I was discussing property investment with a potential client the other day. He was really into gaining an education about how to buy real estate for creating long-term wealth. He’d read plenty of online blogs and books and was a keen student of the relevant data and economic commentary. He was both cautious and eager – a great example of what an investor should be.
During the conversation, I mentioned meeting investors like him before. Talented amateurs who knew a lot about markets, but who weren’t qualified professional advisors. I told him I’d run across plenty who convinced they knew what they were doing, decided to shun our specialist guidance. So, I asked him, “Why are you seeking investment help?”
His reply?
“Why crash the plane when a pilot can fly me there safely?”
It was a great analogy that really got me thinking about the whole process.
Piloting Success
All the successful property investors I know understand that the journey creates the outcome when it comes to wealth creation.
That’s why I love this notion that building a portfolio is like travelling by airplane.
First up, you need to know where you want to be. It’s no good starting out a trip by heading in the wrong direction. You could end up travelling for hours and hours and be further from your desired destination than when you started.
It’s the same with unqualified investors who start buying assets without any thought about how the properties will fit into their long-term goals. These homes are at serious risk of underperforming. In the worst instances, they can lead to huge financial setbacks.
Planning your journey and having the right waypoints are key to reaching your destination.
Next, you need to balance your risk and reward.
If you only concentrated on every possible thing that could go wrong with an aircraft in flight, there’s a chance you’d never step foot in the airport. Bad weather, mechanical failure, human error… all can have devastating consequences.
But most people instead focus on the reward. You can be where you want to be – starting a holiday or visiting friends – in no time at all. A wonderful result from your commitment to act. Also, by choosing a reputable airline, the chance of a disaster is minuscule.
Like flying, property investing comes with risks and rewards. If you only ran every worst-case scenario, you’d never buy an asset. Rising interest rates, lousy tenants, and failing buyer demand are all factors that can see you out of pocket. But for those who do act, the results can be financial freedom, early retirement, and a fabulous lifestyle.
This leads me to another point. You want to get the best possible result for the least amount of risk.
So, when you board an aircraft, you put your life in the hands of people who make it their professional mission to get you where you are going safely. From mechanics and airport maintenance staff through to the control tower and the flight crew – and especially the pilot. These are specialists who have done training and gained practical experience to make your travel worry-free.
Likewise, lowering risks as an investor means trusting professionals to help navigate your investment journey. QPIA-qualified advisors can help you plan a path to your desired financial outcome. Best of all, they can help you execute that plan by locating and acquiring assets that suit your stage of portfolio growth and consolidation.
And like a pilot, they can read the surroundings and make important decisions along the way that will continue to reduce your risks. A pilot will fly above the clouds or around bad weather, or they might divert to another airport in the case of an emergency. Similarly, your property advisor can track where economic and locational factors are driving markets and help you amend your financial plans to suit the investment terrain. They might even counsel you on how to change path when the unexpected happens.
So, whether it’s flying or investing, the three things I urge you to do are:
Trust the professionals
Trust in the process
Trust a business with a track record of success
Follow that path and you will enjoy a mostly stress-free journey to a fabulous destination.
Bon voyage!
Always review any property investment strategy, location research, and investment analysis data with a professional, QPIA (PIPA Member) qualified & accredited ASPIRE Property Advisor Network Advisor. Never rely on glossy sales brochures or property marketing information, ensuring a property is right for your strategy. Property Investing is about BUYING a property that matches your goals and aligns with your investment strategy. Never be SOLD an investment, know your numbers!
