Brace yourself because in this article we won’t hold back! Here are some blunt truths about property investing. Yes, you’ll learn all the things that can go wrong, all the frustrations of property investing, even some smooth marketing that can lead to a disaster. It may sound daunting, but property investing isn’t all that bad. If you would just understand what could go wrong and avoid these, you can enjoy some good property investing wins.


Property investors


The first shocking truth is – only very few property investors succeed in building a large property portfolio. Many stop at one or two property investments. The reality is – and despite what real estate agents say – property investment is not as easy as it may seem! But it is simple in that if you follow certain guidelines, you’ll head in the right direction.


Another thing you should know is that property markets go through cycles. A residential real estate in a good location will increase in value over the long term but sometimes property cycles stay stagnant for several years. There can be short periods when values will drop a bit. However, if you’re wary of this, you can just stick to investment-grade properties and A-grade homes, which are less volatile.


By now you already know that you’ll need a solid amount of money to invest in property, so if you can’t manage to save for a deposit, then it might be a good time to rethink property investment. Have the discipline to handle your finances before you borrow money to invest in a property – especially now the bank are getting seriously strict on home-loan lending. Get your house in order first before you start investing, or the debt that comes with buying an investment property might overwhelm you. You may think you’re smart enough to handle property investing but the smartest move is to get the right mentor early in your property investment journey.


Property investment


Did you know that the average investor will take 30 years to be financially free because of property investing? You can get rich through property investment in the long run but it is not a quick buck. Many investors waste their first 10 years learning and making mistakes (which isn’t always a bad thing). It might take you two or three good property cycles before making the profit you expect.


Another brutal truth is that no one really knows what the property market will look like in a few years. Markets are only driven by fundamentals in the long term. And yet, Warren Buffet says “Be fearful when others are greedy and be greedy when others are fearful.” You should be pessimistic during booms and optimistic during downturns!


Property consultants and accountants


When you think about it, real estate investment is all about finance with properties being thrown around. Strategic property investors buy time with financial buffers that can get them through the ups and downs of property cycles. Property investing is a game of finance and timing, and can get pretty boring!


What you can do is arm yourself with the right property information. The most expensive piece of advice is the wrong one, so be careful who you listen to. Instead of listening to instantly-rich stories, listen to those who made mistakes. Avoid promises of quick returns by salespeople.


Remember that there’s really no investment secret. Everyone invests in propertybusinesses, and shares, but what makes people successful is their mindset and habits. There’s no secret in that.


Cash flow or capital growth?


Do you invest in real estate for cash flow or capital growth? How many properties do you think you’ll need to have a steady cash flow for retirement? Develop a strategic property plan for your investment journey. We are a team of property gurus – so, sing out if you have any questions, we’ll be more than happy to help!


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