What do you do when the only thing holding you back from investing in property is your partner?
Many relationships succeed because of the spark created by opposite personalities; it can add a frisson of excitement when your life partner has different interests and pursuits.
But when it comes to the business of investing in real estate, these magical differences can suddenly become a major stumbling block to a successful investment program.
All property experts we spoke with agreed there’s a virtually unspoken drama of real estate investing: one partner wants to charge ahead and invest; the other is more cautious, wanting to hold off or take a more conservative approach.
“It’s a common occurrence,” says buyer’s agent Scott McGeever.
“There’s always one sceptic in a couple.”
McGeever says conflict between couples can be a serious issue and lead to major strategic errors.
He says many resolve their differences by choosing to invest in smaller, cheaper property which actually increases risk.
“Smaller homes these days are the risky ones: they’re in volatile markets, in lower socio-economic markets, and tend to be one-bedroom.”
However, convincing your partner to invest in property requires not just being able to sell a deal, but possibly exploring deep into their psyche to understand how they perceive risk, opportunity and money.
Fortunately, there are strategies – by no means fool proof – that allow couples to confront the issue and proceed with their investment program and reap the rewards.
McGeever says that, based on his experience, a number of issues constantly crop up between partners, including where to invest, how much to invest and whether property is the best investment.
“Certainly, over the last few years some (partners) were asking why you would put money into property when the share market’s going ballistic,” he says.
“Probably a large proportion of the people we see are in conflict over what to buy and where to buy: one half of the couple says we should buy a brand new property to get tax depreciations and buy in outer areas; the other is saying ‘no, we should buy an older property close to the city’.
That can be a real conflict.”
Author and property investor Jan Somers says couples disagree on any number of issues, but disputes over property investment tend to be more serious because more money is involved.
She says couples often disagree on matters of taste, such as whether to have chicken or beef for dinner.
But investing in property “is not a matter of likes and dislikes; it’s about being properly informed.”
Few of us are entirely rational when it comes to money.
The risk involved triggers emotional reactions and deep-seated fears.
Buyer’s agent Deborah Small often forms close relationships with couples she advises on property deals.
That has given her an intimate look at the dynamics of relationships and investing.
“Without a doubt in a relationship, one person is much more confident than the other,” she says. Small says your upbringing and what you’re taught as a child determines your attitude to money.
“The person who lacks confidence grew up in a poorer background or a very, very traditional upbringing where it was all about money in the bank,” she says.
Small says she’s faced the issue herself.
Her partner Andrew Dauth had invested in property before but when it came time to pursue a join investment strategy she found she was more of a ‘risk taker” and Andrew the “procrastinator”.
“The risk taker wants to “just do it” and the procrastinator wants to do it but ‘think about it a lot first’,” she says.
“That’s extremely frustrating for the risk taker.
They’ve already worked out their strategy in their mind and see no reason not to forge ahead straight away.”
HOW WE’RE WIRED
“A lot of people are programmed to be scared of debt,” he says.
The beliefs that debt is bad, it’s best to pay off your house, get an education, etc.” are so ingrained that many people don’t understand why they think the way they do”.
He says people see the world through their beliefs but some of these are disempowering.
The picture is further complicated by gender: men and women perceive the world and their roles in it differently.
Surprisingly to some – and despite their macho risk-taking image – many experts says it’s the men who often baulk at investing in property.
Jan Somers says: “It’s usually the woman who comes up to me and says, ‘I’d really like to do this but I can’t convince my husband. Will you ring him?”
“Most people assume it would be the bloke (wanting to invest in property)… funnily enough it’s probably the other way around,” Deborah Small says.
She says women tend to be more interested in real estate investment because they often have more of an awareness of the growing costs of the likes of education.
“They’re more in touch with the real thing of how much it’s costing to bring kids up.
The husband doesn’t necessarily see a lot of that stuff.”
Women “also see the value in their home and are driving around the suburbs all the time and talking about real estate value.
The husband hasn’t got time for that.
Women are just really, really good at multi-tasking,” she adds.
“Women are also more driven to making sure that if something goes wrong down the track there’s more than just the husband’s superannuation.”
HAVING TO CONVINCE THE MAN
The problems begin when the wife takes her real estate aspirations to the husband.
The male immediately frames the problem in terms of its impact on his hip pocket – and his ego.
He looks at his pay packet and how much they have to pay out on the investment property.
“They translate it into: I’m going to have to work harder,” Small says, adding it then switches to a pride issue about the male’s ability to provide.
A wife or girlfriend wanting to invest in property is translated into: “you don’t feel I’m an adequate provider. What I’m doing… isn’t enough?’ They get very sensitive about it,” Small says.
Fortunately for women driving the process, there is a way forward by shifting men out of feeling emotionally vulnerable to their stronger suit of thinking logically.
Small says women need to get themselves a really good broker and accountant, hopefully who are into property, and drag the husband along to them.
“They’ll say, ‘why do I have to have a meeting with the accountant, why can’t you just do it?”
Ignore it and insist they go, she says.
With an accountant, broker, or banker going through the numbers, the man should begin to be more trusting of the project.
“Their logical brain kicks in,” Small says.
It also gives them an opportunity to feel important by asking “wise” questions, which begins their interaction with the project.
In her own case, Small says that “once Andrew was comfortable with the team around him and he could see that it would all work, the fear factor was negated”.
But she says the key for women is to do the hard work and present a scenario.
“Unless you do all that background work, you never get to that,” she says.
“When one person is hesitant or has that fear, the other party has to do the work behind the scenes to be able to put forward a comprehensive plan to show that all the boxes are ticked.”
HAVING TO CONVINCE THE WOMAN
Small isn’t so optimistic when the men are driving the process and the woman is opposed.
She says women who are against investing are usually so for emotional reasons, and often accuse the man of putting their family’s future at risk.
This is particularly common for men who want to pursue investment as a full-time job.
“It’s not seen as a traditional job in that sense.” She says many women use “emotional blackmail”.
“When you put all the logic in front of them, men are much more logical,” she says.
“That doesn’t work the other way around.”
She believes that despite being presented the facts, women emotionally opposed to investments remain emotional.
Unfortunately, many men believe there’s only one path forward: cut the wife out of the information loop and proceed without them.
“A lot of them get to the point where they say, ‘this is happening, we’re doing it and that’s it’,” Small says.
“They just don’t share as much information with them about upcoming deals.”
Somers says the best way forward is “being informed, not pushing ahead regardless. Both ultimately have to take responsibility.”
But she does admit that some partners choose to invest by themselves. She cites one woman who told her that she was going it alone and would own the property in her name alone.
AVOID INFORMATION OVERLOAD
When logic doesn’t work, it’s time to explore the core issues creating the hesitancy.
“If one person is further ahead than the other, it’s because the other one is scared of something,” says Michael Yardney.
“Therefore, one really has to go back a step and work out what they’re scared of.”
The danger here is that when one partner detects resistance, they bombard the other with information.
“More figures and more numbers could bamboozle them and give them more fear,” he says.
McGeever agrees that one of the problems some couples find is filling their minds with too much information.
“I’ve come across numerous couples who’ve gone to half a dozen seminars and read a dozen books,” he says.
“They’ve given themselves too much information and end up sitting on their hands because they’re not sure which way to go.”
Too much information can also lead couples fall in love with different strategies, exacerbating conflict.
McGeever says some couples in conflict approach buyers agents.
“It puts people into a little bit more of a comfort zone.” But he says that couples are often divided.
“It’s usually the wife that’s reluctant to invest; it’s usually the husband reluctant to use a buyers agent. The husband usually says, ‘but we can do it ourselves’.”
Rather than providing more information, Michael Yardney believes the partner has to sit down with their loved one and discuss why they don’t want to invest.
That involves exploring issues including what concerns them, what their money beliefs are, what their parents were like (were they spenders or savers?), and what they were taught about money.
“It’s not logic,” he says, adding that you can have a strong, long-term, sensible plan but people will still say no because they haven’t confronted their underlying fears.
He says the only hope is a program of re-education to let go of old, disempowering beliefs.
But he warns “it’s very difficult to educate your life partner”.
He believes in going to seminars and reading books – not about real estate investing – but on learning to model themselves and their thoughts on successful people.
He doesn’t necessarily believe that couples should see psychologists, as “most psychologists are not wealthy”.
But if the dispute is causing serious issues, there’s no harm in seeking professional help from a psychologist.
Even if they choose not to seek professional help, couples can adopt techniques psychologists use to change the way people think.
One technique is to look at issues from a fresh perspective, or reframing.
Jan Somers, for example, advocates flipping the question from “should we invest in property” to “what will happen if we don’t invest”.
“The consequences of doing nothing are you might be reliant on a pension that doesn’t exist,” she says.
Somers says by approaching the issue differently, property becomes a real option because it clearly affects both partners.
“It’s a joint responsibility if they end up on a non-existent pension,” she says.
Small says resolving the different attitudes to risk she and her partner Andrew had has paid off.
They began by buying two blocks of land off the plan on the Capricorn Coast.
They have gone on to buy several more residential and commercial properties throughout Australia.
But she admits “it’s never ever fully resolved”.
“The reticence is always in one partner or another.
There’s always a person who’s more a risk taker and the other person who’s very hesitant.”
The key is to recognise the differences, accept who your partner is and create mutually agreed strategies to move forward and realise your dreams in property.
Accept the partner has a different risk appetite and be understanding.
Explore in an emotionally sensitive way your partner’s beliefs about money and investing.
Try to address any limiting views they were taught as a child.
Explore the benefits of investing but also the negative consequences of not being proactive in property.
If necessary, take your partner to suitable seminars that expand their knowledge.
Do most of the background work yourself on a potential deal so it’s well progressed before bringing your partner in.
Involve your partner in discussions with experts, including valuers, bank managers and accountants.
Talking with experts will alleviate some of their concerns.
For male partners, it will engage their logical thinking.
If the issues remain a constant source of tension and is creating major relationship issues, don’t be afraid to consult a professional psychologist.
Editors Note: This article has been republished for the benefit of our new readers. It was originally was written by Ben Power and was first published in API Magazine in September 2008 and has been republished with their permission.
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