Yes – they all sound like dirty words, yet most of us accept that creating wealth is not going to be easy or fast. So, if we want to create real security and a comfortable lifestyle through property investing then we need to face the facts… “getting lucky” is going to be hard work!
There is one golden rule; time maximises the effect of capital growth. The only kicker to that is that it’s not about tomorrow or the next day or next week but what happens to your investments ‘over time’. Capital growth increases your nett wealth and allows you to diversify your portfolio (leverage) increasing the effect of capital growth and reducing risk. Time can also bring large change to both the economy and your own personal circumstances so your plan and portfolio need to be flexible.
Time & Tide
That said, time alone won’t work the same as it has in the past. Our economy is undergoing change impacting the performance of varying sectors of the economy over the next 15-20 years. This will influence the demand and affordability of homes in different areas causing a greater disparity in the capital growth. What this really means is that your choice of location could totally change your outcome over a 10 year period (eg. take two $450,000 properties today and a 3% difference in the average growth would mean more than $300,000 in the nett end result to you).
To ensure your plan is right for your circumstances and goals and you continue making informed decisions all the way through your journey, you need to develop a plan and apply it. That means understanding property as an asset, understanding how that asset class performs, understanding purchasing, holding and selling property as a business and how that all effects your personal circumstances … and, I haven’t even got to what research sources and analysis models you are using or how hard funding is in the new world post GFC. The reality is we won’t just be able to buy and get ‘lucky’ like we could in 2001 to 2003 (due to a change in our economy in the ‘90s). To be successful property investors, we now need to work hard to be better educated and better structured.
A Disciplined Approach
The ‘hard’ part about this type of ‘work’ is that effective property investing in any season takes discipline and that’s even more critical in this new era. What is discipline? It’s the courage to make the right decision to do the right thing at the right time. Easy… isn’t it?
Apply sound business practices to your property investing (which means effort and discipline), get the right support on the journey and watch how ‘lucky’ you get over time. These are the real truths or ‘secrets’ to creating wealth through property.