7 Clear Signs You’re Not Ready To Invest in Property
Investing in property is an exciting thing but how do you know if you’re ready to invest or not? Here are 7 clear signs you’re not quite ready to invest in property yet.
0:45 – #1: You Have Lots of Debt At High Interest Rates
1:45 – #2: You Live Paycheck To Paycheck With No Buffer
3:00 – #3: Not Having a Deposit or Not Being Able To Borrow Money
4:24 – #4: If You’re Susceptible To Get Rich Quick Schemes (Shiny Object Syndrome)
5:34 – #5: If You Don’t Understand Market Cycles
7:53 – #6: You Have No Clue How To Invest In Property Yet
9:23 – #7: You Have No Clear Investment Strategy
investing in property and achieving financial freedom can be a really exciting thing that you likely want to do however not everyone is ready to invest just yet and in today’s episode i want to share seven and clear signs that you’re not ready to invest so let’s go through these to see if any of these exists in your life and if they do focus on getting rid of them and if they don’t then maybe you are ready to invest hey i’m ryan from onproperty helping you achieve financial freedom and let’s have a look at the seven signs that show that you’re not ready to invest yet and as we go through this have a thing does this apply to my life and if it does you need to focus on okay how can i remove this barrier so i am ready to invest the first one is that you have lots of debt at high interest rates so if you’re in a situation where you’ve got lots of debt whether that be personal debt car loan credit card debt excetera if you’ve got lots of debt and you’re paying high interest rates for those then it’s likely that you’re not quite ready to invest yet a you’re not really in a cash flow position to be able to do it you likely don’t have a deposit so you probably can’t get any can’t get a loan anyway but if you’ve got yourself into this position that i mentioned not the best at managing money or something’s happened to you you need to kind of pull yourself out of that hole before you can be ready to invest in property now obviously investing can be a way to pull yourself out of that hole but going further into debt to try and get out of debt can be a really risky thing to do is to be highly educated to pull that off so being heavily in debt generally speaking you want to focus on wiping out all of that bad debt before you start investing in property the second thing is you live paycheck to paycheck with no buffer so if money comes in each week each fortnight each month from your business or from your job and you’re living paycheck to paycheck meaning that you get to the end of the month and there’s no money left over and if you don’t have a buffer fund in place so you don’t have savings in place that can cover you if you lost your income so generally speaking most people advise having about three months of income set aside as an emergency fund in case something happens to you if you’re not in that situation where you have that emergency fund and you’re still living paycheck to paycheck not really being able to save everything then that says to me you might not be ready to invest yet because with property things go wrong from time to time there can be cashflow issues with the property let’s say you lose a tenant or a tenant vandalizes your property and then you can’t rent it for a while yes there’s insurance but there’s going to be delay until that comes into effect and so you can lose a lot of money there and be in a very difficult cash flow situation so if you’re already in a rough spot financially with your cash flow and you’re struggling each and every month to finish the month still with money in the bank then it may indicate you’re not ready to invest yet the third one is not having a deposit or not being able to borrow money so i’m putting these two together because you do generally speaking need a deposit to purchase property in australia that deposit can be as low as 5% that’s quite rare to be able to borrow at 5% however that is potentially possible you know generally speaking you’re looking at 10% or ideally 20% in order to invest in property so you can go ahead and speak to a mortgage broker about this but if you don’t have a deposit it’s gonna be very difficult to invest and in the same boat if you can’t borrow money then it’s going to be difficult to invest and highly unlikely that you’re going to be able to invest so if you have a business and you don’t have a proven track record of income or if you’ve lost your job or sometimes if you work as a casual worker then banks won’t count that income because your hours can get cut at any point so if you don’t have a deposit or if you can’t borrow money then that’s an indication that you’re not ready to invest in property yet and you may be great at property finding great properties and renting properties out and managing properties you might be great at that but if you’re not in a situation where the banks are happy to lend you money to purchase that property then it means you’re not ready to invest yet need to make some changes in your life so that you can look good to the banks and that they can lend you money unless you have so much cash that you can purchase it yourself the fourth one is if you’re susceptible to get rich quick schemes so i call this shiny object syndrome so if you see a new get rich quick scheme whether it be with property or be with stocks or be with option trading or be with
internet marketing or whatever it may be and you just jump around from one thing to the next going to the seminars and be like yes i’m going to get rich this way and then the next month i’m going to get rich this other way if you’re jumping around like that then that kind of indicates you’re not ready to invest in property property generally speaking is a long term play especially given the current market conditions of australia Being in turbulent times, or muddy waters and not being really sure where we’re going in the short term, investing to flip properties is not really a thing. And just generally speaking as a whole, investing in property tends to be a long term play. So if you’re going to invest and then jump out really quickly to go and do some other get rich, quick scheme, the people who have to leave their property investment early are often the people that lose money on those investments. So if you’re susceptible to get rich quick schemes, then you’re might not be ready to invest yet, you need to settle down, and to have a strategy. The fifth one is if you don’t understand market cycles, now, this was a massive mistake that I made back in 2017, with cryptocurrency and I’m so glad I made this mistake, and I lost 1000s of dollars. But luckily, it wasn’t ridiculous amounts of money, just not understanding market cycles and understanding exactly where the market cycle was that at the time, so I bought after it had peaked and was starting to go down. And so a lot of it, I kind of bought on the way down, and I lost a whole bunch of money there. And unfortunately, my life situation changed. And I had to liquidate that. So I actually lost a lot. And then it was only six to eight months later, six months later, actually, that the market went back up again, and was above where I had entered. So if I had been able to hold out just six months longer, I wouldn’t have lost any money. But unfortunately, sometimes that is life. And that happens. But I didn’t understand market cycles. At the time, I didn’t understand how to look at a market and say, Okay, this market is high risk, because it looks like it’s peaking and may still continue to go up for a bit. But what’s my risk reward ratio in this situation. And so I didn’t understand that. And the same with property, investing at the wrong time. If you don’t understand market cycles back in 2017, as well, you didn’t understand that Sydney and Melbourne, were at the top of the market that were peaking, and we’re about to go through a decline, then you can be in a very rough situation in two years time. And that market does slide. And Sydney has dropped about 15% since its peak with some areas in Sydney dropping over 20%. So very important that you understand that market cycles. And if you don’t, cryptocurrency is a great thing to look at, because it goes through such quick market cycles. And they happen so frequently. And so obviously, so with Bitcoin back in 2017, it went up exponentially, and then crashed about 80%. And it had done that a few times prior, and it will likely do it again in the future. So that’s just a cool way to see market cycles in action and how they’re happening.
And I now follow cryptocurrency from the side. And it’s interesting to just watch the market cycles. And I’m learning more about market cycles through that. So understand your market cycles and where the property market cycles at for the individual area that you’re looking at investing in. The sixth thing is that you have no clue how to invest, you just heard that property is a cool way to invest that could lead you to financial freedom. But outside of that you have no idea how to invest in property, you just don’t understand the fundamentals behind it, you don’t understand how to pick a good area, you don’t understand how to pick a good property within the area, you don’t understand how financing works, you don’t understand how to purchase and settle on a property, you don’t understand what the cashflow over property is or what the expenses or property is likely to be. If you don’t have a clue on how to invest, then likely you’re not ready to invest yet. But that’s really easy to fix. You just take some time out to educate yourself, listen to videos like this one. Or go ahead and check out. There’s so many different property channels out there, not just this one. But I’ve got so many videos on how to research property, how to look at market cycles, how to choose the best suburbs, I’ve got a paid course on how to find good suburbs and how to do suburb analysis, you can go to onproperty. com. au forward slash suburb. If you want to learn about that I got a great video with Ben Everingham, we’ll be talking about how to choose the best property within a suburb. So you can go ahead and check that out. I’ll link it down below, you can also learn how to negotiate I’ll link up to that one down below. There’s so many great resources out there. I’m not the only one, there’s obviously heaps. So if you don’t have a clue how to invest, get educated and spend some time investing into yourself and your education. And the seventh thing is if you have no clear strategy at all, so by clear strategy, I mean, you have a clear starting point, you know where you’re at now, you have a clear ending point, you know your goal and where you want to get to and that’s a realistic goal, but also in between, you know how you’re going to get to that goal or you have a rough idea of Okay, which assets are likely to get me to that goal. Now that could be different asset classes like property versus stocks versus businesses versus crypto versus whatever else you may invest in. I don’t know what else there is, but it also can be within the same asset class like properties, what type of properties are going to get you there? So a I’m going to go for more affordable cash flow properties in a metro market like Brisbane, or are you going to go for more expensive units in Sydney that are going to be negative cash flow, but you’re hoping for growth? Because they’re near the CBD? What is your strategy to get you to where you want to go? And then map that out? Okay, by purchases property? What’s the cash flow? How long is it going to take me to pay that off, and then I’ll get, you know, 50 grand of income from that property for life because I own that property outright. That’s a pretty clear path to financial freedom, if it comes from you know, okay, I want to have $10 million in equity, what property Do I need to purchase? How is that likely to grow, and not being overly optimistic whether to say it’s going to double every seven years, but be okay? I’ve found best suburb, here’s a property within the suburb, here’s how I’m going to manufacture growth myself as well. And here’s how I see the property growing over the future, and map out best case, as well as worst case scenarios. So that’s what having a clear strategy is understand where you’re at now, where you want to go, and what sort of assets are going to get you there. And then you can focus on Okay, the next asset that I need to buy is there. So if you don’t have that clear strategy yet, then chances are you’re not ready to invest. But if you do need help, with a strategy, you can a check out the two properties to financial freedom strategy, which is a simple property investing strategy that leads you towards baseline financial freedom. So if you go to onproperty. com, au forward slash two properties, you can check that out, and I’ll link up to that down below. You can just learn more about that simple strategy, or you can book in a free strategy session. So if you go to onproperty. com, au forward slash strategy, you can go ahead and learn more about that over there, get on the phone, and then talk to one of the team here at Pumped on Property, about where you’re at where you want to go, and what’s going to be the best investment strategy for you. So go to onproperty. com. au for as a strategy to check that out. Thanks so much for tuning in. I wish you the absolute best in your property investment journey. Until next time, stay positive