Property Investment, Success & Money | The Michael Yardney Podcast

Have you ever thought of getting involved in property development?  More and more investors want to become property developers.  We’re experiencing a period of lower capital growth at the moment, so investors want to “manufacture” some capital growth, want to get better rental returns, and want to get their properties at wholesale.  This is the first of a series of podcasts over the next couple of months explaining more about the property development process that I will be conducting with my son, Bryce Yardney, who now manages the property development department of Metropole and who, over the years,  has been involved in hundreds of property development projects.  We’re going to start with some of the rules you need to understand if you want to get involved in property development.  Then, in my mindset moment, we’re going to talk about one thing successful investors do differently to those who aren’t as successful.  The rules of property development  Get all your ducks in a row before you start  Before starting down the path of your first (or next) development project, get your finance pre-approved, have your ownership structures set up and have the core of your team of consultants selected.  Understand where you are in the property cycle  As a development project often spans two or more years, understand where you sit in the property cycle and pay attention to the big picture economic factors that will affect the real estate market.  Do careful pre-purchase due diligence  You need to undertake due diligence including checking the council zoning, as well specific property due diligence – things like checking:  the title for covenants, easements and overlays the neighbourhood character as well as adjoining buildings and trees the topography of the site.  Get your budget right  Do a detailed feasibility study – be realistic rather than optimistic and include all the little costs beginners tend to forget.  Then allow a contingency in case unforeseen costs crop up, because they always will!  Don’t overpay  It’s important to buy your development site at a price that allows you to make a fair profit; otherwise you’re immediately at a disadvantage.  Get a good team around you  Your team is likely to involve a property lawyer, accountant, finance broker, architect, real estate agent and a project manager to oversee the whole process.  And remember…if you’re the smartest person in your team, you’re in trouble.  Be realistic about your schedule  Setting realistic time frames will help you budget more accurately and remember to set aside some contingency money in case unforeseen problems stretch your schedule.  Be meticulous with your documentation  Put everything in writing, especially when dealing with consultants and contractors. This helps avoid misunderstandings and confusion.  And keep very clear accounts. If your paperwork isn’t in order, it’ll only cause headaches further down the line.  Design your project with the market in mind  To maximise your profits your project must suit its target market – not necessarily your tastes.  Don’t become overconfident  I’ve seen many investors make substantial profits through property development; however I’ve seen even more developers, some much smarter than me, lose it all through overconfidence or undertaking just one more development before the cycle ended or a project with too little built-in profit margin.  Hopefully these rules will help steer you on the path of property development success so you won’t run into many potholes.  What all successful people do differently  There are so many sayings we just take for granted as true, but it’s important to really look at them, because sometimes they don’t make sense. What’s the point of having a cake if you can’t eat it too? Shouldn’t the Trojans have looked that gift horse in the mouth?  Today we’ll look at two sayings that you may want to reconsider.  Don’t put all your eggs in one basket. Common wisdom suggests that you need to diversify. But is that really correct? Successful people specialize.  Why not just take good care of your basket?  Diversification is a protection against ignorance. But successful people focus their concentration on one single earning activity and become an expert in that area.  Don’t always be on the lookout for new opportunities.  If you’re like me, you’re getting new opportunities in your inbox every day.  Opportunities can be like obstacles if they take your focus away from what’s in front of you right now.  It can be exciting to chase the next shiny toy, but to become a successful investor, you’ve got to do the same thing over and over again.  You’ll only become an expert by doing one thing one hundred times, rather than doing one hundred things once.  Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Bryce Yardney - Metropole Projects Join us in October for our annual Property Renovations and Development Workshop Learn more about how to become an “armchair developer” using Metropole’s property development management services  See the full show notes plus more here: The rules of property development | What all successful people do differently Some of our favourite quotes from the show:  “Don’t trust your memory, and don’t allow other people to get it wrong either.” – Michael Yardney  “To find success, you’ll sometimes have to dismiss common beliefs.” – Michael Yardney  “I’ve made more by saying no to perceived opportunities than by saying yes to them.” – 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

Today’s episode is unashamedly about becoming rich and getting more money.  I’ve often said that money’s important in those areas where it’s important and not important at all in other areas. But any problem that can be solved by money isn’t really a problem, is it?  So please let me show you how you can obtain more money.  First of all, we’re going to explain why property investors develop financial freedom. In my mindset moment, we’ll talk about some of the money habits of the rich.  Then, I’m going to share the steps you need to take to develop financial freedom.  It’s a process, it takes time. There are no get rich quick schemes here.  But if you’re patient and follow a proven strategy, money doesn’t discriminate. You can have as much of it as you want.  Why property investors develop financial freedom  We dream of it, work for it, and plan for it. But can the average Australian develop financial independence?  Yes.  If others have done it, you can too. Wealthy people don’t do different things, they just do things differently. And you can learn to do the same.  Not everyone works hard for their money. The rich earn recurring passive income. That means that they control a money source that makes money for them even when they’re not there. This is how business owners or property investors build wealth.  When it comes to how people make money, we can all be placed in one of four categories.  Employees – Employees trade hours for dollars. They really only get what’s left after the government takes its share in taxes.  Self-Employed – a self-employed person owns a job. They want to be their own boss, but often they’ve simply swapped one boss for many bosses, called customers or clients. Self-employed people aren’t business owners, but they do have an advantage over employees, in that they get to take advantage of tax deductions that allow them to pay their business expenses before being taxed on what’s left over.  Business Owner – A business owner owns a system and people work for them. They don’t have to be at work in order for the business to run. They invest their money in an idea and a business system, then let that investment – in the form of a business – work for them.  Investor – Investors don’t have to work because their money works for them. This is the group that you want to belong to if you hope to be wealthy someday. Investors convert money into wealth. By building your own property portfolio with income-earning residential real estate, you are taking the steps to move from employee to investor.  Money Habits of the rich  The rich know how to work full-time at their job and part-time on building wealth. The rich save their money and spend what’s left. Learn to live on 70% of your income after taxes. The rich contribute to their communities by giving to charity. Of the 30% of your income remaining, 10% of your income should go to charity. The remaining balance should go into savings. When you have sufficient savings, you can begin investing in growth assets.  The steps to financial freedom  Many Australians have chosen to invest in property to develop financial freedom and get themselves out of the rat race.  As they take their investment journey they fit into one of the following five Levels of Wealth. Let’s have a look at these more closely and see where you sit:  Level 0 – Financial instability Since most Australians live from pay cheque to pay cheque, they are Financially Unstable. If they lose their job or have an emergency, such as an illness or the car breaks down, they have no money reserves to cope. Level 1 - Financial Stability To achieve this most basic level of wealth:  You’ve accumulated sufficient liquid assets (savings or money in a line of credit) to cover your current living expenses for a minimum of 6 months.  You have private medical insurance and some life insurance to protect you and your family’s lifestyle should you become ill, disabled, unable to work or if worst comes to worst – suddenly die.   Level 2 - Financial Security Now you have accumulated sufficient assets, such as a substantial property portfolio, to generate enough passive income to cover your most basic expenses. These would include;  Your home mortgage and all home-related expenses. All your tax payments and the interest payments on your loans and debts. Your car expenses.  Your grocery bills and minimal living expenses.  Insurance premiums including medical, life, disability and your house.  Level 3 - Financial Freedom You’re financially free when you have accumulated sufficient assets to generate enough passive income to pay for the lifestyle you desire, not necessarily your current lifestyle, and all of your expenses, without ever having to work again.  Level 4 - Financial Abundance A small group of sophisticated property investors achieves Financial Abundance when their portfolio works overtime. They’re free of financial pressures and have so much surplus income that after paying for their lifestyle, all of their expenses and contributions to the community (often through charity work or donations), their asset base continues to grow.  Climbing to the top of the investment ladder  So how do you climb the rungs to the top of the property investment ladder and achieve financial abundance? Here are 4 steps you can take:  Decide you want to become wealthy. Most Australians dream of financial independence and want to be wealthy, but never make a firm commitment. If you don’t truly commit, life gets in the way and you get sidetracked. Choose the date you’re going to be financially free, then put it in writing, make a firm promise to yourself and tell others so you have no excuses.    Invest in your financial education. If you’re a beginning investor focus on increasing your financial education. To fast track your success, keep reading books, going to seminars, watching DVD’s and learning from people who’ve already achieved what you want to achieve.  Don’t wait until you know it all to get started, because if you do, you’ll never take the first step. One of the things I learned early in the piece is the paradox of knowledge: The more you learn, the more you realise you don’t know.   How do you know when you know enough to start investing?   When you have the courage and conviction to take action, knowing that you’ll never know it all, but you’ll learn more along the way – educating yourself as you move up the investment ladder.  Surround yourself with like-minded people. There’s no such thing as a “self-made millionaire”. Even financially independent investors surround themselves with a smart team of advisors and professionals as well as other like-minded individuals. Get a mentor, join an investment club and associate with others who have similar aims to you. If you stop associating with people who are negative and point out all the things that can go wrong, and instead surround yourself with people who are positive and will spur you forward, you’ll reach your financial goals much quicker.     Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors  Some of our favourite quotes from the show:  “The rich and the poor both start with the same amount of money. They just have a different philosophy.” –Michael Yardney  “Be really, really careful who you listen to. Because if you listen to what most people listen to, if you follow the people that most people follow, you’ll never get to financial abundance, because that’s not what they’re aiming for.” –Michael Yardney  “The lovely thing about money is it really doesn’t discriminate.” –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 are where you are in life because of all of the things you’ve chosen to do and all of the things you’ve chosen not to do.  So, in today’s show, I’m going to share with you 11 things that successful investors don’t do, so you can move ahead in your investment journey.  In my mindset moment, I’m going to explain the vast difference between being wealthy and being rich.  And in my chat with Ahmad Imam, we’re going to talk about the fears of first-time investors. So, if you’re a beginning investor wondering if you should or shouldn’t get in, this conversation will be very useful.  But even if you’re not a first-time investor, you may have some of the same fears, so you can get something out of this conversation as well.  11 things successful investors don’t do  While there are many great tips on what to do to become a successful property investor. However today I'd like to look at a number of things successful investors don’t do.  They don’t concern themselves that the markets are unpredictable.  Successful investors are comfortable with the reality that their future can’t be predicted. They know that despite having the best plans and strategies there are always X-factors coming out of the blue that may affect them negatively. So they protect themselves by planning for the worst yet expecting the best outcome.   They don’t accept things as true without questioning.  In an uncertain world, we love to be right because it helps us make sense of things. One of the ways we strive to be correct is by looking for evidence that confirms we are correct. Psychologists call this confirmation bias.  Instead successful investors understand that most of us are ruled by our prejudices, so they maintain a healthy skepticism and question new information before accepting it to be true.  They don’t think success will come “quickly” or “easily.”  Successful investors don’t look for the next “get rich quick” scheme, knowing that those with a long-term perspective and who delay gratification are more likely to be financially successful because wealth is the transfer of money from the impatient to the patient.   They don’t wait for the “right time” to take action.  Successful property investors don’t try and time the markets.  They know there isn’t a “right” time to do anything.  They don’t try and do it on their own  Successful investors know that if they’re the smartest person in their team they’re in trouble. So they’re prepared to pay good advisers and have mentors who inspire and motivate them and keep them accountable.   They don’t waste their time worrying  Interestingly most things you fear will happen, never do. They are just monsters in your mind. And if they do happen then they will most likely not be as bad as you expected.  The lesson here is that you shouldn’t take things too seriously because that which seems like a big problem today, you may not even remember in five years.   They don’t give others the power to define “success” for them.  When you compare yourself to others you let the outside world control how you feel about yourself.  Successful people pursue what makes them happy without worrying about what others think, especially other people's definition of success.   They don’t dodge responsibilities.  Successful people are human so they make their share of mistakes, yet they’re willing to accept responsibility and admit to their faults.  They don’t ignore problems.  Successful people confront problems as soon as possible. Like all of us they’re tempted to neglect things that are difficult to deal with, but tackle them anyway, because putting off a problem only turns it into a bigger one.  They don’t speculate  Rather than following the latest fad, successful investors follow a time-proven strategy that they repeat again and again, recognising that you can’t become an expert by doing one hundred things once. Instead, they do one thing a hundred times till they become proficient and can produce repeatable results – that’s how they know they’ve become an expert. It may make their investing boring, but the results make their lives exciting.   They don’t forget the people who matter.  No matter how busy they might be, successful investors make time to tend to their personal relationships, knowing how empty life would get without love and friendships.  So, there you have it – 11 things not to do if you want to be a success.    Overcoming the fears of being a first-time investor  Fear and uncertainty lead to procrastination.  The best way to overcome fears is to ask yourself two questions: what am I really afraid of? And how likely is it? Today’s chat with Ahmad Immam may help address some of your fears.  Strategies for overcoming fears  Only listen to people who know what they’re talking about. Everyone has an opinion, but not everyone’s opinion is useful.  Understand the media’s love of sensational headlines. You can’t turn on the news without hearing something about property, but bad news and sensational headlines sell papers and generate clicks. That doesn’t mean the information is useful – most property journalists are not economists. Stick to reading journalists who understand the economy, real estate, and how to create wealth through property.  You don’t need to know everything before you get started. If you want to know everything, you’ll get to a stage where you’re procrastinating and never really get started. Accept that you’ll likely make some mistakes but minimize them by getting a good team around you.  Being wealthy is different to being rich  There are a number of definitions of wealth.  True wealth isn’t your money or your property or how big your business is, it’s what you’re left with when they take all your money away.  Another definition of wealth has to do with time freedom.  Being rich doesn’t mean you’re wealthy. The rich may have a lot of money, but they have to keep working because they spend most of it.  The wealthy have money without having to work too hard for it, and their money covers all their expenses. Generally, they’ve worked hard to get to the point where they don’t have to worry about money.  The difference between the rich and the wealthy is that the wealthy don’t have to worry about money while the rich do because they generally spend most of what they earn because they haven’t put enough money aside to invest in income-producing assets.  You can think of the definition of wealth as how long you can survive and maintain your living standard without working.  Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Ahmad Imam Metropole Property Strategists Sydney  Some of our favourite quotes from the show:  “The lesson here is strive to become the best you can be and look at how far you have come, what you have accomplished and how you have grown.” – Michael Yardney  “Sometimes negative experiences, mistakes and failures can be even better than a success because you learn something new which another win could never teach you.” – Michael Yardney  “True wealth is money plus the ability to keep growing and learning and spirituality, and that means different things to different people.” – 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

Do you have children or are you planning to have children? How about grandchildren? If so, this episode is for you.  Even if you haven’t got children, you’ll get some great money lessons from this episode.  Today we’ll share seven tips to make sure your children grow up rich.  And it’s not just about money. We’re talking about tips that will help children find success in all areas of life.  So how do you go about creating a rich child? Here are some of the things we discuss:  Reading to Learn  Tom Corley found that 88% of the rich folks in his study spent 30 minutes or more every day reading to learn, whether it was about money, how to succeed in their industry, self-help, biographies of successful people and history.   Cultivating relationships:   You want to associate with those people that typically upbeat, optimistic, enthusiastic, positive types. If you’re not in a circle that meets those criteria, volunteering at a community nonprofit is a good way to find them.   Exercising:   Because exercise improves brain performance by increasing the amount of oxygen and helping the health of the neurons, people who exercise think faster and have better memories—which make you more competitive in the workplace.  Managing anger:   It’s normal to feel anger and frustration, but how you express it can make or break your success.  Exploring talents:  When kids are little, they get to do a lot of activities such as art, music, theater, and sports. But as they get older, they focus on just one or two. But that's a mistake. Exposing kids to numerous activities helps them explore their talents  Keeping an abundance mindset:   Of all the habits, this is the most significant that plays out in every aspect of our lives. Our brains are wired to emulate our parents from the start.  Dream-setting:  Dream-setting is a process. It's visualizing what your ideal life would be. The self-made millionaires in his study would map out what their dreams are at least 10 years into the future, and then build goals around the dream to make it a reality.  Some of our favourite quotes from the show:  “Being rich is about wealth in all facets of life.” –Michael Yardney  “You definitely have to grow and learn by having that habit of reading. It’s a success habit not just of children, but of adults.” – Michael Yardney  “I want an expandable pie where if we all do well, are more productive, our country is better. There’s enough for everybody.” – 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. 

Our property markets are changing in front of our eyes, but a couple of things are changing that you may not be aware of.  One of those things is the ghost towers in Sydney. What’s a ghost tower? You’ll find out in this episode. It may not be what you expect.  I’m also going to have a chat with Andrew Mirams about the changing finance markets and bust some myths about finance.  In my mindset moment, we’ll talk about 12 things that are more important than money. Listen in and by the end of the show, you’ll be a more informed businessperson, investor, or entrepreneur.  Sydney Ghost Tower warnings   The ghost towers that are springing up across Sydney aren’t haunted buildings, they’re empty apartment buildings.  By the end of this year, around 54,000 new apartments will have flooded the Sydney market in just two years. This has led to an oversupply of apartments for sale or for rent.  Of course, this has occurred at a time when first-time buyer incentives have worked, with one in four people in the Sydney property market currently buying their first homes. It just hasn’t been enough to soak up the extra apartments, though, and ghost towers are on the rise in Sydney.  These vacancies have created a tenant’s market, giving tenants the upper hand in lease negotiations. Landlords and property owners need to keep their rents the same when the lease expires, and may even need to drop their rents when their property become vacant in order to find new tenants.   Metropole’s Sydney vacancy rates are at about half the general market industry average, and they’re currently sitting at around 2%. A large factor in this is the type of properties that we bought for our clients over the years – established apartments in small blocks that are close to amenities, that are still in strong demand and that have some uniqueness to them. Those apartments are holding their values well and they’re leasing more quickly.  The problem is we’re building too many of the wrong type of apartments, and there are too many of the wrong types for sale or lease. Currently, the apartment market is being artificially propped up by developers manufacturing scarcity by holding onto their stock. They’re not releasing a lot of their vacant apartments on the market because the market is saturated. At the same time, many investors are not putting their properties on the market for lease. They’re keeping them in brand-new condition and waiting for better times.  Developers built high-rise apartments aimed at foreign investors and a new generation of local investors who really didn’t understand what made a good investment. This has led to high vacancy rates. Investors are going to lose out not only because they’re not getting their rent, but because they’re unlikely to see an increase in the value of their properties for at least a decade. Those who wish to sell or have to sell are going to have trouble finding buyers.  Established apartments, the ones that used to be called flats, are outperforming new apartments. They’re what we call "investment grade" apartments because they appeal to a wider range of more affluent owner-occupiers, not just investors.  They’re located in the right places, a short walking distance to lifestyle amenities. They have street appeal and good views, they offer security, and they usually have the ability to add value. And they have a high land-to-asset ratio, which is very different to the big buildings.  The bottom line is that buying an investment-grade property is all about following a proven blueprint laid out by successful investors. It surprises me that people are still talking about buying off-the-plan apartments. Your best move is to avoid them.  You’re more likely to increase your chance of financial success in the future and reduce your chance of getting caught out as the property market moves to the next cycle by buying the right property in the right location. Don’t worry about the timing. This is one of the best countercyclical buying opportunities I’ve seen in many decades.  Busting finance myths   It doesn’t matter how long you’ve been with a bank, you still have to meet the current assessment criteria. Don’t assume that your bank will take care of you out of loyalty. Things change with the credit cycles, and just because you got money in the past doesn’t mean that you’ll be able to do it again. You may not qualify, or you may need to meet new criteria. Your credit cards and credit limits matter. Whether you use it or not, you could spend up to that limit.  And at any time your circumstances could change. So, it does matter and you do have to disclose credit cards and limits If you’re adding a higher interest rate and a lower term, that has significant impacts on your borrowing capacity. We’ve hit the bottom of our credit squeeze. We want a balanced market. That will have a positive effect on the ability to borrow. Having a finance strategist on your side makes a big difference because the banks really aren’t on your side.  12 Things more important than money  Put your health and wellness above everything else Take the time to do the things you love Stop taking life so seriously Always say what you need to say Open up your mind to possibilities Follow your own path Stop living in the past Accept the things you can change Practice mindful living Stop chasing money, fame, and possession Always practice gratitude Pay attention to all the sources of love in your life  Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Andrew Mirams – Intuitive Finance  Some of our favourite quotes from the show:  “It surprises me that people are still emailing me, leaving comments on my podcast, leaving comments on my Property Update blog talking about buying off-the-plan apartments.” – Michael Yardney  “When you get to know me, you’ll realize I believe true wealth is what you’re left with when they take away all your money.” – Michael Yardney  “Appreciate what you’ve got. Be grateful for what you’ve got.” – 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

Are you looking for more success in life?  If so, then today’s show is for you.  I’ll be sharing with you tips from high achievers to help you get further in your property investments, career, and other parts of life.  I’ll also have a chat with a successful person, Ahmad Imam, who’s going to share some property tips as well as some general life tips that he would have liked at the beginning of his career.  13 things high achievers do differently  I’ve noticed there are some rules that high achievers never break.  I makes sense that if you obey these rules, you will also become a high achiever.  So let’s look at them…  Don’t compare your life to others and don’t judge them; you have no idea what their journey is all about We all have our own distinct purposes in life. Be yourself always and become the best version of you.  Don’t act the way you are feeling. Instead, act the way you want to feel High achievers get disappointed a lot because they fail many times, but since they are highly optimistic people, they see advantage in adversity and make the best of every situation.  Make peace with your past so it won’t screw up your present Forgiveness is the first step to progress and only those with a strong heart can forgive themselves and those who have hurt them. Move forward today and stop dwelling on the past.  Don’t answer ads that promise get-rich-quick schemes because it won’t be you who gets rich quick If it sounds too good to be true, then it most likely is.  You can’t do everything yourself, so get help along the way Your level of influence in most cases determines your level of success. Make meaningful relationships and help others get what they want.  Don’t envy what others have; you don’t know how they got it The truth is that you don’t know how he got what he has or the price he had to pay in exchange for it. Think about this before you envy somebody.  If you can’t say anything nice, don’t say anything Most successful men are very careful with their tongues–they hardly speak out of turn or when it is unnecessary. Learn to talk less and listen more.  Be comfortable only outside of your comfort zone Do something every day that scares you and break your own records each day.  If you are going to jump off a bridge, make sure you know how deep the water is This is the gateway to tremendous self-improvement. It is the secret of high achievers. Always determine the price you have to pay for every decision you make before making that decision.  Change only what you can change and let go of the rest No matter how important it may be, sometimes it’s better to do your own part and leave the coming generation to do theirs.  What others think of you is none of your business Ignore whatever anyone has to say about you and hold firm what you know and what you believe.  Never test the depth of the river with both feet Spread out your risks in life. There is no way to succeed without taking risks, but it's wiser and safer to take calculated risks.  Honesty is a very expensive gift. Do not expect it from cheap people Do not expect too much from people–only a few men have that virtue called integrity.  Investing and success tips from a property expert  Take the emotion out of your investment decisions – When investing in property, decisions should be based on strategy, statistics, and logic. Will the property provide wealth-building rates of growth? Is it the highest and best use of your funds? Is the location a stable market? Does the property have owner-occupier appeal? Can I purchase the property at or below intrinsic value? Does the property have a twist that will make it unique relative to the level of demand? Does the property have the potential for value-add via renovation or development? Avoid speculative investing – it can be tempting to buy a property in a location that’s predicted to be the next best thing, but it can also be risky. Hot spots tend to be not-spots. There are three core fundamentals to keep in mind: Leverage Compounding Time If you want something you’ve never had, you have to do something you’ve never done. Amazing things happen outside of our comfort zones. It doesn’t matter how slowly you go, as long as you do not stop.  Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Ahmad Imam  – Metropole Property Strategists Sydney  Some of our favourite quotes from the show:  “It’s not going to be you who gets rich quick. It’s the person who’s going to sell you whatever they’re selling you.” –Michael Yardney  “I keep saying, I’d like my investments to be boring so the rest of my life can be exciting.” –Michael Yardney  “You are where you are today because of all the things you’ve done and all the things you’ve chosen not to do.” –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

Imagine you woke up one morning and found out your investment property was on Airbnb.  Your tenant, who you thought was looking after your property is now letting anyone and everyone in.   What are your rights? What would you do? Today we’re going to have a chat with Leanne Jopson about what your rights are and how you can prevent this.  I’m also going to share in my mindset moment, six things successful people only ever do once.  In our first segment, I’m going to chat with Ken Raiss about whether Australia could fall into a recession. Are we in trouble? What could be ahead? What should we watch out for?  You’ll find out in today’s episode.  Could Australia really fall into recession?  What is a recession? A recession measures how the economy is growing measuring GDP.  Every quarter is measured against the previous quarter.  A recession is when the value of goods and services (GDP) has fallen in two quarters in a row.  According to Ken Raiss, if a recession did occur now, the bounce back would be relatively fast.  The negatives at the moment are subdued property prices and wage growth.  But more people have jobs than ever before and for most people, the ability to pay their living expenses and home expenses is driven because they have a job. The unemployment rate is at the lowest it’s been for quite some time.  The Australian economy has turned around in relation to property process, so the rate of decline has slowed.  There’s a lot of activity in the economy and money being generated.  The RBA has relaxed its restrictions on home lending. APRA have reduced the gap that they require to show that people have an ability to repay.  We also have a more stable government, we’re seeing a stimulus by the government at both the state and federal level, and we’re seeing growth in iron ore and coal, both in price and volume.  Additionally, population growth is up.  These are all signs that we should be optimistic about the future of Australia’s economy.  What if my investment property ends up on Airbnb? Leanne Jopson  Every state has slightly different legislation, but landlords do have protection against their tenants letting out their properties on Airbnb.  In Victoria, owners’ corporations have the power to impose fines on owners of properties where their tenants who disturb other residents. They can be charged a separate fine for each resident affected.  Across all states, landlords are protected because a tenant can’t sublet your property without permission. That restriction was briefly lifted in 2016, but now it’s back in place.  In New South Wales, planning laws limit the number of nights that a property can be let on a short-term stay basis (like Airbnb).  The key to finding out a tenant is subletting is having a professional property manager monitor for telltale signs. Some signs include: Key safes outside of properties Too many toothbrushes Empty or extra beds Lots of spare linen in the cupboards  When it comes to insurance claims for damage caused by an Airbnb letting, if you granted permission for your tenants to let the property, you will need to have your policy adjusted to cover that risk.  But if your tenants were letting the property without your permission or awareness, you’ll be able to make a claim for your damages.  Links and Resources:  Michael Yardney  Metropole’s Strategic Property Plan – to help both beginning and experienced investors Ken Raiss – Metropole Wealth Advisory Organise a time to speak with Ken by clicking here:  www.Wealth.Metropole.com.au Leanne Jopson – national director Metropole Property Management  Some of our favourite quotes from the show:  “Sometimes we ignore our gut instinct about people, and it can get us into hot water.” – Michael Yardney  “If you make decisions based on what you may think feels good in the moment, then it’s very likely you’re going to fail to take care of your long-term plans.” –Michael Yardney  “If you’re not strong on detail, you’d better surround yourself with people who are.” – 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 Reserve Bank's board meeting minutes for July paint a much more gloomy picture of the economy than the one governor Philip Lowe paints in public. The RBA has left the door open to even more interest rate cuts due to their ongoing concern about the state of the jobs market and the lack of wages growth. So what does this mean for our economy, for our property markets and for your pay packet? The RBA board members agreed jobs growth needed further acceleration when they cut the cash rate to a record low to 1% at the beginning of July, but the  minutes from the central bank’s latest board meeting confirmed that further rate reductions are on the table. In fact the money markets are pricing in a 78% chance of another 0.25% rate cut in November. Some of the topics we discuss: What is going on with our economy The RBA minutes seem to contradict the positive spin RBA governor Phillip Lowe put on things when he recently met with Treasurer Josh Frydenberg and said: "I agree 100 per cent with you that the Australian economy is growing and the fundamentals are strong." The Reserve Bank seems to have set itself some ambitious goals when it indicated that it wanted our unemployment rate to drop to 4.5 per cent, which they argued would mean full employment. At that level the RBA believe excess capacity in the labour market would be soaked up, wages would start to rising and in turn this would drive inflation back up into the RBA's target band. This looks like quite a challenge. The last time unemployment was that low was late 2008, and inflation has only been in their preferred range of 2-to-3 per cent a couple of times in the past five years. The big question is - where will all the new jobs come from. With the construction industry slowing down and retail spending languishing, it will be really hard to create the number of new jobs the RBA is hoping for. Will this lead to another property boom? Some commentators are suggesting we’re on the cusp of another property boom with surging house prices. While lower rates and more jobs will be positive for our property markets, I don't see a property boom ahead. Sure prices will flatten out over the next few months and then start rising gently, but it is likely property values will only rise 3% to 5% in our 3 big capital cities next year. Of course our markets will, as always, be fragmented, so some areas will outperform. However if overall house prices do respond aggressively, this will create a policy dilemma for the RBA which doesn't want this to occur. What's happening on the jobs front The continued flood of new job seekers has pushed the participation rate to record highs and meant solid employment growth has made no inroads into the unemployment rate (5.2%) which has actually climbed a little over recent months. Why we are skeptical that lower rates will decrease the unemployment rate to the range the RBA is looking for. If the RBA expects growth will only return to trend "over coming years", then it's unclear how the economy will produce enough jobs to push the jobless rate to 4.5 per cent or below, which is where monetary policymakers now reckon it needs to be before we get some meaningful and sustainable wages growth. Links and Resources: Dr. Andrew Wilson, chief economist of MyHousingMarket.com.au  Join us at our annual Property Renovations and Development Workshop in October – click here for more details  This podcast was originally published as a video here:Are we heading into dangerous territory? What the RBA minutes reveal – PROPERTY INSIDERS VIDEO    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 mood for our property markets has definitely changed.  If I were to ask you what moves our property markets, what would you say? Finance? Supply and demand?  Today I’m going to discuss one of the major factors that move our property markets. It’s one that most people don’t talk about or understand.  In my mindset moment I’m going to discuss ways to fail. This show is usually more about success than failure, but if you understand how to fail, you’ll better understand what not to do so that you can become more successful.  Finally, I will have a chat with Ken Raiss about some finance hacks about getting more financially fit.  How investor mindset moves the markets  Market movements are far from an exact science.   The fundamentals are easy to monitor. Things like population growth, supply and demand, employment levels, interest rates, affordability, and inflationary pressures.   However, one overriding factor that the experts have difficulty quantifying is investor sentiment.   And that’s what’s really been behind market movements of late.  We’re not rational  I’ve found that investors often suffer lapses of logic when investing and many of their investment decisions are driven by emotion.   For example, we tend to extrapolate the present in the future.   When things are booming we tend to think the good times will never end and when the market mood is glum, we have difficulty seeing the light at the end of the tunnel.  Can you see how investor psychology, drives booms and busts?   Can you see how the dominant investor mentality of the time helps drive the property cycle?   Just to make things clear…homebuyers, who make up around 70% of property transactions drive our property markets. But investor activity creates our booms and busts.  We follow the herd.  Obviously, one or two misguided investors won’t be able to influence property prices, but investor psychology is infectious.   People tend to want to do what others are doing - they ‘follow the herd’ because going against popular opinion is perceived as risky. What if you make a mistake? What if “the crowd” is right and you are wrong?   This behaviour stems back to the days of our ancestors when it was safer to remain part of the herd rather than leave the security of the pack and be eaten by a Saber-toothed Tiger.  This “herd behaviour” is magnified by several things including;  Mass communication enabling the behaviour to become infectious. Now more than ever we are bombarded with messages from the media that influence how we think and feel about things. When we hear that real estate is doomed, all but a handful of sophisticated investors get scared out of the game. And when the media tells us housing markets are booming everyone wants a piece of the action.  Pressure to conform. If your friends or family are doing it, it must be right. Right? Human nature makes us reluctant to do the opposite of what our peers are doing.   A major precipitating event can give rise to a general belief that motivates investor behaviour. The Global Financial Crisis that saw waves of investors scared out of the share and property markets. On the other hand, the resource boom enticed thousands of investors into mining town housing markets to cash in on the resulting property boom.   A general belief that grows and spreads. When the belief that property values can only go one way, and that is up, spreads through an uneducated new generation of investors the enter the market pushing up prices, perpetuating the belief and helping make it a reality! Similarly, when the herd believes the market is going to crash, they steer clear, this gets reported in the media and the negative sentiment feeds on itself.   When investor sentiment is positive, the crowd jumps in feet first, pushes up demand and places upward pressure on prices – causing boom conditions.   Conversely, when sentiment is negative, the crowd backs off and frequently sells out of the game due to concerns that they’re about to lose everything – causing market slumps.  What can an investor learn from this? Our property markets aren’t only driven by fundamentals, but also by the often irrational and erratic behaviour of unstable crowd investors.  Booms never last forever, and neither do busts. Don’t be surprised when they come around and don’t overreact. This will stop you from getting sucked into the booms and spat out during the busts.  Treat your property investments like a business and stick to a proven strategy to help take the emotion out of your decisions.  Recognise that property is a long-term play and set up financial buffers to help you ride the property cycles.  Invest counter cyclically  I’ve always been an advocate of counter-cyclical investing because moving against the crowd often produces the best results and can mean the difference between outstanding gains in the property market and average ones.   Sure, it takes some courage to do the opposite of what everyone else is doing, but the results of your contrary behaviour will ultimately speak for themselves.    Now seems the best time in almost a decade to invest counter-cyclically.  Tips to gain financial fitness – Ken Raiss  Have a plan. You need to identify where you are now and what your goal is, then put a plan in place to achieve those goals. Have a savings regime. Deposit money from your income in savings before you see the money. Reinvest for growth. Compound growth helps you get a better result. Invest in capital growth assets. That capital base will give you the ultimate choice when you need to live on your investments in the future. Borrow, because it’s leverage that will help you create wealth Find a good coach and mentor, and build a team around yourself. Find a winning formula and stick to it Don’t beat yourself up for things you can’t control. Make a plan that has some room for flexibility and safety nets for unexpected negatives. Think big and don’t restrict your dreams. Get people around you who will help you achieve your dreams.  Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Ken Raiss – Metropole Wealth Advisory  Some of our favourite quotes from the show:  “To grow as a human being requires work, and more often than not, it requires embracing the unknown.” –Michael Yardney  “It comes up every time you speak with successful people about what you need to do to get there. Having goals and then having written plans comes up every time.” – Michael Yardney  “Building wealth isn’t a solo game.” –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

Want to build a business and not a job? If you're a business owner, entrepreneur or professional, you'll have to grow your business very differently to most people. The traditional way to build a business is to build a Level Two business.   In a Level Two business, you as the business owner gather up the reins of power.   If something should happen to you, your business would crumble.   If you manage to somehow escape for a short vacation, you probably sneak your laptop or iPhone with you on the trip and check email when your spouse and kids aren’t looking.  What’s wrong with building a level 2 business?  Pitfall 1: It caps your income and your success.   If your business revolves around you and your personal production, as you become more successful, you’ll smack up against the ceiling of how much you personally are able to produce for your business.  Pitfall 2: It puts everyone at greater risk.  If you stop working or get injured, your business dies—quickly. This is risky for you, your family, your employees, your customers, and your investors.  Pitfall 3: It eventually corners you in the Self-Employment Trap™— the more success you have, the more trapped you become inside your business.   You’re so busy doing the “job” of your business that you can’t step back and focus on growing your business.   What’s the way out of the Self-Employment Trap?   Simple: build a business, not a job.  In the traditional Level Two approach, you try to escape by personally working harder.   But that’s like stepping on a treadmill and saying that the way to get off is to simply run faster. Not so. The faster you run, the faster the speed of the treadmill.   You take on more overhead and hire more employees, but you put them into a Level Two model that merely increases your personal pressure to produce.    A job is something that you do yourself; a business you build does your job for you! Getting your business to do more means building the infrastructure that profitably produces value in the market in a scalable way.  This means building your business with the end in mind, the end being the day when it no longer needs your time and attention on a daily basis.  As you enter Level Two, you’ll face a crucial decision point at which you can settle for owning a Level Two job or instead choosing to raise your business to be a strong and independent entity that benefits from your involvement but is ultimately independent of it.  The traditional Level Two approach is for you the owner to work harder, to do more—to work at the job of your business.  The Level Three solution is for you to do less and get your business to do more.   The 4 Building Blocks of All Level Three Businesses  Every Level Three business is made up of these four key building blocks:  Systems  Team  Controls  Scalable solution  Links and Resources:  Metropole’s Business Accelerator Mastermind Mark Creedon – Business Coach to some of Australia’s leading entrepreneurs  Some of our favourite quotes from the show:  “I’ve learned over the years that it really is important to let go of control” –Michael Yardney  “If everything’s dependent upon you, what happens if something happens to you?” –Michael Yardney  “Having a group of people around you who are already movers and shakers, who are already successful, that’s so, so different to reading something on the internet. It’s so different to reading a book or listening to a podcast.” –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.