Property Investment, Success & Money | The Michael Yardney Podcast

For many of us, 2020 has been a year to forget, but I don’t think we’re going to do that easily. I’m confident that we’re going to remember 2020 for a long time. I don’t know when you’re going to listen to this podcast, but it’s almost certainly time for me to wish you a happy, healthy, and prosperous 2021 – a much better year ahead. 2020 brought a lot of its challenges to us, but it’s actually been a great year for me, my family, and my team, as well as for this podcast and blog. I look forward to continuing this education in 2021, but for today, I want to say thank you for being part of my community, and to share with you 20 lessons I learned in 2020. Michael Yardney’s 2020 lessons Each year brings its own set of wins, challenges, and lessons to learn and 2020 was certainly no exception. It’s been an extraordinary year. Nobody could have foreseen all that’s happened, including the coronavirus, its economic fallout and the way our lives changed. But as we head into 2021, I can’t help but reflect on what Australia as a country has accomplished and what I’ve achieved personally, what I’ve overcome, and the lessons I want to carry with me into the New Year. Here are my top 20. Expect the unexpected. Every year an unexpected X factor comes out of the blue to undo the best laid plans – sometimes on the upside (like the miracle election result in mid-2019) and sometimes on the downside like Covid19 in 2020. While an X factor seems to come every year, a major Black swan event as some call it, one that “breaks the world”, tends to come every decade. Focus on the long term Strategic investors have a long-term focus and don’t change their plans based on what’s happening “now”. In fact, they don’t buy investments that are working now – they investment in the type of assets that have always worked. Clearly this was the thinking behind Warren Buffets quote “Be fearful went others are greedy and be greedy with others are fearful.” It’s the media’s job to entertain you – not educate you. Remember… it’s media’s job to get eyeballs on the advertisers’ content, rather than to educate you. Think about it… how many of those expert’s forecasts this year came true? But look how many people worried and stressed about the potential outcomes that just didn’t occur. Unfortunately, being overwhelmed with misinformation led many people to live in a state of fear and anxiety and caused some to make disastrous investment errors. Take economic forecasts with a grain of salt. If you’re reading something frightening in the business section, or hearing it on TV, or learning about it from your neighbour, it’s almost certainly too late to act—because the information is already reflected in market – in either the share price or property prices. Don’t believe the Doomsayers There will always be somebody wanting to stall the aspirations of their fellow Australians who are looking to take their financial futures in their own hands and do something about it. Don’t let them stop you achieving your financial dreams – the doomsayers are always wrong, at least in the long term.  6:  No one really knows what’s going to happen to the property markets. As a real estate investor, while it’s important to have mentors make sure you’re listening to somebody who has not only built their own substantial property portfolio, but someone who has kept their wealth through a number of cycles. There are just too many enthusiastic amateurs out their offering investment advice at present. 7. There is no such thing as the “Australian property market.” There are multiple markets in Australia, and each state is at a particular stage of its own property cycle and within each state there are multiple submarkets depended upon price point, geography and type of property. Don’t try and time the markets. Even though they are armed with all the research available in today’s information age, economists never seem to agree where our property markets are heading and usually get their forecasts wrong. That’s because market movements are far from an exact science. And if you think about it, the top and the bottom of the market are really only one or two days or weeks or months in the cycle. The crowd is usually wrong Market sentiment is a key driver of property cycles and one of the reasons why our markets overreact, overshooting the mark during booms and getting too depressed during slumps. Remember that each property boom sets us up for the next downturn, just as each downturn sets the scene for the next upswing. Property Investment is a game of finance with some houses thrown in the middle If you can only afford to own 2 or 3 properties, make sure they are all “investment grade” properties that are working hard for you. Invest for Capital Growth At Metropole, our 40-year analysis of investment returns shows that properties with higher rental yields generally deliver low overall returns for investors. Our analysis proved that over the medium to long term, properties with lower rental returns (but stronger capital growth) delivered significantly higher overall returns (i.e. capital growth + rental return), while “cash flow properties” with high rental returns delivered lower ones overall. There will always be reasons not to invest Where investors get into trouble is that rather than focusing on their long-term goals, they see these crises as once in a generation events that will alter the course of history, when in reality they are just the normal path of history. Property investment is risky in the short-term, but secure in the long term I found it takes the average property investor around 30 years to become financially independent, but most don’t make it because they can’t stay the distance in part because they don’t have good cash flow management. Many people get into property investment to improve their cash flow position, but if they don’t have good money habits to start with taking on more debt only compounds the problems. Plan for the worst and look forward to the best. As a property investor, I protected myself from the challenges that 2020 brought by:- Owning the right assets – investment-grade properties in desirable locations. Having multiple streams of income from a diversified portfolio of residential, commercial, and industrial properties as well as shares. Owning my assets in the correct structures that protected my interests and were tax efficient. Having set up financial cash flow buffers to see me through difficult times. Protecting myself and my assets with adequate insurance policies. There are always risks associated with investing. Don’t be afraid of failing, because the biggest risk is not doing anything to protect your financial future. Sometimes negative experiences, mistakes, and failures can be even better than success because they teach you something new which another win could never teach you. Cautious optimism is better for your investment health than perma pessimism. Life is not fair – get used to it. But having said that, optimists are more successful in all areas of life than pessimists, or so-called realists (who are just pessimists in disguise). And this includes the realm of investing. Time is a limited resource – don’t waste it. On some level, most of us know that life is short, but 2020 taught us and solidified the fact that we don’t get a second chance and the importance of truly appreciating what and who we have in our lives whilst living to the fullest. The only certainty is change Rather than worrying about all the changes occurring, I’ve learned the concept of having a useful belief about the changes that are happening to me and seeing what good will come from them. The more I feel in control of my life, the more comfortable I feel and the better I perform in all areas of my life. Worry Better Forget the saying “don’t worry be happy.” Instead, worry the right way – it’s better than not worrying at all. You see…worry can play important role in your life, and it doesn’t have to be destructive. This too shall pass. How often do we need to hear the world as we know it is coming to an end before we realize that the world as we know it has not come to an end. Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: 20 2020 lessons you don’t want to forget Some of our favourite quotes from the show: “If you saw it coming, you’d be prepared for it. But no one was prepared for these X factors.” – Michael Yardney “Strategic investors have got a long-term focus and they don’t change their plans on what’s happening “now”.” – Michael Yardney “There’s nothing new about these doomsayers – they’ve been peddling the same forecasts for a couple of decades.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

You’re in for a treat today because I’m going to chat with one of my very early mentors when I started my property investment journey. I bought my first investment property in 1971 without much money, having saved a little deposit and going halves with my parents and I definitely didn’t understand the rules of the game. I just knew that wealthy people owned property and I wanted to be wealthy. At that time, I didn’t have any books on property investing and clearly there were no podcasts. There weren’t even investment tapes or CDs available in those days. One of the first books I read was by Robert G Allen, an American author who wrote the book Nothing Down. Obviously, the concept of buying properties with none of my own money – nothing down as the Americans would say, or no deposit – seemed a very attractive proposition. While it may well have work in the United States, those principles did not work here then or today, even though some people still suggest you can work your way around the system by investing in property with no money down. Let me make it clear: I don’t advocate that strategy and never have. However, Robert Allen went on to write 10 books including five New York Times bestsellers and I kept buying them and learning from him. Especially his great book Creating Wealth which explained how to retire using his seven principles of wealth – this book, which we’ll be discussing in my chat with this legend of real estate today, changed my way of thinking about money and property investing Robert’s subsequent books and training courses also were part of my early investment learnings and still stay with me today, so I was excited to have the opportunity to interview Robert Allen recently. I’m sure you going to get a lot from our discussion. But here’s a word of warning…. Robert does mention his concept of buying property with nothing down and that you can go and find distressed vendors and take over their mortgage and buy a property at a huge discount. I was going to cut that section out of the interview but decided to leave it in, not out of courtesy to Robert, but because while these principles may work in the United States where the economic situation is very different, they definitely won’t work for property in Australia. However, I decided to leave that segment of the interview in so that you can hear how some people think and how others in the property market in Australia are incorrectly teaching these principles to naïve investors today. Let me be clear, our housing markets have moved on and the next property wave has commenced. There are very few mortgagee sales happening, and there are very few distressed property owners who would let you take over the mortgage as Robert suggests. As I said the situation maybe different overseas, but this particular aspect of his investment strategy just doesn’t work in Australia should be very wary of those selling courses trying to teach you those techniques here. There are legal and stamp duty reasons why this doesn’t work here. It’s another example of how many overseas gurus just don’t understand the local market here in Australia and why their teachings are not necessarily relevant here. The fact is, there is a shortage of investment grade properties in the market at the moment with more buyers than sellers. You won’t get a bargain if you look for the right type of property – an investment grade property - that will grow at wealth producing rates of return.   It is often said you make your money when you buy your property, but it’s not because you buy a bargain, it’s not because you buy a secondary distressed property cheaply as Robert will recommend, it because you buy the right of the property – one that will grow at above average rates of capital growth, a property that will be in continuous strong demand by owner occupiers and tenants who can afford to and will be prepared to pay you higher rents. Over the years I have had many mentors, and as I explained Robert Allen was one of my early mentors but like with everything in life I’ve chosen to select portions of his learning the applicable to Australia and discard others that are not. Of course, this is easy for me today with the perspective of close to 50 years of investing – I know what works and what doesn’t, but I can understand why beginning investors get lured by the concept of nothing down – remember Real Estate investing is not a get rich quick scheme and wealth is the transfer of money from the impatient to the patient. Now that you’ve heard that disclaimer, there is so much great information in my interview with Robert Allen, so please let me know and welcome to today’s episode of the Michael Yardney podcast. Some of the topics that Robert and I discuss Robert started doing research on how to buy property with little or no money down because he had little money when he started According to Robert, the reason Nothing Down became so popular was because people were so skeptical about it. Robert’s advice for people facing challenges in the COVID era More people are highly motivated to sell and can’t wait because of the pandemic It can be beneficial to work with a partner who may have better financials Safety vs. Freedom – entrepreneurs like to go outside their comfort zone Most people don’t think like entrepreneurs, because they’re taught by employees Diversification isn’t necessarily the goal – it’s better to focus and become an expert in one thing Win/win is a fundamental principle How to build enlightened wealth Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Find out more about Robert G Allen Shownotes plus more here: Lessons for an International Property Legend – Robert G Allen, a 50-year property veteran Some of our favourite quotes from the show: “Most people don’t believe they can make it, they can do it, whether it’s real estate, internet businesses, even relationships.” – Michael Yardney “If you avoid risk, you’re also avoiding opportunities.” – Michael Yardney “You shouldn’t necessarily diversify, you should concentrate on something you’re good at, and become a real expert.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. 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Today’s podcast is a little different: it’s all about me. This is an interview with me. I hope it will help give you some insights about what makes me tick, what I’ve learned, what I’ve done wrong. This interview is with Peter Fritz of the Office Anywhere Podcast. Peter is a client, a successful property investor, and an author who writes regularly on Property Update. Peter has had his ups and downs like all of us have. He went through a midlife crisis, recognized what’s important in life, like his family and his children, and he now works in a different way. He’s less stressed and closer to his family because now he no longer has a commute, he works at home. That’s what his Office Anywhere blog is about, to live and work on purpose. I think some of that is going to come out as he chats with me. So I hope you’ll gain some insights and learn some new things from this episode. Topics discussed in Peter Fritz’s interview with me: Whether it’s been difficult to swim against the tide of get-rich-quick mentalities How Michel got into real estate investing in the first place What can happen when you’re overconfident and impatient The importance of investing in oneself The value of perspective The definition of wealth and success How the pandemic is feeding into the desire to build wealth independently The opportunities available because of the pandemic The work from home situation and how it’s working for Michael Tools Michael and his team are using to manage their projects as they work from home Whether Michael’s team will continue to work from home post-pandemic Michael’s heroes, and why they’re his heroes Why it’s important to listen to people you don’t agree with Darker periods in Michael’s business journey Where Michael feels most inspired What matters most to Michael these days What legacy Michael would like to leave behind Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Peter Fritz’s Office Anywhere Podcast Shownotes plus more here: Methods, Mindset and Masterstrokes of a 45 Year Investor Some of our favourite quotes from the show: “I would rather make more Australians wealthy and help improve our communal wealth and the beauty of our country rather than knock other people.” – Michael Yardney “If everything’s important, nothing’s important.” –Michael Yardney “I’ve also learned not just to read and speak to people who confirm my assumptions and my beliefs.” –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

One of the interesting benefits I experienced from the prolonged lockdowns during 2020 was that I’ve been working more efficiently. Prior to COVID-19, I worked from home one or two days a week and from the office the other days. But interestingly, working from home full time made me much more efficient with my use of time. So, how do you make the most use of your time? How do you make sure you’re working most efficiently? That’s the topic of discussion today in my monthly Build a Business, Not a Job podcast with Mark Creedon. But even if you’re not in business, and even if you’re not a professional, this podcast is going to be valuable, because for most of us, it seems there’s never enough time in a day. However, we’ve all got the same 24 hours to accomplish a task, and some of us seem to be exceptionally good at it, while others seem to struggle meeting their deadlines. So, my question is, why are some people so much more efficient at using their time than others? And the answer lies in time management. Today, I’m going to share with you how successful people manage their time, so you can make the best use of yours. We all have the same amount of time but some of us squander it, waste it, don’t use it efficiently, so my aim today is that at the end of this podcast that you’ll be able to see how much time you have in the day and you’ll find something in that will help you get more out of your day. #1 Time is your most valuable and scarcest resource You should realise how truly valuable time is. You can lose money and get it back again if you’re sick you can often get your health back again but once the time has gone it is gone and is irretrievable. You’d be surprised how much you can achieve in one minute, and your health you could take some deep breath stretch and relax, in your relationships in one minute you can tell somebody that you love them. In business you can come up with a breakthrough idea in one minute. #2 Identify your most important task (MIT) and do it first. What is that project that’s going to double the size of your business what is that task that he’s going to get you that promotion at work, and then break it down – what domino can I tip over today that will lean on the next one and the next one? Schedule time to work on your MIT – preferably in the morning –– we are at our cognitive best for a two-hour window of time first thing in the morning. #3 Work from your calendar – not a to do list 41% of items that people have on there To Do list never get done it all. A To Do list is the graveyard of important but not urgent items. If you really want to get something done – pick a day, a time, a duration and put it in your calendar #4 There will always be more to dos I first started out five days a week wasn’t enough, so I work seven days a week. When I first started out eight hours a day wasn’t enough – so I worked 10 and at times 12 hours a day. #5 Always carry a notebook Maybe it’s journaling, maybe it’s capturing ideas words of wisdom etc Our minds are best used for processing different ideas, not for holding onto information #6 Control your inbox Shut off the notifications on your emails and go to inbox when you want to do it, not when somebody calls you. Process emails three times a day. #7 Schedule and attend meetings as a last resort You may not be in the position that you could say no to your boss, but it is likely you can say no to a lot of meetings or make them shorter meetings, stand-up meetings. If you’re most productive in the morning say no to meetings in the morning. #8 Say no to everything that doesn’t support your immediate goals. The problem is when you say yes to one thing you’re actually saying no to another thing, or many things. #9 Follow the Powerful Pareto Principle 80% of your results will come from about 20% of your activities, so slow down and look at all the work you’re doing and then work out the handful of tasks that give you the most results and focus on them #10 Focus on your unique strengths and passions Learn to delegate – remember the 80/20 rule #11 Batch your work Leading consultant Dan Sullivan says entrepreneurs should have focus days, buffer days and free days Free days are days when you don’t work – you’re resting and recharging. #12 If you can do a task in less than five minutes do it immediately The touch it once principal #13 Productivity is about energy and focus, not time Look after your body, sleep take more breaks We’re designed to sprint and have a break Links and Resources: Why not join Metropole’s Business Accelerator Mastermind Learn more about Mark Creedon – Business Coach to some of Australia’s leading entrepreneurs  Shownotes plus more here: How successful people manage their time revealed – with Mark Creedon | Build a Business, Not a Job Podcast Some of our favourite quotes from the show: “We’ve all got the same 1440 minutes every day.” – Michael Yardney “You don’t get most of the things on your to-do list done. You never do.” – Michael Yardney “Be careful about what you accept.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

It’s clear that we’ve worked our way through the COVID-induced recession and the resultant lull in our property markets has now turned the corner and the markets are on the move again. Property predictions are now coming thick and fast. One is that there’s an elephant in the room that most aren’t aware of. That prediction was made by property researcher John Lindeman, and I’m going to ask him what he means by that. But first, I’m going to give you the answer that I gave to a journalist who recently asked me “why are property values going up at the moment, when wages aren’t going up and unemployment is still high?” This should provide you with some insights as to what’s ahead for our property markets and help you make your own plans. And of course, I’m also going to share my regular mindset message. Why are property prices rising? This isn’t the same as asking why house prices are resilient. Swelling disposable incomes at a time of falling interest rates and therefore lower property holding costs have left many borrowers much better off than they would have been a year ago. And we know that property is a game of finance and if credit is easy and holding costs are low, property values go up. Like the virus itself, the economic consequences of the virus have not hit everyone equally. The people hit hardest by the pandemic tend to be lower income workers more likely to be tenants than homeowners. This has hurt the rental market, especially the apartment market, but not the overall property market. Thanks to government intervention to support jobs, 90% of Australians are still employed. At the same time, many workers have recently seen their pay packets go up because of tax cuts. Australians have also wiped out a lot of credit card debt and stashed much more cash than usual as a buffer against Coronavirus. So, a significant group of Australians have secure income, secure employment, and are in a position to take advantage of low interest rates. The Elephant in the property market One respected researcher believes there’s an elephant in the room that many people just haven’t been paying attention to and that happens to be John Lindeman Now just to make things clear…John isn’t the Elephant – John is widely respected as one of Australia’s leading property market analysts. With well over a decade of experience researching the nature and dynamics of various types of assets at major data houses. In a recent blog he suggests that an elephant is about to make his presence felt in the property market and it’s a potentially significant game changer. It won’t be deterred by rising unemployment, housing finance restrictions, buyer confidence or economic downturns. It has the power to radically alter housing prices and rents, and it’s about to be unleashed on our property markets. What is this elephant in the property market and where will it reveal itself? The elephant is the massive movement of people from one State or Territory to another that will result in large changes to our property markets. Before the pandemic there were twice as many people moving as there were new residents arriving or being born here, but there’s much more to it – these relocators pack a double whammy. Not only does every moving household increase demand by needing a new home where they move to, they leave an empty one behind, increasing housing supply where they move from. Even when our State borders reopen, the potential effect of these relocations is still likely to go unnoticed. This is because many statisticians and economists quote and rely on net interstate migration numbers, not the total number arriving or leaving. Net interstate migration hides changes in housing needs and preferences Where will the winners and losers be? The most recent housing approval figures show that while approvals for detached dwellings has increased, there is actually very little in the pipeline for new apartments. Developers are often blamed for building unsightly, even unsafe high-density apartments and encouraging speculative investment, yet housing development has been the means by which our cities and towns have grown and been rejuvenated. Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us John Lindeman – Lindeman Reports Shownotes plus more here: Why on earth are property prices rising + The elephant in the property market with John Lindeman Some of our favourite quotes from the show: “Now all credible economists agree that our property markets are going to enjoy a period of strong capital growth.” – Michael Yardney “I couldn’t go from being unknown in the real estate community to being the most respected expert straightaway.” – Michael Yardney “What I’m trying to say is at the time, I set myself some audacious goals that were unrealistic for me.” –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how  

We’ve worked our way through the recession, the property markets are moving on, and more Australians are looking at getting into property. So today, I want to share three segments with you that will help make you more successful. First, I’m going to talk about 6 learning fees I don’t want you to pay. These are costs that investors and homebuyers have paid to the market, or marketers, or spruikers, and if you can avoid paying them, there will be more money in your pocket. Next, I’m going to have a chat about some new urban trends with a leading demographer, Simon Kuestenmacher. We’re going to talk about how the pandemic has forced all of us to reevaluate how we live, and what that means for you for your own lifestyle, but also as a property investor and a business owner. Then finally, in my mindset message, I’m going to talk to you about what I believe success is – and what it isn’t 6 Learning Fees Here are 6 “learning fees” I’ve seen investors pay:  The “Oops, I bought the wrong property “learning fee” Did you know that statistics show 20% of investors sell up their property in the first 2 years and 50% in the first 5 years? So, you decide to sell within the first year or two and regardless of what price you sell the property for, you need to remember the huge costs associated with buying and selling real estate. There’s the stamp duty when you bought it (plus the stamp duty for the new place), legal fees when buying and selling, selling agent commissions and marketing costs and, of course, the cost of moving twice in quick succession. This means your learning fee is likely to be tens of thousands of dollars and potentially into six figures when you take into account lost opportunity costs. The “no capital growth” learning fee  This is the fee that you pay when you buy an investment with poor capital growth because it’s in the wrong city, suburb, or street. Perhaps it grows at 2 or 3 percent per annum when buying the right property may have achieved 6 or 7 percent capital growth. A three-percentage point difference might not seem like a lot but over the years this could add up to a learning fee easily in the hundreds of thousands of dollars. The “renovation reality” learning fee This is the learning fee that you must pay when you realize that renovations are hard work and not as easy as the reality TV shows or the property blogs would suggest. Perhaps you bought a property that needs a significant renovation in the order of 10 percent of its purchase price. But then everything ended up costing more than you expected, and the project ran over time, which increased your holding costs substantially. This learning fee could easily cost you tens and tens of thousands of dollars as well as a waiting period of many years as you wait for the market to improve enough to get your money back. The “I got eaten by a shark” learning fee Here we have Sam and Susan, a couple of 25-year-olds who charge off to one of those investment property seminars that promise you’ll make a million dollars in six months. Instead, our bright young things end up knee-deep in cash flow tables, bank documents and (oh dear) a signed investment home contract that results in their off-the-plan, out of town, so-called whiz-bang investment property growing at a miserable 1 percent or so per annum over the next 10 years. The learning fee in this scenario is especially scary as that “shark advice” could end up being a millstone around their necks for many years. The “buying with emotion” learning fee  You can end up paying this fee in 2 ways. Firstly, when you fall in love with a property and overpay. Now while this may be allowed when you buy your home, it’s a big mistake for property investors. The second way you pay this fee is when you miss out on an opportunity because you have an unrealistic expectation of what the property’s price actually is and offer well below an acceptable price. You then get angry that the vendors are being “greedy” and storm off, not prepared to negotiate at all. This learning fee here is about your own ignorance and not remaining objective and basing your negotiations on cold hard facts such as recent comparable sales. The “negotiation” learning fee  This is the extra cost to you when you are too afraid or too inexperienced to negotiate on price. Many property purchasers are “shark bait” to selling agents who are highly trained negotiators who are taught how to get the top dollar for their clients – the seller. Some highlights from my conversation about urban trends with Simon Kuestenmacher Now that we live in a pandemic world with less travel, we’re seeking more entertainment within walking distance. We have a large share of young people living in apartments, that spend time outside of the home because apartments aren’t ideal for socializing and exercise That’s going to shift in the next ten years as those young people grow older and move to houses. They’ll be looking for neighborhoods that allow them the same amenities within walking distance in their new suburban destinations. The features of the 20-minute neighborhood Destination locations will be more in demand The move toward regional Australia may happen, but it’s important to understand who will be moving Young singles are better off in a large city But young families who have more mobile jobs are more likely to move to regional areas Larger homes with 3 or 4 bedrooms will be more in demand Links and Resources: Michael Yardney As our markets move forward why not get the team at Metropole to build you a personalized Strategic Property Plan – this will help both beginning and experienced investors. Simon Kuestenmacher - Director of Research at The Demographics Group Shownotes plus more here: 6 Investment learning fees you don’t want to pay; Important Urban Trends moving forward with Simon Kuestenmacher Some of our favourite quotes from the show: “The “I got eaten by a shark” learning fee keeps lots of people out of the market. In other words, they never get past their first investment property.” – Michael Yardney “The homes we’re living in today aren’t designed to do a lot of entertaining.” – Michael Yardney “Neighborhood’s always been important, but it’s probably going to be more important moving forward.” –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how  

The way we live in Australia has changed. We’ve traded backyards for balconies and courtyards and this has resulted in around one in five Australians living in apartments today. That’s up from one in seven in the 1990s. According to the Australian Bureau of Statistics, of the ten million or so dwellings in Australia, around 10% of these are what they call attached dwelling apartments built in capital cities over the 17 years or so to December 2018. And the trend to medium and high-rise living is only going to increase. So, are apartments good investments? The answer is yes and no. Not all apartments are the same. Some make great investments, substantially increasing in value over the long term. But many, especially those in high-rises built over the last 15 years or so, will continue to underperform. Today, I’m going to dissect a recently produced report by Stuart Wemyss on the performance of investment grade apartments, and there are some very valuable lessons in there for property investors and even potential buyers. And of course, I also have my regular mindset message to share with you today. Highlights from my conversation with Stuart Why Stuart decided to research the performance of investment-grade apartments Typically, houses tend to have growth spurts that last 5-10 years In Melbourne, between 1997 and 2010 apartments grew at 10.7% Apartments can provide very attractive growth Between 2010 and 2020 the median growth rate has only been 2.7% -- just a touch above inflation Why have apartments underperformed? The supply has increased significantly With the demand keeping up with the supply, there’s not been much room for overperformance The intrinsic value of apartments must have increased, but the increase is being masked by all of the new apartments coming online Local buyers are dominating the market, which means that developers need to build a higher-spec apartment This leads to higher costs for the next round of apartments Lifestyle is going to be a big factor in the neighborhoods people choose going forward This will push older-style apartments – the kind that used to be called flats – into a renaissance It’s probably not fair to compare apartments to houses Houses are a better proposition if you’re in the financial position to afford one However, quality is always crucial. A higher quality apartment in a desirable area might be preferable over a lower-quality house in a less desirable location Location does a lot of the heavy lifting when it comes to property value Apartments have underperformed, but they do have periods of cyclical growth Melbourne and Brisbane are set for the next stage of increased apartment values Links and Resources:  Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Stuart Wemyss – Prosolution Private Clients Stuart’s Book – Rules of the Lending Game Get Stuart’s special report - A performance review of investment grade apartments Shownotes plus more here: An unbiased performance review of investment-grade apartments with Stuart Wemyss Some of our favourite quotes from the show: “The cost of new apartments is going to be much, much higher in the next round of them.” –Michael Yardney “It’s hard to subdivide where everyone wants to live, in the middle ring suburbs.” –Michael Yardney “Firstly, most of the things we worry about just don’t happen, and secondly, even if they do happen, worrying doesn’t really help, does it?” –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how  

Life after coronavirus will never be the same as before. We’re waiting for a new beginning, and the forecasts for 2021 are starting to appear one by one, and some of them are more optimistic than others. Today, I’d like to share two sessions with you that will help you make the best of 2021. First, I’m going to share three tips for 2021 if you’re interested in getting into property investment, and then I’m going to have a chat with Dr. Nicola Powell, senior research analyst at the Domain Group. We’re going to talk about the trends that Domain has noticed and what’s ahead for property. At the end of today’s podcast, you’ll be well equipped to have a better understanding of where we are and what’s ahead. I’m also going to share my regular mindset moment with you. 3 Tips for 2021 Property investment is a process, not an event. To be successful with property is more than just doing some research on the internet. Searching for a property is very different from researching the property markets. Successful investors have a long-term strategy to grow their wealth. They have the correct asset protection and finance structures in place, and they have a good team around them. Location will do 80% of the heavy lifting of your properties. Some locations in the last decade have outperformed others by 50% to 100%. How do you identify these locations? It has a lot to do with demographics. Look for gentrifying locations, lifestyle or destination locations, locations with a high walk score, lots of amenities, and locations where the tenants rent for lifestyle reasons and can afford to pay more. You can’t pick the top or the bottom of the property market, so don’t try. Rather than trying to time the market, you should buy the best asset you can and hold onto it for the long term. One extra tip – don’t be scared of taking on debt in today’s market, because debt is not a problem. Understand the three types of debt – bad debt, necessary debt, and good debt. Highlights from my chat with Dr. Nicola Powell Two property highlights of 2020 It took a pandemic to reimagine work lives The reaction of the housing markets when faced with social distancing rules and lockdowns Many workers will choose to continue working from home if they have the option The use of the term “home office” has increased since the beginning of the pandemic There are other differences in the searches for neighborhoods – specifically, more lifestyle words are being searched Interest in a second home may trend upward post-pandemic Dire predictions about the property market didn’t come to fruition. Historically, property prices fare relatively well against negative economic shocks House prices don’t necessarily fall during recessions Rental markets have seen more disruption than sales markets Likely a shorter holiday period in Melbourne Other capital cities have been performing near normal Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: Property Investment tips for 2021. Is this changing property trend permanent with Dr. Nicola Powell Some of our favourite quotes from the show: “I believe our capital cities have passed the bottom, and when we look back next year, you’re going to see that in mid-October this year, in general, our property markets have turned.” – Michael Yardney “Your money’s going to run out long before the opportunities will.” – Michael Yardney “Who you are today is a result of all the decisions you’ve chosen to make and the decisions you’ve not chosen to make in the past.” –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how  

You invest your money to give yourself the highest likelihood of reaching your goals. But how do you know if your investment is actually helping you reach your goals? And what do you do if your investment properties are underperforming? That’s what I’m going to discuss today with Brett Warren, and our conversation will be informative for both new and experienced investors. Then, in my mindset moment, I’m going to share some advice from Bill Gates. Are your properties achieving the results you were expecting? Will it get you where you want to get to? The first thing to understand is what your overall strategy is and how the property fits into that strategy. Then you need to know whether the property is performing as expected and whether it’s outperforming the market. Ask yourself if you would buy the property again if it were on the market today. Are there improvements that you could make to the property to increase its value? How is the property going to perform going forward? Ask yourself why you chose this property – often because it was recommended by someone with a vested interest. Where are the locations that will outperform? Places where people have multiple streams of income and more wage growth Gentrification Infrastructure Livability and amenities – people will be prepared to pay a premium to live in places where they feel safe and comfortable, especially post-COVID-19 Good investment properties need multiple pillars. Just one of these factors isn’t enough. 4 Reasons why properties under perform Timing – bought at the top of the cycle Price – paid too much for the property Location – if the location is under performing, the property will be as well Property – poor selection, something wrong with the property If the timing or price was wrong, but the property is right, it might just be a question of waiting. But if the property isn’t going to improve in value, it’s time to sell. Links and Resources: Michael Yardney Metropole’s Strategic Property Plan – to help both beginning and experienced investors Brett Warren - Metropole Property Strategists Shownotes plus more here: What you do with a dud property. How do you know if you should sell or hold, with Brett Warren Some of our favourite quotes from the show: “I think it’s important to understand what motivated them, what their thoughts were when they chose that particular property.  ” –Michael Yardney “We frequently say it takes the average property investor 30 years to become financially independent, that’s because in the first 10 years you make all those mistakes.” – Michael Yardney “If you can only own 2 or 3 properties, you’ve got to own the best ones you can.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

It looks like we worked our way through the recession, and slowly but surely, the coronavirus pandemic is coming under control. That means that the recession that we had was very different from previous recessions. But what does our recovery look like? That’s what I’m going to talk about today with Pete Wargent. We’ll discuss what’s ahead for our economy, why the recession panned out as it did, and how that’s going to set the scene for the next stage of Australia’s economy. Then, in today’s mindset message, I’m going to discuss the concept that yes, money can buy happiness… with some qualifications. How will this recovery differ from previous recoveries? Most economists predicted a recession due to the pandemic, but they differed on what it would look like. Today we’re going to discuss why this recession, that we’ve now worked our way out of, and the coming recovery are different from previous downturns. We may no longer technically be in a recession, but it’s not all over yet. We have a long way to go to get back to pre-COVID levels Prices have stopped falling, even in Melbourne The reserve bank has released further interest rate cuts, quantitative easing, cuts in fixed-rate mortgages There are still issues relating to mortgage deferrals The response from the government to this recession has been very different from the responses to previous recessions There are actually more dollars in the economy because people can’t take vacations and spend money overseas Some of the changes in working – such as more working from home and online – are likely to stick A V-shaped recovery is probably too optimistic But Australia is still better placed than many other countries for a strong rebound next year Sydney and Melbourne will lead the way in double-digit housing price growth next year, with a strong performance in Brisbane as well However, some sections of the market will still lag, such as high-rise apartments in the CBD Links and Resources: Michael Yardney Metropole’s Strategic Property Plan – to help both beginning and experienced investors Pete Wargent  -- Next Level Wealth Pete Wargent’s new book Low Rates High Returns Shownotes plus more here: The recession is over, here's how the recovery and property will be different, with Pete Wargent Some of our favourite quotes from the show: “I think one of the government’s jobs is to look after its citizens.” – Michael Yardney “Interest rates are not going to go up for at least three years, and that gives people a level of security.” –Michael Yardney “Generally speaking, having enough money for the basic necessities in life, as well as your wants and needs, usually means a happier life.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how