Why do you invest in property? Knowing the answer to this question will be pivotal to your success.
Property investment is a hot topic and with millions of people currently owning, purchasing or just considering investing, I believe it is essential for individuals to step back and review ‘Why?’. My experience with clients over many years has been that while the front of mind driver has been wealth creation, there really has not been a great deal of thought, understanding and reflective planning undertaken.
When you consider that the purchase involves hundreds of thousands of your hard-earned dollars, it is really quite amazing! It is so easy to get caught up in the wave of noisy psychic energy created in the market by the media and marketing and just fall into the current and get dragged along on this somewhat unknown journey.
We are so comfortable with debt today we often lose sight of the risks and responsibilities it brings with it.
However, consider how much more effective and productive the outcome would be if you took the time to put some conscious and consistent focus into understanding in more detail the desired outcome, the time frame, the relevant factors, the potential changes and also built in strategic reviews to ensure your plan was on track?
It does not matter how old you are when you begin, taking the time to look at your life and then allowing yourself to look into the future to the life you wish to be living in 5, 10, 15, 20, 30, 40-plus years and setting some goals gives you a destination to aim for. It also allows you to be realistic in what you can achieve in the time frame you have to work with. It will be a different plan if you are doing this in your mid-20s to doing it in your mid-50s.
You may have heard how important it is that you don’t get emotional when investing in property. I believe this to be very true when it comes to the property selection part, however it is essential when it comes to defining your ‘Why?’.
Property investing takes time, often a very long time, and staying connected to the long-term outcome requires commitment, focus and diligence. The best way to be able to stay connected and reconnect if you lose it, is through your emotional connection to your ‘Why’ you want the desired outcome.
It is important to consider and factor in anticipated life events. This may include, getting married/divorced, having children, changing jobs, moving, retiring, travelling etc and the lifestyle activities, passions, hobbies and events that are important to you along the way.
Of course it is impossible to know what will happen in the future and to plan for all possibilities. If we did, the stress of that would keep us rigid and inflexible.
One of the greatest strengths to have is an ability to be flexible, review and re-evaluate as we progress. All I am suggesting here is that you explore the possibilities and likelihoods and in this way you are better able to formulate a successful plan that is relevant to you and your circumstances, rather than going with the cookie-cutter approach used by the great majority.
Understanding your risk profile will assist you in how you might mitigate the risks, plan for the unexpected events that happen in everyone’s life from personal to micro and macro-economic events beyond your control.
Understanding what drives individuals to succeed or fail, and how this forms their current experiences is a whole different conversation, however it is well understood that an underlying fear of poverty will keep you in poverty and a connection to your abundance is the doorway out.
It’s also never too late if you are on your investment path and have started without a plan. Get one now, and ensure your portfolio is set up for delivery of your desired outcomes.
A plan helps you take control of your outcomes and then, by working with skilled and independent professionals (essential for optimisation of the plan), you will have a far greater chance of success.