Property investment or real estate investing seems to be getting increasingly popular, probably due (in no small part) to podcasts like Bigger Pockets, or popular YouTube channels.
The FIRE movement, and others like it, encourage everyday people to look at real estate as a potential means of extra income, allowing them to live more freely, and retire early. Online courses, live seminars, YouTube gurus, and the like are pumping out loads of free, helpful information to help you start investing in properties.
And all of this is great. But in my experience, there’s a downside.
All of this is seemingly resulting in hundreds, or thousands of people that start investing only to end up poorer than when they started.
In fact, if becoming a real estate investor is at all like starting a business, then most people will end up failing. I’ve personally seen individuals or couples launch a website, set up shop, and go hard for a few months (or a few years) only to end up pulling the plug after spending time and money trying to get off the ground.
So what is it about investing that’s so hard? Or, a better way to ask this would be, “what’s the main differentiation between people who make it, and those who don’t?”
To help answer this, I’ll share perspectives from two full-time real estate investors. Each has gone from nothing, to creating a full-time business in property investing,
So if you’re reading this, and you’re thinking about getting started in property investment – I hope this pumps the brakes, and helps you evaluate everything so that you can either bail out now (before there’s too much pain) or go the long-haul and become an ethical, successful investor.
If you’re not much of a reader, the three things you need are: perseverance, patience, and the right mindset.
The need to persevere and be consistent.
Far too many coaches paint property investment as a get rich quick scheme.
And when it’s made out to be, people jump in and become surprised at how many times they face rejection, how many times they make mistakes, and how long it actually takes to create a successful business.
David Bokman is the founder of Philly Home Investor and has been a full-time, professional property investor for years. He got started somewhat on a whim, but has persevered and grown it into a successful business.
He warns that most people who get started, lack consistency. “Most people lack doing the small item on daily routine. Being successful means doing item that most people do not want to do.”
For example, let’s say that in order to get 1 property, you need to reach 50, or 100 homeowners. Out of that many, 1 will sell to you. Consistency is doing the same thing, every day, week or month, as long as you need, to get your results.
If you’re heading into investment thinking it’s going to be easy, you’re in for a surprise.
The need for patience.
But what happens when you’re consistent in your actions, but results just aren’t coming?
What happens when you’re doing everything right, but you’re still not seeing any results?
This is where patience comes in.
No business (including property investment) is an overnight thing, even if it seems that way. When you start down the road of real estate investment with the goal of making a career out of it, you need to realize that it’s going to take time.
Carter Fisk is another real estate investor that has become successful. He founded Carter Buys Homes and has been investing in properties for 14 years. It’s hard for any business to operate that long, so it’s worth paying attention to what he has to say in the area of patience, “Understand, you should be in this for the long run,” and he adds, “slow and steady increases will get you through down markets much better than trying to get as big as possible as fast as possible.”
At the time I’m writing this article, we’re in a down-market. COVID-19 has brought the economy to a grinding halt.
But if you have the mindset that you’re going to be around for 10, 15 or 20+ years, a minor setback won’t deter you.
The need for the right mindset.
All this can be boiled down to having the right mindset.
My advice to anyone reading this who wants to get started in real estate investment is this:
Decide what your goals are. Do you want to turn this into a full-time gig, and have freedom to work for yourself? Or are you looking to invest in 1 property, make a little bit of money, and see how it goes? Neither of these are bad. But your mindset should be different for each. And if your answer was, “I’m going to make this into a full time job,” then you better be prepared to be consistent, patient, and have the right mindset going in – or you’ll burn out and fail.
What the gurus, seminars, and podcasts tell you is true. You can make good money in real estate. It can be a way to retire earlier then you expected, or to bring in extra income, or to have financial freedom, or to work for yourself and quite the 9 to 5 rate race.
However, that’s what you want out of it, understand it won’t come easy. Be patient. Be consistent. Persevere. And if you’re not prepare to do that, or if property investment was just a way to make a quick buck, then you’re as likely as not better off not starting.