Are you a Goldilocks property investor?
Listening to some potential property investors discuss deals often reminds me of my childhood and my mother reading to me the story of Goldilocks and the three bears.
Those of you that know the story will recall how fussy Goldilocks is. The porridge she tries to eat is either too hot or too cold, the chair she wants to sit in is too big, the beds are either too soft or too hard. So often I hear sideline property investors talk the same way. The market is either too hot to invest so they don’t buy, then if the market cools down it is too cold to invest so they don’t buy either. And then 10 years later they stand around the braai lamenting to everyone that will listen about how they wish they had bought something 10 years ago and what it would be worth today.
I am not suggesting that one should not be fussy and cautious about how and when to invest, but by the same token conditions are never really perfect and there will always be two groups of advisers - one telling you to go for it and one telling you to wait. At the end of the day, you need to make your own decisions and be able to take the plunge regardless of what everyone else might be saying.
In my own experience, I use the following strategies to make sure that I have the confidence to not follow the crowd when it comes to investing. Firstly, I use every tool available to continually educate myself about property investing. I read books, newspapers, websites, blogs, and articles from economists and many other professionals that are way smarter than me. I then draw my own conclusions and act accordingly with the confidence that I have done all the research and homework possible about investing conditions.
My next strategy is to always focus on the specific deal I am busy with as opposed to the market conditions. I have often said that you can do a great deal in a bad market or a terrible deal in a good market – it all depends on you. If the numbers work on the specific property you are pursuing and it meets your long term investment criteria, then that would be a good deal in any market regardless of what the naysayers might advise.
The good news in the Goldilocks story is that after a number of tries she does eventually find the porridge at just the right temperature, the chair that is just the right size, and the bed that is the most comfortable. I trust that armed with the right knowledge and approach that you will have the same success in your future property deals.
Those of you that know the story will recall how fussy Goldilocks is. The porridge she tries to eat is either too hot or too cold, the chair she wants to sit in is too big, the beds are either too soft or too hard. So often I hear sideline property investors talk the same way. The market is either too hot to invest so they don’t buy, then if the market cools down it is too cold to invest so they don’t buy either. And then 10 years later they stand around the braai lamenting to everyone that will listen about how they wish they had bought something 10 years ago and what it would be worth today.
I am not suggesting that one should not be fussy and cautious about how and when to invest, but by the same token conditions are never really perfect and there will always be two groups of advisers - one telling you to go for it and one telling you to wait. At the end of the day, you need to make your own decisions and be able to take the plunge regardless of what everyone else might be saying.
In my own experience, I use the following strategies to make sure that I have the confidence to not follow the crowd when it comes to investing. Firstly, I use every tool available to continually educate myself about property investing. I read books, newspapers, websites, blogs, and articles from economists and many other professionals that are way smarter than me. I then draw my own conclusions and act accordingly with the confidence that I have done all the research and homework possible about investing conditions.
My next strategy is to always focus on the specific deal I am busy with as opposed to the market conditions. I have often said that you can do a great deal in a bad market or a terrible deal in a good market – it all depends on you. If the numbers work on the specific property you are pursuing and it meets your long term investment criteria, then that would be a good deal in any market regardless of what the naysayers might advise.
The good news in the Goldilocks story is that after a number of tries she does eventually find the porridge at just the right temperature, the chair that is just the right size, and the bed that is the most comfortable. I trust that armed with the right knowledge and approach that you will have the same success in your future property deals.
