Why Property Investing IS SO HARD!
Almost anyone can go out there and purchase an investment property, but it’s actually really hard to become good at investing in property. Why is property investing so hard?!
The Reasons It’s So Hard To Get Good At Property Investing
1: The Barrier To Entry – 0:55
2: It’s a Multi-Faceted Skill – 2:07
3: A Lack of Repetition and Feedback – 3:23
What Can You Do To Get Better at Property Investing?
1: Education – 4:51
2: Hire Someone To Help You – 6:19
3: Practice The Free Stuff – 7:50
4: Get Clear On Your Strategy
almost anyone can go out there and purchase an investment property but it’s actually really hard to become good at investing in property in this episode we’re going to talk about why it’s so hard to become a good property investor and some things that you can do to improve your property investment skills to lower your risk and increase your chance of return so you can get to your goals faster hey everyone i’m ryan from on-property and welcome to my property workshop today property investment is just one of those skills that can be very difficult to get good at but once you’re good at it it actually is it’s quite simple and can become quite simple – repeat the same strategy over and over and over again and to grow your wealth so what is it about property investing exactly that makes it so hard and then what are some things that you can do to kind of overcome those obstacles and improve your skills anyway one of the main reasons property investing is so difficult is the barrier to entry in order to purchase a property you can’t just go out into it if you want to go and play tennis don’t buy a racquet or hire a racket and you can start practicing and playing straight away but if you want to invest in property then you’re going to need to save a deposit whether that be ten or twenty percent of the value of the property if you’re talking four hundred five hundred thousand dollar property at twenty percent that’s about 80 to a hundred thousand dollars that you actually need to save as a deposit in order to get into the market even ten percent you looking at forty to fifty thousand dollars which is a larger sum than most people have saved in their entire life so barrier to entry is really hard in that aspect you also need to be in the financial position where you can borrow money from the bank or a lending institution so generally that means having a decent income and having a stable source of income as well so that can further add to the barrier entry of getting into the market so Barry fir entry just means it’s hard to actually start doing it and as I say practice makes perfect and if you can’t even start how are you meant to get good at it the second thing that makes property investing so hard is that it is multifaceted it’s not just one skill that you need to learn when it comes to investing in property is understanding things like market cycles understanding the global cycle and the Australian cycle and how that fits into things understand the cycles of different major capital cities within Australia looking at then understanding you know different regions within those cities how they perform doing suburb analysis understanding that being able to analyze investment properties and their potential as well as problems that they may have looking at a suburb and the best spots within a suburb and what properties to avoid negotiating contracts all of this sort of stuff as you can see it can be a long list of things that you need to learn in order to get good at property and each of those things is an individual skill that you need to practice and get good at doing suburb research and comparing suburbs to each other that’s a skill that you can build an acquire but that’s a skill that’s completely different from doing overall market analysis and seeing what the market trends are which is a different skill again from negotiating with real estate agents so it’s multifaceted there’s lots of different skills that you need to learn and get good at that can be very overwhelming at times another thing is that you have a lack of repetition so if you want to get good at something practice makes perfect again but being able to repeat that thing over and over and over again and improve each time so with repetition there’s also feedback on whether or not you’re doing it properly so with tennis let’s say you’re doing a forehand if you hit the ball you’re getting feedback straight away as to whether or not that ball goes where you want it to go and if it hits the net okay you did something wrong let’s adjust for next time so with property you’ve got the lack of repetition because the barrier to entry is so high you’re not going to be buying a property every single week or maybe not even every single year you might only buy a few properties in your lifetime and so you’re not having that repetition where you can try things over and over and learn each time and as well you’re not getting the feedback straight away either you don’t know if you’ve picked a good suburb sometimes until five maybe ten maybe fifteen years down the track to see how that suburbs performed compared to other suburb so you’re not making a decision in something and then getting the feedback straight away there can be a lag time of 10 to 15 years as to whether or not you made a good decision and so you can’t learn from your decisions straight away and get good at it so there’s a few things that obviously make property investing pretty hard to get good at but what can you do in order to get good at an adit anyway and to achieve some great results so the first thing and probably the most important thing is just education and educating yourself in whatever way possible so there’s a lot of different books out there there’s a lot of different YouTube channels or property podcasts out there or different property blogs you can go into Google you can ask Google questions and there’s always answers out there to your property needs this channel alone has something around 800 videos and you can go through the back catalogue and there’s some really good content in there showing you how to do particular things what things to look out for mistakes to avoid etc so there’s a lot on this channel so make sure you subscribe if you haven’t already and go through the back catalogue and have a look at some of the things there there’s a really good video that I did with Ben Everingham on how to find the best property within a suburb and what to avoid within the suburb so I’m gonna link up to that one in the description down below you can go ahead and check that out that’s a really good one on how to learn things I also have a course on suburb research so if you want to learn how to pick good suburbs and how to research individual suburbs then go to onproperty.com.au/suburb and you can go ahead and check that out but does it just have to be me it can be anyone there’s so many different people out there and each of them can teach you something different when it comes to investing in property so education is extremely important because you can learn so much from other people what other people have done and what they can teach you the other thing you can do is you can just go out there and hire someone else so I work really closely with the buyer’s agent Ben Everingham from pumped on property and so they help people buy investment properties and so you know how we talked about it’s really hard because you don’t get that repetition well Ben in the team over there rather than buying one property every couple of years is there buying around 7 to 10 properties per week no per month per week would be very impressive and I’m sure they’ve done weeks like that but they are getting the reps in and they’re able to look at so many different properties and negotiate multiple different times every single month and be able to settle on properties and then also they can get the feedback faster because they’ve got a larger pool of properties to look at to say okay we purchased this one for this price in this suburb compared to six other properties that we purchase within the same month how do they perform compared to each other and they can get feedback from that and then learn from that to make better decisions next time so you can hire someone else make sure you find a buyer’s agent who aligns with your strategy and where you want to go but if you’re interested in working with pumped on property they do offer free strategy sessions so you can get on the phone to them and talk about where you’re at where you want to be and see they’re a good fit and they can help you understand okay what do you need to do to get to where you want to be if that sounds interesting to you go on property condo you forward such strategy and you can learn more about that free strategy session over there and book in a time that suits you the other thing you can do is practice the free stuff so if you’re educating yourself and learning things there are a lot of aspects of property investing that you can actually practice that don’t actually cost you anything so budgeting is one thing to learn how to budget and learn how to save because you’ve got that barrier to entry you actually need to say that deposit in order to get the property so if you haven’t started there if you haven’t got your deposit yet then learning how to budget because budgeting is a skill that you can learn and get better at you can also start doing market research you can start learning about the different trends in the market as well Phil Anderson has a really great book that Ben always recommends so I’ll link up to that in the description down below if you want to learn about different global as well as Australian market trends check out his book I’ll link that up down below as I said if you want to learn about suburb research as I said I’ve got a course or there’s a lot free videos on this channel but that’s something you can practice you can look at suburbs and you can go through and look at the data for each of those suburbs and to see whether or not you think that’s a suburb that’s primed for growth and if that’s the suburb that’s low risk and you can do that in multiple different markets you can compare suburbs to each other that’s probably one of the most important skills is actually being able to pick a good suburb and really that skill gets developed as you compare suburbs to each other it’s not just looking at one suburb that gives you the data it’s when you get all the data points together and then you compare suburbs to each other and then you start to see trends that okay these suburbs have these things good in common these suburbs have these red flags in comment that means that they’re bad suburbs and then you really start to get a feel for it and then when you do suburb research and it’s actually time for you to buy a property it’s super quick to look through the suburb look at the growth statistics look at different things and to say okay is this the suburb I want to explore further it becomes a really simple process the same with inspecting properties and looking at properties you can look at properties online and you can look at different floor pans you can do you can run the numbers on it and look at cash flow analysis on different properties and do hypotheticals I do have a cash flow analysis tool at property tools comdata you if you want to go ahead and check that out or you can create your own Excel spreadsheet or do it on paper but going through looking at the property working out what this property is going to rent for and then doing the cash flow analysis to see whether it’s going to be positive cash flow or not then when it comes time if you want to look for positive cash flow properties I’ve searched through thousands of properties and done the analysis on thousands of properties in my time are you surrounding a membership site where I would actually find positive cash flow properties and share them with my community so I’ve done this analysis thousands and thousands of times so I can look at a property now and just by knowing the purchase price and knowing the rental income I can basically know whether it’s going to be positive cash flow or not sometimes I just need a gist of the rental income and I can know so it’s that analysis becomes really quick for me now obviously we also purchase a property I’d go into much greater detail so practicing all of this free stuff is really important some of the things that get hard to practice is obviously negotiating on a property because you don’t want to really falsely negotiate with real estate agents if you don’t have an intention to buy the property so that can be difficult as well as you know going through the contracts and settlement process and things like that but generally you’re going to work with a solicitor or conveyancer anyway who will help you along in that process so that’s not as important then when negotiating can be pretty simple again that’s something that we’ve covered previously on the channel so I’ll link up to the video me and Ben did on step-by-step exactly how to negotiate on property if you want to learn about that click the link in the description down below so go ahead practice that free stuff whilst educating yourself reading books listening to podcasts watching YouTube videos and you will build up your skills as a property investor as long as ideal as being someone like a buyer’s agent who gets to purchase 10 properties a month but it’s better than nothing and it means that when it comes time for you to actually purchase your property you’re gonna have so many skills in the bank and you’re gonna have less things that you need to focus on or less things that you have no idea about and each skill that you build up and each little knowledge gap knowledge gap that you feel lowers your risk and increases your chance of a return because if you’re only going to be buying one to three properties then you want to buy the right properties and if you buy the wrong properties that can set you back years towards your financial goal so each thing you learn lowers your risk increase your chance of return and then once you actually get into it and once you understand property investing and know how to do it spotting gems spotting good suburbs putting good properties within good suburbs spotting under priced properties or properties with opportunity like renovation potential or granny flat potential it actually all becomes quite simple and if you have a strategy and you know what your financial goal is then you just repeat that strategy over and over again and you’ll find that most people are actually successful property investors get really bored with property investing once they’ve done it a couple of times because you’re just repeating the same thing over and over and that’s the point that it actually becomes a really easy skill and you’ll find that people then want to go out and do development and want to go out and do more exciting things because they just get bored with it because it’s actually so simple so it’s hard in the beginning it’s hard to learn how to be a good property investor but if you practice those skills that you can for free educate yourself and then once you get into it and you’re buying properties you’ll learn the rest and then you’ll find that if you’re working towards that clear strategy if you have that clear strategy in mind that filter that you’re looking at everything through then that’s going to help you learn so much faster and you’ll be able to learn from each of your purchases the mistakes that you make so that the next ones can be better and better and better and better so I hope that this explains why becoming a good property investor can be so difficult there’s a few barriers there to overcome but you can do it with some diligence with some education with some practice you can become a good property investor so don’t give up out there go out there do your absolute best I wish you the best in your property journey and having a strategy and having a goal that you are filtering everything towards this is what I want to achieve this is the strategy that I’m going to use to achieve it narrows that gap and makes it so much faster to learn how to invest in property because there’s actually so many different ways to make money in property you can do development you can buy and hold you can do renovations granny flats there’s so many different things that you can do but if you have your strategy if you’re working through that filter then you can cut out all the noise you can learn faster and become a better property investor faster if you want help creating a strategy for yourself as I mentioned earlier defending the team over pumped on property do offer free strategy sessions so head over to onproperty.com.au/mortgage and you can learn about that get on the phone with them get clear on your strategy so you can work to become work towards becoming a great property investor I wish you all the best out there and until next time stay positive