15 Mar Why most property investors fail – Zaki Ameer
Of the over 2 million property investors in Australia, only 18% own two properties, and less than 1% own five or more. Although any asset is an achievement, success to most property investors is really determined by their ability to continue purchasing real estate. Unfortunately, so many Australians save for their entire working lives to be able to afford an investment property, but very often once they achieve this, their progress remains stagnant because they aren’t sure of what to do next. Zaki Ameer Founder of Dream Design Property tells us about his formulae for building a successful portfolio.
Kevin: Did you know that there are currently over two million property investors in Australia? Though the number may seem quite significant, statistics reveal that the majority struggle to maintain or even grow their success after initially entering the housing market. In fact, only 18% of those investors own two properties, and less than 1% own five or more. This highlights the challenge that many people face when they’re trying to build a property portfolio.
Zaki Ameer, who is the founder of Dream Design Property, has a very effective theory and practice on building your portfolio. He’s learnt that through bitter experience. He joins me to talk about his experience.
Zaki, thanks for your time.
Zaki: Thanks, Kevin, for having me.
Kevin: Tell me about your experience and why are those statistics so wide? You’re going from 18% only ever owning one property and 1% five or more. Why is there such a big chasm?
Zaki: I feel like in my years of property experience and now probably seeing about 1100 transactions go through for our clients, there seems to be a trend, and the one that strikes out is about being selfish. What I mean by that is that most investors say they’re investors but they’re actually investing with their heart or their emotions and they aren’t able to look at it from a completely factual point of view. They might be looking at the numbers but they’re still deciding with their heart or their emotions as opposed to complete logic.
And if you somehow find a way to surround yourself with people who can make strong investment decisions purely on numbers, I believe you’re in it; you’re going to be a part of that top percent.
Kevin: Yes. Zaki, it’s interesting, that point. This is a bit of a mindset, isn’t it? You have to look at property investing as a business and take out the emotion.
Zaki: That’s correct, which leads to my second part about impatience. I’ve seen many, many friends or families or clients, etc. in the community who buy a property and within a year, they go, “It hasn’t gone up in value, so that was a bad decision.”
Again, that comes back again to mindset and being completely aware that property is a long-term investment and in my take, at least a minimum of seven to ten years and maybe even more because you can’t predict. How is anyone ever going to predict? We can only rely on data, but no one can make an accurate guess. You have to be in it for the long run. If values go down or go up or whatever, you just have to stick it through.
But the other problem, as you’ve seen probably in the Sydney market also, is when the values do go up, they go, “Oh, wow. I’ve made a gain. Let me now just sell it.” And then they miss the concept anyway of having holding for the long term and holding that asset to appreciate over time.
Kevin: It is a bit like running a business, though. You have to have nerve and be very, very careful about who you talk to. Do you think sometimes we can over-analyze the market, Zaki?
Zaki: Correct. I think it comes also with technology and social media. Everyone becomes an expert, unfortunately. It’s so easy to get opinions from people who’ve absolutely done nothing, and you rely on their advice. By relying on somebody else’s opinion, you get more emotional and then you make bad decisions. They all go hand in hand. It’s just about being self-aware to stop all the looking at things, take a step back, and let things be.
In my take, if you have a property that can be rented and is hopefully somewhat neutral or maybe slightly positive, just let it be and let it just do its thing over time.
Kevin: Because if you continue to look at something and analyze it too much, you actually do become paralyzed. You become very fearful about moving ahead, don’t you?
Zaki: That’s correct. And you just stay in the same position. Many clients, I’ve heard that they’ve had hundreds of thousands of dollars saved up or from a property they’ve sold or from an inheritance, and they’ve done absolutely nothing and it’s just sitting in the bank I guess for the bank to invest that money.
Kevin: You make another very good point, too, earlier in our conversation about not doing it alone –in other words, building a good team around you, Zaki.
Zaki: Correct. That’s why I think if you’re going to buy quite a few properties – and I mean anything above two in my take – modern property investing, I look at it as a property investing business for yourself. You want to surround yourself with the correct people.
Whether it’s an accountant or a depreciation provider or a pest and building report or a lawyer, all of them need to be qualified, not just in degrees but also having the results so that they have the experience, which is far more important than just education, and that they can advise you from their own experience in these matters. It’s very key to take advice only from people who have done it before.
Kevin: You’ve made some very good points in our very brief time together, but I guess it can all be underscored with the comment about getting the right mindset and how important that mindset is to becoming a successful investor.
Zaki: Yes. And it reminds me of back in the day, in 2007, when I was getting into property, I didn’t read any books on real estate per se, but I’ve read tons of books on mindset and the correct attitude and when things go wrong. I feel that’s probably 95% of what you need and the other 5% you can learn.
Kevin: Great talking to you, Zaki Ameer. Zaki is the founder of Dream Design Property. How do we reach you? Just through your website, Zaki? Is that the best way?
Zaki: Yes, DreamDesignProperty.com.au is the best way.
Kevin: Wonderful. Zaki Ameer, my guest. Thank you, Zaki. Talk to you again soon.
Zaki: Thank you, Kevin.