With an ever-expanding mass of information readily available on how to invest in property, I expect you are wondering how to separate the good from the bad, the right from the wrong and the better from the worse. After all, conflicting and confusing messages are an everyday dilemma. We empathise with your confusion, and rather than add to the problem, here is a list of 10 tips which offer sound advice to save you time, money and stress in the long run.
How to invest in property
As an alternative to the ‘this-is-what-to-do’ guides, this article seeks to express a series of principles. These principles form a sensible process for moving forwards. Imagine the principles as a coach. A good coach will not tell you what to do, but instead will guide you towards your own conclusions.
- Set your goals
Before bounding into the nearest estate agent, it is important to step back and consider two basic questions. The first question is: why are you doing this? The second question is: what are your goals in property investing? These two questions are important because they will give you a target to work towards and an understanding of your reasons for doing so.
- Invest in knowledge
There is no denying that property investing is a business involving considerable sums of money. Getting things wrong could result in crippling debt and a host of unspeakable situations that may accompany it. Gaining sound knowledge from people who have success and experience is an invaluable investment that will reap great rewards in the future.
- Confidence in numbers
Having the confidence to accurately calculate the numbers is undeniably a vital element of property investing. Knowing your expected costs, fees, risks and income are considerations that will swing the pendulum between success and failure. If numbers strike fear into your heart, be reassured that we are here to hold your hand and give you the confidence you need.
- Do your property area research
What sets a professional landlord apart from an accidental landlord? Accidental landlords, broadly speaking, rent out their property not through choice but as a consequence of inheritance, divorce or separation. A professional landlord will take a calculated approach to finding the right area first. Having gained knowledge, they understand how and where to find the properties they need.
- You will profit only from good advice
Once close friends, relatives and total strangers learn of your property investing intentions, there will be no shortage of advice on how and where to buy property. While I am sure their intentions will have your best interests at heart, the advice may not be so favourable to your profits. Therefore, surrounding yourself with a community of experienced investors is key. Above all and regardless of the source of any advice, always do your own research, calculations and know your area like no-one else.
- Get out there
To find the best opportunities in your chosen investment area will require a great deal of local knowledge. Understanding the demographics, developments and amenities in your area will be invaluable information with which to make informed decisions. It will involve talking to people, making connections and knocking on doors to know the area like a local and build a team around you.
- You will need a team
Going it alone is the error of fools and you will need a team of specialists to get you to your goals. You will need financial, legal, building contractor and letting agent advice and most importantly an experienced coach. A good coach is a treasure trove of knowledge. They will prove priceless when helping you to find the best specialists to build your team and start finding the deals.
- Start small
It’s easy to be seduced by the mirage of big deals and their associated profits. However, it is sound advice to construct a solid foundation from which to grow first. Beginning with the smaller cashflow deals, while they may not be gilded and sparkly, will give you the experience that will be worth its weight in gold in the future. Along with the knowledge and confidence gained, you will also have a strong income stream to support you if other ventures do not go to plan.
- Follow your head not your heart
Knowledge, methodology and numbers will be your three wise friends along your path to building a property portfolio. Many people buy properties by following a series of emotional responses. Property investing is simply a matter of calculating the numbers and negotiating the deals off the back of the results. While your heart may be delighted with wooden worktops and cast-iron radiators, your bank balance may be less enchanted in 12 month’s time.
- Adopt a mindset geared for success
Behind all of this is a mindset that is motivated to succeed. A mindset that is pragmatic and systematic in its approach yet creative and open to growth. Gearing your mindset to achieve your goals will be the biggest step you can take forwards and is something that can be improved with the support of the right team and expert coaching. The great news is that it is within your power to change.
Invest in what is important
Knowing how to invest in property successfully is far more than simply visiting estate agents and practicing your signature. It is far more than listening to unqualified advice. It is certainly far more than buying a property at full market value after being assured the price will sky-rocket in the next few years. Before investing in any bricks-and-mortar, it is vital that you invest in yourself and the complex conglomerate of neurons within your head.