Stuart Zadel is one of Australia's freshest wealth education experts and teaches thousands of Australians annually from his vast knowledge and experience in leadership, entrepreneurship and most importantly, your mindset for success.
Stuart Zadel gives a short discussion about the 3 biggest pitfalls in property investing.
If you’ve been to one of my events, you’ll notice a common thread among all speakers: they focus on diligent and thorough research. So I wanted to share with you three of the biggest pitfalls in property investing. Read carefully and you could save a fortune on your next (or first) investment!
1. OVERCAPITALISING AND UNDER-BUDGETING
You may do one of these, or you may double-edge sword yourself and do both. Overcapitalising your investment is not a recipe for success, nor is under-budgeting.
It’s important to research the location of your investment to ensure you aren’t wasting money on aspects of a renovation that aren’t necessary. Additionally, to nail your budget, you need to calculate the expenses before you sign on the dotted line. Miscalculation of costs or reckless spending can drastically decrease profits or create loss.
2. EMOTIONAL ATTACHMENT OR DETACHMENT
This can mean buying in an area that you like, despite it not being as profitable or vice versa. It could mean making a house look so nice that you become hesitant to let it go, because you’ve installed or built the way you would envision your own home – rather than creating what the market demands… I believe that to profit in property, you should leave emotion out of it.
3. IGNORING THE RISKS
Like almost anything in life, if you want to be successful you have to be aware of (and manage) the potential risks involved. Property investment is certainly no exception. This is why I often refer to faster ways to turn profits in property. More than anything, this leaves you less exposed to massive market fluctuations. Case in point: the 2008 recession. Of course, there are many other risks to consider and address, which should ideally be dealt with during the planning and due diligence process.
What can we all learn from Acres of Diamonds? Stuart Zadel re-tells the story and the lessons we can all learn from the famous speech by Dr. Russell H. Conwell.
In 1843, a man was born in Massachusetts, U.S.A. Unknown to him, his life was destined to have a profound effect on millions of people all over the world. It still does to this day.
ACRES OF DIAMONDS
That man’s name is Dr. Russell H. Conwell, and he delivered his most famous speech ‘Acres Of Diamonds’ more than 6,000 times across the United States.
Acres of Diamonds is a story of a wealthy farmer who had it all: a beautiful wife and family, good health, a great purpose in life, a productive farm, valuable assets, and a good reputation. But he left it behind in an attempt to become the richest man in the world. How? By finding diamond mines.
Sadly, the story does not end well for the farmer. He died penniless in a foreign land having exhausted his savings, all to no avail.
In the meantime, on his farm, the new owner discovers – you guessed it – diamonds. In fact, the most magnificent diamond mine in all of history.
Had the farmer remained at home and dug in his own backyard, under his own crop fields, he would have discovered Acres Of Diamonds – free and clear for the taking.