Today I thought I would share my tips for not going stir crazy while you are trying to find a great property deal!
I get so many calls and emails from people who are desperate to get their portfolios producing enough income so that they can quit their jobs, or find the perfect development which will lead them to financial freedom – but the sad truth, is that property is not an overnight route to riches. It’s paved with hard work, perseverance and a bit of luck!
The key thing which you have to remember is that while you are desperate to do a deal – property is illiquid. You only make money when you sell – but that takes time. If you buy a dud property it could end up losing you money rather than making it.
Being desperate to do a deal means you are more likely to make mistakes. In your bid to become a property millionaire, you could end up buying the wrong property at the wrong price. And then you’re screwed. Then you’re desperate! Both time and money have opportunity costs attached to them – once you’ve invested your cash and your time, you’re going to have to sit and wait till you can turn your profit. Your opportunity cost is that your money is invested in property A, however property B may come along which is a better deal – but you’ve used up all your funds buying property A, so property B can’t be done. That’s your opportunity cost.
Time also has an opportunity cost – while you’re focusing on property A, you may not even notice property C which could be a mammoth bargain, but you’re so busy spending time on property A, you don’t even recognise property C. Time, like money – needs to be spent wisely to make sure you get the most out of your property investments.
- Get used to waiting. In the property game patience really is a virtue. Many so called “successful” property people have gone bust because they did not wait. Waiting is boring – but it’s a fact of successful property investment. Think of it like this – buy a property, any property and just wait. Wait long enough and it’ll be worth double what you paid for it. Now doesn’t that make waiting sound more attractive!
- Remember the business objective of buying property. People invest in property to make money. However, in the thrill of the chase and the process of trying to buy a property you can lose sight of the objective. Property as an investment is a means to an end. It is not the end itself. The objective is to profit from property. It’s not about buying a gazillion houses. Who cares if you own 40 gazillion houses if you’re not making a profit. Be clear on your goals.
- Learn a new skill. As you idly twiddle your thumbs while fretfully checking on Rightmove and the auction sites that a new amazing property has not cropped up you will have plenty of time to learn a new skill. Being focused on finding a great property deal is great – when it happens – but while you’re waiting why not learn some new skills? How about a short course on plastering or decorating. Great skills to have and you may even meet some contacts!
- Make some new friends. There’s nothing worse than only having friends in property. Somebody has always got a good deal and makes you feel as though you are missing out. If you had a normal office job would you really spend all your time with your colleagues? I didn’t think so! So get out, reconnect with friends who have different jobs and talk about different stuff. There is a whole world outside of property (honestly!!).
- Get a part time job. Okay so this sounds weird, but really at least if you have a part time job with some other income coming in you won’t feel so bad for not finding the world’s best property deal this week. It also gives you something else to do apart from stalking estate agents and eyeballing Rightmove 24/7.
- Go on holiday. Counter intuitive I know – but really if there’s nothing doing why continue to push water uphill? Everybody is allowed to take a break now and then and if there’s not much going on in the property market right now then why not? If you still want to be kept in the loop while you’re away you can set up alerts on Rightmove for your property search.
Property investment is a business like any other – it takes time and money to grow. Think of your property investment career like a career in a “normal” office job – it takes time and experience to get to certain levels. You have to have X amount of experience before you can jump to the next level. It’s just the same in property investment – you have to “earn your stripes” before you can start reaping the riches. In the meantime, settle down for the ride 🙂