Have you ever done a long-distance run with a blindfold on?
It takes longer, you come across bumps and collect some bruises on the way.
Not very effective if you’d like to cross the finish line in one piece Or at all.
Yet many people buy property without a plan or clear idea of where they want to end up. This is the property equivalent of getting into the starting blocks with the blindfold on.
Which brings us to number 3 of our 7 critical mistakes.
In episode 33, we discuss “Starting without a plan and an end goal – #3 of the top 7 Critical Mistakes”.
Listen as David Johnston, Cate Bakos and Peter Koulizos take you through why planning is critical to success, the mistakes to avoid when putting together your plan and the misconceptions that trap property investors.
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Resources:
- Why short-term investing has long-term consequences
- Why you need to plan for your future home when buying an investment property
- Why do you need a Property Plan?
- How to develop your own Property Plan – start with the end in mind! (Ep. 4)
- The importance of establishing your goals when developing your Property Plan
- How to assess and select property like an A-grade Buyer’s Agent (Ep. 7)
- Novice investors being blindsided by spruikers
- Small time development – How it can work for you, but is it a risk worth taking? (Ep. 11)
- Development is sexy – but looks can be deceiving!
- Mortgage Strategy 101 – Ep 5. Risk Management
- How mortgage strategy shapes your ability to hold property and grow your wealth for decades into the future! (Ep. 24)
- Buying with your future plans in mind
- How to succeed with Property and Create your Ideal Lifestyle
- Mortgage Strategy 101 – YouTube video series
Show notes
- Are you setting out on a long-distance run with a blindfold on? This is the same as buying property without a plan or goal in mind. It takes longer and you come across bumps and bruises on the way. Having a plan for whatever you want to achieve, just makes sense.
- Goal setting is the foundational step – your plan must have goals.
- Look into the future! What would you like your lifestyle to look like? Set goals around income, date of transitioning to flexibility stage. How does this look and work backwards.
- Your next decision is always the most important!
- What income do you want to be receiving from property when you retire? Are you looking for yield or building a nest egg?
- You may be super clear on the next 5 year or 10 years, but not so sure of how you want things to look at 65. That’s ok.
- Critical mistakes:
- Sporadic goals – if your next property goals don’t correlate with financial outcomes needed in your over all property journey, you are more likely to make mistakes.
- Don’t even start looking at property until you have a clear goal.
- Don’t let your ego get in the way – it sounds great to compete with your friend or neighbour and get an investment property under your belt, but this can go wrong quickly.
- Owning a property does not make you an expert.
- Neither does believing that every property doubles in value every 7 years, that is simply not true.
- Not putting in the time and effort – how much time did you put in planning your holiday? If the answer is more than it took to plan your future, you are in trouble.
- Collecting bad past homes – this is a flawed strategy. If you didn’t want to live there, why would anyone else?
- Think simple – the Property Professor’s goals – retire earlier, retire richer, work part time, make some money here and there or give up your day job. What are your goals from property? This will determine the strategy.
- So, you may have purchased a lemon – that doesn’t mean it’s time to sell. If the sale won’t help you achieve your goals, it may be worth keeping. We are loath to recommend selling a property unless there is a really clear upside to do so.
- The symptoms of not having a plan:
- You’ve accumulated number of properties rapidly – got to a point where you’re financially under the pump. Cash flow is difficult and the property has not grown as you had hoped.
- You have procrastinated into not buying anything.
- You have made investment decisions which have later hamstrung you when you wanted to purchase a home.
David Johnston – The Property Planner’s Golden nugget: developing a plan and setting goals is not about being perfect or knowing precisely what will happen in the future, take the time to put down goals and plans, and begin process and journey of doing that, if you continue to iterate and review, you are much more likely to get the outcomes you’re looking for.
Peter Kouilzos – The Property Professor’s Golden nugget: work out what your goals are first, then work out the strategies as part of your plan. No goal and you will fail.
