Real Estate Investor Magazine South Africa Real Estate Investor Magazine - June 2017 | Page 65

I
n our May edition, I introduced you to
six of 12 best practices you can apply to
your own investment strategy to become
a fruitful property investor. These insights are
ones gleaned from personal experience, as well
as from interviews with successful and wealthy
businessmen, sportsmen, celebrities and investors.
Lessons seven to 12 are as follows: 7.) build a
reputable team, 8.) avoid emotional investing,
9.) be persistent, 10.) work on and not in your
business, 11.) expand your network, 12.) and get a
mentor or coach to guide you.
“Wealth is about having an
abundant mindset; however,
achieving financial freedom is a
longer-term game, which requires
a specific plan and a strategy.”
Lesson seven – build a reputable team
Don’t think that you can invest by yourself, it is a
team sport and selecting the right team is part of
the systems and processes you need to set up for
yourself. You need to find and develop a team that
has your interests at heart.
You need estate agents to source deals, bond
originators or financiers who knows how and
where to get you finance, and property managers
who can effectively manage your properties and
collect the rent. An accountant who can advise you
on tax and your finances is a crucial team member,
as well as an attorney who can advise on buying
structures, deal structuring and conveyancing.
Contractors and handymen, such as electricians,
plumbers, property inspectors and builders, will
help you with the on-going maintenance of your
properties. Ensure that you interview each and
every team member, choose the best and make
him or her aware that they are all accountable in
their roles.
Lesson eight - avoid emotional investing
Investors have a knack of investing at the top, when
there is hype, and selling at the bottom, when the
market is bad. Why does emotional investing
happen and how can investors avoid euphoric and
depressive investment traps? Always keep your
emotions and behaviour in check, or you may end
www.reimag.co.za
up on the proverbial emotional rollercoaster, which
can fluctuate from an ecstasy to a low of depression.
As Tony Robbins says, “don’t let other people’s
emotions control or affect the implementation of
your plan”. He also says, “Don’t let their optimism
or pessimism cause you to deviate from your asset
allocation”.
One of Dolf de Roos’s eight golden rules of
property is to “fall in love with the deal, not
the property”. When it comes to an investment
property, leave your emotions behind. Do the
numbers work? What are the growth prospects?”
he says.
By using a rules-based approach to investing,
you can remove the emotional component of your
investment decisions entirely. This is the quickest
and easiest way to say goodbye to the “behavior
gap” that may be limiting your returns.
Lesson nine – be persistent
Persistence is defined as continuing, firmly or
obstinately, in an opinion or course of action
despite difficulty or opposition. Persistence
continues to exist or occur over a prolonged period.
Everyone makes mistakes and experiences setbacks
from time to time and this is something that you
must expect and embrace as an investor. Making
mistakes and failure is part of the learning process.
The most important thing is not to give up when
the going gets tough because sometimes it does.
Many investors stop after one property purchase
and sit on their laurels. However, those with an
investor mindset can see all the compounding
benefits of building a portfolio and realise they
must keep on going despite the challenges. You
can be a successful real estate investor with no
qualifications, and with very little money. As de
Roos points out: “What it really takes is diligence
and persistence”.
Lesson ten – work on your business (not
in your business)
Real estate investing is a business where you
should expect a year-end profit. You must view and
run your property investment as a business, not a
hobby. The key is ensuring that you are working
on your business and not in your business. This is
where having an excellent team is critical to ensure
you are not constantly dragged into it. It is so easy
to fall into the, ‘I will just do it myself ’ trap ‒
especially if you have all the knowledge.
JUNE 2017 SA Real Estate Investor
63