By: Robyn Wolfson
It’s Women’s Month and, as women, one of the things we can celebrate is our financial emancipation. But before we break open the champagne it has to be recognised that despite all we’ve achieved, there still seem to be some investment fields where women are lagging behind, and buy-to-let property is one of them.
In fact, informal surveys of the biggest property management companies seem to indicate that male property investors currently outnumber their female counterparts (in some cases by as much as five to one) and that when women and men invest together, it is often the woman who sabotages the deal. So, unless there is a dramatic reversal in current trends, property investment may continue to be a predominantly male domain.
Buy-to-let investments have shown incredible returns and, with the property market in a lull, the time to snatch a bargain is now. So why are women holding back? These are what I believe to be some of our top concerns, and how to overcome them.
You don’t have to look far to find someone who will tell you that investing in property is risky. The suburb you choose may go downhill, you could be stuck with a property you can’t sell, and that’s without even mentioning rogue tenants who damage your property and then refuse to pay the rent. For many women, especially moms who are concerned about risking their family’s well-being, investment-related fears can be particularly debilitating and paralysing, leading them to defer decisions about where to invest to the most persuasive investment advisor.
The fact is, however, that the bank’s willingness to continue lending money for property investments suggests that some of the fear is unjustified. The sober response when it comes to any investment, including property, is to understand the risks and proceed with caution. Your chances of success are, for example, greatly enhanced if you save a deposit prior to investing, if you have a slush fund to take care of vacancies and if you seek good advice.
As a family, our first property deal fell through was because I wasn’t willing to proceed without doing a due diligence on the property, and without sufficient funds to tide us over in the event of vacancies. It was a pity that we lost that deal but it didn’t slow us down too much and, as my husband will attest, we were really grateful for the slush fund once we did get going (we did have a few vacancies while we were learning how to choose the right tenants). So, the caution was helpful. Twelve years later though, I can say sincerely that the property-related fears so articulately and extensively conveyed by many investment experts have never materialised.
No one wants to receive a phone call from a tenant at 9pm on a Friday night to say that his geyser has burst. The hassle factor may be enough to put any investor off but is particularly invasive if you have a family at home, or are a single woman dealing with male tenants. Many people who have “had a go” at property will tell you that the hassle of finding tenants (often the wrong ones), collecting rent (or chasing it when the tenant doesn’t pay) and dealing with service providers to fix things that the tenant has broken, is just not worth it. Again, you don’t have to be a lone ranger and women (according to psychologists and comedians alike), are much better at asking for help than men. There’s a perception that if you invest in stocks you’ll have the backing of a large firm with years of experience, while if you buy-to-let you need to go it alone. The truth is there are reputable experts who can help you decide how much to pay and how to find the best tenants, as well as property management companies who will reduce your risks. Advice from an expert (I use Organic Growth) will help you to buy in the right area at the right prices, and a good property management company can take the pain out of being a landlord by showing space, recruiting the right tenant, preparing a legally enforceable lease, collecting rent, chasing delinquents, managing service providers and dealing with anything that might go wrong. Personally, I have used a property management company (Targer Realty) since I embarked on my property journey and I can genuinely say that I have never had a phone call (or text or email) from a tenant. I have had some vacancies but never for more than a month and I have never had a non-paying tenant (my property management company has a 99% tenant payment rate).
With some notable exceptions, women are drawn to nests. For us, property is often linked to our feelings and dreams about home and family. This comes out in a number of ways, such as a determination to only choose a rental property that we would live in ourselves. Alternatively we try to ‘kill two birds with one stone’ by buying an investment that could double as something else, such as a retirement place for mom or a holiday spot by the sea.
The problem is emotional choices can sabotage your chances of success. Buying a place that you would live in yourself is likely to make you pay too much for your property or buy a place where your rent would need to be high and your vacancy risk potentially crippling. Or, you might become the landlord from hell, over-policing your tenants or becoming overly upset about fixable damages.
But emotion is not all bad when it comes to investment (no matter what the gurus like to say). Emotion can be an incredible motivator—it is just important to know what to be emotional about. I am no longer emotional about the properties themselves (in fact, in some cases, I have chosen not to see them at all). For me, they are investment tools and frankly, I am not particularly emotional about tools. But, I extremely emotional about what the investments will do for me and my family—that is, providing for my family in the future, securing my children’s educations, and ensuring that we have a buffer if times get tight.
Fear, concerns about the hassle associated with investing in property, and emotional decision making could in part explain why so few women are currently buy-to-let investors. But property investment need not be the domain of risk-taking cowboys—if you swap fear for caution, ask for expert advice and channel your emotions in the right way, buy-to-let can work for men and women alike. Given the potential growth and return on investment, deciding to make property part of your future could be the best way to celebrate Woman’s Month.
So pop those champagne corks — I for one will drink to that.
If you are a woman with a property investment story to tell, please email it to email@example.com or comment freely below.
Image courtesy of [watcharakun] / FreeDigitalPhotos.net
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