Why 99.1% of all property investors fail to achieve results?

Isn’t investing in property designed to make you wealthy? So why do 99.1 percent of investors fail to achieve the results they’re hoping for?

According to the ATO, under 10% of investors own more than three investment properties [1]. One might assume this is what a successful property portfolio looks like, but that’s not always the case. The goal of owning investment properties is to generate enough passive income allowing you to reduce your working hours and enjoy more family time.

Unfortunately, for most Australians this isn’t always the case. A 2019 report released by the Australia Institute revealed rather than cutting back on work hours, Australians work an average of 5 hours overtime each week—often unpaid [2]. This is the opposite of what they’d like to be doing. So how do you do less overtime, spend less time at work, and become part of that 0.9% that owns the property empire of your dreams?

If you’ve been curious about creating an investment portfolio or diversifying your existing one, or simply want to improve work-life balance and spend more time living your best life, read on.

1. Create a clear investment strategy

Property investment without a clear plan is a recipe for disaster. You’ve heard the saying, ‘failure to plan is planning to fail’, right? In this instance, it’s certainly true.

While almost anyone can buy an investment property if they have the finances behind them, turning that property from a one-off to a one-of-many takes a clear strategy and guidance from a strong team. You’ll need to consider a few factors prior to purchasing such as can you afford the initial investment, do you have enough of a financial buffer for maintenance, rates and rental vacancies. Connect with a mortgage broker to help secure finances, and once you’re pre-approved, you need to decide on the property style and location. Also take into consideration whether you can realistically afford to wait the time it takes for a property to reach its full potential.

Working with a business such as National Wealth Advisory will ensure you go into the property investment market with a bullet-proof and clear plan in place to help you make the right choices based on your situation.

2. Treat property investment as a business, not a hobby

We’re going to break your heart here. If you’re in property investment for the thrill of having a portfolio, you’re in it for the wrong reasons.

While investing in your first, second then third property can certainly be exciting, property investment as a whole is not designed to be interesting. In fact, more often than not it should be very boring.

For those who already own businesses, you’ll be familiar with thinking in the long-term. Where do you want your business to be in five, ten, twenty years? What financial and asset protections do you need to put in place to ensure you reach those goals?

Treat property investment the same way – Think of your investment in the long-term, and ensure you have the appropriate protections in place to achieve that goal. Treating your investments as a business rather than as a hobby, and having someone to support you through the long-term process, will help to keep your goals in sight and ensure you achieve financial freedom.

3. Don’t go into it alone

In the famous words of the Legend of Zelda, it’s dangerous to go alone!

Malcolm Gladwell, author of Outliers: The Story of Success, details in his book that it can take on average 10,000 hours for a person to become a professional at something. If you’re devoting every hour of the day to that thing, that equates to 416.6 days. Now, if we factor in sleep, work, eating and everything else we need to do, that time balloons out to approximately 2,500 days. That’s just under 7 years of your life, or practically a university degree!

While Zelda’s words are a little tongue-in-cheek, they’re certainly true in the investment world. Going it alone when you’re not educated in the area can leave you buried in mortgage debt, paying more tax and interest than necessary, and eventually end up forcing you into bankruptcy.

99.1 percent of property investors will fall into some sort of trap like that. Don’t let yourself become another one of the statistics.

Professionals such as the team at National Wealth Advisory will be able to support you in strategy creation, and connect you with the right team of people to support you in your investment journey. If you’re wanting to discuss your financial needs further or speak to someone regarding your existing property situation, contact our team today.

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