Real Estate Investor Magazine South Africa April/May 2019 | Page 31

C
ontrary to common belief the best time to invest is
when sentiment, economy and prices are at its low-
est point, which also makes it a good time to get back
to understand the basics of investing. Investing in property is
definitely not a get rich scheme. It is a proven business that
requires education, research, time and hard work to build a
property portfolio that can generate a regular monthly pas-
sive income called cash flow. Over the next nine months we
are going to give you a guide to act and an investment crash
course on some of the best real estate practices that you can
implement yourself.
Remember, applied knowledge is power. Having a thorough
understanding of the market, its risks and the strategies
for dealing with these will give you an edge to act in the
investment world. You only learn from acting in the real world
and not from going to the classroom or reading books alone.
In part one we unpack the first steps of investing for newbie
or seasoned investors which is getting a proper education. It
does not mean getting a degree but rather getting to know
the terminology or jargon, reading real estate books, websites,
blogs, courses and gurus. Terms like cash flow, cash on cash
return, cap rate, real estate appreciation, net operating income,
and so on. You must also learn how to do real estate market
analysis, run the numbers and how to use an investment
property calculator.
You should also educate yourself on investment property
financing in addition to how to buy an investment property.
The only thing you cannot do in real estate is getting into it
with no knowledge. Of course, there are things that you will
learn along the way, but you must know the basics beforehand.
Get the knowledge to give you the advantage
A surgeon can’t successfully operate on a patient without
the knowledge of the human anatomy and the surgical
procedures. A property investor can’t expect to be successful
without information, knowledge of the property market or
understanding of the various investment strategies. Educating
yourself in those areas is your first priority.
“
How do you become good at
something? Firstly, learn how it is
done. Secondly, learn how others
do it. Then do it your own way.
- KYOS MAGUPE, Philosopher
“
Invest in yourself first
A solid education is an investment in your future. The reason
is simple – there are risks involved in any undertaking and the
best way to manage these risks is to understand the game, so
you know what to expect and how to deal with it. The time and
money required to get this education from the many reputable
sources available before you start, will pale in comparison to
the cost and time involved in learning by trial and error at
the University of Hard Knocks! You also need to know what
questions need to be asked.
“There are no risky investments, only risky investors.” -
Robert Kiyosaki
Investors have so many options and resources from
which to choose that life-long learning really takes on a
literal meaning in the property investment world. Getting
knowledge on where to find the best properties, getting
to know the numbers, how to use debt effectively, when to
take risks and how to maximize tax and your compensation
from the investment can give you a real unfair advantage in
the market. We will unpack all of these options for you the
investor over the coming months.
Reading is the most important tool in your arsenal
There are a number of property resources that you can
start to help you widen your understanding of the property
investment, as well as the trends and developments that are
shaping the future. Anybody who has made money in property
or who has a unique experience has a property story to tell.
Read every property investment book and property
magazine you can lay your hands on, so you have a
comprehensive overview of the industry and the latest trends,
as well as the different strategies and approaches advocated by
the various writers. Magazines like Real Estate Investor mag
have a number of resources such as property stories success,
market information, access to reputable companies and people
that you can partner with and offer you critical information
you can use.
Many successful property investors have shared their
knowledge, expertise and experiences through books available
in local bookstores or available online. Reading these books are
one of the most cost-effective ways to get specific knowledge
you need. Don’t have time to read? Then get audio books so
you can get the knowledge while you are driving.
Online
The Internet has placed the greatest library in the world
SA Real Estate Investor Magazine APRIL/MAY 2019
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