Buy Property like Warren Buffet!!

February 15,2016 Leave a comment

What separates the smartest brains from the not so smarter ones?

It's their ability to understand what's happening around them and making the right choices (almost) all the time. When it comes to buying a property, learn from the smartest investor in the world Meet Warren Buffet.

Though Warren invests in shares, the underlying principles can be applied to every other form of investment including buying your next house. We'll teach you what makes Warren, brilliant. Its nothing complicated as Warren himself emphasises. It just requires strong mental discipline to be that smart. This week, we will take some of Warren Buffet's best quotes on investing and find what we can learn from them.

"You can't make a good deal with a bad person"

Don't deal with sketchy brokers when your gut tells you not to. If you don't know whom you are dealing with, it is better to not do it. Even worse is when someone you don't trust comes up with a property deal that seems too lucrative for you to ignore. One piece of advice from Warren Stay away!

"It is easier to stay out of trouble than it is to get out of trouble"

Someone you trust runs a real estate firm and they claim to be buying a huge mass of agricultural land for a throw away price. That land is going to multiply in value as the new four way lane gets constructed. They want you to give your acceptance immediately even when you don't have sufficient time to check the papers. Many have bought lands and properties in this situation only to realize the papers are not clean and the land is over valued, etc. Even when they want to dispose, it becomes very difficult finding a buyer. Warren warns you that its easier to stay out of fishy deals than to get out of it. Makes sense!

"It's only when the tide goes out that you learn who's been swimming naked"

During real estate bubble between 2000-2008, every thing went up. Any piece of land with papers would make you profit. So, not many perceived any risk of losing money in real estate. But, when the bubble burst in 2008, it clearly separated good investments from poor ones. Today, there are countless properties unoccupied, unsellable and even in legal trouble. The good investors didn't have to face any of it.

"If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes."

Don't be hasty buying or selling a property. Be a long term investor. Do your math, learn everything about the property or land of interest, check with experts about its future, understand its past, check the papers, be sure about the buyers and so on. Buy a property with an intention to keep it for a long time. Even if you need to sell it in a few years, it would still bring you the best returns. Think long term and peace will be yours.

"It is not necessary to do extraordinary things to get extraordinary results."

Some people like to complicate everything. They don't like straight forward property deals. They need sophisticated, extraordinary circumstances surrounding a property. Their lure for complexity leads them to make mistakes. It's okay to wait than to make a mistake because one mistake can erase profits that came from ten good past investments. So, keep it simple and make a sound choice.

"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

Don't buy a property because it's selling cheap. Buy a property for its long term prospects and residual income (rent). Price is what you pay; value is what you get, says Warren. We agree.

"In looking for someone to hire, you look for three qualities: integrity, intelligence and energy. But the most important is integrity, because if they don't have that, the other two qualities, intelligence and energy , are going to kill you."

A property is an expensive affair. You don't want to cut costs or let your greed take over in choosing whom you deal with. Because in the end, if your middle-men lack integrity, it doesn't matter how knowledgeable they are. They will only make your life more difficult.

We enjoyed writing this post. Warren Buffet is one of the wisest guys the world has witnessed and his principles are indeed, time tested. We hope you enjoyed learning them too. Next time, if you need a property to be either bought or sold, come to us and be assured that we will follow each of these principles on your behalf and will make you the smartest investor in the world!

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