5 Things Holding You Back From Investing in Property

There are so many things that can hold you back from investing in property and from setting yourself up for financial freedom. Here are 5 things holding you back from investing in property.

Suburb Research Course

In this episode I mention my suburb research course. In this course you can learn exactly how to collect data on and analyse different suburbs in Australia.

This course will teach you how to identify low risk suburbs with a higher chance of growth and will help you avoid bad suburbs unlikely to grow.

Check out the Suburb Research Course

Timestamps For This Episode

0:00 – Introduction
1:03 – #1: Fear
3:11 – #2: Information Overwhelm
5:19 – Create a strategy that works in any scenario
9:06 – #3: Bad Financial Practices
13:28 – #4: Not Knowing What Market To Invest In
14:57 – #5: Not Having a Strategy

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Ryan 0:00
There are so many things that can hold you back from investing in property and actually doing what you want to do and setting yourself up for financial freedom. Some of those are legitimate excuses, some of those are less legitimate, and they’re just based around our fears. And so in this episode, both me and Simon have had things that have held us back from investing in property, Simon’s actually gone and purchased his first one. I’m not quite there yet. But we’re going to be talking about some things that have held us back and held people back, and then also give some ideas around it. So welcome to the show. And Simon, welcome. Hey, man, how are good? So yeah, we talk to people all the time and get emails from people all the time as to why they’re not investing at the moment, what’s holding them back, some of those things are really legitimate Look, I just lost my job. Okay, you can’t get lending. Yeah, that’s gonna hold you back from investing in property. Some of them are less legitimate around the fears or just insecurities that people have. So you do a lot of free strategy sessions and have spoken to a lot of people, what would you say, are some of the main things that are holding people back over the last probably six months, I

Simon 1:06
would say that fee has been really fairly,

Ryan 1:09
the problem is one,

Simon 1:10
obviously, the biggest one. And there’s a number of reasons for that, that supported it. And it’s, you know, legitimate, it’s a legitimate challenge that people need to overcome, because now you had markets like Sydney and Melbourne that were quite declining quite rapidly had the uncertainty around labor or liberal getting in, you have really, really, really tough lending restrictions from app for and the banks, and all of these different things, just wait put a lot of pressure on people that are really motivated to get into the property market. But there’s all these things that are putting downward pressure on them making the right decision, and then actually being able to do something as well.

Ryan 1:46
Yeah. And fear is something that gets us on YouTube that sells newspapers and stuff as well. And so I follow a lot of economists, and a lot of people who talk about the property market, and you definitely have people are on like the extremes of the spectrum. So people will talk about that now. It’s all good. Sydney, Melbourne, about to rebound, we’re going through the next property boom, which I don’t necessarily agree with. And then there’s people that say that it’s actually like, it’s the end of the world. And you know, this is it, we’re going to have like a massive market crash. And that’s going to happen, and everyone is so certain about the outcome of what the future is going to hold and exactly what’s going to happen in the market. And then often, years later, the economists will say, Okay, yeah, that was going to happen. But this this change to stop it from happening. So it’s still right. But they made different decisions that you weren’t right, yes, the market didn’t crash the way you anticipated. So it can be so difficult out there, because there’s so many people giving their opinions of exactly what’s going to happen. And a lot of people can get scared by that. And I think I definitely try to. And like we always say, we don’t have a crystal ball. We don’t know what’s going to happen. And I think overcoming that fear is the number one thing for people. So how do you help people overcome that fear? And I’ll talk about some of the things that I think are helpful.

Simon 3:09
Yeah, I just want to come back to that as well. Because that’s probably like the second biggest challenge that people they have the fear. But then as you said, there’s so many different opinions are so many different YouTube channels, podcasts, new stations, blogs, whatever, to research and get that education or get that opinion. And that paralyzes people with analysis and overloads and with information, and they’re like, Okay, well, there’s this one guy that saying the property markets going to crash, there’s another guy, this shiny new tell me that it’s all you know, rainbows and sunshine, and when you’ve got

Ryan 3:46
in the middle that are saying, okay, it’s turbulent times

Simon 3:48
there’s good and there’s bad. Yeah, so it’s really difficult. And you just kind of need to go out there and find the people that you can actually resonate with, and that you actually trust and, and do the necessary research. Like, don’t listen to CHANNEL SEVEN, or Channel Nine news, like go out there and listen to the guys, like you said, the economists that actually have spent their entire lives researching the data and the cycles around different economies, different markets. Yeah. So you can get actual feedback so you can overcome some of those fears.

Ryan 4:21
And for me, I think the biggest thing that overcomes the fears is obviously taking in all the information is really good and really important. But what I find the problem with the economists and CHANNEL SEVEN, and everything is they talk about the market as a whole and whether it’s going to grow or crash, but they never actually point it towards the individual. And so when you’re investing, you’re investing for you, and you alone or you and your partners or spouse or family or whatever it may be. And so what happens on I guess the broader economic scale, while that’s important, that’s not you, like because you’re going to buy one property. You’re not buying all of Australia, you know, so So what I think can help overcome that fear is to yes absorb the information from everyone. And as you do absorb information from people with different opinions, you realize, no one knows what they’re talking about. No one actually has a crystal ball of the future. And then for me, it’s really been around creating a strategy that can work in any scenario. So creating a strategy that can work in a declining market, because as we know, markets go up, markets go down, but markets don’t go up forever, and they don’t go down forever either. So creating a strategy that can work in a declining market, in a stable market, or in a growing market, creating a strategy that works for that, as well as doing things actively to reduce your risk as you invest. So buying at a below market value, buying something like you bought, we can actually manufacture value for that property, and actually create equity. So that’s something that will work. if the market goes down, you can create that equity to regain what you’ve lost, okay, so you may have not made money, but you’ve stopped going into negative equity. So you put yourself in a better position there, we’ve done a lot of storytimes, where people have done renovations and increase their rent by 60 or $80 a week. So you can get growth there and then the market stable, you’re creating growth, the market is growing, you’re creating more growth through manufacturing, that there’s so many different things that you can do to lower your risk and have a better strategy. And even something like looking at Brisbane market versus Sydney and Melbourne. Brisbane didn’t have the run up that Sydney and Melbourne had corelogic keep saying okay, brisbanes in a slight decline, but we don’t expect Brisbane to have a huge correction because it didn’t have the run up and the economics behind it. And the growth and the migration to Brisbane is looking really good. So and you

Simon 6:44
look at your history as well, it comes back to the education, you look at your history, and you go Okay, well, Sydney, Melbourne and Brisbane have all performed at over 9.5% over the last 50 years. For the last 11 years, Brisbane has sat completely flat and according to core logic, it’s cheaper to purchase in 2019 compared to 2008. In some locations in Brisbane, when you factor in inflation, you’ve got ht w indicating the rising or the start of the recovery phase of the property cycle. So you pull all this information together, you look at the long term averages. And according to corelogic, again, they say that the average difference between Sydney and Brisbane is about 54% in terms of price difference. And right now it’s it’s much above that. So you look at all of these things and try and figure out, okay, yes, the Australian property market as a whole may be coming backwards. But there’s markets within markets, that you need to understand how these different different things work together and choose the right investment for yourself.

Ryan 7:46
And that’s the thing, like having that fear to say, okay, we’re going to go into collapse. The fact is, we don’t we don’t know what’s going to happen. And so many people, I get emails from so many people that are just like, Okay, well, I’m just going to do nothing and not invest. But then there’s also the potential that the market could stay flat or could grow. And then often these people that say, Okay, I’m gonna do nothing, it’s not like they save their money, and they’re really diligent with it. And then like, I guess some people are, but a lot of people have that money, and then it ends up getting whittled away on a holiday, or your spend on a new car, or real life just

Simon 8:21
gets in the way, we can both talk about that. Like how many times when I was saving my deposit, you know, when you blow it on some stupid material thing because I was just fatigued from saving so much money and never spending any money on myself. And then you know, for yourself, you know, going through some tough hardships in your personal life really put, put things backwards a little bit in and that that happens, you know, that happens, but life goes on.

Ryan 8:47
So fear is like a massive one that holds people back. And I just get so worried for people that are so held back. And then they don’t keep their deposit. And then it was it disappears on life because they got held back by fear. They didn’t do anything with it and then have nothing to show for it in 10 or 20 years time. So absolutely hate saying that. I guess another thing that really holds people back is bad, bad financial practices. We were talking about in that last video about our goals, how it’s in high school and uni you just have to do the work and you achieve your goal of a degree or High School Certificate or whatever. But when it comes to finances, if you don’t actually have that goal and have that diligence, it’s not going to happen. If you don’t diligently pay yourself first and put money aside. There’s not going to be any leftover there now, no one’s waking up accidentally building a multimillion dollar property portfolio that generates some positive cash

Simon 9:40
flow. I wish I wish it was that easy, but it’s not that easy. And I’ve got so many friends that started a trade straight out of school and we’re earning a decent income from the get go and a lot of them are now getting to their late 20s, early 30s. And they’ve got really bad saving habits because they’ve just been so used to spending so much money where for myself going to university and studying and things like that and living off such a limited amount of income made me much better at saving once i did start earning income because i knew how to be frugal with my spending but all of these friends that have always had good money like they just seem to every single time they get a pay rise have more expenses more you know spending more money and saving less than you really need to train yourself to become a good budget or a good saver if you want to get ahead in life

Ryan 10:35
and it’s it’s such a journey to get there as well i start thinking of goals down rather than thinking what i need to do to get to that goal and like what kind of person do i need to be to be someone who just achieved that goal by default yeah and so when it came to saving and budgeting i realized it was a bit over a year ago i realized how bad i was at it and i was one of those people that was okay i had kids young we were always really poor and then as income went up you could finally afford the things that you had not like no one we struggled for so many years and then because my income was rising every year it was like just easy to pay for you know little bits of debt that you may have accumulated or whatever and so just didn’t create good habits because income was going up so it’s just really easy and then as soon as income stagnated and then went down i was like all the wheels fell off yeah everything and i was lucky that it was about six months prior to that happening that i actually realized the error of my ways and actually started budgeting i had read barefoot investor started doing that sort of budgeting setting money aside you know really starting to manage cash flow and get better at that and so i was really like when when the wheels came off i was better at it but through the last six months and being really diligent with paying off debt i’ve gotten so much better at it moving forward and so it’s something that any do that that’s one of the things that held me back was not doing that yeah

Simon 12:02
it’s it’s a skill you know learning how to budget learning how to save i get to know it you’re either good at it or you’re bad at it like everyone can be good at it’s just what’s your priority is your priority spending every cent that you earn and just getting by and ending up on the pension or is yours being a little bit more hard on yourself making a few sacrifices so that you can set up your financial future and have choices for the rest of your life

Ryan 12:26
yeah and then finding the way that that works for you as well like i tried multiple different budgets that didn’t work in the past and then kind of gave up on it and then when i decided okay i’m going to be a better budget up i found the budget and the strategy that worked well for me which is basically just paying yourself first and just having but having it set up so it just happened automatically so setting it up in my bank account so it all automatically happened and just having that weekly discretionary income i could spend you know finally found a budget that worked for me and so yeah that was huge i

Simon 12:57
think it’s a good starting point what you mentioned before the barefoot investor if you’re at the start of your journey and you’re trying to figure out what sort of budgets work for you like going out there and purchasing or listening to the barefoot investor to really good introduction for money management also recommend the rich dad poor dad by robert kiyosaki is a really good starting point to understand better assets versus liabilities and creating more income and limiting your expenses really really good places to start

Ryan 13:27
yeah i think another thing that holds people back just be mindful of time because i know you got to go in a sec but just not knowing what market to invest in and buying magazines that say oh here’s the 40 top suburb to invest in but not understanding why the best suburbs and not understanding what makes a good market a good market is probably a massive thing that holds people back because they just feel like they’re rolling the dice and they don’t know where they’re going to get a good market or not

Simon 13:55
you’re going to take everything that you read and say and listen to with a grain of salt because sometimes people have a vested interest in pushing people into certain investments or publishing those types of articles that say this is the next hot spot and things like that to take everything with a grain of salt and do research do due diligence i think that’s the best thing and take advice from from professionals like don’t listen to the lady in the lunch room like go out there and talk to a professional that’s done exactly what you want to do read their books listen to their podcast call them up and have a conversation with them if you’re in the position to

Ryan 14:29
yeah and then learn how to research suburbs and markets yourself as well which we have a lot of videos on i got a course on how to do suburb research if you go to onproperty com au ford’s suburb you can check that out but just that way you can take the experts information and you can put it through like a framework of how you like to do research on different suburbs and then when you do invest your confidence and investing and i guess the last thing before we finishing off is just like something holding people back is not having a strategy Like not knowing it not knowing what you want to achieve, but then be having no idea how you’re going to achieve it. And I know Ben started like this, he just invest in property. You know, just because he thought that’s what people did. He didn’t actually have a strategy. Yeah, he’s one of the rare ones who actually did it. Most people don’t have a strategy. So they don’t.

Simon 15:16
And the difference do anything like Ben didn’t have the strategy. Now he does. Luckily, for me, I had this strategy from the beginning. And me and Ben have had this conversation, we think it’ll take me about half the amount of time that it took Ben to get to where he is to where I want to be, because I had the strategy in play. So I knew exactly what I need to do from the very beginning to achieve my goals. And I

Ryan 15:42
was just fumbling around trying different things got lucky with some lost money on others. Yeah, which

Simon 15:48
is where so many people around, like, so many people are there, they’re like, I’ve got, you know, I’ve been saving for a while I’ve done what I need to do, but I don’t know what I want, I don’t know where I want to be. So actually, defining that strategy is super important. And something

Ryan 16:02
with you with that strategy is like, you know, okay, you want to do the three properties to financial freedom, you want to buy the properties first, then go back, build the granny flats. And so that strategy has inherently steps in of exactly what to do. So you have to save the deposit by the first property, you’ve done that. Step number two is now Okay, you don’t want to access equity from your first property. So it’s like saving a deposit again, so that you can buy your second property. And so this is the strategy drives you forward because you know exactly what you need to do. So at this point in time, you’re in the saving phase again, yeah, and you’re saving a deposit. And you know, that if you just take those steps, and do it, it’s just gonna happen. So it comes back

Simon 16:39
to like, the assignments in the school, you know, like, Yeah, I just do the activity. Because I’ve already got the strategy, I’ve got the big picture, I know what I need to do to get to where I want to be. Now, it’s literally a week by week. Okay, well, how much money do I need to put away this week? What sort of research do I need to do like when when am I going to be in a position to actually actively look at that next property. And until I’m at that point, I’m not even going to bother looking at the market, because I’ll get emotional, I’ll get overexcited about something and maybe stretch myself too far. But just stick to the day to day activities that I need to do the week to week, the month, month, and soon enough, that activity will turn into results. Yeah, so you know exactly what so

Ryan 17:21
so with me with paying off my debt, it’s like, I’ve got a full calendar setup of how much I’m paying each month. And if I earn more than that, then it goes into like a buffer fund, and a savings account. And so then if I, you know, have a bad month, then I’m prepared. But also, if that builds up big enough, then I’ll be able to pay off my debt faster. So but I know my exact steps, you know, your exact steps. And that means we’re not held back, and we are moving forward financially. So if you do need help actually creating a property investment strategy, if that’s something that you want to get into, but you, you don’t know where to start, you don’t know what your strategy should be, then Simon and Ben and the team over here at Pumped on Property, are offering free strategy sessions so you can get on the phone to them talk about where you’re at where you want to be, and what property investment strategy is best for you. And you can actually get it knocked down. Okay, what are your next steps? And where are you trying to go so that complimentary, obviously, you can work with them after the fact if you decide to, or you can go and do it yourself. So go now to onproperty. com. au for a session. And you can check out all the details over there. There’s actually a calendar where you can book in a time that suits you. So yeah, go to onproperty. com. au forward slash session to check that out. Obviously, we didn’t cover everything that’s going on. today. We didn’t have enough time.

Simon 18:34
I don’t think he could in three hours at least and about a line of

Ryan 18:39
1000 people which each have different issues. But we wish you the absolute best in your property investment journey. And until next time, stay positive

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