What's Stopping You Investing In Property?
What’s stopping you investing in property?
Everyone is always talking about how property investment is a great idea and how much better the returns are versus sticking your money in a bank account. So why isn’t everyone already doing it? All the information is out there in webinars, networking events, training courses and books…but something is stopping you.
I often see a common trend in my clients as they begin their property investment journeys - despite how much knowledge you gain on the subject and how much you say you want to get involved in property, you continue to sabotage yourself from actually getting started. There are common blockers which crop up and threaten to destroy all hope of actually going for it. The good news is, these blockers (i.e. excuses) are in your head and you can overcome practically every issue with the right knowledge, commitment and support.
The myth you need money to make money just isn’t true anymore. It’s so easy to use the excuse “I would love to get into property, but I just need to save up a pot of cash first”. Rubbish. If you know what you are looking for and the deal stacks up well, there are plenty of places you can find the money. Mortgages, bringing finance, private investors, credit cards, bank loans, equity shares…there are so many options out there.
The problem is, people confuse borrowing money to invest in a cash-flowing asset with borrowing money on a credit card or loan to buy unnecessary items, leaving you with bad debt. I can’t get my head around how many people are willing to pay thousands as a deposit for a hire purchase car and commit themselves to paying hundreds each month for years and years on an item which will only go down in value and never produce an income (unless you plan to be an uber driver). Yet the same people don’t like the idea of buying an investment property using borrowed money, even though a property will likely go up in value and, if rented out, will provide income each month to pay the loan repayments for you!
Don’t get me wrong, I’m not recommending buying your own home using lots of borrowed money – you’re not going to get an income from your own home to pay off the borrowed funds (popping a room or two on Airbnb could always help with that though!). But if you are buying property as an asset, in the true positive cash-flowing sense of the word, then so long as the profit each month will cover the interest payments on a loan and still leave you a comfy buffer, then any borrowing is actually good debt!
My partner and I took out loans of over £10,000 each just to do our property investment training, let alone financing our first property purchase. We just made sure we calculated that we could pay back the loans from the profit of the properties we were buying. Our loans are now paid off and we have a portfolio worth nearly £1.5 million. Those loans definitely don’t look like bad debt now.
For me and for most of my coaching clients, the whole point of investing in property is to create a passive income which allows them financial freedom and therefore more time to spend doing things you love with people you love. Generally, when you first start out you may be working a full-time job and wishing for more time…so how can you possibly squeeze in starting a whole new property investment business?!
This was exactly how I started. I was working full time, on shift, in a new managerial role where I was constantly stressed, tired and generally miserable. The thing which I realised (mainly thanks to reading lots of inspirational books…email me for a reading list!), was that everyone has 24 hours in their day.
I was working around 8 to 10 hours a day and had to save 8 for sleep, but that still left me with at least 6 hours a day, plus weekends. Ok, there was also travelling to work and eating my meals, but I committed to carving out at least 1 hour most weekdays and a couple of hours over the weekend so that I could do what I needed to build myself a better future. Add in one Saturday a month to visit my chosen investment area and I had all the time I needed to buy 4 properties in my first year.
And if you have even less time than that then there are always property sourcing agents. Sourcing agents are generally people who want to be property investors and who happen to live in good investment areas, but lack money or confidence to take on the deals themselves. They will charge a fee (sometimes a fairly hefty one), to do all the leg work and find a cash flowing property for you.
A word of warning, make sure you do you own sums and work out the returns for yourself…you never know what someone else will include or leave out in their calculations. For example, you will probably want to include the sourcing fee as a cost, but they may well leave this out to make the property appear a better deal than it is.
Whether you carve out time yourself, or outsource the bulk of the time to others, the time is there and it is doable. Isn’t it worth giving up Love Island for a bit to change your life forever?
This is the BIG one. You can have all the knowledge, money and time in the world, but this one will get you if you aren’t prepared. It doesn’t matter how many years go by or how many houses I purchase…I still have those moments where I question everything I am doing. It might be before I make a call…What if the estate agent on the other end doesn’t take my offer seriously? What if the offer does get accepted and then I have to find the money quickly? Will the builder realise I have only just learnt the terminology for what I’m asking them to do?!
The answers to all of my last-minute panicked questions don’t really matter. They are all scenarios my inner voice has concocted in my head to protect me from potential failure. The reality is that none of my invented situations have ever actually materialised. Usually people are a lot friendlier and it all goes far more smoothly than I could ever have imagined.
There have been less than ideal responses of course – an agent once forgot to put me on hold whilst they turned to their colleague and said “It’s that ridiculous couple again, they can’t see this property, can they?”. To which their colleague replied “Absolutely not! They will just waste everyone’s time”. My response surprised me – all I could think was their loss. Personally, if I was selling a house, I would rather get as many interested people through the door as possible!
But, snooty agents aside, you need to believe that you can do this. You need to gather enough knowledge that you are confident in what you are doing and then you need to build your self-belief so that you have the confidence to carry on in the face of rejection. And there is a lot of rejection in property, believe me.
Along with plenty of motivational literature, the big thing that has kept me going through all the rejected offers, belittling agents and general confidence crises has always been my mentors. I have had a few mentors depending on which area of my business I am working on at the time, but they have all been invaluable. Whether I need some expert advice, a sounding board, a motivational pep-talker, a critic or an accountability partner, it’s my mentors I turn to.
My biggest piece of advice if you want to realise your dream of being a property investor, is to find someone who has done what you want to do and who you get on with on a personal level and then get as close to them as you can (without being weird!). Draw confidence from them, use them in your moments of self-doubt as a safety net. Let them be an example of what is possible, so that you can silence the little voice in your head and instead allow room for your self-belief to grow.
So, there you have it, no excuses now not to get out there and make it happen! You can do this. You have access to everything you need if you just look for it. You are 100% capable of achieving your property investment aspirations. And if you find yourself going back to the same old excuses, go and find someone else who will break through your doubts and hold you accountable to your own dreams!