How to have More Investment Luck
People will often say to me, you were lucky that you got in at a good time when you started your investing, you couldn’t do that now. Or, it was lucky you found some good agents to help you find properties when you started, there’s too much competition from other investors now.
Roger Hamilton uses a word analogy with the word ‘Luck’, mostly with operating a business and comparing it to a game of soccer (football). I’ve used it below in a similar way to show you how it works if you are a property investor and want to become luckier!
In the game of football, you may think someone like Christian Ronaldo or Lionel Messi is lucky in the way the ball is passed to them, and all they have to do is kick it past the goal keeper to get a goal. And they get paid millions of dollars each year to do that. You might think, well I could kick the ball past them too, it looks so easy - why not me?
The first letter stands for location which means being in the right place at the right time.
The same applies in real estate – where are you located when all the deals are happening? Are you out working in a job or a business, or are you doing work around your properties because you think you’re saving money?
So location is very important. You need to be in a location and available to act quickly when you need to.
With football, the players must understand why they are there. What is their purpose, or intention for being in the right location? They need to understand that their purpose is to get as many goals as they can. In real estate, you also need to have an understanding of what you want to achieve. What are your financial goals, what plan are you following and what are your rules for investment? You need to have a good understanding of what you are doing, and why you are doing it.
You can be standing in the right place and also understand why you are there in the game of soccer, but you might turn around and nobody is there, or wonder why nobody is passing you the ball. That is where connections are very important. You need to have a good team of people around you that will pass you the ball so that you can score the goals.
You must have good connections in real estate investing too, a good team of people you can rely on in many areas. These people will let you know about the potential deals, whether its real estate sales people or other investors passing you deals. You may also have various tradespeople available to do maintenance on your properties that need doing from time to time. This would include plumbers, builders, painters, electricians, carpet/lino layers etc. If you don’t manage your own properties, you will need to have good property managers to find you tenants, do inspections, and make sure the rent gets paid on time. You will also have people to handle the legal side of things for you when buying and selling properties, also an accountant to do your accounts at the end of each financial year.
All of these are very important people who you will form part of your team, or your connections.
This is where you must know the rules of the game. In soccer you must know what you can and can’t do to stay on the field of play. You must have an in-depth knowledge of the game itself. In real estate, you must also have knowledge in many areas.
Firstly, the city you are investing in. What streets should you avoid buying in, are there any suburbs you should stay away from?
You’ll also need to know what the market-value of properties are in your area, properties that are similar to ones you want to buy. If you don’t have an in-depth knowledge of the market, how will you know if you are getting a good deal or not?
Do you know how to negotiate well as a buyer and a seller?
How do you structure your offers when buying property, what do you do if you are bidding at an auction?
There are other things you should be knowledgeable about as well, things like what are your banks’ lending criteria, what yield do you need from your rental properties when buying, what are the current bank interest rates for borrowing, keeping good records for your accountant, what it will cost if you need to do maintenance or renovations on a property when buying, all sorts of things you will need to have good knowledge of.
You may have all of the above and yet still not succeed. In the game of football, if nobody on your team likes or respects you, they may not even want you to score any goals, so will keep the ball to themself.
You will need to be a good team player and know that most of the time - you need them more than they need you.
Investing in real estate can be the same, how do other people see you?
- Do you have a good reputation in the eyes of these people?
- Why should they do business with you?
Your reputation and integrity are very important and can make or break your success.
- When you say you’re going to do something, do you do it? Or do you have a reason or excuse why you didn’t follow through? Some people think - saying you’re going to do something, then not doing it, plus a good excuse - is the same as actually doing it.
- You need to be able to relate to others, and they relate to you.
- Are you approachable when people ask something of you, or do you not have any time for anybody apart from yourself?
- Do you get easily distracted from your goals or your plan?
- Can you stick within your rules for investing, or break them because things seem boring to you?
- Will you keep going when the going gets tough and it would be so much easier to quit?
- Do you have good money management skills?
- Can you oversee your entire operation to make sure everything is operating and performing as it should be?
- Think of yourself as a stock on the share-market.
- Would other people invest in you if you were a stock they could buy?
- Would they see value in you, and see the long term prospects?
- Or would they want to buy now and then sell again in a short space of time because they see too much long term risk in you?
All of these are important things to look at for yourself.
If you look at each of these – ‘Location’, ‘Understanding’, ‘Connections’, ‘Knowledge’ and ‘You’, the ‘You’ is the most important, and brings it all together.
You could be perfect in all other areas and get this wrong – and it could cost you everything you’ve worked for. So it’s important to make sure you’re someone that people want to do business with and can relate to.
If you take a look at each of these five things in detail, then rate yourself honestly from 1 to10 for each.
You may give yourself a low rating in some and a high rating in others. By doing this, you will immediately see what you need to do in order to improve your own rating in each area.
When you can honestly say to yourself that you are 9 or above in each of the L.U.C.K.Y. areas, then you will find that you do indeed become luckier in the eyes of not only others, but yourself as well.
However luck really had nothing to do with it at all.
It takes effort and dedication over time to become a successful property investor.
iFindProperty can help you get started now and avoid making a mistake that will hold you back. Our team are active in and understand their markets (where they also invest themselves), are well connected in the industry and themselves have strong teams they can call on at any time to help evaluate a deal and make it work for you.
If you would like to speak with someone at iFindProperty about property investment please contact us today, we would love to hear from you.