When an asset performs as strongly as property does, particularly in major capital cities like Melbourne and Sydney over the last few years, many people jump on the bandwagon. Some do it for strategic reasons, whilst others do it because every else is.
This may or may not resinate with you, but let’s face it, we’re all guilty of following the herd at one point in our lives. The issue with following the herd is that it could lead you up the wrong path. My advice has always been to… beat to the march of your own drum..!!
I recently assisted a client who was referred to me and his objective was to invest in property. When I asked a simple question, why property? …he looked at me funny as if I was from another planet. I mean, who wouldn’t invest in property given its strong performance in recent times, right? And there lies the issue. Some people do something because it’s the going trend with no real purpose, no real direction, and this can (and usually does) end up in tears.
When I started investing in property at the tender age of 18, my purpose was very different to what it is today. Back then, it was to buy my first home so that my first wife and I had a roof over our head and avoid renting. A goal I achieved at a young age and one I am proud of until this day.
Today it’s a very different story. A roof over my head has never been an issue for me. Nowadays, the reason I continue to buy and accumulate real estate is to; a) provide my family a lifestyle in retirement which we have become accustomed to, b) to help those that are living on our streets at no fault of their own, and c) to leave a legacy that my family can continue to grow into future generations. This is my purpose, my why, and what drives me to keep going and to keep growing.
You see, if you don’t find your purpose, or your why, then investing and taking risks (sometimes big risks) becomes hard work and meaningless. Let me share something with you… money is an empty victory..!! Ask any self made multi-millionaire and they’ll tell you the same thing. The journey is where the thrill is.
The same applies with everything going on in your life. Whether it’s your job, career, family, friendships, and so on. Unless you have a strong purpose and understand why you do what you do, then it’s a hard grind.
Property investing is not for the faint hearted. Managing a property, or a portfolio of properties, can be simple, but not easy, as it definitely comes with it’s own challenges.
There are many facets to property investing that requires careful management; such as collecting rent, keeping tenants happy, managing your loans, managing cash flow, paying the bills, paying your taxes, maintaining the property, and the list goes on. If you have several properties, then multiply all this effort plus more.
If you’re a more sophisticated property entrepreneur and develop property, then it’s a very different ball game again as you have a team of consultants to manage, on top of ensuring that your project is delivered on time, on budget, and that you achieve your desired profit.
In my daily work, I see a common theme as to why people invest in real estate. The most common objective for most people is to build wealth and to create a passive income from a portfolio of properties. This is a great objective to have, and so long as it’s “your purpose” (i.e. your why), then the challenges will seem much easier to tackle and conquer.
I also come across people that invest in real estate to achieve a major goal; for example, to one day buy that multi-million dollar dream home. Again, this is a great objective to have and so long as it’s “your purpose” (i.e. your why), then the challenges will seem much easier to tackle and conquer.
As you can see, the common denominator in my message is ‘purpose’ and knowing your ‘why’. Once you define exactly your purpose and your why, then investing in real estate will become more meaningful for you and it will help you ride the ups and downs that comes with property investing.
I hope my blog gives you food for thought and helps you remain on track, or get back on track if you’ve deviated, with your property goals. If you haven’t discovered your purpose or your why, then my advice is to start by putting pen to paper as this is a crucial step towards successful property investing and towards reaching your desired goals.