Becoming, being a landlord will change you. In the driving seat, no longer a passenger, will shift you into a different state of mind. Investment does that to people: the feeling that others are paying you is enlightening. A business plan is rarely straightforward; at a higher more focussed level of understanding, your way forward will be clearer. What next to do for the best is less likely to be an issue.
The taking of advice and help is still necessary, but not from anyone. What’s needed is advice and practical help from people who really do know what they are doing, what is happening at a deep level of understanding. New ways of thinking are emerging, advancement in technology sees to that, but the fundamental principles are unchanged. Professional advisers have a dual-role: to act for you and guide you through the complexity of the property system, the law and valuation and to extricate you from your mistakes. Good advice will point out the pitfalls and prevent falling into them; wise advice will help prevent making mistakes in the first place.
With commercial property, mistakes are readily available. They serve as a reminder a landlord is not infallible. Anyone can buy what they fancy, but beauty is not necessarily packaged to appear obvious. There may be hidden qualities in the discarded and neglected – as anyone that paid next-to-nothing for commercial property in run-down parts of East and North London can testify now that prices have shot through the roof. Anyone can read a lease but literally is not necessarily the correct conclusion. Legislation can override, so too can case-law.
Investment may be a passive, you can buy to hold, come what may, but what to buy is a challenge. All property is owned by someone somewhere but it doesn’t have to be you. Statistics are averages. For the long term, you have to get your choice of a particular property right from the start or over time you could find yourself out of pocket.
For successful investment it pays to be pro-active. With business tenancy asset management, problems can crop up all the time, often when least expected, frequently when least convenient. A difference between a passive and pro-active investor is the ability to transform problems into opportunities.
Tenants may be corporate entities but are run by people; and people have feelings. If already in your nature then it may not hurt to be accommodating of tenant requests, but nevertheless it will pain if your approach does not lead to you becoming better off. Business tenants are very good at getting what they want at the expense of the landlord. You will have to be firm in your dealings with them, possibly tougher than you normally are with others. To call a bluff, you may have to be willing to let go of the existing tenant, no matter how tempting to hang on. You may have to leap into the unknown and risk a void to improve your prospects. Wise advice from a professional sounding-board will prove a good investment.
Property does not perform, people do. Performance is a measure of achievement. “Wealth is the product of man’s capacity to think”. How wealthy you become depends upon thinking like a wealthy person. Property is not simply a commodity, land and buildings for occupation, it can also double as a store of money. Play the property game well and substantial amounts of money can come your way. You can jump on the bandwagon whenever excitement is in the air, but the big money comes from listening. Listening to wise advisers, listening to what you don’t want to hear, listening to yourself.
When you listen, you hear timing. Successful investment and all that entails is about the art of timing. When to say yes, when to say no. Indecision and choice become things of the past. The more adept, the more you trust your intuition at all times, not just in emergencies and in crisis as do most people. Most people lurch, thinking problems are normal. Essentially, a problem is about direction, a helpful signal in a tangible form. Letting go of wanting to be like other people will result in being yourself. Being yourself is the first step in knowing what to do, to whom to turn for help and guidance.
Anyone can become a property investor by putting their money and mind to it, but there’s a cut-off point, a limit after which things start to go downhill. The point of no return is to warn you. To change your approach to investment. When something comes naturally, you are made for each other, well-suited. All property belongs to someone somewhere but not all property comes onto the market. At any time, the selection of property for sale may not be the property for you. You may have to bide your time, to be patient, perhaps extremely, until the right moment arrives for you to strike while the iron is hot.
People generally are impatient. Most people are scared of going it alone because they are inhibited by a desire to be popular. Lacking emotional self-confidence, they follow the crowd. As Warren Buffett said of equities, “you pay a very high price in the stock market for a cheery consensus.”
To swim against the current of common opinion is contrarian, but to succeed in commercial property investment requires a different mindset. Serious research and a thorough understanding of the principles and forces at work to ensure the crowd is wrong or else the signs can be misinterpreted. The market is so distorted by sentiment and eagerness that long-gone are the days when low yield could be interpreted as certain growth or high yield meaning trouble ahead. Impatience will cause you to become involved regardless. Impatience is an addiction, it takes hold of you and habitually destroys your capacity to think.
Be yourself and you will have one strategy in common with successful investors – let the market bring the deals to you, rather than you chasing after them.
The Rent Review Specialist