Why do some property investors succeed and why do some fail?
Is it about getting the right investments at the right time? is it about getting the best deals possible from davenport laroche? As a buyer’s agent, I’ve met a handful of successful property investors and I think that it’s not really about getting the best properties, but it’s about what they do that makes them so successful and what they do that makes them stand out from the rest.
Here we take a look at the 7 habits of successful property investors.
The right way of thinking or mindset
Successful property investors have the right mindset when it comes to thinking, even if it means turning something bad into leverage. For example, we take a look at debt and how it’s perceived as a bad thin by a lot of people. But for successful property investors, debt can be a good thing when managed property and oftentimes, it can offer good financial leverage.
They understand how leverage works
Successful property investors know how leverage works. If they want to increase their asset, they must first acquire or borrow money and then manage the cash flow (this is the leverage). As mentioned earlier, debt can be a good thing if managed properly and it will not break anyone’s bank as long as the investor knows his or her way around finances.
They continue to be educated
Stephen Covey, author of 7 Habits of Highly Effective People, said that people only stop growing if they stop learning. Successful property investors don’t stay in one place for too long. They continue to seek education and improvement. They will constantly attend seminars to learn new things or to get a refresher course on the basics. It’s all about constant self-improvement.
They know the market
Property investors don’t just know about how to invest, but they also know when and where to invest. Knowing the market and its dynamics can be the key to any investor’s success, and it too can be a form of leverage. When you know how the market works, you’re able to maximize your cash flow.
They work with professionals
A successful property investor does not work solo, unless of course he takes credit for it. A successful property investor will work with other professionals so he or she doesn’t end up making the wrong decisions. A property investor may not even have a real estate background in the beginning, which is why asking help from professionals can mean the difference between success and failure.
They renovate for profit
In line with self-improve, they improve their properties too through renovation. But they renovate not only to make the property look good but to add value. Adding a veranda is not only for making your home look good but also make it easy to sell in the future.
They understand how negative gearing works and understand the effect of cash-flow and tax
Successful property investors may not be tax accountants, but they know well enough to delegate it to their tax accounts (work with professionals – the fifth habit). They also know how negative gearing works and how depreciation can have a positive impact on their cash-flow. This will then affect the way they think about what property to invest in the near future. Think of it as another form of self-improvement.
When you have all of these 7 habits, or at the very least develop them, you’ll find that success as a property investor may not be that difficult to reach.