to work for me, not the other way around. I want strong performance from day one, and plenty of security around the fact it will keep performing, year after year without any nasty surprises.
If you share my passion for building wealth through residential properties, I’d also encourage you to get very clear upfront on what you plan to do with these properties.
A: Live in it – If you are planning to buy a house to live in, it’s a family home, not an investment property. Selecting a family home is a very different process, and most of the rules applied to identify a great investment property simply can’t be applied to a family home.
B: Renovate it – A renovation may seem fun and slightly romantic, but unfortunately, most renovations spiral into tears and disappointment. I’ve completed countless renovations and grew to understand that nasty, costly surprises must be expected. Please don’t underestimate the stress they can place on relationships and your pocket.
C: Redevelop it – Taking on a development for the first time is the most common way successful property investors set themselves back years, financially. Each of us needs to be realistic about our risk profiles, time restraints and skill levels.
D: Rent it – I’ve grown to realise I’m a lazy investor. I much prefer a property to go to work for me from day one, rather than creating another job for myself.
Once you have clarity around the property category, you are going to make your specialty, and what you plan to do with these properties. You can now focus on finding the best recipe for proven success.