When it comes to real estate, we are doing so many things wrong! Then we begin to wonder, why aren’t we getting results? Why aren’t we making the progress that we thought we should be making by now? The reason we discovered, is there are a number of things that are preventing most people. And I’m here to tackle them today because I’m all about keeping it real.
This is from the experience we’ve had with our own investments and with those of the people that we’re working with every single day. It’s the top three mistakes that we have discovered over the past three, four months. The idea is that you can use these discoveries to evaluate where you are with regards to your own real estate investments. Are you actually on track? Are you using the right bank or are you still kind of wandering about? You never know, you might be doing the completely wrong thing and have no idea! Because often, when we get started with our real estate investments we tend to jump right in without the expertise or skills.
Think about it. For your career, you spend ages preparing for it.
You prepared for your career or anything that you do or did post high school, isn’t it? Doing that diploma or graduate degree or postgraduate degree, there’s so much we do in preparation for a career. We spent almost four to six years preparing for the career that we set out to engage in.
But when it comes to real estate, we’re not putting as much time or effort into it. You’re not investing your time, or investing your money. I’m going to ask you right now, think about how much you have spent in your education. Think about it right now. How much have you spent preparing you for your career? I would hazard a guess that is nothing less than $100,000. Or maybe you joined a public school like I did for my undergraduate, the best in the country, and didn’t have that much school fees to pay beyond room and board. So, for some countries, this may be closer to $10,000, if you count your room and board, your school fees and so on. You spent a lot of time. And you know what, most people are going to earn a lot more from their real estate investments than they ever will earn from their career.
This is the truth of the matter – we will earn much more from our real estate investments than we ever will earn from our careers. Just because of the nature of real estate investments.
So why aren’t we spending enough time in it?
I am already touching on one of the things that we normally encounter. So, let’s just start with #1.
Mistake #1 Adopting The Wait-And-See Approach
This is by far the worst mistake that people are making, adopting the wait-and-see approach. You’re like, “Okay I see that there are things people are purchasing right now, I might maybe get into a few low-cost investments. Maybe I’ll wait-and-see”.
Now, you’re either ‘waiting-to-see’ to see when you’re inside the investment, or you’re ‘waiting-to-see’ when you’re outside the investment. Both of these are not the way to do it.
So, you can do this in one of two ways. You are looking around at potential real estate investments and you are think “Okay, this seems a little bit out of reach for me right now, I’m going to wait-and-see.”
Or maybe you’re like “Okay, that one seems too …. (insert whatever adjective you want to us) … I’m going to wait-and-see.”
So, you just sit aside and you wait-and-see.
Wait-and-see approach is not going to help you one little bit because guess what’s going to happen with real estate. It will always accrue in value. If you want to get into it, you want to get into it now.
So, that’s one end of the wait-and-see approach.
The other end of the wait-and-see approach is saying, “I am going to get into this real estate investment, and then I am going to wait-and-see.”
So “I’m going to buy land, I’m going to buy or a stand, I’m going to a plot”, whatever you call it in whichever country. “And then, I’m going to wait-and-see if that land accrues in value, or I’m going to wait-and-see if something comes up around this property that’s going to make it easier to get something out of”, you think. But either way both of these are a wait-and-see approach that are not helping you at all.
Because #1, you just let a perfectly good investment pass you by.
Or #2, you’ve got into an investment and it’s eating up your money and not giving you back anything in return.
So why would we ever do that? Do you buy a car and then go and pack it in your garage and say, this is cool? I got that car, men, I got it’. And then you are sitting there, enjoying having the car.
This is the same with our real estate investments. We don’t just buy them, and then we are waiting to see. We move into monetizing. What we have found, the people that are getting the best results for their real estate investments, they are adopting a pro-active approach. they are moving forward and saying “I see this investment, I am going to get into it, I ‘m going to take it all the way, until it starts to bring me money.”
And the way it brings you back money, would be depend. Is it going to bring you back money through rental income? Is it going to bring you back money through agricultural income? Like through using greenhouses and the like. Is it going to bring you money through leasing it to people who want to use it for various purposes? Whichever way it is, you are moving forward. Wait and see is pretty much the worst approach that can ever use.
So, that’s the #1 approach that is one of the worst you could ever use. Don’t do. And what’s a better approach? Keep reading. And if this resonates with you that “yes, I’ve fallen into this trap”, never fear, we do it so often, it’s so natural because we don’t want to move, we don’t want to take action. We want to kind of sit and wait for things to come to us. And that approach just doesn’t work.
#2 Playing It By Ear
I’m going to go into the next mistake that people make when it comes to the real estate investment and I’m just going to call this one, you know, playing it by ear or guesswork, so to speak.
Playing it by ear is when you’re getting into something, but you have no idea if it will give you returns, because you’ve not run the numbers. Because you’ve not sought to find out, “if I put this money into my real estate investment, I’ll get this amount back”.
Playing by the ear is not what the top real estate investors do. I’m going to lay it out for you. Guesswork will never get you where you want to go. Do you start a business without a business plan? Even if you don’t have a business plan, don’t you start the business with an idea of what it is you want to get out of that business? Don’t you have an idea of this is the product that I am going to sell, this is where I am going to sell it, this is who needs this product.
You don’t start a business without having all these tenets in place.
So why do the same for real estate? Why get in when you have no idea how you’re going to monetize it, when you have no idea if it’s even going to bring your returns. One thing I have found is,
before you get into a real estate investment it’s very important that you figure out what that investment is going to give you back. It’s basically doing analysis. Doing an analysis to know what is the market rate, what are you going to pay it for, what will be your daily rental rate? What occupancy that you can expect? How often it will be rented out, therefore, you know how often you can put as an average income per month. And, of course, you know conversely, what will be your average expense per month? What are the different things that you’re going to offer?
So, you can’t just jump right into this without analyzing it, simply because it’s not a wise move. Sure, you can play by ear, but you’re simply not going to get the best results.
You know why? Because the time that you determine whether you’re going to be making any real estate returns is before you invest in the property, not after.
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Want to know more about how short term rentals can super-speed your real estate investment process? Here’s a great place to start -> http://jacquelinetsuma.com/5steps
Jacqueline Tsuma is Founder and Director of Upani Homes and JT Consulting, lifestyle companies that provide coaching, consulting and done-for-you services in the area of real estate and home ownership for both diaspora and local home buyers, as well work with brick and mortar businesses based in Africa for their digital marketing. She is also a motivationa speaker and is Co-Host of the AfricaX Show.
She works with African professionals in the Diaspora to help them maximize their real estate investments, by providing the best strategies for getting financing, managing and monetizing their properties back home. Watch her free masterclass to learn the the 5 Steps Our Clients Use to Earn Six-Figure Rents From Their Homes in Africa (while living abroad and doing it 100% virtually.) More here -> http://jacquelinetsuma.com/5steps .
Connect with Jacqueline here on LinkedIn or visit her at jacquelinetsuma.com