Property investor and educator PK Gupta revealed the property investment strategies and behaviours that work versus those that will set you up for failure.
PK said the key to property investing is implementing the right data-led systems and long-term strategies, supported by the right mindset and decision-making processes.
On Property Hub’s Get Invested podcast, PK talked about the lessons he learnt from his own successes and mistakes.
Property investment: DON’T make emotional decisions
Rash, emotional decisions based on media commentary, especially when they contradict your established investment strategy, will generally set you up for failure.
“From a practical perspective, always rely on data like microeconomic data on the location that you’re focussed on and the suburb you’re focussed on, more so than emotive. The news articles and headlines … just kind of forget all of that and focus on the data,” PK said.
“That’s the mistake I did. I forgot about how I’d made money to date, and I just kind of got carried away. I made a long term decision based on a short term emotion, and that’s probably not the best way to live life. So the opportunity cost of that was immense, because I could have invested somewhere like in Sydney and rode the next two years of the boom, rather than Cairns.”
Property investment: DO stick to your systems
PK explained how your systems and goals go hand-in-hand throughout your entire journey.
“Goals are important. Goals are potent, especially if you write them down. But I wasn’t automatically going to rise to the level of my goals, but rather I was going to fall to the level of the systems that I had around myself,” he said.
“It’s great to go and dream, but a dream is just a dream unless you have a system to get there. So I kind of fell back to the systems that got me my first three properties, that were still doing well, and I just refined that thought further and further. And so, my next steps were to just rinse and repeat.”
Property investment: DON’T look for ‘get rich quick’ strategies
PK warned investors not jump into projects and strategies that you assume will accelerate your property journey. At the end of the day, property investing will always be a long-term game.
“At one point I thought, let me get into development a little bit. You know, can I speed this up? Do I really want to wait 20 years before I stop working? I was a little bit greedy in that sense. And so I got into a little bit of development, and it made money, but once again it wasn’t the pot at the end of the rainbow,” PK said.
“It was a lot of effort, a lot of sleepless nights, a lot of headaches. I mean, it was profitable, but was it really worth it?
“So for people listening and asking ‘can I achieve my property goals?’ You can, you really can, as long as they are realistic and as long as you give yourself enough time.”
Bushy added: “the allure and the mystique and the prestige around being a property developer sounds really good. However, when you run the numbers and those holding costs, and then if there are any overruns there, and then the taxman coming in to chunk into the capital gains exercise over a short period of time, is for many, an unforeseen exercise.”
Property investment: DO focus on the hard work
Property investing is all about the work you put into it – there are no short cuts.
“I changed my mindset away from that ‘is the panacea to fast tracking my way to retirement’, to ‘that’s another ingredient in the recipe to getting to my goal of of retiring early’. It’s almost like we’re looking for that perfect strategy, that perfect tactic or that perfect project. But it doesn’t exist like that. Nothing can replace hard work,” PK said.
“So that was my realisation moment. That yes, we can do a few projects on the side, but let’s stick to the bread and butter. There’s no ‘get rich quick’. I’m not going to leave my 9 to 5 anytime soon, as much as I’d love to. I’ve just got to build the wall. I’ve got to build the bricks, and I’ve got to build the foundation. I’ve got to just build this up slowly and steadily.
“I’d love to say that I’ve figured out this amazing method of like this and that, and you should follow me. But it didn’t exist. So going into that first property development, it was a lot of naivety, and it was a lot of vanity. In hindsight I’m glad I went down it, but property investing takes time and takes effort. It’s worth it, but there’s no short term results.”
Part of this is ensuring you find ways to keep yourself motivated.
“If we really put our effort and mind and talent and skills together, we can actually achieve more than what we thought we could achieve. And that’s probably something that I’m still working on. It’s not like that mindset is just permanently fixed in my head and I’m just this amazing, motivated person. I’m constantly having to remind myself of it,” PK said.
Property investment: DON’T always follow the crowd
Property investing isn’t a one size fits all, and PK encouraged investors not to blindly follow the trends just because everyone else is.
“No one really cares about your money as much as you do. So at that time, property podcasts were becoming really famous, and what I did was listen to hundreds of them and see what the intersect was of what most experts were talking about. Okay, on the outliers, experts might be wrong, but everyone’s talking about this and everyone’s talking about that. Therefore, I must invest that way and I must invest there. But this can cost you immense opportunities,” he warned.