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LetÔÇÖs get started with right investment

Mon, 27 January 2014 03:23
by Mr. T
Columns

Since graduating from college in 2003, I have observed what I have achieved versus what some of my colleagues have throughout the years and realised out of all the types of investments we could ever do, nothing is superior to land and real estate.
I am not shy to share my belief that real estate is the greatest investment ever and that anyone can succeed in it. Mixed with my desire to teach, this belief has earned me hundreds of weekly phone calls and emails inquiring about real estate investment. It can be a bit overwhelming but it is oh-so interesting.
This is why people like Donald Triumph have continued to amass a lot of wealth. Here at home, Old Mutual is one of the country’s few corporate companies with fat balance sheets, mainly because of its properties. Roman Catholic, worldwide, has strength in the quality of the properties it holds. Looking at all these companies and rich individuals, you will agree with the statement that ‘property is a hedge against inflation’.
One of my friends bought a property in the late 1990s for about N$100 000 and today, he is asking N$5m for it, less than 20 years later, yet inflation hasn’t grown that far since. In sharing this information, many people always ask me how to get started, which is a great question. Problem is, most people fall on their faces, because they don’t have three things:
1. A clear set of goals,
2. A team, and
3. Knowledge of market trends.

Goals:
Goal power is what you feel when you’ve set a target and focus all your efforts on hitting it. It makes you decisive and ultimately successful.
Goals cannot be vague and must be measurable. Goals must be realistic and attainable. Otherwise, they will either be shelved, thrown away or never acted upon, triggering feelings of failure.
One should decide not to risk their future on wishes and useless dreams that will never be acted on. Instead, get smart by setting goals.
Team:
Having a team of experts on call is neither free nor cheap. Those are the two biggest reasons why many inexperienced investors make a rookie mistake: They try to do almost everything by themselves. On the other hand, they pay peanuts to the experts who should help them. If you pay an expert cheaply, they will provide cheap service and most likely concentrate on those who pay more. Sure, such rookie investors may save a few dollars in the short run but they usually lose in the long run.
Without experts on your team, deals take longer to find, evaluate and close, so there’s the loss of value for your time and hence the loss of valuable opportunities. Do-it-yourselfers (DIYs) miss details that could cost them everything, when the experts would have detected them in a minute.
An expert team limits your surprises and protects your investment.
Market:
The market is more important than the property.
The objective with market research is to get an accurate read on the supply and demand in the area. Supply is simply the number of rental properties available. Demand is the number of people looking to rent them.
There are three drivers of a market’s supply and demand concept. The first and most important is employment. It is a fact that population follows employment.
The second driver is population. People certainly go wherever there are jobs but they also migrate to places that have certain persona or living experiences built into the area. Look in markets where the population trend is growing.
After employment and population growth, the other important factor becomes location; one has to check the location they are investing in and consider the kind of people who stay there. Great locations have driven-by visibility. You can feel the place by merely looking at it. Great locations possess a one-of-a-kind quality and are in demand. This does not mean they are unaffordable. Affordability is everywhere, even in the ‘hottest’ neighbourhoods.
Remember, real estate is the greatest investment ever and anyone can succeed in it, even you. If you need knowledge, learn more and read more.
Happy investing!