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Property investors are constantly being bombarded by rags-to-riches success stories.

No doubt you’ve heard the one about the 24-year-old on an average salary who owns four investment properties, or the single mother who bought her first property out of desperation and went on to build a $5 million portfolio within a few years.

The seemingly overnight nature of these grandiose tales is enough to make you ask yourself what you’re doing wrong. How is it these star pupils can defy the odds and achieve what others cannot? 

Most investors agree expanding their portfolio is a good thing, yet of the 1.9 million property investors in Australia, less than thirty percent have grown their portfolio beyond one investment property.

Most investors agree expanding their portfolio is a good thing, yet of the 1.9 million property investors in Australia, less than thirty percent have grown their portfolio beyond one investment property.

Surely there’s some hidden secret, right?

Maybe they were gifted some huge sum of money, perhaps they have some innate ability to pick the best properties, or could it be they have some other hidden advantage?

Chances are, the circumstances of these success-story investors probably give them no unfair advantage, but there are several factors that create a successful investors' mindset.

The good news is that you too can replicate these strategies for your own situation to realise your investment goals sooner and take your personal wealth from good to great.

The 5 habits of highly effective investors

1. They have a burning desire

Whether you are an aspiring Olympic athlete, an artist or property investor, desire is an intriguing aspect of the ability to achieve greatness. Some people are born with extraordinary natural talents, but the rest of us need to light a fire within ourselves that stops us settling for average returns.

If your need is strong enough you will find a way to change your circumstances. The reverse is also true. If you are comfortable in life with a fair paying job and food on the table, it can be difficult to create a strong desire to get out and take action.

Many people who have successfully built large property portfolios have either had, or been able to create, a burning desire for success. It might have come from a need to urgently generate enough money to retire comfortably, from hating their 9-to-5 job or some innate desire to create a better, brighter future for their family.

The first and most important step in setting a path to create wealth is to determine what will fuel your desire. You must be able to clearly visualise and describe what success looks like for you and not let go of that picture. The stronger your emotional responses to this vision, the greater chance you have of being able to break through and achieve it.

2. They have a mentor and strong support network

Years ago there was a certain shame associated with seeking support. It might have been seen as failing or being unable to achieve success on your own. Today, personal trainers, business coaches and counselors help people achieve their goals every day.

A professional property mentor or simply someone who you know can support and encourage you and keep focus on your goals is invaluable. Make sure they understand what is driving your desire and how you will measure success. Your mentor will also need to be able to get tough with you if you veer off course.

3. They have a clear plan and know what success looks like

To fail to plan is to plan to fail. More than 1.9 million Australians own investment properties. You could argue they are not investors at all - they just happen to own an investment property.

It is remarkable how many Australians own an investment due to circumstances. For example, they may have got married and their partner also owns a property so they rent out one and live in the other or they might have inherited the property.

There is nothing wrong with being an accidental investor. In fact, it can be a great opportunity to turn one property into many more. But if you plan to use property as a vehicle to create wealth then you need to develop a plan to achieve your investment goals. The plan needs to cover:

  • What is your current reality? (i.e. what is your current net wealth, passive cash flow, lifestyle and how much time is devoted to aspects of your life?)
  • What is your desired outcome? (i.e. what is your desired net wealth, passive cash flow, lifestyle and how much time is allocated to achieving your goal?)
  • What actions do you need to take to move from your current reality to your desired reality? These need to be specific, measurable, realistic and set against time frames
  • How are you going to measure and report on your overall success?
  • What support, education and resources do you need to meet your plan
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4. They follow through on their investment strategy

Investors with large portfolios follow their investment strategy vigorously. Some go for capital growth properties and others prefer positive cash flow properties or a blend of both. Whatever your approach, stick to it.

  • Buy on mathematics, not emotion. Do the numbers on each potential investment and be prepared to walk away if the property does not match your criteria. There is a saying in real estate, "The deal of a lifetime comes up every week".
  • Hold properties long term. Do not be pushed into a short-term decision that could damage your portfolio.  Hasten slowly, but be flexible enough to move quickly if the right opportunity comes along.
  • Learn from your mistakes. Consider them not as a cost but as an investment in your future success. Be determined to make up for mistakes with future decisions that will more than compensate for the earlier failure.View finance as a tool, not a burden. Property is a product and financial arrangements and the ability to leverage through equity.
  • Work to your strengths. If you find a property sector that works for you, stick with it and don't listen to the doomsayers if your experience says what you are doing works for you.
  • Exploit your risk profile. If you are an aggressive investor, maximise your borrowings with a clear conscience, but make sure the "sleep at night" factor is balanced with the reality of your cash flow.
  • Look and listen. Not all successful investors were a success when they started but they learned how to improve their chances of winning while reducing their risks.

5. Get off the couch and take action

If there is one action to take, it is to set some time aside each week to focus on your property investing activities. Ensure you block out this time in your diary. If something totally unavoidable comes up, make sure you reschedule. View property investment as a business, not a spare time hobby.

Where will your portfolio take you?

The only person who can create the life you want is you. There is no magic secret. The only thing between you and a property portfolio that can provide you with financial freedom is you.

Find out how Little Real Estate can tailor its services to fit in with your property investment strategy. Contact us today and speak to our experienced team about your property goals.

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