Why slow and steady is a better investment strategy than fast and furious

When it comes to investing, slow and steady definitely wins the race, writes Luke Harris, CEO of The Property Mentors and author of Property Fit.

If there’s one lesson to be learned about property investment, it’s that a slow and steady strategy is better than fast and furious.

This is because successful investing should be about the long term and not about making a risky quick buck. It’s crucial to set up the best systems and processes to follow (and fine-tune), allowing you to fit the right property into your portfolio, at the right time.

Growing your investment property portfolio

And of course building and growing a successful property portfolio doesn’t happen overnight, because there are no overnight successes! Success in property evolves over many years.

So, let’s look at the difference between ‘slow and steady’ and ‘fast and furious’ when it comes to investing.

Slow and steady

Property values are subject to market cycles, but successful property investors will tell you time in the market is more important than timing the market.

Of course timing a purchase well can be beneficial in the short term (if you’re lucky). But waiting for the perfect time to invest is not only risky and difficult, it can also delay your entry into the property market so you miss out on great opportunities. Even worse – it can stall your property investment strategy altogether.

Timing is also irrelevant if you’re not buying the right assets in the first place, so focus on location and long term growth potential instead. Short term market fluctuations have a lower impact on returns when you’ve bought the right property for your overall, long term strategy.

A truly successful property investment strategy is one that looks to the future and builds wealth slowly and securely.

Fast and furious

While a lot of so-called ‘fast-track to wealth’ strategies are available, there really is no fast-track that will do all the work for you. The type of impatient investor prone to falling for this approach often has a passion for property – and they’re just keen to get started.

They often believe that they are young enough, lucky enough and have enough money to burn to be able to absorb any setbacks along the way. They tend to throw their money at any old wall (or in this case market) to see what sticks without establishing a sound strategy first.

This can see them bypass important planning and education to try and get rich quick; but in truth they are likely addicted to immediate outcomes rather than planning for the long term.

This approach has more in common with gambling than sound wealth creation made in line with a solid strategy.

Piggy bank sitting on pile of coins between two houses

Finding the right balance

Let’s face it, anyone can be guilty of being too quick to charge after a goal, not realising that a far bigger prize is there for the taking if only they choose a different approach. And that comes down to managing risk against reward.

Yes, investing does carry some level of risk; the property market will always have its challenges, whether its interest rates, building issues, compliance, changes to tax rules and government policy, or something else.

Typically, the higher the risk the higher the potential return. However this is not always the case, and some investments should be avoided altogether. Make sure you are as aware of the risks as you are of the potential rewards that the investment may provide. Know how your capital is protected and consider the worst case scenario.

Remember, the fundamentals of long term property investing work. Risk can be mitigated with the right education, the right team of people around you, and an informed and educated plan of attack. And, as your knowledge and education improves with each purchase you’ll become a better investor.

It’s just that sometimes you need to slow down in the short term in order to speed up over the longer term!

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