Dear reader, I would like to thank you for keeping up with my past articles and I sincerely hope that they have enriched your life in the slightest. Once again, I would like to share something that could prove invaluable to you, so, I hope you could grant me 5 more minutes of your time.
The year was 2006 and I was only 21 years old when I first started to invest in property. While most of my peers were busy planning for their holidays, I was busy learning about real estate. It’s not that I didn’t like having fun, it was just that I had a burning desire to reach financial independence by the time I hit 40 years old and I saw property investments as a way to do it.
It wasn’t easy at the start, especially since I didn’t know much to begin with; but under the tutelage of my two rich moms – I’ll tell you all about that later – I’ve managed to come this far practically unscathed. It all boils down to six simple rules, as they said:
Be 110% sure you understand the market.
There are many things to take into account when you’re thinking about starting a new venture, so be sure to do your due diligence before you proceed. In my case, I paid extra attention to the market’s supply and demand and made sure that I had an ounce of control for the next 5 to 7 year
Take the weather into account.
There are various things that could affect your business; so, you should keep an eye on the news to look out for political movements and to stay updated on the economy as well as past trends in order to be able to stay on top of things.
Choose a suitable vessel.
Property investment can seem daunting due to the high capital needed to start but our financial system actually offers many options that could help you in realizing your potential. You just need to decide which financial institute is just right for you.
Build your business model.
So, now that you’ve got your capital and you’ve done your homework, do you think you’re ready to jump into the game? If your answer was yes, think again. In order to make your venture sustainable, you need to come up with a business model – or plan – so you’ll know what moves to make and when. Try to come up with model that covers the next 5 to 7 years and keep an eye on your figures to make sure they go according to plan.
Always prepare for the worst.
Make contingencies and exit plans for when things don’t work out. While it’s a good thing to be optimistic, you should always stay grounded in reality and put together ways you could save yourself if it comes to that. This is where a business model comes in handy because if you see any inclination that your investment could go south, you’d have an answer when someone asks: “What do we do now?”
When dealing with big figures, especially for property investments, it’s easy to lose sight of what’s important due to our own nature; but in order to reach our goals without further delay, we must always be in control of our impulses. This is, by far, the most important rule for any investor to follow because the slightest misstep could prove disastrous.
I’ve abided by these words throughout my entire career and it hasn’t let me down just yet. By now, you must be thinking something along the lines of: “Aiya! Talk like that senang la but can do or not?”
Speaking from experience, I know for a fact that everyone would struggle in trying to implement those six rules; but I found that the glue that ties it all together is humility. Always avoid hubris – meaning overconfidence – as I’ve seen it become the downfall of many other investors.
What happens to these investors who land in hot water is that they assume that by taking advantage of their two 90% residential loan quotas when the market seems optimistic, they could generate enough income to keep their cash flow positive and stay afloat; but then greed would take over and they would try to double their profits by capitalizing on those factors, hence leaving them vulnerable to any unfavorable event.
You see, when it comes to property investment, you need to understand that it’s not at all a short term game. The six rules that my two rich moms established isn’t exactly a trade secret as you’d get the same sort of advice from any businessman; but to walk the talk, you need to have courage to face adversities head on, technical expertise – or at the very least, a brief understanding of how things work – and the strength to see your visions through to reality.