Is it Better to be a Real Estate Investment Speculator or Investor?
When I first started my career in real estate investment, I was so excited. I started finding “good deals” everywhere and jumped right in!
However, a few months in and I hadn’t turned a profit. I knew that real estate investment was a lucrative industry. I was passionate about the topic. So why wasn’t I making any money?
After speaking with my mentor, the problem became clear: I was acting like a speculator and not an investor.
Real estate investment speculator vs. investor
So, what’s the difference between a speculator and an investor? Warren Buffet’s mentors Benjamin Graham and David Dodd said it best in their 1934 book Security Analysis:
“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”
Both real estate investment speculators and investors exchange money for investment properties and take on some level of risk. However, while there are some similarities between speculators and investors, the two are notably different.
Speculators look at the big picture, invest without strategy and are mainly concerned with short-term profits. They invest based on feelings instead of thorough research and due diligence. Speculators take bigger risks with less guarantees and tend to lose their principal.
Investors, on the other hand, research every investment opportunity and only take on calculated risks. They make sure that their investments will make them money- and that they will be profitable in the long-run. Instead of relying on feelings, they rely on facts.
Is it better to be a speculator or an investor in the property market in South Africa?
Many real estate investors start out as speculators because they are excited to get started and lack the knowledge or experience to make expert investments. However, being a speculator will only hurt you in the long run- and make you lose money.
Here are a few tips to help you transition from speculator to investor:
1. Do your research: Be sure to do your due diligence on every property- before investing! Don’t let someone sell you a pipe dream. If a deal sounds too good to be true, it probably is.
2. Educate yourself: The more you know about real estate investment in South Africa, the more confident and capable you will be in your investing.
3. Develop a strategy: The most successful investors have a strategy they use when analysing potential deals. Your strategy should answer questions like, How will I profit from this property? What is the risk? Will investing in this property help me reach my investment goals? How soon will I see profits>=?
Don’t let money sit on the table. 2020 has been a rough year for everyone- mentally, emotionally, physically and financially. Don’t let 2021 be the same. You have the power to invest in yourself and create a financially secure future.
When I went from speculator to investor, my real estate investment career took off. I went from making nothing to closing several high-cost investment deals per month. You can, too.
Take action towards building wealth through real estate investment today. This 10-minute survey will help you find out what kind of investor you are.
From there, you can book a call with us and get in touch with some of our students who can source you great deals!
Want to work smart, not hard? You can learn more about real estate investment by downloading my FREE ebook, checking out my blog or contacting me for a 1:1 consultation.
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If you’re ready to take the next step in your real estate investment journey, I would love to help. I have created a no-nonsense course that can help you go from beginner to profitable real estate investor in the next 90 days. Click HERE to find out more!
Interested in learning about how to invest in real estate with no money down? Grab your copy of my ebook How to Invest in Real Estate with No Money HERE! I am giving it away for FREE! In it, I reveal my proven strategy to building wealth through real estate investment without spending my own money. This strategy includes several of the income streams I created without paying any money down.
So- are you ready to start building wealth through real estate? If the answer is “yes,” then it’s time you followed these steps:
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