Episode Details

Over the years, I've worked with thousands of investors and I've found that most fall into one of three categories.

I'm going to explain what those categories are and let you work out which one you fall into.

I'll also explain why one of those categories tends to be more successful than the other two.

I'm also going to have a chat with Leanne Jopson, the national director of Metropole Property Management, about what you can do when a tenant doesn't pay rent. Then, in my mindset moment, I'm going to share an uncomfortable truth.

What type of investor are you?

There are three main types of property investor. Which category do you fall into?

Passive Investor:

• Tend to spend little time looking for a property.
• Not really interested in understanding all of the ins and outs that go along with creating a property portfolio such as finance, tax laws, compounding and so forth.
• Rather than conducting any due diligence or consulting industry professionals for advice, they're more likely to buy one of the first properties they come across

Active Investor:

• Puts in some degree of work in order to find a good investment prospect.
• Gains a basic understanding of the principles involved in property, finance, and taxation.
• Tend to seek professional advice with regards to the structuring of their portfolio and conduct some due diligence in the hope that they can increase the likelihood of making a viable investment purchase.

Analytical Investor:

• Tends to run around for months, sometimes even years, examining every nook and cranny of our property markets, endlessly comparing values and sales, reading reams of material regarding real estate do's and don'ts and seeking advice from as many experts as possible before committing to anything.
• They like to conduct as much due diligence as possible and look for the 'ultimate' investment property.

So which is better?

If property investment was like many other things in life, then the more effort and energy you sink into property investing, the greater your rewards are likely to be.

In other words, the passive investor would enjoy smaller gains than the active investor, while the analytical investor would come out on top as they were willing to do the hard yards.

Yet, in relation to property investing this is only partially true!

Many passive investors purchase their investment properties the way they would buy their home – emotionally.

They tend to buy their investments near where they live, or near to where they work or close to where they want to retire or holiday – all emotional reasons.

Some live to regret their investment decisions and have difficulty holding on to their investments.

The active investor usually does well if he seeks advice from a team of consultants.

What about the analytical investor?

Let me share a story with you…

I remember years ago when I was still presenting at Property Expos (they seem to be a thing of the past now) and I ran into Leonard – a successful IT Engineer.

He has subscribed to my newsletter for over 5 years and when I first met him about 3 years earlier he said he was going to invest in property.

When I asked him how his investments were going, he explained that he had still not made a move.

Instead, he continued to research the market.

Leonard was very intelligent and has a tendency to over-analyze things, hence he is still waiting for the perfect property, the perfect time or the perfect set o