- The importance of discipline
- Having a precise strategy
- Taking decisive action
Having spent so long in the Navy, it’s only natural that much of my approach to life is shaped by my training, my former way of life, and the strong values of the military.
As I outline in my book, A Military Guide to Property Investing, my time in the Defence Force has also guided my approach to real estate, with a focus on discipline, strategy, and courage.
It’s how I’ve built a successful portfolio, mitigated risk, and avoided the pitfalls that ensnare many investors.
And there are many would-be investors who are wading through minefields right now without even realising it.
Australian Bureau of Statistics data on lending shows the value of investor finance has surged by a staggering 70 per cent over the six months to May this year – double the rate of owner-occupier lending.
The problem is that when someone rushes into a decision as major as property investing, they can expose themselves to all kinds of danger.
This is especially true when buying in the midst of a boom – and one that shows no signs of slowing anytime soon.
So, before racing into the property battlefield, aspiring investors should prepare themselves in the way every good military person does.
The importance of discipline
Just like basic training in the military, anyone preparing to make a property investment move should first learn the principles of discipline. After all, you have to walk before you run.
Discipline in a real estate sense means dedicating yourself to training – that is:
- Educating yourself on market fundamentals, so you can recognise the signs of movement, both up and down;
- Conducting your research before going into battle, so you know where the risks are; and,
- Knowing your mission goals, so you can avoid hot-headed and emotion-driven decisions.
It’s those rash calls that open you up to battlefield losses, when your thinking is clouded, and it’s harder to spot potential red flags.
Having a precise strategy
It’s when you’ve whipped yourself into shape that you can begin devising a strategy, not just for individual battles but for the entire campaign.
Building your property investment strategy involves a number of important questions that sometimes don’t have simple answers.
Some of the revelations to come from this period of honest reflection can be illuminating, but also fear-inducing, and even a little disappointing.
This means you need to decide what your long-term goals are: What do you want to achieve from property investment? When do you want to achieve it?
You need to figure out what you’re willing to sacrifice along the way if you need to, from the big stuff like a new car to an expensive overseas holiday, down to small things like nights out with mates and less regular Uber Eats deliveries.
How prepared are you for each step you’ve got to take over the coming years to achieve your goals?
Are there things you can do to be better prepared, like improving your income or cutting your expenses?
Are there strategic decisions you can make, like deciding not to buy your own home and instead defer that money to an investment, instead, renting where you want to live?
What’s your appetite for risk and will that change in the future with life shifts like having kids, changing careers, or relocating interstate or overseas?
Ultimately, you need to figure out what will get you to that ultimate goal and then refine your strategy.
For the majority of property investors, the journey begins decades before they will realise the benefits of their decisions.
You’ve got to have a long-term focus and a thorough plan.
And most importantly, your strategy should have some flexibility built in so you can respond to changing conditions.
Building the best possible team
No one wins a battle on their own. Every good mission is fought and won by teams that bring specific expertise to the table.
Property investing is no different. Every good investor should surround themselves with a crack team who can assist with your preparation and handle the elements of investing that you shouldn’t leave to chance.
It could be a buyer’s agent to help you source properties to add to your portfolio, including pre-market and off-market opportunities.
It could be a mortgage broker to handle all of your loan needs, not just as you purchase but over the long-term, to ensure you’re getting the best possible deal from your lenders.
It may include an accountant to manage your tax affairs, helping you make the most of the perks available to you.
And a building and pest inspector to check over potential buys and a conveyancer to do the pre-settlement checks and then get the purchase done.
Likewise, a property manager to lease your investment and keep an eye on it, overseeing tenant and maintenance issues, and doing regular rental income checks.
In the military, even the toughest and most battle-hardened soldiers know that you have to call for help when you need it. That’s what your unit is for – to support you when your back is against the wall.
Essentially this means that when you’re uncertain, ask for guidance; when you’re confused, ask for advice; and when you’re in a rough spot, ask for backup.
Taking decisive action when ready
There’s no point laying out a top-notch plan if you’re never going to act on it, instead becoming crippled by analysis paralysis.
It’s a condition some would-be property investors find themselves in.
They spend so long putting down a solid foundation that they become afraid to build anything on it.
It can seem daunting, because buying real estate is one of the biggest decisions you’ll make in your life.
But, when you and your team have done the hard work, you’re ready to act, including mustering the courage needed to back yourself.
After all, the benefit of being as prepared as you can be, and having the necessary supports and backups in place, is that you can move swiftly when a great investment opportunity presents itself.