So, I’ve got a confession to make. I’ve actually been that guy that walked smack into a street sign because I was looking down at my phone. Yeah, a bit sad, but I just needed to know right then and there who was headlining the SxSW Festival in Austin Texas.
I’m not really sure why I needed to know that right then and there, but I bet a lot of you have done more or less the same thing. It’s a symptom of the “instant” world we live in – we’ve grown way too accustomed to getting what we ‘need’ now.
We’re in a world now where Dr Google satisfies our curiosity in a quarter of a second, those shoes we saw online can be delivered same-day by noon, and a simple swipe to the right gets you a date tonight.
Yep, it’s all about instant gratification.
We have the ability to get so much of what we want right now, that it can be excruciating to wait.
Though I’ll tell you, the bump I got on my head also shows that it can be painful not to. Yeah, sorry to be a bit of a downer here, but there is some truth to that old saying: “Good things come to those who wait.”
Now, I admit that I never was the most patient guy, but nowadays I can’t even sit still for two minutes at a cafe without jumping on my iPhone and checking Facebook or playing Words with Friends. And, this is coming from a bloke that can still remember when phones had cords and “Express” meant next week.
But for Gen Y and other younger folks, instant gratification is, and always has been, the norm. It’s hard to expect anything else from people who have grown up with the expectation to make things happen through their smartphone screen and get instant feedback from their friends on Instagram and Facebook
The big worry for me is that I’m starting to see the need for instant gratification creep more and more into property. Investors, especially the younger ones, are increasingly focused on “instant” equity and quick capital gains.
You always hear the success stories but rarely hear stories about those who go bankrupt or almost lose everything. And, I tend to see that the ones who are going to lose everything are often those who jump in on some “Get Rich Fast Scheme” or wait to they hear that an area is BOOMING and jump in immediately. The idea of getting rich very quickly is too tempting not to pass up on or do thorough due diligence. Nah, let’s just sign up now and we’ll give it a go.
Now I don’t need to tell you that once you hear an area is BOOMING, then that ship has sailed.
As an investor who almost always buys from financial distressed vendors, I see the ugly side: those who are losing their life savings by investing at the wrong time. They were the ones who raced to the back of the room, credit card in hand, to sign up to that expensive property seminar or get involved in the property scheme being offered. Can’t miss out, there’s only a few blocks of land left. Instant gratification – see what I mean?
Now the location they invested in was great – hence why I am buying there years later – but their market timing was completely off, and chances are they jumped in too quickly and were looking for some instant gains.
But as I’ve said before, the boom days are done. So investors need to train themselves to ramp down that urge for instant gratification. Or invest smarter.
More than ever it is important to get the buying part of the cycle down to a ‘T’. Get this wrong and capital growth may be zero for many years to come.
Now renovations are a way to actually add value, but they take hard work. Are you up for the challenge? Then there can be some great rewards for those who are keen, lean and smart renovators. Get it wrong, and the same thing applies. If you’ve watched Selling Houses Australia, they renovate houses in bad property markets ,just so they can actually make their property sellable.
Market timing along with time in market will be what’s required moving forward. Patient investors who are able to hold on will be a whole lot better equipped to excel in the current real estate market.
Get it right and building wealth through property can be hugely gratifying.