Have you noticed what motivates people to do things these days?
It seems that almost everything today is based around how quickly it can be done, or how easy it is and how simple it is to get the result. Our motto of the times seems to be “Little effort for big reward”. Reality TV shows promote “instant fame”. Others claim to show you how you can renovate a house in a weekend. Even celebrity chefs advertise books with meals that can be prepared and cooked in 10 minutes, allegedly.
Consider how often you have seen these words recently:
- Fast solutions
- Quick meals
- Discounted for quick sale
- Only 3 easy steps
- Do this one simple thing and (fill in the blanks)
Does this all sound familiar?
This constant need for speed is alarming. The frantic nature with which people expect things to happen today is dangerous. It’s even worse if you are a new property investor. But of course people are brought up on a diet of instantaneous gratification these days. Everything is done quickly and getting financially free through property investment is just another thing to do quickly.
The only problem here is that property investing is not about speed. For the average person, successful property investing is about buying and holding. Holding, of course, takes time and patience. Sure there are strategies that can help you to make money faster such as renovations, flips and developments, but these things still take time and knowledge to master.
Its almost as though we are being conditioned into believing that you can get something for little or no effort. Why is that? This type of belief might work for a hamburger but it has no place in investing.
Investment is a process by which you investigate what you want to do and then how you want to achieve it. Normally you would employ experts in the area you are interested in, research what are the available options and make sure you can get finance. Then and only then would you buy. You see, buying a sound investment property takes time.
Think about it. If investment properties were sold in shops, when would you ever walk into one with no pre-conceived ideas of what you wanted and then walk out with an investment property under your arm, having given it as much thought as you do choosing a cup of coffee. Does that sound like something you’d want to do?
Of course not, it makes no sense.
I often tell the story of how I bought my first investment property. A friend of mine told me one day that he had to move from the home he was renting because the owner was selling. My friend didn’t want to move, in fact he had been there for a number of years and wanted to stay.
Over a 5 minute conversation I told him not to worry as I would buy it. I rang the agent later that day, made an offer and bought it. I guess that sounds like the opposite of what I’m telling you. Actually though, the purchase was made exactly as I said you should.
I had been looking for an investment property for quite some time. I knew the area where he lived was a solid performing suburb with a history of good growth. I knew the unit he occupied was solid and well built and I knew him very well. He was someone who was meticulous in keeping things in good order, clean and neat. I knew any property he was in would always be looked after.
Although the decision took a little less than 5 minutes, the process to come up with the knowledge to make the decision took a lot longer.
In the same vein, selecting a finance strategy doesn’t happen quickly or at least it shouldn’t. Finance is not about speed. Rather it’s about selecting the appropriate lender and product for your circumstances in a manner that allows you to borrow the maximum amount now. Ideally the strategy allows you to have the maximum amount the next time as well and the time after that.
It is possible to wake up in the morning and decide to become a developer or a renovator because you watched The Block last night. However, common sense tells me there won’t be a happy ending.
Most things that are worthwhile take time to master.
If you’d like to spend some valuable time discussing finance strategies with us, please feel free to contact me at firstname.lastname@example.org