One of the most difficult aspects of being a property investor comes from the fact that we have competing emotions depending on where you are in the property cycle.
There’s fear and greed, overconfidence and loss aversion, panic and euphoria.
We’re told there’s nothing more important than being disciplined when getting involved in property and investment, but it’s not easy when the emotions hang in there.
One of them is fear of missing out, like a lot of people are currently experiencing as they feel the market is moving faster than they can get in.
And there there’s fear of getting in, which a lot of people were experiencing last year when people were talking about property Armageddon.
So today I have two segments: the first one a chat with property researcher John Lindeman and we have a little bit of a general chat about FOMO and what you should watch out for.
Then I’ll share the ten FOMO mistakes I’m seeing many property investors make, to ensure that you don’t make them as well.
So, today’s podcast will be useful for you whether you’re looking to get into property or you’re already in property anyway, because as we go through these things, there are a couple of great fundamentals and lessons I’d like you to know.
Some of the Topics John Lindeman and I Chat About:
- FOMO is an emotionally based desire.
- We don’t want to miss out on something someone else has.
- It’s similar to greed.
- You have to respect the market.
- When things settle down, some people will find they bought the wrong property or overpaid.
- FOMO can move a boom to a bubble when too many investors become involved.
- That’s why it’s better to buy in areas that are mostly owner-occupiers.
- There will always be another opportunity, so buy with your head, not your heart.
- Big FOMO mistakes John Lindeman currently sees:
- The emotion that takes over decision-making.
- Finding it difficult to wait.
- Have rules that can help you rationally you decide which property to buy so that emotion doesn’t take over.
10 FOMO Mistakes
- Not really understanding the nature of the property cycle
- You need to remember that the property market always moves in cycles. So after a boom, you will see a downturn.
- Acting with heart and not head
- Allowing your emotions to cloud your judgment means you are more likely to over-capitalize on your purchase, rather than negotiating the best possible price and outcome for your investment goals.
- Diving in or Dithering
- FOMO causes some investors to act too impulsively, while others freeze up out of too much caution and never act at all.
- Not adhering to their property strategy
- Successful wealth creation through real estate requires you to set goals, determining where you want to end up, and then devising a cohesive plan to get there.
- Changing their investment strategy.
- If your aim is to gain financial freedom through property investment this is a critical time to stick to a proven strategy.
- Speculation over Patience
- Property investment is not a get-rich-quick scheme. Doing it successfully requires patience.
- Not having a finance strategy.
- Strategic property investors have a finance plan to allow them, not just to buy one property but the next and the next.
- Compromising on Location
- A property’s location will do 80% of the heavy lifting when it comes to capital growth, so don’t compromise on it.
- Taking advice from the wrong people
- You should take advice, but from proven experts, not just anyone with an opinion.
- Buying the wrong property
- Don’t make a snap decision on the wrong property.
Resources:
Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us
John Lindeman – Lindeman Reports
Get our special bundle of eBooks and reports at www.PodcastBonus.com.au
Some of our favourite quotes from the show:
“It’s owner-occupiers that basically create the markets, about 70% of purchases, and it’s investors who push it up to its heights - the booms, and even sometimes the bubbles and then also create the slumps” – Michael Yardney
“Currently I’m seeing some buyers so worried the market is going to pass them by that they’re compromising their selection criteria just to get in the market.” – Michael Yardney
“By approaching property investment with patience and persistence, you will gain far more success and wealth than if you seek out the next big thing.” – Michael Yardney
PLEASE LEAVE US A REVIEW
Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how
Subscribe & don’t miss a single episode of Michael Yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to Michael Yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.