I remember when I was a budding property investor – full of aspiration and drive but I was sadly lacking in the fundamental know-hows required to maneuver my way through all the information available. It can be pretty overwhelming and you can easily get trapped into following the hyped up projects just because many others are doing the same. However, in all my years of experience in property management, a lesson that really resonated within me (still does) was that, there is no one-size-fits-all formula.
If you are looking for a secret formula, a magic answer, the Holy Grail, you won’t find it here. There is no short-cut BUT I can give you some pointers that have helped me along the way to becoming a successful investor and I believe will help you with your journey in property investment.
1) Get to Know Yourself
The most fundamental thing I can tell you is before anything else, look within yourself. Your traits, values and goals determine what kind of investor you are. What exactly are you going into property investment for and what do you expect out of it – multiple property assets? Rental yield? Long term or short term? Knowing this can give you direction on what kind of property and location you can target.
A focus area is what you need so you can take the time to learn about the place and form your deductions on what the best place for you to invest in is. Looking around and targeting different areas will just expand your energy aimlessly and more often than not, leave you not learning much about any of the areas at all. So, take your time to observe the trends of your target area, and assess the market there. From there, you can start forming your plan and executing it.
2) Education & Networking
Learn the basics! And after that, continue learning and delving into property market news. Likewise, with everything else, this is also a continuous learning process. The property market is dynamic and it too changes with time. It is imperative that you get updated with the policies, laws and regulations, market trends and terms regularly used such as “cooling measures”. It is not easy but it is very necessary. This also ensures that you are able to form your own opinions and deductions leading to your final decision and not pursue anything just because everyone else is doing the same thing. Other people are not you and don’t share your circumstances. They cannot make the best decision for you, only you can do that.
This does not mean that you shouldn’t get to know more people from the same sphere though. Knowledge sharing is a very powerful tool and you should make the most out of it. So get to know more like-minded people. Share your thoughts and opinions with other property investors and this can also give you an insight to how other investors operate. However, I should make a disclaimer here. Do not go in unprepared with zero knowledge and seeking answers. Many have asked me for property advise, “What should I buy? What do you think about this property? What should I do?”
The answer you would probably get in return is, “I don’t know.” While I do enjoy hearing people’s thoughts, sharing my own opinions about the market and the whole enriching process of exchanging ideas, it is very difficult to provide an answer with no supporting information to go with the question. Not only that, as previously stated in the first point, everyone has different goals when they invest. The last thing I would want my answer to do is have it misconstrued and become absolutely misleading and irrelevant to the person asking. I cannot tell you what you SHOULD do but I can share with you what I would probably do in such a situation. Therefore, always come prepared if you are asking for advise.
Waiting to be spoon-fed and looking for a quick fix unfortunately won’t get you results. Nobody will want to help you if you don’t put in any effort to help yourself first. Do your background research, share your thoughts about your plan and people will be more receptive to you and willing to share their own experience. At the end of it all, you will probably be privy to many differing opinions. It is your job to filter through them and conclude which solution will fit you best.
You will also find that networking can provide a valuable support system and create potential business opportunities. In any case, you will be meeting many people sharing the same interests so it is a great medium to collaborate and even make lasting friendships.
With property investment, often the stakes are higher. So whenever you invest, be prepared that you might not get your expected returns. Never put in more than you can afford. Always make sure you are within your means with any property you are investing in. Especially when it concerns overseas property – many Singaporeans also choose to focus their sights on overseas real estate but bear in mind that in a foreign country, risk assessment becomes much harder.
There are foreign policies and regulations to familiarise yourself with, economic and political conditions you must learn, it’s a much different market you have to equip yourself for. Thus, do not rush to buy anything just because you see an exciting and promising advertisement somewhere or perhaps your friend introduced you to.
Regardless of the country, here are some things to think about. “Unexpected fees?” Always be sure on who pays for what and how much. Between you, the developer, the agent, anyone else involved in the property purchase. You should also be certain about your taxes and I cannot stress this enough, READ and UNDERSTAND your contract before you sign it. If you have any doubts, question the agent and the developer. Seek professional advise from a legal AND financial perspective if need be but make sure you are going into the deal with two eyes wide opened. DO NOT sign anything if you have even the littlest doubt, do not succumb to any pressure and make your decision only after thoroughly thinking it through with a cool head.
4) Work Hard
Your investment should be like a business. You should have an end goal and in order to meet this goal, you have a set plan in mind. It takes work; there might be site visits, market research, diligence checks, and maintenance work. It can be quite complicated so it takes time before you can see a steady income. But put in enough time and I promise you, it does get easier.
5) Be Ethical
You stand to lose more than you gain if you want to find a “loophole”. The government takes great care of the property management so follow the regulations set by the relevant government authority such as IRAS, URA, MAS and SLA. In any good investment opportunity, appreciation will take time so don’t be greedy to complete a transaction and give in to underhanded methods.
Don’t be afraid to seek help and advise from relevant parties if you require them. Property deals are varied in their simplicity and complexities. There is only so much a person can do by himself or herself so do reach out to people who are more well-versed in the area than you are. My success as a property investor is much appreciated and contributed by the expertise of mentors, contractors, lawyers, financial advisors, property developers and agents and not to mention, other investors like myself.
You can reap great rewards from property investment if you give it the amount of attention and dedication it deserves. Remember not to lose focus and only form deals that are aligned with your own beliefs and value system. I have learnt many lessons in my years in real estate and my journey still is not over. What are some valuable experiences you’ve gained from your journey? Share your thoughts!