What are the critical success factors for investors to go from one or two properties, to 10, 20 or 50 properties? What else do you need in your DNA?
Statistics from the ATO show that about 70 per cent of property investors never get past one or two properties, and only about 6 per cent ever get beyond seven. Very few go further than that, but high-end investor, buyer's agent and director at Right Property Group, Victor Kumar, says anybody can do it – but you must tick these three boxes first.
“If you want to be a prolific investor you need to hang out with people who are investing, going to networking functions and so on where you can rub shoulders with them.”
“You need to have the right mind set and put the right thoughts in your mind,” he said.
2. Impeccable fundamentals
You need to come back to “bare basics”, Mr Kumar said, back to basic goal setting.
“Why are you doing this? Ask yourself, and then make the ‘why’ really, really count. When the ‘why’ is clear enough, then the ‘how’ will happen by itself.”
Focus on what you want to achieve in one year, five years, even 10 years in your portfolio, he says, and nut it down to cash flow.
3. Complimentary lifestyle
In the initial stages you will have an element of negative cash flow regardless of what type of property you buy, Mr Kumar points out, due to things like vacancy and maintenance.
“You need to look at how much of the negative cash flow you can sustain and whether it will impact on your lifestyle or not,” he said.
“That is what slows people down. If the investing starts impacting on lifestyle then obviously one partner would say ‘no let’s slow down’. We try and shy away from pain, so if property investing is causing pain, we stop.”
Listen to Victor Kumar's full story on The Smart Property Investment Show:
Episode 14: How I turned $4,500 into a multimillion-dollar portfolio
Episode 19: ‘How I built a multimillion-dollar portfolio even though I bought the wrong properties’