What mindset do you need to be successful in property?
To flourish in property investment do you need to be a risk taker? Or will you be more successful if you’re risk averse and take a cautious approach?
Actually, both mindsets can work pretty well – as can a combination of the two.
Happy with high risk?
If you’ve got a strong nerve and aren’t going to lose sleep worrying about a high-risk deal, then there’s no reason not to go for it.
All our property mentors would suggest is that you do your due diligence first. If you’re happy you’ve done your homework and are prepared to take a chance on deals that others might deem too risky, then chances are you’ll be rewarded.
Often the riskier the deal, the higher the potential profits. However, if you’re a cautious investor and would rather increase your wealth gradually, then avoid deals that are going to cause you too much stress.
Risk takers may reach their goals sooner – but could experience some scary moments along the way.
Prefer a low-risk approach?
Low-risk property investors often adopt a diversification strategy rather than putting all their eggs in one basket. A slower build-up of cash you can rely on is preferable, along with a degree of long-term capital growth.
This strategy may seem dull to some, but at least the cautious investor is steadily increasing their wealth, safe in the knowledge their investments are sound. Of course, nothing is ever 100% secure, but there are fewer nasty surprises along the way for the low-risk property investor.
A combination of both?
People can change. Some property investors will opt for both high and low-risk deals while others may start out as adventurous and become more cautions and vice versa.
A once careful investor may get lucky on a one-off high-risk deal and change their mindset overnight. Alternatively, a high-risk investor may get burnt once too often and decide to adopt a more cautious attitude.
If you take a mixed approach, you need to be comfortable with a ‘win some, lose some’ mindset. As we’ve mentioned, whether high risk or low risk, always do your homework and follow due diligence.
The rest is about how much you trust your gut instinct. If you think you’ve identified a potential future housing hotspot, are you prepared to focus your attention on one location alone rather than diversifying?
Each deal you make plays its part in the kind of property investor you end up becoming. One of the great things about being a property mentor is meeting different types of investor and learning from their varying experiences.
And just like the property market, your mindset is forever evolving, as the economic market constantly changes.
Want to learn more about property investment from our property mentors?
Look out for the next PMA Mentoring Programme; we’ll be running one in Jan/Feb 2018.
Our property investment strategies are designed to equip you with everything you need to get out there and make your mark in the world of property.
Join our Facebook Group to ask property questions, share knowledge, vent frustrations – and, you never know, it could also lead you to potentially lucrative deals.