Property investor Bindar Dosanjh gives her advice on what to consider if you are thinking of investing in property
I find so often that people rush into investing in property believing it to be easy, later discovering when it’s too late that for various reasons their investment isn’t making money and naturally become disheartened.
Before anyone starts out in property investment, I always recommend they spend time considering some key questions such as:
- What is important to you in life? Is it to build up a pot of savings, build a pension, provide for your children’s education, go travelling or no longer having to worry about money? Whatever the reason is for you, it is important to have a powerful reason to keep you motivated when obstacles/challenges come your way.
- How much money do you want to make from property investing? Are you looking for lump sum payments or monthly income or both?
I look at this in four stages, firstly to replace your monthly expenses, then your monthly salary. Once you get to this point, you will have the choice of quitting your job or your existing business. Then to focus on your desired lifestyle. Finally focusing on lump sum payments to enable you to be in control of your own financially destiny.
- How much money do you have to invest in property? If you don’t have enough money for your first deposit, where can you obtain that money from?
- What is your attitude to risk? Taking small, calculated risks throughout life generally leads to rewarding returns, weigh up everything and make decisions calmly and logically without emotion as it’s all about the returns.
- How far are you prepared to travel to your investment area? Do you want to invest only in your area or are you open to travelling to buy the right properties? The key principle here is that your property investing should fit in with you and your life. It shouldn’t dictate it.
- How hands-on do you want to be? Do you want a letting agent to manage your investment properties or do you want to manage them yourself? Do you want property investing to be your part-time or full-time focus?
- What is your credit score? Throughout your property investment career, your credit score will be a key determinant in the kind of lending you can obtain.
- What category of tenants would you like to work with? So many to chose from namely professionals, social housing tenants, couples, migrant workers, students and short-term tenants.
- Do you have a secondary strategy? What is your alternate plan if your primary plan doesn’t proceed. You may initially have bought a property to renovate and sell on for a profit but during this process the market conditions may have changed. So, a secondary strategy could be to rent it out until the market picks up again.
- Who do you have to support you? It is important that you have like-minded people around you who have walked the talk and who have done what you wish to achieve. What experts are on your team and who is your mentor?
- When should you start? In my opinion the answer to this is always as soon as possible depending on your financial and personal circumstances. A third of property investors report that they wish they had started at a younger age. I include myself in that.
- Do you have the right mindset? Are you mentally prepared for success or is your inner voice holding you back?
Once you have decided to start, you have four options as to how you move forward.
- Either doing it yourself based on what you already know or what you learn. With this approach, you may make novice mistakes.
- You could get financially educated to learn the processes and then do it yourself.
- Seek the guidance and support of a property mentor to assist with the shortcuts. When I first started I had no mentor and I made countless mistakes. I now help other people achieve their financial goals in a safe, speedy and certain manner.
- Use services of a sourcing agent, if you have the money or access to money to invest but you don’t have the time due to your other work or personal commitments. They will find the properties for you for a fee. However, always remember to do you own due diligence.
Here’s to your financial success.
Bindar Dosanjh is a multi-award winning property investor, property mentor, trainer and lawyer who has mentored people of all ages from 18-63. She is an acclaimed international speaker who inspires women to get into property. Her recent book Power Property Investment For Women gives an insight and encourages women to take control of their financial future.
