When you start your investment journey, it is not uncommon to encounter opposition from people closest to you. Family, friends and acquaintances can become opponents, potentially shutting down investment opportunities before they can flourish.
Michael Beresford, Director – Investment Services at OpenCorp, is well aware of the challenges that such "dream shredders" can present to potential investors. He gives his ideas on how to fight them and reap the benefits of residential real estate investment.
YIP: First of all, why do you think people should invest in residential property, as opposed to other forms of investment?
Michael Beresford: The main advantage is that he is a proven long-term player for wealth creation. It offers leverage, it is a low risk asset class, and there will always be demand for housing. Of course, other investments also have advantages, but they pose additional challenges. Commercial properties can be reassessed every 12 months and stocks acquired with gears are subject to margin calls, which greatly increases risk in a fluctuating market.
The other reason I like property is because you can choose exactly what you buy and how you act on it. You are in direct control, not beholden to members of the board of directors, CEOs and other senior managers, all of whom have strategic discussions that you are not aware of – it's up to you to decide.
YIP: How important is it for potential investors to have specific objectives before taking the plunge?
MB: First and foremost, investors need to understand why they are investing and what they want to achieve with their investments. You wouldn't jump in a taxi without informing the driver of the destination, and investing in real estate is no different. That said, life rarely takes us on a simple journey from point A to point B, so the plane doesn't need to be completely frozen or unyielding.
I would suggest checking your investment goals and reviewing them two or three times a year. Your goals may change because personal circumstances and what is important to us also tend to change over time.
"Dreamminders often try … to make sure you don't make mistakes, but people are afraid of what they don't understand not "
YIP: You previously spoke of "dream grinders". How would you define a dream crusher?
MB: In the past 15 years of helping investors, I have encountered two common concerns that keep people from investing. The first is simply that they don't know what to buy – they don't feel they know the landscape of the market, so they don't know which property or location will benefit them the most. The second is not to understand the cash flow aspects of investing, especially with regards to risk mitigation and maximization of income.
Potential investors have already taken a step in the right direction to work around these issues, but it is not uncommon for them to seek feedback from loved ones. Understandable, but their closest and dearest ones are not necessarily investors themselves, are much less knowledgeable about the nuances of investment, and as a result, they can give very reactive and notified in the negative. He is someone who acts like a dream grinder. They often come from a nursing station, but well-intentioned is not the same as knowledgeable.
This doesn't mean that the first investment isn't scary at times, but if you don't take the first step, you'll never take the second or third. In addition, the people who act as dream grinders are not going to turn around in 20 years and will offer you $ 100,000 per year for the rest of your life for following their advice not to invest!
YIP: What are your suggestions for combating the negative opinions of dream choppers?
MB: This is where property mentors can be very helpful – as sounding boards and helping you stay on track. They have come a long way before you and can share their own ideas. Surrounding yourself with other successful people is crucial.
In addition, dream grinders are often your closest family and friends, so you need to understand their state of mind – they want the best for you; they try to make sure that you don't make mistakes.
People are afraid of what they don't understand, and investing well is generally not well understood. That said, if you know that they are likely to discourage you, it is best not to share the relevant information with them until you have accumulated a track record of success. It also becomes easier over time. Once you've succeeded, some of the dream grinders will change their tone and may even ask you for advice!
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My four-year real estate investor
by Cam McLellan, visit:
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