One of my earlier blogs were my top 10 tips on property investment.
This blog is going to be on the many mistakes either I have made, or I have watched other people make as I have worked my way up the property investment ladder in the last decade. I won’t apologise if some of these are the complete opposite to the excellent (if I do say so) tips that I gave you, think about it, there might be a bloody good reason……….
I am thinking of these on the fly, so I won’t commit to a ‘top 10′ or ’20 things you must avoid’ – I am going to exhaust the list with the sublime and the utterly ridiculous, the “well that is obvious” to the “oh shit, I didn’t think of that”.
So, strap yourself in, frank chat on mistakes to avoid time……
STOP MAKING INVESTMENT DECISIONS WITH YOUR HEART
Investment is not a place for emotion. Emotions cloud your judgement and weaken your negotiation arm, and decision making ability.
“I would love to live here” – you aren’t buying or renting the property from yourselves.
Overspending on refurbishment because you are picturing yourself in a property you are never going to live in.
Paying too much money to get an offer accepted, because you want to feel good about it, or you are competing with “another offer”(they usually don’t exist) that the agent has kindly told you about.
Properties are money making boxes, treat them as such, base your decisions on numbers and not feelings, finish fit for purpose and to a good standard (you will be better than nearly all your competition) without blowing your budget and return on investment.
STOP BUYING BASED ON SPECULATION
Market growth in the time that you own a property is NOT guaranteed.
As an investor I always try and make my money when I buy.
We all know that property is a great asset, that increases in value, over time.
I saw many people recently buying property in London near to market value, and benefitting from 10% growth in the year, when they would then trade the property on. Thats great in an up market, but eventually that stops, and then turns. If you have bought with this speculative strategy at the wrong time then you are going to catch a cold. Remember, we buy our margins in at the start, based on the current market value at the time of the purchase, not on what it might be worth at some point in the future. Those things are often beyond our control.
Be an investor, not a speculator.
STOP BLAMING OTHER PEOPLE OR OTHER THINGS
Your success is your responsibility.
Take responsibility for everything that you can. Blaming is a negative emotion and it also passes the control of your success to someone else, it gives another person the power. If a builder takes money from you, then you have not set up payment terms or communicated expectations clearly, or maybe you didn’t research their work and ask for references, or maybe you weren’t on site inspecting enough – either way, its on you.
Also stop blaming conditions – when the market is quiet – work harder to find deals, find other ways. Stop blaming the market, you can make money in every market if you know how, and you have educated yourself enough.
Taking responsibility is easy to do, but also incredibly hard to do – and that is why most don’t.
Own your sh*t as I so often like to say.
STOP COMPARING YOURSELF TO OTHERS
Look to others, but for inspiration and direction only.
People so often stop themselves from moving forwards, because others are viewed as being “more successful.”
The reality is, you don’t know how well they are truly doing, and nor should you really care. As someone 10 years into property investment, and now developing millions of pounds of property a year, I see this all the time.
People always say “I want to do what you are doing”, and I always reply the same – after 10 years full time in property, and working from the basics up, increasing your education and risk profile every day – then you can.
Stop comparing your chapter 1, 2 or 3 to someone else chapter 20. Do the work, serve your time, make mistakes, make money, have success and repeat, for a long time.
STOP EXPECTING THE GOALPOSTS TO STAY STILL
In our industry, and in fact every industry, someone is always moving the goal posts. You have got to adapt accordingly. As above, don’t look to blame someone when things do change, it is out of your control, but how you react isn’t.
In 10 years of property I have seen hundreds of changes. The market, the economy, supply, demand, house prices, interest rates, legislation, politics, competition, laws, tax changes and many more. There is a change that impacts the property market almost once a quarter, and one that causes “the death of buy to let” at least once a year.
One investment strategy in one investment area will not work forever – you have got to be adaptable, and be prepared to change your course, even if by a small degree.
Some things that you can do to help with this happening are:
– Analyse any change that you can feel. If it is getting harder to find property – why? If property prices are increasing, why? If it is taking longer to rent your properties, why? Look for reasoning at all times.
– Stay educated and do not get complacent. Remember, things change.
– Operate in more than one strategy in more than one area – eggs and baskets….
– Be prepared to ask for help. If I see someone having success with a strategy that I haven’t used, then I will ask for help, and I will pay for it. What I will pay is relative to what I feel the opportunity offers, with no real upper limit.
– Embrace change – if you are willing to what it takes any change creates an opportunity, because most other people will sit and blame the change for their new found struggles. Observe the masses and do the opposite. Change and challenge create the greatest opportunities in every market. That is why more millionaires are made in a recession than any other time in history.
MOVE THEM GOAL POSTS BABY – I AM READY !!!!!!!!!
I am sure that there are many more do not do’s. In a world of people telling you what you should do, it is often rarer to be told what you should not. However, what you shouldn’t do is often even more important, because if you spend too much time doing the wrong things, you are never likely to do the right thing.
The biggest blocker I have seen in 10 years of working as, and with, property investors of all levels, is that they spend too much time doing the wrong things. They often spend too much time on low or no returning activities. Whenever I go to a new task or strategy, I will spend as much time looking for what I should not do as I do what I should. Highlight the high returning activities and the things to avoid – so that you can spot them and move quickly.
Remember, to know and not to do, is as good as to not know.
Happy Investing 😀