Negotiation, Negotiation, Negotiation

UK Property Investment news and comments from Mark Harrison of YourPropertyExpert.com

“Anyone can do it” does not mean everyone can do it.

Posted by markharrison on July 2, 2007

I’ve been thinking about the “anyone can” argument that us property investors who also sell information promote.

The logic goes as follows:

  • People claim that <insert disadvantage here> stops them investing in property
  • The experienced investor either:
    • Had/has that disadvantage or
    • Knows a successful investor who had/has that disadvantage
  • Consequently, the experienced investor reasons that the disadvantage is “in the mind” of the person complaining.

The following logic has been applied to lack or time, lack of money, physical disability (hell, I was stone deaf as a child and grew up with a speech impediment as a result of not hearing sounds properly while learning to talk, and went on to become a professional speaker.)

A counter-argument I sometimes hear is that most people WILL NOT go on to become property millionaires! After all, every let property needs a tenant, and while the landlord may do well, the tenant won’t go on to become a property millionaire.

This is true, but I’m not convinced it’s relevant.

I’m making up figures here, but compare the three possible scenarios:

  • Scenario 1: You have a 100% chance of winning £0.
  • Scenario 2: You have an 80% chance of winning £50,000 and a 20% chance of losing £50,000
  • Scenario 3: You have a 70% chance of winning £50,000 and a 30% chance of losing £5,000

Which would you pick?

In scenario 2 the chance of winning is highest, but the cost of losing is also high.

In scenario 3 the chance of winning is lower, but the benefits of winning are ten times the risk of loss if you lose.

Personally, I’d go for scenario 3 every time.  The reason I like investing in property is that, providing you do your homework properly (and this does, indeed, take time and effort) it is normally possible to find deals that have a minimal downside even if they don’t show the upside hoped for.

One Response to ““Anyone can do it” does not mean everyone can do it.”

  1. billbiko said

    Hi Mark,

    Interesting observation, but can I add two other thoughts? From what I have seen with potential investors and potential property owners is the lack of knowledge, and fear of the unknown (quite often the same thing.

    Many people simply don’t understand how to go about becoming a rental property owner and the fear of losing money doing it scares them off. Once you have systems in place and understand the process it can get easier and easier. Depending on your market of course.

    Regards,

    Bill

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: