What do you need to be a successful property investor in 2020 and beyond?
People always ask me this question.
When I first started out in property investment I didn’t consciously think about these things. That was a mistake as I made a few mistakes which I could have probably avoided if I had taken the time to work out what attributes I needed.
We all have strengths and weaknesses. Identifying your weakness and taking action to improve them is essential in any business. So having a list of successful property investor attributes to work from as a foundation is an excellent idea.
The list of 7 attributes that I am going to share with you have come from my experience as a successful property investor for many years. No matter if you are just starting out in property investment or have been involved in it for a while I urge you to take a look at the list and identify where you need to make improvements.
If you were to ask other property investors for their list of successful property investor attributes then they would probably all be slightly different. But it is very likely that the principles would all be the same. So here is my list of the 7 things that you need to be a successful property investor:
1. Your Mindset needs to be right
My book “The Foundations of a Successful Property Investor” is all about developing the right mindset for your property investment business. This is the most important attribute of all in my opinion but few investors really examine their mindset which is why I wrote the book.
The first thing that you need is total belief that you will succeed as a property investor. Without this you will really struggle. Your success starts in your mind. There will be a lot of challenges ahead for you as a property investor and having an unshakable belief in yourself and your dreams will help you to overcome them all and succeed.
There are other important attributes that you need such as money and knowledge that we will discuss later on. You can always acquire these things. But if you don’t have a rock solid belief in your property investment business then you will be doomed to mediocrity or even failure.
Belief is the thing that sets people apart from each other. You can have two people that go into property investment at the same time and one ends up being successful and the other doesn’t. The difference between these two people is their belief. An unshakable belief will drive you to take action and never give up.
My mindset has always been pretty strong when it comes to property investment but I am always prepared to work on it to keep my belief unshakable. You need to do this too. I have a couple of really good mentors that help me to do this. I also use various personal development techniques which you can read about on this blog.
2. A Thirst for Knowledge
Are you a continuous learner? Do you have a routine where you commit to learning at least one new thing every day? You need to develop your knowledge of property and the strategies that you can deploy. There is always something to learn in the property investment game, so make a commitment to stay on top of everything.
I am a strong believer in choosing one property investment strategy at a time. The main reason for this is that you can develop a deep understanding of it and use this knowledge to your advantage. It is far better to be an expert in one strategy such as “buy to let” than a jack of all trades with all of the strategies.
Once you have decided on your strategy then you need to decide what areas of the country you will invest in. Right now there are better buy to let yield opportunities in the Midlands, the North of England, Scotland and elsewhere than there are in London and the South East.
So if you are going to operate in an area that you are unfamiliar with then you need to know everything that you can about that area such as:
- The types of property available
- The average prices for property in the area
- The best locations for investments (down to street level)
- The average rental prices
- Any differences in property law (e.g. Scotland)
Believe me I am just scratching the surface here. Knowing the rules and regulations is also very important. I am now in the HMO market and I had to learn a lot to become an expert in it. This knowledge is invaluable and has enabled me to be very successful with the HMO strategy.
How can you learn? Well there is a lot of information online that is updated regularly. You can use the “news” feature in Google to find out the latest trends in the property investment industry. Then there are seminars and events you can attend as well as online training courses. Of course you need to keep reading my blog posts as you will learn a great deal here!
There are books available on property investment. Getting yourself a good mentor is a great way to learn. They will be there for you if you need help resolving a problem. A mentor is not going to sit down and teach you the fundamentals of property investment – there are a lot of easier and cheaper ways that you can do that yourself.
Learn all that you can about systems and taxation. Finding the best people to join your virtual team is a learning experience too. You want the best solicitors, mortgage brokers, estate agents, letting agents, contractors and so on as part of your team. Learn who these people are and then contact them to see if they are a good fit.
3. Attention to Detail
I have seen a lot of people end up with failed projects because they didn’t do the proper due diligence required. Even I have made a mistake here. I am someone that has always had a good eye for detail, but with an opportunity presented to me years ago I didn’t look into it properly and things did not turn out the way that I wanted.
You need to be committed to checking the detail. Do your research and then do it all over again. There are so many things that can trip you up in property investment. Don’t just accept the word of others either. Go out and check things for yourself.
There is always a lot of money involved with whatever property investment strategy you follow. Why would you risk your money without checking all of the details first? Never be pressured into a deal. It doesn’t matter that your agent tells you that the property will not be available at the low price for very long. Check everything out!
A lot more property investors are looking to other parts of the country for better buy to let yields. This is fine, but you must pay attention to the detail here. You are not familiar with these new areas so you have to research thoroughly. If you don’t you could end up losing a lot of money.
Look I get it – research is not the most exciting aspect of property investment. It takes time and persistence to research something properly. But the alternative doesn’t bear thinking about. Just buying a property on the “say so” of someone else is very likely to end badly for you.
Some property investors will say that they don’t have the time to conduct thorough research when they want to invest in a property. Really? So what is more important that is taking up your valuable time? Does it have the potential to lose you money like failing to pay attention to detail can? Probably not right?
4. Setting Goals
Do you have written goals for your property investment business? If you do then congratulations you are probably in the minority. It is fine to have big dreams about being successful with property investment. I encourage this totally. But you need to take it a step further and create inspiring goals from your dreams.
Why don’t people set goals in general? Because it takes effort of course! You have to use that wonder muscle in your head to think about what you really want and when you want it by. It is not something that you can do in 5 minutes – which is a really good thing in my opinion.
Your property investment business has the potential to significantly change your life for the better. So why wouldn’t you spend a few hours on creating clear and exciting goals for your business? As someone that has always been driven by goals I really don’t understand this.
So if you do not have any clear goals written down I want you to do this today. Check out my post on goal setting and take action. You will feel so much better when you have goals in place.
They will clarify the direction that you need to go in to achieve your dreams. Goal setting is not something that just you do on New Year’s Eve. We all know how that generally turns out!
5. Access to Finances
Notice that I said “access to finances” rather than just having money. I know several successful property investors that hardly use any of their own money. It is a strategy that I use from time to time as well.
If you don’t have the money that you need for a down payment on a great investment property then you need to believe that there is always a way. You can find other investors and create a joint venture. They provide the money and you provide the expertise.
Having a good mortgage broker on your virtual team can literally mean the difference between success and failure. I know several mortgage brokers who can find the right deals for me. Don’t just rely on the mainstream lenders for your mortgages. Get out there and find a competent mortgage broker who you are happy to work with.
On the subject of finances you need to be on top of the money flowing in and out of your business. Cash flow is really important and you need to make sure that you will be able to pay for things on time. Any slip ups here could result in a bad credit rating which will scupper your chances of success in the future.
6. Mental Toughness
Have you read my post on mental toughness? If not please read it. You need to be mentally tough as a property investor. There are going to be problems that you have to deal with that you would have never anticipated. If you let these problems overwhelm you then you will be a lot more likely to give up.
Mental toughness will enable you to bounce back from the setbacks that you will inevitably face in the future. People are going to let you down. Deals are going to fall through at the last minute. Lenders are going to reject your application for a mortgage. The council is going to reject your planning permission application. And so it goes on.
Imagine purchasing a property that you thought was sound only to discover that it has a major problem that is going to take thousands to put right. How would you feel in that situation? This has happened to many property investors. They did all of the right things but something was overlooked which could take all of the potential profit from the project.
I am not trying to be negative here – just realistic. One thing that you can absolutely guarantee with property investment is that things are going to go wrong. You know that it is a risky business but you got into it because the rewards are worth the risk. So work on your mental toughness because you are going to need it!
You may not have any employees at the moment and maybe you are not ever planning to have any. Regardless if you have employees or not you will always have a virtual team comprising of solicitors, estate agents, letting agents, contractors, other investors, mortgage brokers and so on.
You are the leader of this team. If you do not lead your team properly then there is a much higher probability that things are going to go wrong. For example, you have found some good contractors to work on your properties. They do a great job when it comes to renovations etc. But if you don’t lead these people then they will not achieve your deadlines.
Communication is a critical part of leadership. You need to make it abundantly clear to all of the members of your team what your plans are and when you want everything completed by. And then you need to ensure that they all play their part to make it happen.
I have a number of excellent employees and some of these are leaders themselves. But ultimately the buck stops with me. I need to lead them to ensure that my property investment business continues to go in the direction that I want it to go. So if your leadership skills need work then do all that you can to be a better leader.