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Part 5: Finding the correct market suitable for your investing style

Many a times, investors prefer to invest in their country of residence or birth. After looking part 1, 2, 3, and 4, it is now time to use the information that you have gathered to decide on where you are suitable to invest in your country of residence or birth.

Why do I emphasize more on investing according to your investing style?

Because Type A and Type B investors have totally different personalities. Asking Type A to emulate Type B and vice versa, is definitely going to result in disastrous outcomes. It’s akin to trying to make  a square peg fit a round hole.

Let us face it. Do we really think that we are as logical as we like to think we are? In all my years of experiences in selling properties, buyers can have many reasons why they do not want to buy a property but they only need ONE reason to BUY a property. All my investors use logical reasons to explain their illogical feelings. That is why no matter how logical, how right, how filial it seems, as long as your kids do not feel like helping you with the housework, they will not do it.

Let’s use an example. Imagine that the property market is more suitable for quick profits. This type of market is very suitable for Type A investors. In this market, properties have to be sold quickly. Decisions have to be made quickly. A Type A investor is probably one who can make decisions quickly (since he has already unconsciously done his “homework”), and can handle the stress level. He will probably do well in this market since to him, it is not stressful at all. In fact, it is exciting to him.

To a Type B investor, this type of stress is hell to him. It’s not that he can’t make the decision quickly, it’s just that he does not have sufficient information to  make a quick decision (he doesn’t do his “homework” as often as Type A investor probably because his work, and lifestyle does not allow him to. Typically, these investors have young children or run businesses that require their constant attention and would prefer to take a more hands-off approach to investing in properties). And he doesn’t really like to sell a property. He likes to keep the property, he likes to count how many properties he has, rather than how much money he makes. He needs a lot of good reasons to sell the property but in this particular market that favours Type A investors, by the time he makes the decision, the steam has run out. The buyers are all gone, and now, he is stuck wondering why. As time goes on, he is forced to lower his price and in the end, he does not make as much money as Type A investors. In the end, he swore that he will never invest in property again and just because he was investing in the wrong market for himself.

On the other hand, a market where property market is more suitable for accumulating a portfolio of properties requires a different approach. This type of market is very suitable for Type B investors. In this market, many properties are bought over a period of time, and various strategies are used to minimize tax. Type B investors generally are comfortable being a landlord and know the benefits of paying for the services of a tax agent and property manager to manage their property portfolio. As time goes by, they eventually sell off a few properties to pay off their mortgage loan, and eventually enjoy a positive cash flow in their property portfolio. They are aware that the property prices will increase gradually and they are comfortable with it because they want to keep the property and have no intention of selling it. Because it is suitable to the lifestyle and personality of Type B investors, they will do very well in this type of property market.

On the other hand, a Type A investor will do terribly in this market. They do not have the patience for it. They do not like to be a landlord and they find it a hassle. They do not have the patience to understand the tax laws, and some of them might not even want to pay for a tax agent or property manager. The property becomes very poorly managed and they might even have tenants who were so fed-up that they damage the property. Because the property value rises very slowly, Type A investors get even more impatient. In the end, out of frustration, they decided to sell their properties, and swear once again, that they will never invest in property again.

 What you need to know, is what your natural reaction will be. Sure, you can change from Type A to Type B along the way, but it will be a gradual change, not an immediate change. That is known as your personal growth, being able to handle situations that you were not able to previously. But changing overnight, that has never happened. When a person is forced to change, he will simply retreat to his natural state of being. It is a very normal reaction. Hence, you need to know your investing style and be comfortable with it. There is no need to compare with others because they are not in your situation and vice versa. And it’s simply none of your business! You can learn from them, but don’t compare yourself with others. 

Hence, there is no point in investing in your country of residence, or birth, if your investing style doesn’t match.

Once you have identified the market that you are suited to invest it, do understand the procedures of investing before you start. After that, find a reliable realtor and you are good to go!

[End of Part 5: Finding the correct market suitable for your investing style]

[Click here to go back to Part 1: Introduction]

[Click here to go back Part 2: Knowing Your Investing Style]

[Click here to go back to Part 3: Knowing what and where your priorities are]

[Click here to go to Part 4: Knowing, and understanding the characteristics of the property market that you are interested in]

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