6 Steps to be a Successful Property Investor

1.Get really clear on what you want.

I just can’t reiterate this enough, because clear goals drive the strategy you’ll be undertaking and therefore the investments you should be making.

Don’t fall into the trap of making the wrong investment decisions because you don’t have very clear criteria on the type of properties you’re aiming to invest in and the geographical areas that you’re investing in.

Set a small number of SMART goals (Specific, Measurable, Achievable, Reasonable, Time-bound) and be very clear about what they are and WRITE THEM DOWN!

2.Be Accountable

Make your goals visible and review them often - about once a month works well. This, more than anything will drive your success because you’ll be making progress every month. Some people like to keep a daily journal, but whatever frequency of review works best for you, just the process is very powerful.

Tracking your habits is important - if you get them right, you’ll be much more likely to achieve the goals you’ve set.  It’s one thing to have great intentions, but quite another to look up to discover you’ve drifted way off course. There’s a tonne of habit-tracking apps that make this fun and help make it easy to keep you on track.

It’s easier to be accountable if there’s at least one other person involved. So, buddy up, have a business partner, or work in a team. If you’re independent use networking groups, a family member, a mentor, or a friend to share your goals and your progress so that it’s out there!

3.Outsource

Don’t imagine that you should do everything yourself. If you’re going to be a successful property investor, that just won’t be possible. If you break down a list of the steps in securing a great property deal then maximising the return on investment, it stands to reason that you won’t enjoy every aspect of it.

You might not be good at every aspect of it. So, think big, outsource in a deliberate way so that you can focus on the things that you’re really good at. For example, a good client of mine is great at doing deals, but he’s not so keen on property management. It’s too much hassle for him, it takes too much of his time and he’s not particularly interested in it. I have another who has a great network of property finders who source potential deals for her. She researches them, looking at the data and making decisions based on it, which exactly suits her experience and skill set.

Outsourcing different stages of the value chain can vastly improve your experience as a property investor, but also help speed the process up, which is a massive bonus if you’re taking building a property portfolio seriously.

4. Do your homework

Start with the basics. Does the area give your property the best chance of success? What is its capital growth potential? If you’re investing for the long term, then this is particularly important. 

Look for the fundamental factors e.g.:

• transport links, employment investment due in the area, schooling, what investment has there been in the area, and what is planned? 
•  Rental demand - a good way to find out how strong it is, would be to speak to local letting agents and find out from them. Resist the temptation to be too general as it may even differ from street to street. You could also scour through Rightmove or Zoopla to see how long properties took to let out in the area you’re interested in.
  
  

One of my clients has taken this to another level, by really studying economics, not in the academic sense, but understanding how the global economy works allows him to see patterns and trends then use them to invest more wisely.

5. Get comfortable with risk

Risk is often something newbies are concerned about. Being a property investor means spending a great deal of money on things that are subject to wider economic forces which are difficult even for experts to predict. One of the biggest risks that any investor faces is resisting the temptation to procrastinate a little too much when in search of the ‘perfect deal’.

It would be easy to conduct a great deal of research to find any reason not to invest. That’s brilliant because you’re much less likely to make mistakes, but the upside of that is that it’s quite possible to lose out on a number of potentially great opportunities. 

So, get comfortable with weighing up the upsides and downsides of any potential investments - thinking about the worst-case scenario and considering the upside. Think about if everything goes horrendously wrong, there’s always something you can do, a way that you can get rid of a property or find an alternative use for it.

Our message is that successful property investors take calculated risks.

6. Manage your Finances

When starting your property portfolio, make sure that you keep an eye on your finances and goals:

•  does your rental income cover your mortgage payments and the other landlord costs?
• are you getting a reasonable return on investment?
• would you be able to cope if your tenant moved out or there was a maintenance emergency, for example, a flood?
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Managing your finances is key if you want to grow your portfolio further. Keeping track of all your financial information will allow you to work out when you’re in a position to buy your next property.

What have you done to become a better property investor? Share it with us in the comments below. If you have any specific questions get in contact, one of the Finance Nation team would be happy to chat.