Wisdom you gained through property investing

Anger management when dealing with tradies, managing agents, banks, real estate agents, especially valuers and accountants.

But in all seriousness, I quite enjoy the research aspect of going to open homes, inspecting the suburbs, in- depth data analysis, gut feeling and so forth in the property search. Really grateful to people that's been involved in my journey so far.

 

And you leave out council....

 

Do all of your thinking & research before you purchase. Once you own the asset, relax and let it do its thing & have confidence that all aspects of the investment have been considered.

and....patience.

Best to all

 

Unlike any other work I've ever done, investing is a truly non discriminatory level playing field, merit driven where your creativity, respect for others and smart left field ideas get richly rewarded!

Noone cares where you grew up, went to school, your degree, who you worked for before; I don't have to worry about what my previous boss says about me. While I had to work hard in normal PAYG jobs for about ten years to get going, now I pick and choose what I want to do. Usually it involves playing at the beach with my kids and holidays with my family...

 

i wont say investing is a fair playing field.. if your buying normal resident and hold yes.. but people in the know are buying lands long before the public knows about (zoning and future developed areas), just like the stock market (or lack of listed company) now. VC and angel investors get to invest in startups long before we even heard about them.

 

very true @jins13

 

how can we forgot this!

Council, council, council ..................

 

well said @Poppy

 

Learning how to cut losses and leave.
It was a hard decision to sell an IP recently. But now its sold I feel so much lighter!
didn't lose much but really not a good place for future capital deployment. You can't be sentimental about suburbs or investments. If it doesn't work, stop throwing money at it. pack up early and leave. Limit your losses.

learning to have delayed gratification.
it felt futile buying small lots of shares and pouring money into realestate with no gain in the short term.
suddenly (Ok 10 years) later. the IP is paid off and the increased rent is paying off another IP so Im cash neutral. And the share portfolio is cracking along nicely.

learning to ignore the herd
Buy! Sell! crashing!
if my cash buffers are intact then I can sit and hold on. I am happy doing my thing especially with shares.

learning the point of difference makes the investment solid.
all IPs have a twist that makes them easy to rent... and sell...

learning to change strategy with life
I was a rentvestor but now thinking about an PPOR.
all cash is in IPs offsets so easy to get and and maintain tax benefits of max deductibility and smashing down bad debt.

which brings me to the final one....

learning the tax laws.
make you money work hard AND smart

 

1. Cycle.
THERE IS NO SUCH THING AS A PROPERTY CLOCK!
That phrase makes millions for marketers, so only use it if you're selling services to property investors

2. Leverage.

The only time to leverage close to 100% is at the beginning of your journey when the interest bill is easily managed.
In fact expect to re invest in most of your free cash for the first 5 yrs at least.
After that your goal should be to keep it as low as practical.

3. Compounding .

Don't even bother with RE for 8% return. Too many headaches, taxes etc.
All you have to do is save your $$ and buy the ASX20 when the market is below 25% of the previous peak. No brainer, no hassle.

 

The main things are covered pretty well by the previous posts. I'm going to add some somewhat contraversial things I've learned over the years, many might disagree but it's worked well for me.

1) Understand there's 3 levels of risk - 1) what's allowed (e.g. by the book, what's literally written in laws etc), 2) what experienced people actually tend to do, and 3) what you can reasonably get away with. I tend to sit between 2 and 3, because I'm confident in my abilities to manage consequences as they arise. In other words - take calculated risks, be confident in your own thinking / due diligence / experience. Be comfortable making bets.

2) There's no guidebook / no crowd support / no support group etc where you're headed. This is especially important since I practice what I describe in point 1. Often, if you share your thoughts / rationale to common people, you'll be met with disagreement / naysayers / even ridicule. Then years later you have proof of concept or have succeeded in your endeavour and those same people will give a **** tonne of excuses of how I was lucky or this and that.

3) Forget about asking the masses. I'm quite cynical about asking for the common opinion on things that are quite specialised. E.g. if I want to buy a computer part, sure, read reviews / make a forum post etc. But investment decisions? No way. Pay for advice. Network and find a trusted / successful individual. But as a rule, common opinions will lead to common results.

4) Seek out and create win-win situations. Even if you win 100 and I just win 1, I will deal. Especially if I can scale this deal a million times over.

5) Tying 1 and 2 together - a professional can tell you what you're allowed to do according to the rulebook (legislation etc). But a trusted mentor / person of success etc who has done what you want to do, successfully, can tell you what you could / should to do. On this note, I hope one day to meet a tax agent who is deeply familiar with audit triggers and actual ATO procedure / algorithms for red flagging etc.