The exciting investing strategy that’s so boring, it works

When you first thought about buying property as an investment vehicle, did the words ‘quietly boring’ ever pop into your mind?

I’m guessing they didn’t.

Real estate is often seen as an exciting affair and whatever names you have to describe it, “boring” isn’t like to be one of them.

But investing isn’t just for corporate fatcats and rich risk-takers.

Most Australian property investors are regular people with regular jobs (you might call them ‘mum and dad investors’) who you’d never pick out of a crowd because their investment life is just that – quietly boring.

Yet “boring” is the most exciting thing about property because it often means your strategy is snowballing towards a thrilling victory.

Gung-ho investors filling up their portfolios with exciting, fast-paced properties that promise a quick profit and an instant uplift in lifestyle, are usually a disaster waiting to happen.

Better to watch from the sidelines than be involved in that!

Boring doesn’t mean lacklustre – means keeping it simple

Simplify your strategy into realistic goals for your situation.

When you make a realistic plan with goals you can achieve, you’ll be motivated by each success

If your first goal is to buy a $ 1.5 million penthouse because that seems impressive and will surely be in high demand, you might find five years slipping by before you’re financially ready.

By then, the plan has fallen by the wayside, along with any growth you might have accumulated in a more affordable investment.

Start small, stay simple, and stick to the plan.

Remember to keep on top of your other investment vehicles like superannuation, and if it fits with your plans, you can explore diversification into shares to complement your real estate portfolio.

Try to ride out fluctuations rather than getting into a twist

Our markets continuously cycle through highs and lows.

You could drive yourself crazy trying to predict ‘the next big thing’, or whip yourself into a frenzy worrying about whether you should sell as soon as a local market dips.

We have enough historical evidence – and enough investors who have gone through it all before – to see what the market is likely to do, even though it ebbs and flows.

Seek some experienced advice, but don’t be driven to distraction by market movements.

Being a hare rather than a turtle can quickly turn on you

Properties that promise astronomical rental yields don’t often stay that way.

The property might be in a typical boom-and-bust location like a mining town or be the result of a new development push that consequently suffers from oversupply and dwindling demand.

Instead, find a location with multiple growth drivers underpinning a long-term return.

Jobs growth and employment, housing demand exceeding supply, infrastructure, and a rental return that fits into your financial strategy will set the scene for a property that achieves long-term results rather than a flash-in-the-pan property that ultimately burdens your portfolio.

If your game is long-term capital gains, then being a turtle will get you there with far less risk.

Be open to opportunity, but don’t be an eager beaver

If you attend a seminar eagerly peddling underground lairs as the next big thing in property, walk away.

If a property hawker tells you that a nightclub in town is up for a ‘too good to be true’ sale, hang up.

Opportunity is everywhere.

Properties come in thousands of shapes, sizes, and locations.

They can be good, bad, and ugly.

But some should never find their way into your life, so control your enthusiasm to make sensible decisions.

A three-bedroom family home near a primary school and shopping strip is mighty boring – but in terms of risk mitigation and long-term projections, it could deliver exhilarating returns.

Slow and steady wins the race

New property investors would be wise to remember that property is the turtle approach to wealth creation.

It’s not flashy and sparkly.

It’s full of numbers research and waiting.

A straightforward portfolio and simple strategy are accomplishments to be proud of.

Relish your growing portfolio of sensible units and suburban family homes, because they’re on a journey that will one day reap huge benefits.

It might not make great party conversation, but it will deliver financial results that could thrill you for a lifetime.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.