It’s one of the most essential life skills you’ll ever learn…
I’m talking about listening.
Whether it’s opening your ears to casual conversations, lectures, talks, opinions, or the media… I can’t tell you how many times a simple conversation, a brief comment or a short discussion has alerted me to something that has proved extremely interesting and often very profitable.
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I’ve made a lot of money over the years from simple conversations that have alerted me to something, or some opportunity, that I might not have otherwise noticed or seen clearly.
And in real estate, keeping your ears open can lead to big gains – and avoiding big losses.
(For example… the property I referred to in this article that I bought in 2006, came onto my radar during a conversation over a couple beers with a friend. That conversation ended up being worth nearly a million dollars. That’s a lot of beer.)
So whenever you’re looking to buy property, you should take the time to ask your friends, colleagues and acquaintances for their thoughts.
People love talking about property
It seems to be that every dinner party I’ve ever been to has involved at some point these two topics of conversation: Airline horror stories, and real estate.
People love to talk about property. Everyone’s an expert – or knows an expert. Everyone has a tale to tell. And you’d be wise not to dismiss this as small talk or idle chatter, and tune in.
Whenever friends visit Hong Kong, I always ask about what they’re seeing in real estate back home in their neighbourhood or city. Always, always ask for opinions about property – and chances are you’ll receive plenty.
No matter how much experience you have or how much research you do, you can’t know it all. Real estate markets are huge, diverse beasts. In any city, real estate behaves differently depending on the district, street, neighbourhood and property type. There are constantly new developments coming on stream with different physical characteristics and different financing models. Councils and local authorities change planning rules, providing further opportunities to enhance value.
New infrastructure can have a big impact on nearby real estate, resulting in new opportunities – positive and negative. It’s impossible to keep track of all this in one city – let alone several.
Over the years, a passing conversation, informal chat or piece of gossip has led me to dig further and on many occasions resulted in making a profitable investment decision.
Talk is cheap, so why not listen?
Big-picture research helps
Over my career, research and analysis have been my main professional endeavours, and they have contributed immensely to my family’s wealth.
Understanding what goes on in certain markets – the trends, drivers, cause and effect, who’s doing what to whom and why – are all vital for making informed investment decisions.
Some of my most profitable calls have been made on the back of understanding what drivers are likely to shape trends in the markets in the coming months or years.
But as important in my mind as big-picture research is, so is listening and talking to locals who share knowledge that you would otherwise not be privy to. Before you make an investment, call a few people, shout them a coffee and see if they can add to your research.
What’s happening on the ground
Top-down research can give us the big-picture story. But digging into the subtleties and nuances of what is happening on the ground can bring even bigger rewards.
Getting the overall market call right is hugely important, but it is that knowledge at grassroots level that can really give you an edge when you’re making big real estate investment decisions.
Listening to people who are close to these very local forces is key to success. Yes, the big picture for the London market (or the Hong Kong, Auckland, Sydney, San Francisco market) may look good, but how do you invest in it? Ask a few locals and I bet they’ll have some ideas.
Listen, listen and listen some more
Just by listening and being alert and interested in property news and stories, I have chanced upon real estate investment opportunities – many of which have led to very profitable outcomes.
If you make it a habit to ask questions, and more importantly listen to the answers, you’ll put yourself in the best position to do the same.
Finding properties to invest in is often just being in the right place at the right time, and following up on a hunch or a rumour that with a bit of luck leads to an opportunity.