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Behave like a 1% property investor with these tips

You say you’re a property investor. You spend the weekend looking at open houses and you read the real estate section. Domain.com.au or realestate.com.au is permanently open in your menu bar. But did you know less than 1% of property investors successfully build a portfolio?

 

In a previous article, we spoke more about these statistics. The most common type of property investor only owns one home, apartment, or commercial building (72%). Less than 20% own two. First time investors often fail to truly build their best portfolio thanks to a trail of mistakes that prevents them from growing.

 

So how do you behave like a 1% property investor? Well for one, you must understand risk and have a high tolerance for it. Property is a business, a game to be respected. Treating it like a side gig or a hobby, or just not taking it seriously, will come back to bite you when something goes wrong.

The 1% are patient and have clear game plans for what they want to achieve. Property isn’t a ‘get rich quick’ scheme by any means. There’s loans to take out, home-hunting to do, and meetings to attend with professional advisors. The general consensus with entering the market is to make money. Investors in the 1% will have 6 or more properties in their portfolio. They make hundreds of thousands, right up to the millions, every year, and that’s only from rental income.

 

If you aspire to grow your portfolio like the 1%, learn from your mistakes and from those that others have made. Friends and family, though they mean well, aren’t the best place to look for advice. Rather, join an investment group, like a  property club, that has a network of professionals. Communities like this are great for accessing financial advisors, meeting fellow investors, and even making new friends.

 

Don’t just act like the 1% do think like them. This is one of the best ways you can grow your portfolio and your bank balance. Change your mindset to something more clinical and business-like. You’re a property investor, a business person. Not ‘player one’ in the property game.

 

Liked this? Read more like it:

  • 5 types of property investor
  • Property Investment is for Stayers not Players

5 types of property investor

There’s a common perception that a property investor lives the high life. Their portfolio rakes in hundreds of thousands of dollars that funds an extravagant lifestyle others can only dream of. This is true, but only for a small number of them. One type of property investor likes to boast about their success, others prefer to keep it quiet. Do any of these traits look familiar?

 

The dreamer: This type of property investor has big visions of wealth, owning a large portfolio, and making it in the ‘big leagues’. You’ll find them constantly looking at property listings and researching suburbs with good growth. It’s good that this investor does their homework, but their dream might cost them if they put down a deposit they can’t afford. In property, you must spend money before you can make it, something that this type forgets.

 

The renovator: This property investor looks at the old and outdated, sometimes the crumbling, and sees something beautiful: potential. Occasionally they’ll buy the home for the sake of the land because it’s in a good location, and demolish the house. They’ll build it up again into a property that will attract tenants and give them a better return. This type of property investor, though, has sometimes  watched too many renovation shows and has visions of doing everything themselves. That’ll turn the investment property into a money pit rather than an asset.

 

The silent assassin: You’ve seen agents and reps on the phone at auctions communicating with their clients and making bids. This type of property investor has the experience to know what they want. They’ll trust a rep to inspect the property on their behalf and put down money at the auction.

Another side to this investor is they’ve often got a full or part-time job that keeps them busy. They don’t boast about their property prowess. When they turn up at the auction they’ll wear sunglasses and stand at the back of the crowd. They look like a silent observer…until the bidding begins.

 

The wise: This property investor isn’t necessarily older, but they’ve got experience in the property market. They were born into it, had an early interest, or just educated themselves. The wise property investor does their research, knows the best growth suburbs, and has their property manager on speed dial.

 

The one-home ponies: This type is probably your parents, or someone else’s. After the children leave the nest, their parents move into a smaller home. Some will sell the family house, others will renovate it and lease it out to tenants. They’re an ‘accidental’ investor, and don’t think of hiring a property manager or getting a depreciation report until someone else suggests it.