Building a successful property portfolio is a process that requires knowledge, experience, smart decision-making and, above all, patience. In today's blog, we present five timeless tips for novice or experienced property investors to start or accelerate their investment journey.
1. STRATEGY COMES BEFORE PROPERTY.
The most common mistake that property investors make is to start looking for properties before defining what they want to achieve from their investments. They spend long hours comparing properties on websites and inspecting them. They often lack clarity on their borrowing capacity, funds required to purchase and settle the property and understanding how the cash flow would work once the property is settled.
Tip: The most important step before commencing property investments is to have a plan - knowing where you are (your priorities, earnings, spending, liabilities, etc.) and what you want to achieve. Once you have defined your goals, you can create a strategy around the number and types of properties you will need to achieve your goals. With the right strategy in place, finding suitable investment property becomes a much easier process.
2. TRUST FACTS, NOT FEELINGS.
Properties are one of the most significant purchases in one's life. The natural tendency is to make decisions emotionally than rationally for investment properties.
Often investors fall into the trap of buying in their known locations, looking for a big piece of land, spending on unnecessary inclusions and upgrades, falling for rental guarantees, free upgrades, or other developer incentives. Many investors make the mistake of looking at an investment from the perspective of living for themselves, leading to unnecessary overspend.
Tip: Investing in property is like investing in a business, and whilst it is ok to think emotionally, facts must prevail over emotions. Getting the right facts and education is essential in ensuring that emotions do not negatively impact investment decisions.
3. DON'T JUST LOOK AROUND. COMPOUND.
Potential investors can spend years in the "search" mode, completely unaware of the actual cost of being out of the market. The more you delay starting your property journey, the more you lose on the compounding effect of property appreciation. In Australia, historically, property values have doubled every 7-10 years. If you have the patience to hold a property for a longer term, the compounding growth will do its magic.
Tip: Albert Einstein famously quoted, "Compound interest is the eighth wonder of the world. One who understands it earns it. One who doesn't pays for it." Remember, the sooner you buy, the longer you hold, the luckier you get.
4. DODGE DIY, BUILD YOUR TEAM OF EXPERTS.
There is a lot more to property investing than just finding the right property. Trying to figure it all out on your own can be a big ask. DIY may work in many other areas of life, but it may not be the best way forward when it comes to investing.
Warren Buffett, who has been consistently on the list of the wealthiest people in the world, says, "It's good to learn from your mistakes. It's better to learn from other people's mistakes." We firmly believe that mentorship allows mentees to learn from their mentor's experience, mistakes, and successes, providing a much clearer roadmap for a winning portfolio.
Tip: Seek a coach or mentor and build a team of experts around you, who can help build your knowledge, prepare you to make the right investment decisions, and consistently guide you on your investment journey.
5. YOUR BIGGEST ASSET IS YOUR MINDSET.
Wealth is largely a result of mindset. It is what separates the best from the rest. No strategy, product or step-by-step procedure would work unless one has the right mindset.
It is ok to feel overwhelmed when investing. Fear of the unknown is the most common blocker for most investors. Thoughts of choosing the wrong property or waiting months without finding a tenant can be daunting.
Tip: Developing the right mindset is key to building a successful property portfolio and confidently navigating through the challenges along the way. With investment comes risks, and managing them with the right team beside you is essential.
Team SONI can help.
We understand that building a portfolio of properties can take time, and often it is hard to do it alone.
At SONI Wealth, our team of experts lead by example when it comes to property investments. We have designed and executed an effective step-by-step system with our clients to guide and empower them to make investment decisions with confidence.
By implementing a tailored investment strategy, you will have a detailed roadmap to start and succeed in your property journey.
✅ To learn more about how we can help you win as a property investor, book a free no-obligation Wealth Consultation today: soniwealth.com.au/free