By Kyle Bath
When you look at the residential property market and performance of the property as an investment class in South Africa over the last 30 years, it has proven that even in the worst cycles, it has never had a drastic drop in values. Even in the extreme cycles, it was one of the asset classes that recovered within 9-24 months.
Therefore, it is not only important to start investing, but it is also important to know which type of property investor you want to be.
Whether you are a latecomer, labourer or savvy, every type of investor has its strengths and weakness. It’s important to know which type of investor you are, so you can pinpoint your weaknesses and start working smarter, not harder.
The different types of investors are judged according to their investment motives and level of control over their assets.
There are three types of property investors we’ve encountered over the years:
The late developer
There are many people who are ignorant of the various options of how to become a property investor and participate in the property investment market.
When your daily passion is to create wealth utilising property, you notice how unaware people are that they can become part of the property investment community.
From people who have just started their career and qualify for a bond or home loan even with no cash deposit, employees qualifying for government subsidies, high net worth individuals or current property owners – the lack of awareness remains the same.
When talking to millennials, they do not believe they can nor do they understand how to enter the property investment market.
Government employees are also not aware that they qualify for subsidies and many have not purchased any property during their lifetime.
Do you want to work for your money your whole life to hopefully, one day, do the things you want to do?
Or would you rather be an investor whose money and debt work for you and provide the opportunity to do what you want to do, now?
The hard worker
There are people who have already invested and continue to invest in property but are still doing it the hard way, instead of a smart way.
Are you aware of the current trends and methods to maximise your returns with the least possible effort?
Certain property investors work hard, obtaining the required knowledge, with a do–it–yourself approach, not utilising the knowledge of skilled people. Companies or individuals with these skills have already learned the lessons and can assist you to avoid pitfalls.
It’s not possible to build up the knowledge which trusted property investment organisations have done for many years in a short period of time and you cannot trick the system in this way.
The smart worker
These are the investors who build up knowledge and strategies to make the best investments possible with above–market related returns and property as the underlying security.
These investors make an impact with the least amount of time spent.
The wisest property investors initially dedicate time to study the various options, attend seminars/webinars, read educational pieces and upskill themselves continuously.
They invest the initial time selecting a property advisor and organisation that already has the skill set and track record. These advisors provide them with the right opportunities to achieve their goals.
These are the investors whose creditability and money are working for them!
“Whatever you do, get in early. It is a wonderful asset class and investment vehicle that will change your life forever. “