Living the dream is closer than you think.
People often make the mistake of thinking that property investing is a purely technical game.
It’s not. In fact, it’s more art than science.
The science is important, don’t get me wrong. You need to know if the numbers stack up. But you’re very rarely making the big bucks off the technicals.
This is one of the key differences with shares and why I find shares a bit frustrating. With shares, you’re trading purely on the technicals. You need to know if the current share price reflects good value given what you know about the company, and where you think the general market is going.
But once you’ve bought, there is very little you can do. If you do try to do something to affect the share price, you’re likely to get arrested for insider trading or something.
(There’s no ‘Renovation Rescue’ TV equivalent with shares.)
Once you’ve bought some shares, you’re stuck with them. The only next move you have is deciding when to sell.
There’s not a lot of room to move.
But property? That’s a whole other ball-game. With property most of your money often comes with deciding what to do with it.
And if you decided to add an extra bathroom, ASIC is not going to come bursting through your door and confiscating your hard drives.
And so often it’s not the technicals of a property. It’s the potential.
And how do you know what the potential is? Well, that’s where the art of property investing comes in.
Deciding on a vision and strategy for a property is a creative process. It involves a high degree of intuition and left-brain thinking. It takes vision and imagination. It involves lying on your back looking at clouds, or that flash of inspiration that hits you in isle 7 at Woolies.
And so ultimately, you’re making hay on your imagination, not on your ability to crunch numbers. How great is that?
But don’t get me wrong here. When I say property investing is like an art, make sure you understand what’s involved with being an artist.
Most people imagine it involves sitting around in cafes until inspiration strikes or drinking wine and schmoozing at gallery openings.
For some artists, that is all they do, but they’re not the ones making great art or great money.
Being a professional artist involves a butt-load of work. A painter might paint a 1000 painting in red tones, just to understand how the colour red actually works. A potter may make hundreds of pots in exactly the same design until they get the technique nailed down. A musician will know their instrument better than their own body.
You’ve got to know your craft.
Likewise, these days the senior people on my team can read the potential of a property from just 5 minutes with an internet listing. Give them ten photos and some recent sales and they’ll give you an amazing vision straight back.
But that’s only because they’ve put in the time. The first deals you do are slow. They’re clunky. You don’t know what’s going to work. You don’t know which options are best. Renovate or knock down and subdivide?
But like anything, you get better with practice. You build a familiarity with your craft. You know your materials. You know how it works.
In time, this process becomes a sixth sense. You recognise a good deal even before you’ve understood why it’s a good deal. You’re free to draw on creative, associative thinking. You’re not tied to slow and linear thought processes.
You become an artist.
And I can hear people rolling their eyes hearing me describe property investors as artists. But I’m not saying their artists in the sense that they’re making art. They’re artists in the sense that they use a process that draws on a combination of experience and insight, of rigour and creativity.
And this is why its so much fun. It’s a creative process. Some people like to throw paint at canvases. I like to work with entire buildings.
But if you’re only up to your third or fourth deal, then you’re probably haven’t found your stride yet. It might be more hassle and stress than ‘fun’.
But like anything, you get better, it gets easier.
And very quickly (trust me, surprisingly quickly) you’re stepping into your mastery, where you understand your craft, and you’re engaging your creativity and your imagination.
And when you’re creativity and imagination are engaged you’re having fun.
And if you’re having fun and making money??
Well, now you’re living the dream.
That’s what I’m talking about.
Are you finding property investing is a creative process?