3 military principles that will make you a better property investor
Rising lending could be a sign of more speculative investing, with an industry expert highlighting that it is causing some bad financial decisions.
Stronger lending could be leading to weaker purchases, with ‘the good times’ experienced by investors unlikely to last forever.
Figures released by the Australian Bureau of Statistics Lending Indicators show that the value of investor lending has surged by almost 70 per cent over the six months to May – double the rate of owner-occupier credit growth.
While some investors are seeing this as a sign of a strong property market, Atlas Property Group’s director, Lachlan Vidler, is warning of the potential dangers of a buy-in in a rising market.
“Unfortunately, they may find themselves buying at the peak of the market, or investing in an inferior dwelling or location, which can have serious long-term financial ramifications,” he said.
The former Naval officer believes strategic property investment is very closely aligned to military principles because both required discipline, dedication, and courage to be successful.
“Property investment requires incredible discipline over a long period because, for most people, investing begins decades before they will be able to realise the benefits of their investments.
"Similarly, discipline lies at the core of all military activities and missions,” he said.
“Although the barrier to enter in the property market is substantially higher than other asset classes, such as shares, we advocate for all investors to take a leap of courage and decisive action to incorporate property in their personal portfolio, because of the leverage, reliability and stability it provides investors for their money.”
Mr Vidler said property investors that remain dedicated to their financial goal and their strategy, over the long term, will likely see greater returns.
“Savvy investors accept the fact that their portfolio may not generate a profit every single year because this is an unavoidable reality in the cyclic nature of the property cycle,” he said. “They always remember that the most important days in the market are the day they buy and the day they sell.
“During the time in between these two days, as long as their suburb incurs more years of growth than decline, their property should be achieving an investment return. Unfortunately, some investors may currently be considering ‘mission creep’ due to the robust market conditions over the past year,” Mr Vidler concluded.