The 4 key factors property investors must control

John Pidgeon says property investors can maximise wealth creation by taking control of their mindset, behaviours, strategy and timing.

John has been in the property game for over two decades as an investor, mentor, podcast co-host and author, recently releasing his new book Sort Your Property Out And Build Your Future.

On the Get Invested podcast with KnowHow’s Bushy Martin, John provided guidelines on how investors can take control of their property journey.

1 – Control your mindset

Before taking any action, investors need to adopt a positive mindset which is fostered by their surroundings and network of people.

“Over and above everything else, it’s mindset. It’s the success to everything in life, isn’t it? If you’ve got a positive can-do mindset, and you surround yourself with good people, and you’re an open book for learning and absorption of new knowledge, and you can can wake up and turn up every day, then you’re going to get better results. So that’s hands down my most important tip for someone is just have a good frame, and then from there, I think the rest can fall into place,” John said.

2 – Control your behaviours

Establishing healthy habits will pave the way for sustainable success in property investing and all facets of life.

“I’m really big on habits. I think everyone likes to set a goal and New Year’s resolution, whether that be health, work, leisure, hobbies, whatever it might be, but generally a lot of those goals go missing and by the wayside because we don’t have habits. Just like cleaning your teeth, flossing and seeing the dentist every six months, if you do that you’re going to have reasonable teeth. Same thing happens with any property goals or wealth creation,” John explained.

“If we’re doing things consistently, habitually, it becomes second nature. We gain confidence, we gain knowledge, and we have a great mindset as a result of that. So then combine that with surrounding yourself with a good team of people, and it’s actually hard to get it wrong when you combine all those things together. It’s like a preseason in sport. You put in the hard yards through that preseason period, and by the time round one comes, it’s actually not an issue. It’s just natural that you’re going to do well. So if we’re putting enough work into something, we’re going to get pretty good at it.”

3 – Control your property strategy

John delves into the eight point plan for investing in property, which addresses the controllable factors.

“I think too many investors put too much focus on location. And for me, the location is actually the last part of those eight points. Absolutely it’s important, but we’ve got to look at what’s in our control. So let’s look at how much deposit we’ve got what we’re loaning at, and look at how much the banks will actually lend us. Look at what our overall strategy is, so do we want capital growth, do we want cash flow, or a combination of both, and how much? Look at, is it a long term buy and hold? Is a renovation flip? Look at the buying entity, look at other things that don’t involve us jumping on realestate.com first and foremost, because that’s what all of us do. We get excited to knock off at work, go home, jump on realestate.com, sit there for three hours, start in Adelaide, end up in Albany and get more confused than when we first started,” he said.

“So let’s get all of those indicators right, including the yield we need, the cash flow, and the type of property that we think is going to work for us. And then the last part is the important part of location. But as a result of that, we’ve eliminated a lot of locations around the country because we’ve already got a pretty succinct plan as to what is going to suit us, not the other way around.”

4 – Control your timing in the market

The best way to get on the property ladder is to set a target, design a strategy and take action accordingly.

“We’ve spoken about action, mindset and those things that are non-negotiable. It’s got to be your version that’s going to work for you, instead of looking at what everyone else is doing and and reading the glossy brochures and magazines. And I think getting on the ladder can come in all shapes and forms. My first purchase was regional Victoria because I knew it. Now is that right or wrong? I don’t know, but I took action and that’s probably the most important part of it,” John said.

“So you would look at it and say, right, realistically, around the country, what sort of dollars do I need to lend and what deposits do I need to have to get into the markets? And generally speaking, in today’s dollars, you’re probably looking somewhere between 400k to 500k as a starting point to buy a reasonable asset. So if we strip that back, we need probably 40k 10% deposit plus stamp duty, so let’s call it 60k overall with other costs maybe on top of that. So that might be the goal for someone is to say, right, how many months is it going to take me to save 60 grand? And then I’ll come up for air when I do, I’m not getting on realestate.com before then, but I’m designing a strategy in the meantime. It’s going to work at that price point.

“And I think the mistake that a lot of investors might make is, oh if I don’t buy something for one million dollars, it’s not going to not going to go up in value. The million dollar property started somewhere didn’t it, it was a 500k property at one stage in its journey. So I believe you’re better off getting in earlier than waiting another four or five years to try and save that deposit for that million dollar property.”

Listen to the full interview here.

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