To gain from the market you need to be in the market, not watching from the sidelines.
This blog will help you become unstuck and empower you to make informed decisions about your investment strategy. Like a seasoned investor you’ll know when to say yes, when to say no, and when to say “not now”.
- Seasoned investors are able to see the bigger picture while also having the ability to focus in on the smaller steps that will help them achieve their goals.
- Plotting your thinking on cartesian coordinates and determining your underlying vision for investing can help you understand the bigger picture of your investment strategy.
- Macro research will help understand the property market factors at play while micro research will help you determine the key selection for choosing the right property for you.
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If you’re a first-time investor just starting out on your journey it can feel like a slow, confusing and frustrating process. There are an estimated 9 million private dwellings in Australia (2016 census) and with such a vast number of options to choose from it can be difficult to know where to start.
First-time investors are often bombarded with conflicting opinions from well-meaning friends and family. And the proliferation of information available on the internet only serves to confuse the issue.
If you’re reading this and thinking to yourself, “yep, that’s me,” you’re not alone. In the face of so much information and such a high stakes decision it’s no wonder analysis paralysis sets in. But thinking more like a seasoned investor will help you to gain confidence, reduce fear and make strategic decisions that allow you to achieve your goals.
Look at the big picture
Seasoned investors are the masters of zooming in and zooming out. They are able to see the bigger picture, training their vision on where they’d like to get to, while also having the ability to focus in on the smaller steps that will help them to get there.
The exercises below will help you get a handle on the bigger picture elements of your investment decision.
Cartesian Coordinates is a strategic process that can help you see the bigger picture, understand how important the decision is and unblock your thinking. It poses four questions.
What will happen if I do it? For example, build personal wealth, create tax breaks, move towards your goals, create an extra income.
What will happen if I don’t do it? For example, you won’t progress towards future goals, your future retirement plans will be affected, you won’t be leveraging financial resources, you’ll become financially stuck.
What won’t happen if I don’t do it? For example, the accomplishment of personal goals, financial stability, less stress-busting leisure time, unable to give back
What won’t happen if you do it? For example, struggle in retirement, unable to build your dream house, unable to continue education, unable to fulfil travel goals.
The next exercise is to determine your vision or your “why”. Identifying your objectives, vision and overall why is a powerful way to motivate you when you become stuck and create friction towards taking action. Coming back to your “why” when faced with decisions can help you determine which direction to take and help you overcome any “how”.
Key property selection criteria provide the smarts behind choosing an investment property to support your lifestyle goals. But Australia’s economic conditions should play a big part in your decision too.
What areas make for smart property investment choices? Australia is a big country. To choose where you’ll invest you’ll need to understand the big picture. Accessing well researched, current insights into how Australian capital city property markets are performing is the best place to start. Once you target a capital city that suits your financial goals, it is time to get micro and funnel down your choices to a specific location.
For more insights on macro research check out:
Which national economic indicators sway the property market
Switched-on Strategy Series Australian property market overview 6 key factors
The detailed picture
Seasoned investors have a systemised approach that allows them to see how a property stacks up. This is the “zooming in” part of the equation. Seasoned investors know that property markets are cyclical and they monitor key market indicators so they know which market to enter at which time.
Once you’ve identified a metropolitan area that has sound property investment fundamentals and a current median house price that fits your affordability range – it is time to dig deeper into specific locality data. We call this locality data the micro criteria of choosing an investment property for capital growth.
In my article, 8 property selection criteria to drive switched-on investment decisions, I condense decades of experience into the top criteria you should use to choose your investment property. It will save you days of trawling search engines for magic solutions that don’t exist.
Doing the work, plotting your Cartesian Coordinates, articulating your vision, and conducting your macro and micro research will empower you to act with confidence and beat the analysis paralysis once and for all.
Education empowers you by putting you in control of your goals and how you’ll reach them. Read my seven-step philosophy in Property Investment SOP. The book builds my story and how I managed to build up a portfolio while serving in the Defence Force.
Get your free PDF copy here – www.propertyinvestmentsop.com.au
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