And How You Can Avoid These Mistakes
“Experience is simply the name we give our mistakes.” Oscar Wilde
Mistake 1: Not Getting Educated
We pay thousands and thousands for Academic education over $40,000 is not uncommon… so we can get a ‘good’ job . But many are reluctant to pay a fraction of that to get educated to invest in property. There are courses specifically for development, renovating etc. but what is really lacking is the the fundamental information …. It’s the education you need so that you head off in the right direction.
We are not talking about courses to become a real estate agent, property manager or financial planner we are talking about education that teaches you the fundamentals like where do you start? Who do you need on your team? How do you research and do your due diligence? What investment strategies are out there?
It’s up to you to look after yourself and your own money – KNOWLEDGE IS POWER!
We’ve found you also need Inspiration and the right Network so that you use that education and put it into Action! And that is why Property Women was created to provide YOU with non biased education, inspiration, networking opportunities in a fun, supportive environment.
Mistake 2: Not Having a Strategy
If you don’t have a plan and a strategy to work towards you may find that you either do nothing or you follow someone else’s strategy. A strategy that is not Right for YOU – the only way to avoid this is to find out what strategies are out there and what strategy is going to suit you the best.
Mistake 3: Not taking ACTION!
No time? What will you sacrifice?
Write down 5 Property Goals now.
Switch off the TV – use that time to start actioning those goals NOW!
Mistake 4: Trying to Do it All Yourself
Multi-tasking is fine but not focused action and you don’t need to be superwoman! How long does it take to clean your house? What if you dedicated that time to building your property portfolio or a business…would the price you pay for a Cleaner be small in comparison to the time you save, the stress you reduce, and the profit you could make with focused action on wealth creation?
If you don’t have the necessary skills to do a particular task then it is must better to enlist the help of someone who does!
Take some time to work out what your strengths and weaknesses are: then beside each of your weaknesses write down a professional or person who you could outsource this task to and then do it!
Mistake 5: Not Believing You Can Do It!
So many people just give-up as they start to believe they can’t achieve. Like Henry Ford famously said
“Whether you believe you can do a thing or not, you are right.”
When you hear the negative mantra in your head you need to shut it down. Its like the nagging desire for a cigarette when you are trying to quit or the temptation of dessert when you are trying to lose a little….break the cycle and turn the temptation around from negative to positive.
Think of affirming speech patterns like ‘I believe I can achieve’…now add those 5 goals you wrote down earlier.
I believe I can buy an investment property every year for the next 10 years, I believe I can renovate on my own, I believe I can do this on my salary etc.
‘You need to Believe to Achieve’ – it is a baby step but having a little faith if yourself is going to get you everywhere.
Mistake 6: FEAR – Letting FEAR Stop you…
So worried about making a mistake that you don’t make a move is something that a lot of first time investors have to overcome.
Sure … You may have a ‘gut’ feeling about something and that needs to be taken seriously. But if you look at a house and think you wouldn’t want to live there … does that mean it wouldn’t be a good investment?
Fear has two meanings…
Forget Everything And Run
Face Everything And Rise
Challenge yourself to face the fear and do it anyway! This is true for many things in our lives. ACTION will always set you free from the fear.
Mistake 7: Holding onto Something that Isn’t working for Too Long
Have you heard of something called the “Spider Monkey Trap”?
Hunters in South America trap spider monkeys by filling special jars with very narrow openings with special treats that the monkey’s love. The monkey comes along and is easily able to slip their hand into the jar, however when they grab the treat their fists become too big to extract the treat and their hand and the jar is too heavy for them to carry it away. Instead of letting go of the treat and running away the monkey just sits their until the hunters come and collect them.
Are you holding on to something that is never going to give you the return your are after? If something isn’t working let it go and move on to your next adventure before your lose more than you bargained for.
Mistake 8: Having the Wrong Structure
Starting out holding the property in the wrong structure can greatly impact on many factors. Your structure should be determined by the strategy you are planning on implementing, your financial position and if you will costly to change. Strategy related / financial position related / If you’ve made a mistake on this one you may be better to leave the mistake as is.
So the key here really is to get the structure right in the first place and the best people on your team to speak to are your accountant and your solicitor.
Mistake 9: Not Taking Care of your Cashflow
Not tracking your cashflow is a big mistake investors make – when’s the last time you increased your rent? … lots of properties equals lots of missed rent.
Other cashflow monitoring tips include:
- Finance – check regularly at least once a year to see if refinancing might save you some money
- Keep on eye on the Property Management Statements
- Check your water rates make sure you are getting everything you are entitled to from your tenant.
Mistake 10: Being over optimistic with your assumptions
“I can’t lose on this Property!!!!” …don’t be blinded by positive emotion or frozen by fear… Get educated about what you need to know to make an informed decision …. Make a decision and make the decision right.
Mistake 11: Over Analysing
Analysis Paralysis …I spend so long analysing a property I never get to buy one! Answer ….stop it! Write out a list of criteria you need to check … tick them off and then take action! Or get a coach!
Mistake 12: Not Crunching the Numbers Properly
It’s important that you take the time to crunch all the numbers there are some great tools out their including PIA software to help you do this. You can get a copy of the PIA software from our shop.
Mistake 13: Not Doing Your Due Diligence Upfront
Not doing the due diligence and research properly can cost you in may ways.
The more information you have the better informed you’ll be when you start negotiating on the property for example.
Things that help with negotiation include knowing what else in on the market, how long your property has been on the market when it was last sold and for how much.
Other things you need to know is how much rent your can achieve, if you can add value and how much that might cost, if you can do the subdivision or development your are thinking of doing etc.
Take the time to really know the area you are buying in, the property you are buying and who your target market is going to be.
Property Women do have a group license for RP DATA that we share with our members if you want to find out more send an email to info@localhost/propertywomen
Mistake 14: Not Starting Early Enough
We all wish we had of started earlier , but alas that time has past so now the best time to start is TODAY – don’t look back in 10 years and wish you had started 10 years ago!
Mistake 15: Not Managing your Credit History
Your credit history is your ticket to getting more and more finance – you need to make sure you have your credit history intact – did you know that if you don’t pay your telephone bill on time the telephone company can now add this to your credit file which won’t look good to your new lender. Make sure you pay your bills and credit card on time and you should be fine.
Mistake 16: Abusing Your Line of Credit
Be careful with your line of credit – if it is an investment line of credit only use it for investment purposes.
Mistake 17: Not Organizing Finance Before you give up your Day Job
A lot of investors decide that their investing is going so well that they can give up their day job and concentrate solely on Property. Its a great place to be…but make sure you get all your loans for the next projects before you quite your job, otherwise you may find that you cannot borrow anymore because your serviceability has gone way down.
Mistake 18: Talking to the Wrong People too Early and the Right People too Late!
Not surrounding yourself with like-minded people, listening to the wrong people and not assembling the right team are all mistakes that can be avoided.
So who are the wrong and right people anyway?
Firstly stay away from the naysayers they will only instill fear into you no matter how good the property is – stick with like minded individuals who are already investing in property.
Some of the wrong people may include: Friends who are not investing, Family members who are not investing and don’t laugh the Taxi driver – the Taxi driver always has an opinion on the property market but if they aren’t investing then I suggest you don’t listen to them.
Some of the right people include: Property Women (we have a wonderful network of women who are investing in property that love to support other women), Broker, Accountant, Buyers Agent, Solicitor – learn from those who are walking the walk not just talking the talk!
Mistake 19: Buying in the wrong area
It’s important to do your research.
The wrong area is normally an area that is:
- Away From Infrastructure
- Not where Tenants want to live
- Not near employment
- In a noisy or dirty location
- Near bad neighbours
A good area on the other hand is an are that is:
- Close to Amenities
- Close to work
- Where Tenants like to live
- Location with good resale potential
- Good growth potential
- Opportunity to add value
Mistake 20: Believing everything the Real Estate Agent Tells you
Remember who the real estate works for, he/she works for the vendor so they want to sell the house to the highest bidder. Make sure you know everything about the property from your own or a trusted team member such as a buyers agent observations.
What the agents says is not always what they mean…here are some funny examples we’ve come across.
|What the Agent Says
|| What the agent means
Knock down rebuild
What the agent doesn’t know:
It’s a great renovation project
Mistake 21: Not Making any Offers
You never know if you’ll get the property for the price that works for you if you don’t make an offer. If you’ve done your research and you are happy to go ahead make sure you submit your offer.