The Number One Reason Why People Don’t Invest in Property

Do you suffer from the number one reason why people don’t invest in property?

I keep having a conversation with people lately about why they’re afraid of investing in property, so I thought it was worth looking at the main thing holding them back.

“Come to the Edge” by Guillaume Apollinaire
“Come to the edge.” he said.
“We can’t. We’re afraid.” they said.
“Come to the edge.” he said.
“We can’t. We will fall!” they said.
“Come to the edge.” he said.
And they came.
And he pushed them.
And they flew.

This quote has always been one of my favourites because it hits on three key points:

1. Firstly, with anything new there’s fear – accept that.

2. You need to recognise what the fear is and what it’s preventing you from doing before you can do anything about addressing it.

3. Finally without a push you remain stagnate and may never get the chance to fly.

Be it learning a new sport or property investing, sometimes the push you need is from inspirational words in a book, sometimes it’s the confidence you get when you learn the tools and master the techniques, or sometimes it may be a mentor, someone who coaches you.

Over the past five years I’ve taught thousands of property investors and in general there’s one main reason why people hesitate when it comes to investing. This one thing often manifests in ways I have found to be common.

Do any of these sound familiar?

1. My partner isn’t supportive and won’t discuss property investing.

2. We/I tried it once and it didn’t work out.

3. I keep trying to pick the market but every time I go to act I seem to have missed the boat.

4. I can’t afford it.

Each of these come down to a single thing – fear. The fear of losing money, essentially the fear of getting it wrong.
This is absolutely a legitimate concern because let’s face it, property will be the most expensive thing you will ever buy and if you get it wrong there goes all your hard earned savings and it could take years to recover.

Many of us are acutely aware that we can’t depend on our superannuation or government pension and hence we need to get involved and actively contribute to our financial security.

In my mind you need to do a few things to address this fear.

1. Start with the end in mind. Work through with your partner or by yourself where you ultimately want to be. In fact after you complete this simple conversation you might find out a few interesting things. Firstly what your partner’s concerns actually are and also that property investing may not be the way to achieve your goals. At least you know and you can assess other options.

2. Determine your strategy.

So how are you going to pull this off? Which property investing strategy suits your goals and timeframes? Maybe it’s negative gearing, positive cash flow, or both, off the plan, renovation and hold, renovation and flip, buy and hold, land banking etc. Then work out how much you need to make a start and get saving.

3. Be prepared. Successful property investing is hard work especially initially, so be prepared and understand it will require lots of time and work.

4. Consider your exit strategies – not just the long term one but also your emergency exit strategy and plan for that emergency situation. As the saying goes “an ounce of prevention is worth a pound of cure”. Create buffers for yourself so if things do go wrong you don’t have to sell immediately, you can wait until the market is where you want it to be when you sell.

5. Minimise your risk. For 15 years I was an explosives engineer. Everything was assessed by evaluating what the worst thing that could happen was and what measures could be put in place to minimise the risk of that happening. I apply that same criteria to every investing decision I make, because after all if you minimise your worst fear to an acceptable level then what’s preventing you from taking action?

In summary, get aligned with your significant other and determine why you’re putting in all the hard work, formalise how you’ll achieve your goals and where the funds will come from and finally work through all the ‘what-if’ scenarios.

Remember you have the opportunity to fly, you just need to overcome your fear and take the leap.

Jane Slack-Smith is the director of Investors Choice Mortgages. She’s a mortgage broker and runs property investing courses throughout Australia. Visit:www.stepbysteppropertysuccess.com.au for details.

Are you playing the game or watching from the sidelines?

Property investing can be likened to sport – it takes practice to perfect your skills and achieve winning results.

Recently I attended a rugby match. I was only there as my husband has the misconceived idea that one day the Kiwis will beat the Aussies – alas he was proven wrong again. I don’t understand the game but it doesn’t stop me cheering from the sidelines and I do appreciate the skill of those playing.

This is my take on rugby:

• There are 30 players, a few water boys, a couple of medics and the refs. In the stands are 30,000 cheering fans.
• Those 30 players are assigned a goal. Sometimes they make it, sometimes they get close, sometimes they don’t. Some get knocked out and only one is man of the match, however they all play as if they could be.
• Every player knows the rules of the game, and they know which is their goal and every move they make is to get them closer to the goal.
• Every player takes days, weeks and sometimes years to prepare themselves, physically and mentally for the 80-minute game.
• They have mentors, coaches, therapists and medics who are there to assist. These professionals help prepare their attitude and ability so every player can achieve their potential.

Then there are the 30,000 ‘fans’ yelling at the elite professionals, or for want of a better word giving them ‘advice’. These fans are more often then not former elite athletes, many have never played the game and in honesty, looking at the amount of beer and pies consumed, I doubt they ever would.

Property investing is very similar: there are those who play and repeatedly practice the craft and those who commentate from the sidelines. Through my business and workshops I speak to hundreds of property investors.

Without any doubt in my mind I know the successful ones are those with a clear goal, a mentor/coach, the right attitude and a quest to keep trying and perfecting their strategy.

I have a large property portfolio based around a low-risk buy and hold strategy. I spent years learning from practicing and using mentors.

Ten years on I’ve found that once you have the right game plan then the rest is perfecting and tinkering.

Property investing does require an investment in education, experience and practice. However, if you get it right you set yourself on a path to achieve your goals.

I hope that you find my regular blogs part of the education and coaching to get you on the field, playing and perfecting your game.

P.S. My favourite part of the game is watching the kids lining up to run on the field at the end of the match, dreaming that they too could one day be a player.

Jane Slack-Smith is the director of Investors Choice Mortgages, a mortgage broker, property educator and player of the game. Visit:www.investorschoice.com.au