One way to spot the difference!
by Neil Jenman
Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/good-or-bad-property-investing/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au
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This is a story of two different couples who each invested in property at the same time (2010) with vastly different results.
The first couple bought a property for $1.9 million.
Last week they sold it for $3.8 million.
That’s a gross profit of $1.9 million.
The second couple bought a property for $980,000.
Last week they offered it for sale at $680,000.
They face a loss of at least $300,000.
My wife and I know both couples. While we are happy for the first couple, we are shocked and saddened at what happened to the second couple.
It doesn’t get much publicity but, each year, thousands of investors collectively lose hundreds of millions of dollars investing in property.
The reason for winning and losing in property investment is quite simple: It depends on whose advice you take.
In probably 95 per cent of cases where people lose money investing in property, they took the advice and bought the property based on what they were told by the people who sold them the property.
As they all attest – everything looked so good at the time.
Well, of course everything looked good, that’s why they bought it. Once they bought, they felt good. Finally, we have invested in property. Finally, we are on our way. But the end result –they bought the wrong property – may not occur to them for years, until they sell.
There are so many reasons why so many people make so many costly mistakes when they invest in property. It would take a book to explain them all.
To help as many people as possible, I will give you one reason why almost all people lose money investing in property.
It’s this: They don’t seek the opinion of someone with the following characteristics:
First, someone who is not earning a huge commission or an enormous profit when they buy.
Second, someone who has a good record of investing – someone who has never lost money in property investing.
Third, someone who cares about them.
That’s it – three characteristics of a person you should consult before you invest in property.
Right now, as you read these words, many people are investing in the wrong sort of property (and in the wrong places). They are taking advice from people who have three characteristics:
First, someone making a fat profit from their purchase.
Second, someone who never buys the type of property they are selling.
Third, someone who does not care about them.
Last week, when we heard about the lovely couple facing a huge loss after owning a property since 2010, my wife looked at me and said, “That’s never happened to us, has it?”
No, it hasn’t.
In our life, we have bought many properties. We have never lost money. Many times, we have done extraordinarily well.
The first rule in investing in anything (according to Warren Buffett) is to never lose money.
The second rule is to always remember rule one.
Now, please understand a vital point: No one invests in property believing they are going to lose money. Everyone who invests in property believes they are doing the right thing. Indeed, slick con artists who sell dud investment properties do not come across as con artists. They have all the feel-good lines and phrases to make you trust in them. They even seem like friends.
Yes, well, there’s an old saying: “You can’t cheat your enemies because your enemies don’t trust you. You can only cheat people who trust you. Your friends trust you.”
If you buy the wrong investment property – and lose a few hundred thousand dollars – it can take you years to recover. If you are in your fifties or above, you may never recover.
The wrong property investment can ruin your financial life – and do enormous damage to your mental health. I have seen it – many times. And, every time, I wish they had done one thing before they made that fateful decision to investing in property.
I wish they had sought the opinion of the right person.
So, let me repeat:
If you are thinking of investing in property, I urge you – BEFORE YOU SIGN ANYTHING – to get an opinion from someone who has those three characteristics mentioned earlier:
1. They are not getting paid from your purchases.
They are successful investors themselves (they have never lost money).
2. They care about you.
If you don’t know anyone with those characteristics, I can introduce you to such a person. Provided, of course, that you are a good and decent person who only desires to invest in property to create a better future for you and your family.
That person is me – Neil Jenman.
Before you buy any investment property – or make any sort of real estate investment – you are welcome to send me an email and ask me: “Hey Neil, what do you think?”
If you promise to keep my opinion confidential – and you are a decent person – I promise to give you my truthful opinion about any property investment you are considering.
Those two people I mentioned earlier, one of them asked my opinion, the other one didn’t ask my opinion.
As mentioned, one of them made a profit of $1.9 million in eleven years and the other made a loss of $300,000 in eleven years.
Which ones do you think asked my opinion?
Of all the dark deeds I see in the murky world of property, nothing is more dark or distressing than seeing good people lose huge amounts of their life savings from bad property investing.
If you need me, I am here to help you. At no charge.
Neil Jenman – [email protected]