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Have you ever wondered how successful investors seem to know what will be in the best interests of their property portfolio? All the while feeling indecisive or overwhelmed by increasing affordability challenges?
‘Which state do I invest in? Should I buy this red-brick 60s home or a unit? Should I buy now or later?’ And on and on.
While it’s unlikely most of us will be able to replicate the luck of the accidental millionaires of previous generations, or leave our job to become a full-time investor, in the vast and ever-evolving world of real estate investment, success isn’t just about luck or timing—it’s about knowledge, strategy, and a keen understanding of the market.
So, how do we get there? How do we become the investor that’s a cut above the rest? One such investor is John Pidgeon, property coach and educator. Happy to share his insights, John recently spoke with Mark about his work as a property coach and how he built his portfolio, demonstrating the mindsets and market acumen that contributes to his success.
While there’s no one way to invest in the property market, John shows us 5 key mindsets the successful property investor cultivates to keep their portfolio on track.
- Strategy is key. Successful investors know that having a well-defined strategy in place keeps the big picture in mind, which keeps you organised and on track. An informed investment plan keeps your decisions and actions strategy-focused and moving towards your ultimate, long-term objectives.
But what strategy will work for you? “There’s never a one-size fits all situation.” John suggests asking yourself a whole heap of questions to identify your highest values going forward. Clarifying your investment goals at the start helps identify your strategies and avoid making impulse decisions or being influenced by short-term fluctuations in the market.
- Cultivate long term vision. John points out that, generally speaking, purchasing property will involve a 7-10 year “hold” (i.e. most investors will look to hold onto the property for at least a decade unless you’re doing some sort of add value development). So, success in the property market is about realising that patience and persistence will likely pay off greater dividends than a “quick-fix” venture.
Investors who keep this in mind are more able to chart a course that aligns with their long-term aspirations. They have the mental space to take deliberate, calculated steps towards a sustainable and profitable real estate portfolio.
- Know the market. Don’t worry, we heard your audible “Yeah Yeah” when you started reading this next point. Bear with us: John encourages people to prepare themselves thoroughly – to dedicate time and effort to understanding the nuances of the market and the risks involved. Research potential investment areas, identifying any opportunities and risks involved, beyond the basic lifestyle analytics of the area. “We look at a 20 year historical growth average – not only average median growth but positive growth versus the negative years it’s had.” Essentially John highlights a true point of difference between his clients and the average investor: “there’s homework and then there is homework”.
And it’s not just about seeing the big picture. Successful investors pay attention to small details too. “When you’re buying real estate, it’s not foolproof, but do your checklists – look right down to the nth detail.”
Doing your homework helps you focus your investments and be confident in your decisions, setting the stage for long-term success.
- Don’t do it alone. It can be very easy to become overwhelmed with decision fatigue, especially when you’re still finding your feet in property investment. “We’re in a situation where there’s actually too much information – how do I syphon it out to then make a decision that’s relative to me?”
Successful investors know that property investment requires collaboration with expert professionals from a variety of fields and surround themselves with a competent team. This might include brokers, coaches, buyers agents, lawyers, accountants, and contractors.
This network of professionals provides invaluable insights, expertise, and support throughout the investment process. By working with a reliable team, investors can leverage specialised knowledge and resources to navigate complex transactions, mitigate risks, and maximise returns. Trusting in the competence of their team enables investors to focus on strategic decision-making, driving growth and profitability in their real estate ventures.
5. Learn and adapt. For John, investment is about mindset. Successful investors embrace a culture of lifelong learning, seeking opportunities to expand their knowledge and skills, and adjusting in response to new information.
As John points out, it starts even before getting that first property. “Understanding cash flow management and the basic foundations before jumping into property is crucial.” You’ve got to understand the business end to be in a position to make strategic and profitable investments.
Once in the market, investors should maintain an adaptable mindset, willing to pivot their strategies in response to changing conditions. When considering how his approach to investment has changed over time, and how he would advise new investors, John says we need to reconsider old patterns of investment. “From a wealth creation point of view they just need to change the goalpost”.
In the past, as John points out, “the aim was always to get back into real estate, whether from new cash savings or equity, every two years but now it might be a little bit harder with property prices a bit more expensive – maybe a portfolio with 3 high performing properties, rather than 10 would get you the same result if not better”.
Adaptability allows investors to refine their approaches and stay ahead of the curve.
The property investment mindset
For John Pidgeon, property investment is about creating an investment strategy that’s linked to your highest values and is realistic – a journey that you will want to succeed in.
And whilst these five non-negotiables won’t remove all the challenges to property investment, they will help you get into a position to stay focused on your goals. As John says, “It’s being a realist but also having the mindset to say, well, I can overcome some obstacles.”
In the end, property investment is an individual journey, and different for everyone. But, there’s a key question that many successful property investors have answered in the affirmative: “can you overcome obstacles?”
