What comes first – your strategy, or your investment mindset?
As a beginner investor, one of the things you’ll want to know is which residential property investment strategy is likely to produce the best returns. My core strategy – one that has worked incredibly well for me during my entire property investment ‘career’ – is to buy:
- an every person property, which is…
- a new build or off-plan property, and is…
- built by a recognised developer.
I adapt this strategy to suit the prevailing market conditions, making house price predictions using the property trend cycle model.
Whatever your core investment strategy, there are four types of investor you really don’t want to become. Each of the following investor types is doomed to failure.
The Shotgun Property Investor
These are property investors that begin on a positive note by doing research and joining every mailing list they can find. They go to property shows. They read as much as they can. Invariably, they end up speaking with salespeople – lots of them. Each salesperson puts a new spin on the ‘greatest opportunity ever to be presented’.
The mistake these investors make is that they have a misguided sense of diversification and a naïve view of real opportunity. Instead of investing in one thing, they invest in anything they can: self-storage, residential, industrial, off-plan, new build, previously lived in, student accommodation, commercial, a bit of international. They buy everything except the opportunity which is most likely to make them money. They discover too late that the ‘deal of the century’ comes with a downside: one that wasn’t discussed or explained or thought about as they rushed headlong into investing.
The Dinner Party Property Investor
This is a similar story to the shotgun approach, except that this portfolio is spread across countries as well as types of investment. The dinner party portfolio is good for one thing and one thing only: the dinner party conversation.
It certainly isn’t good for investment. This property investor needs to keep track of multiple mortgages, multiple economies, multiple legal and taxation frameworks, multiple real estate markets, and a bunch of different currencies. It’s way too much like hard work, and, in my experience, it ends in tears (expensive ones).
The Floating-in-the-Wind Investor
This is possibly the worst type of property investor, and I am always careful about selling to these. They agree with everything you say. They take everything at face value. They trust every brochure and every salesperson. Because of this, they allow salespeople to make decisions for them. Their due diligence is asking a salesperson if they should buy the property!
I run the other way from these investors because, without fail, if things go wrong they look for someone to blame. They refuse to accept responsibility. In most cases, the investment decisions they made were bad and come back to haunt them.
The Control Freak/Trust No-One Investor
This investor is the opposite to the Floating-in-the-Wind investor. This investor feels obligated to be involved in absolutely everything. This makes the entire process impossible, and long-term relationships are all but impossible because all they see are problems.
Discover the property investor in you
When you first meet with Gladfish, we ensure that you benefit from our expertise and experience. Our aim is to help you invest in the right property, in the best location, and for the right reasons – and those reasons are to achieve your investment goals.
We’re often told by clients that our approach to their investment is both different and refreshing to everything else they have experienced. To find out why get in touch with Gladfish on +44 207 923 6100. We want you to be successful in property investment and enjoy the cash flow and profits that we’ve helped hundreds achieve to date.
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