I wanted to bring this up because this is one of the main reasons where I see ambitious investors stop progressing towards their investment goals.
I’m sure we’re all tired of seeing social media marketers talking about how achieving your dream is all about having the right mindset, motivation, the right attitude, getting outside your comfort zone, taking action, thinking big etc etc.
But let me tell you – from my own personal investment experience, and seeing why others who start off with ambitious goals fail – the above stuff plays a MASSIVE role – but maybe not in the way you expect.
When we think about having the right mindset and attitude in relation to property investing, we think about taking action, doing research, saving up for a deposit, getting educated, going to seminars, meeting other investors etc.
People romanticise owning a lot of investment properties and the lifestyle it can bring. They dream of riches, sitting on an island somewhere, driving lambos etc etc. And for the more realistic, they dream of choosing when to work, or being financially able to start that small business they wanted to, doing something not-for-profit, or simply getting $100k passive income in 10 years.
They sit down and work backwards from that goal and work out they need to buy a certain number of properties, a certain type of property, in a certain type of area, and they need to consistently buy x properties every year to reach that goal.
They get pumped. They take action. They buy their first, second, even third…. Then something happens. They get a few maintenance calls. One of the tenants are falling behind in rent. Maybe not paying at all. They hear some doom and gloom in the media. Their friends and family question their decisions. They do a lot of research, talk to more “experts”, do a bit of soul searching…..then doubt kicks in….then negativity…..and inevitably shy away from more “property investment pain”
You see, having the right mindset and attitude is not about getting started or buying properties. Its all in the OWNING of the properties until you reach that goal. Because for most, property is a very long term game. And a lot can happen long term!
The reality of owning investment property is mostly headaches. When these start happening – and at a large scale – this is where I see most investors stop or sell prematurely (or fail) When things go wrong (and they will), its usually not cheap and it usually all comes at once. When you own 1 property you get that call once a month. When you own 10 you might be getting that every week!
So what are the ways to keep headaches at bay? Here are some that’s helped me;
• Make sure your goal or your “why” is REAL enough! How bad do you want that long term dream? What are the implications if you don’t achieve it?
• Landlord and building insurance – make sure you have a great policy and that you take full advantage of claims wherever you can
• Time – time heals most things in the property world. The pain you are feeling right now may be a distant memory in 6 or 12 months time. Brush off the short term pain and focus on the long term gain
• Cashflow – Make sure your head is above water with NET income vs total expenses. Does not need to be a lot, but you should treat your portfolio like a business. And businesses don’t last long running at a loss week in week out.
• Keep track of your income and expenses. At least once a month, update a spreadsheet that keeps track of all income and outgoing costs for each property. When you look at the total P/L, you might find comfort knowing you are still ahead over the year etc even if you had to take a hit now.
Hope this helps especially for the ones starting out!