Why Do Most Investors Stop Purchasing After Two Properties??

[Dan_p]

Forgive the plagiarism....

1. Because 2 is not enough.
2. Because 3 is better than 2, 4 is better than 3 and so on...
2. Because serviceability can still be managed.
4. Because they can.
5. Because of a healthy relationship.
6. Because of good health.
7. Because they don't want to diversify into other asset classes.
8. Because they realize the returns are better than they thought.
9.. Because they bought their first 2 well.
10. Because of positive change in employment circumstances.
11. Because they started a family and want to secure their long term future.
12. Because of age and a lack of trust in superannuation.

I dont think good health is enough.

What about greed and power? ambition to be a slum lord?

 

[jingo]

I would like to hear the whys. What makes people go beyond 2 ips. What keeps people motivated to acquire more.

For us it was this:

Or is it most people who go on to three or more had reasonably easy and early capital growth

Wouldn't have kept going in this situation -

Have many done this who have experienced poor growth early on with the first one or two properties and pushed through.

We gave ourselves a time-frame for growth to occur - if it didn't we would have bailed out and sold up.

Now changing strategy - no more RIP's onto other asset classes....

 

[el caballo]

Jason,

Commercial and/or high yielding shares?

 

[HiEquity]

I dont think good health is enough.

What about greed and power? ambition to be a slum lord?

If you're alive, you may as well be living. A life without risk is no life at all.

Regarding your other highly emotive labels, there is far more to property than just houses and for some reason I find that I no longer have any interest in discussing any of this with you.

 

[Dan_p]

If you're alive, you may as well be living. A life without risk is no life at all.

Regarding your other highly emotive labels, there is far more to property than just houses and for some reason I find that I no longer have any interest in discussing any of this with you.

I wasn't directing the question only to you. I was merely asking what drives people to accumulate more, does it become addictive, to people want to just see how many they can get?

I am not sure what you were reading into my post

 

[jingo]

Jason,

Commercial and/or high yielding shares?

Hi el caballo,

Will be a combination of shares, commercial and property trusts. Looking for income now.

Regards Jason.

 

[Richard Feynman]

I would like to hear the whys. What makes people go beyond 2 ips. What keeps people motivated to acquire more.

I think we might be looking for why in the wrong place in a lot of these cases.

I imagine that (outside of the "getting started" investors who will far exceed 2 properties given time), a huge chunk of the 1-2 IP demographic may just not be hardcore, driven investors with a strategy and goals in place to build a large amount of wealth but rather, they're casual investors. They might buy an IP when they discover it's viable, then another 5+ years down the track when they realise they can buy another, then be content having done "some investing".

 

[Rixter]

I would like to hear the whys. What makes people go beyond 2 ips. What keeps people motivated to acquire more.

My why is for total financial independence to be able to do what I like when I like with whom I like for as long as I like. I did not want a 40/40 club membership.

The size of my why and staying focused on it is what keeps me motivated.

If your why is not emotionally big enough you will not persist long enough to achieve it.

 

[Dazz]

for some reason i find that i no longer have any interest in discussing any of this with you.

That's gold....

 

[Dan_p]

That's gold....

I didn't mean to hit a nerve

 

[devank]

I think talking about ‘number of properties’ alone is kind of useless. ‘Asset value’ should be tied together.

 

[Dan_p]

My why is for total financial independence to be able to do what I like when I like with whom I like for as long as I like. I did not want a 40/40 club membership.

The size of my why and staying focused on it is what keeps me motivated.

If your why is not emotionally big enough you will not persist long enough to achieve it.

That is what I was getting at. Did you have this goal early on when you started investing or did your goal get bigger after you started accumulating more properties?

 

[Rob Williams]

The break down of Multiple Property Rental Owners as of 2007-08 financial year, thanks to Little Stranger.

Just clicked on that link and my name popped up on a very old post. There was a time when I appeared to know what I was talking about

It would be interesting to see some more recent stats. I suspect the percentages haven't changed very much.

 

[Indifference]

I think talking about ‘number of properties’ alone is kind of useless. ‘Asset value’ should be tied together.

Couldn't agree more.... one man's 5 IPs is another's 1 IP. This whole "how many" thing is not really indicative of asset value nor of cash-flow, which is actually the real point after all.

 

[kathryn d]

Couldn't agree more.... one man's 5 IPs is another's 1 IP. This whole "how many" thing is not really indicative of asset value nor of cash-flow, which is actually the real point after all.

But don't forget my if I have a vacancy with one of my 5 cheapie properties, I still have 80% rent coming in, whereas if someone with 1 property has a vacancy, they have 0% coming in.

On the flip side, I have 5x maintenace and repairs (but I still think I'm further ahead)

 

[Indifference]

But don't forget my if I have a vacancy with one of my 5 cheapie properties, I still have 80% rent coming in, whereas if someone with 1 property has a vacancy, they have 0% coming in.

On the flip side, I have 5x maintenace and repairs (but I still think I'm further ahead)

LOL... no, not always.... how about a CIP configured for 5 tenants, or a block of student accommodation or .... use your imagination

 

[devank]

It is a bit of frequency Vs severity in a risk assessment. One has higher chance of being vacancy where as the other has higher impact.

 

[JessP]

I haven't read through the entire thread but it seems people here are assuming it is easy to get more than two ips. It isn't. It takes a certain level of tenacity, creativity, intelligence and just plain hardwork. Many people are scared of debt and of risk and would prefer to take the safe world of the corporate ladder or (*insert mundane existence of choice here*). People are more willing to take risk when they are younger, when they are the least able to service it. As they get older, they become more risk adverse even though they are better placed (financially) to carry it.

People (generally) can't really think outside the square, I think those on somersoft are the exception, not the rule

 

[skater]

I was merely asking what drives people to accumulate more, does it become addictive, to people want to just see how many they can get?

The catalyst for us was the demise of our Business. At the time, we had one IP, a (really crappy) PPOR and a Business that was doing poorly. The only thing going well in our lives was the IP, which was going from strength to strength.

I've posted on this before, so I'll cut a very long story short.

Sold the PPOR, moved into Business premises until lease was finished, flew to Tassie (the place with the highest returns at the time) bought a couple of IP's with 20%+ returns, came home & put the rest of the money into a local IP.

When we closed up the Business we then had 2 nice IP's in NSW & 2 average IP's in Tassie. All were doing good, so seemed like a good idea to just keep going. Bought more, sold some, kept some.

 

[skater]

it seems people here are assuming it is easy to get more than two ips. It isn't.

It's easier than you think.

It takes a certain level of tenacity, creativity, intelligence and just plain hardwork.

To do ANYTHING in life that is above the average is exactly the same. Why should this be any different? You get nothing for nothing.

Many people are scared of debt and of risk and would prefer to take the safe world of the corporate ladder or (*insert mundane existence of choice here*).

Not everyone is going to be a property investor. That's a good thing. If EVERYONE was doing it where would the tenants come from?

People are more willing to take risk when they are younger, when they are the least able to service it. As they get older, they become more risk adverse even though they are better placed (financially) to carry it.

Really? Yet here we are. If you do a poll you would find there are a small amount of very young ones, a small amount of very old ones, and the majority somewhere in the middle. The average bell curve.

People (generally) can't really think outside the square, I think those on somersoft are the exception, not the rule

Of course most people think that way. Most people aren't interested in property, have no knowledge of it & couldn't give a brass razzoo, about it.

The people on Somersoft are those with an interest in Property Investment. Most start coming here because they are searching for answers. They don't want to be average. They want to hear from others who have been there, done that. They don't want to hear the opinions of Aunt Mary, who has never owned a property, but is a know it all and has ALL the answers.