The property self assessment test
When we’re building property portfolio plans for our clients, there is a section we go through as part of learning about them. And that section is what we call the property self assessment test. We ask them whats their level of skill and what’s their level of experience in being able to do this themselves. So we ask them to rank that between 1 and 10. 10 obviously being at complete expert and1 being a complete novice.
Now why is this important?
Well the reality is that investing in property is a high value transaction. This could make or break your financial future so the worst thing is, you don’t want to make a mistake. So when we’re talking about self assessment, we’re really talking about your capability and your deficiencies in being able to do this. And if you do have a lack of capability and some deficiencies in some areas, and what we’re talking about there is knowledge and understanding. Then the best thing to do is to outsource that to someone who has a better understanding or professional value to help you, because again being a high value transaction, it’s really important that we get this right the first time.
Now we only need to look at the ATO data where it tells us between 70% – 80% of people only buy 1 property and the reason for that is usually because it hasn’t been the high performing investment that they’ve been looking for. So understand this property self assessment test. Now in property, a lot of people think they understand bricks and water. They think that well I grew up in a property, I sort of know what it looks like, I’m surrounded by it, and I visit friend’s houses all the time, all property values go up at the same time and at the same value. That’s not true. So understanding that is going to be really important for you to be able to build your knowledge and expertise up. In other words, don’t rush into it, if you don’t have the capability and there are still some strong deficiencies in terms of your level of knowledge.
Now, again you can fast track that by going and speaking to a qualified professional who can help you to improve your level of knowledge and education or someone who has less of those deficiencies because they’ve been experiencing what they’ve been doing over a long time. So that’s the big self assessment test. Don’t think that property investment is easy or simple. It’s not if you want to get the best returns possible. You need to be able to build your level of knowledge up and if that’s going to take a long time to do that, you may be better to outsource that to a professional advisor to help you on your journey.