When I was starting out in property investment several years ago, I didn’t know where to start. It was all pretty overwhelming. So how did I make my start, then? What helped me along in those early, almost 'pre-research' stages? Read on to see some things I learned that I think will help you too.
One of the most sobering truths many aspiring young investors will need to identify early on; is the realisations that, whilst you are not alone in your ambitions (and nor are you without access to all the tools you need to begin your property career); there is sadly indeed no set path or structure on how to 'get there’.
Unlike other industries or expertise areas there isn't exactly a 'Bachelor of Property Investment' degree you can study, nor a fixed guaranteed career path ahead of you which you can take from others and apply to your own life as a start point. To many, this is a scary and daunting idea. You feel a little 'blind' when starting out.
So what of property investment as a path? Where do you start? Sure, you have your end goal in clear view... or do you? That seems to be the best place to start, but how do you take your ‘In ten years I want a portfolio of 10+ properties that will set me up for life’ ambition and get those first steps on this path towards realising that goal?
The truth is; there is no one path that is trodden twice; each one is unique. So it got me to thinking... every path is unique for every person; sure; it can be done at virtually any age, almost income level, and by anyone from any profession or walk of life - Young, old, high-income, low-income, educated, not educated, family-focused, spinster, full-timers, part-timers, and so on,
But, are there any generic tips and tricks one can pass on to someone of any background to help point them to their start-point? I think so.
I came up with the following 7 "Do's" for property investing from my own experiences. The good ones, the bad, the mistakes I made and the subsequent learning's I've made from those mistakes. And remember, when I began my property journey, I was well under thirty years old, earning a modest salary, and leading an equally modest lifestyle.
So even though I’m a relative newcomer to the game; in many ways, I’m just like you...
Do have a goal and timeline-to-goal before doing anything:
Know precisely where you want to get to and in precisely how much time. And I mean precise. Name names and list numbers. Think about it, any professional bodybuilder worth his... erm... weight. doesn’t have a goal of ‘I wanna get HUGE’. Instead he says ‘I want to be benching 120kgs in 6 months, 150kgs in 12 months.
I want bicep measurements of 25cm in 6 months, and then 35cm in 12 months’ etc. Say to yourself ‘I want a portfolio of X number of properties in X years’ or ‘I want to procure X number of properties every two years for the next X years’ or even more bold, perhaps ‘At age X I want a portfolio worth X dollars so I know I can retire comfortably’.
Do learn the 'lingo':
Jargon is plentiful in your travels into the investment property world. Read EVERYTHING you can get your hands on and make time to read. Then read it again. You’ll no doubt come across jargon, abbreviations, acronyms, words that don’t make sense. Get a notepad out and every time you are reading add to that list any terms you don’t understand, then go out and understand them. In property, walking the walk IS talking the talk, so know your ‘chat’ before you make it; it'll save your gravy later on.
Do use people:
And I mean in a good way! People that come into your life, personally, family, professionally, and socially; all have a property story to tell; even if it is simply ‘I’ve rented my whole life and probably always will’. Listen to others' stories; and listen carefully. Correlate it with your own research. Compare it. Even hear out the naysayers on occasion; they gave me the fuel I needed to burn my own fire to prove them wrong!
Use the people around you in any way possible to help your property ambitions. Perhaps your neighbour who you have a yarn with every so often was a real estate agent for ten years in another life? What a great way to get, for example, unbiased truthful anecdotes from such a person! Perhaps your best friend just bought their own investment property? What a way to learn the up-to-this-minute state of affairs on the property market in your area.
Do trust data, but recognise the data may no tell the entire story:
Data doesn’t lie and if you get it from the right sources, it cannot be doctored easily. Trust in numbers, trends and so on. Learn what the different sources of data are, and where to source them out. As you uncover data; so too with it will come the relationships with the people who purvey this data. The obvious 'human' data contacts like estate agents, mortgage brokers, your solicitor, accountant and so forth are a great start-point in securing quality data.
Then you have the 'non-human' providers of data. I call them 'non-human' because these data sources are often online log-in based databases (some are free; others may charge for it). So, things like the recent sales trends tools on the real estate websites; news updates and auto RSS-feeds from the likes of REIA and others; RP Data logins; and 3rd party independent and unbiased demographic data sources like Nielsen Data and Roy Morgan. So, do trust in data; just make sure you learn how to both devour and then dissect it.
Do get your 'Microsoft Office' on!
Even before you get to the stage of doing due diligence (research and investigation of markets, properties, etc) there are so many more steps before this. Microsoft Office will be your Bible in this process. It almost goes without saying but I mention it because I'm continually surprised at the number of people who begin to canvass prospective investments - with not a single spreadsheet of calculations to show for it! Learn how to use these tools efficiently firsthand; and save yourself a lot of trouble later on when you have data and numbers coming out your ears.
Do question everything:
There is never anything wrong with asking not one, but many questions; to any one, and at any step of the journey. Never should you feel like you are an encumbrance to others; because odds are; the people you'll begin to deal with are the same people you are paying money to - agents, lawyers, vendors, tenants, other stakeholders - question everything and do not be satisfying
Do stay calm and get yourself a mentor/confidant:
I use the word 'confidant' because people tend to only use their mentor as a sort of 'Oracle' of positivity and advice. In reality, this person should be someone you trust enough to share not only your successes, but your failures (and yes, you will make mistakes the first time around!). But remember, mistakes you made are learning experiences in themselves; and if you have someone you can share these with (as well as your victories) you'll be a calmer, happier, and more successful property investor.
Stay tuned - next time I'll share with you my 'Don'ts' So expect some more insightful words to come your way. Until then, stay informed, keep observing, and stay cool!
