How are budding property investors 'misdirected' when starting their journey?
Positive Real Estate's Sam Saggers believe that many investors get into the vast property investment landscape with little to no education at all—a misstep that can derail one's journey in the business of creating wealth through property.
He talks to Smart Property Investment's Phil Tarrant about the importance of continuing education and mentorship for investors and why emotions should always be out of the picture in property investment:
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Do you think a lot of people are misdirected when starting their property investment journey?
Sam Saggers: Absolutely. If you ask the average investor getting started, "Do you have a strategy? What's your outcome?" Most people actually get floored when you ask them those simple lines. They don't really know. They know they should be investing, and then I guess the concept is, "Is there a wagon out there to jump on?"
Over the years, I've seen certain wagons come and go in this country. I've seen mining booms, I've seen tourism burns, I've seen, certainly, all sorts of dynamics. Unfortunately, a lot of people have jumped on those wagons based on [booms], they sound great, short-term viewpoint looks good, and now [they are] regretting a lot of those decisions.
What should property investors look for in a 'good purchase'?
Sam Saggers: I think it comes back to: Is it a premium location? Is it a premium product? Would an owner-occupier come in, get very emotional about this piece of real estate, and pay you at auction, a huge amount for the property? If they won't do that, why are you buying it? Why are you buying it?
What I'm seeing in the market is we have seen a lot of supply come in—there is a lot [of] supply being built for supply's sake... A lot of that product [is] just filling the gap but not meeting the true demographic demand for home owners and owner-occupiers. If you can pick the right property for them, you're going to have a market to really sell to.
Many people say that property investment should not be emotional. Is that a mindset you encourage?
Sam Saggers: Absolutely... You have to remove emotion. As soon as you get emotional, you ruin the idea of being an investor. For me, I learned early on in my investment career after making some sizable mistakes [that] I need to remove emotions out of this and just really work off what's in front of me.
What's your final advice for budding property investors?
Sam Saggers: If you can buy the right property with the right architect, with the right design, the right features, the right home, the right lighting, the right location, [the] property looks after itself. Property is reliable, people are unreliable. People make the mistakes by buying the incorrect product—it's all based on emotion... People are in such a hurry they just miss the core fundamentals.
People need to study for a bit, maybe grab a mentor and get on with it properly.
Tune in to Sam Saggers' episode on The Smart Property Investment Show to know more about some lemons he bought when he first started investing that nearly stopped his journey before it began and how he worked to rise above these unfortunate circumstances.
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