The hardest part of being a property investor
As a property investor and professional, one of the most important realisations for Positive Real Estate’s Sam Saggers is the challenges that come with holding real estate for the long-term.
After 17 years, Sam continues to invest in properties, all while running one of Australia's largest property investment companies, where he helps other investors start and maintain their property investment journeys—from property purchase and management to financing and renovation.
Throughout the years, he has tested multiple strategies for wealth creation, but he remains a firm believer of the “Buy-and-Hold” strategy, which is based on the investment principle that a property’s value generally doubles in eight to 12 years if you buy the right assets.
According to him: “[I] probably have … one of the most interesting buy-and-hold portfolios in the country. The real estate value's near ... $15 million worth of assets and … I've been successful through [doing] developing or anything more than really just buying real estate, making sure the rents are strong and holding onto it.”
“I'm pretty proud of that fact. When I ... fast forward, I think I'd like to see my $15 million-property portfolio become a $30 million-property portfolio literally by holding onto what I've created,” Sam added.
Holding real estate
Despite the simplicity of the strategy, Sam observed that many property investors are finding it hard to hold on to their investment properties.
He said: “I think the hardest thing for property investors is actually holding the real estate. People fall in love with the idea of buying real estate … [but] once they own it … the reality check sort of kicks in.”
One of his friends recently bought a real estate asset in Sydney, which made her take on a bit of debt and required her to pay a mortgage every month. After quite some time, she suddenly felt the kick of buyer’s remorse.
According to Sam: “I find that the skill of being a great property investor is being able to actually hold the property, not so much buy the property, because investing in real estate [is] actually a marathon. It takes time to become quite wealthy from it.”
While there are a few stories of overnight success in property investment, long-term strategies remain some of the most reliable ways to create wealth. As a property investor, you have to learn how to stick to your decisions and trust your investment’s growth potential.
Sam’s advice to budding property investors: Buy in a good location, find responsible tenants, and wake up 10 to 15 years from now to see that the property’s value has grown to become greater than what you paid for it.
The property professional said: “[If you] just follow the principle of long-term investing, property is very reliable. What isn't reliable is actually people … [who] are always changing their mind about things, being uncertain—all [these] sorts of elements impact the property market.”
“Most people are quite nervous about owning real estate … I kind of teach [them] to go and play golf and just leave it alone,” he concluded.
Tune in to Sam Saggers’ episode on The Smart Property Investment Show to know more about his take on the so-called property crash as well as his advice to investors about the ‘big three’ points he looks for before purchasing a property.
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