The Secret to Becoming a Property Millionaire is… Buying the Right Property
It sounds so simple doesn’t it, but that doesn’t make it any less true. In my opinion the ultimate, bottom line, foundational truth in property is that your success will ultimately depend on what you buy.
Now, before you say,” Peter, that’s obvious” and then click away to read something far more interesting (there are some great guest experts posting on this site) let me ask you this.
If it’s so obvious then why do so few property investors put this into practice?
Here’s what I’ve seen. In my time I have spoken to many, many investors at all levels of experience and regularly I see that they buy property with little thought as to what they are buying and why.
Does this surprise you? It probably shouldn’t. Although it’s less true now than it was a decade ago we are a nation of home owners. Many investors have bought and own their home. It’s true that a little bit of knowledge is a dangerous thing and the danger is that investors put on their homeowners head when doing investment deals. The problem with this is it can make us feel a little complacent when it comes to buying investment property, and it can also send us down the road of buying on emotion and not on the figures.
This is easy enough to imagine with a beginner investor. Perhaps anxious to buy a property and get one under their belt, perhaps seduced by how nice the kitchen is, or by the fact that the property is just down the road and easy to keep an eye on, or that it’s the type of house they would like to live in, or by the fact that they offered £5,000 less than the asking price and so they think they have bought a ‘bargain’.
But none of that takes into account the fundamentals like will it produce a good cash-flow, or is it suitable for future capital growth.
Believe it or not, many buyers are influenced by thoughts like this and even experienced investors can succumb from time to time if they lose their focus.
Of course, the serious investor who knows that the starting point is to know exactly what they are trying to achieve from property, and then to buy property which fits with those aspirations.
That’s why I’m so strident about goal setting, strategising and planning.
If you can get these foundational principles right, then the rest should follow including buying the right property.
Just as the old saying goes “if you don’t know where you are going, any road will do” in the same way “if you don’t know why you are buying, any property will do”. Of course, this is an ironic statement because not any property will do.
Unless you buy the right property which fits with your strategy and plan, success will be a matter of chance and not design and, to be brutally honest, unlikely.
Here’s to successful property investing
Peter Jones B.Sc FRICS
By the way, I’ve rewritten and updated my best selling eBook, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to ThePropertyTeacher.co.uk