Property Investment, Success & Money | The Michael Yardney Podcast

What’s the biggest differences between the rich and the poor?  And I don’t mean the fact that the rich have more money. There is a lot more to it than that. That’s what Tom Corley and I discuss in this week’s Podcast. I’ve written so much about the big differences between the Rich and the Poor over the years. In fact, I’ve written the book Rich Habits Poor Habits together with Tom Corley which explains our findings in detail. I’ve recognised if you want to make a change in your financial life, it must be done in the following 3 steps: Awareness —it starts within you – recognising  your disempowering beliefs and your “ Poor Habits”  – your thoughts and actions. Removing — your disempowering beliefs and your ”Poor Habits” Reprogramming — working on your beliefs and habits so you can create a new way of being. The good news is anyone living in modern developed western countries can become rich today. Listen as I ask Tom the following questions: How many in your study were self-made millionaires? You found being rich eliminates 67% of Life’s problems - how's that work? How much of a role does luck play? We also discuss the following habits of successful people: All success requires passion All success requires unrelenting persistence All success requires taking risks All success requires action All success requires hard work All success requires a team of apostles who believe in you and your dream All success requires continuous daily self-education All success requires a leap of faith All success requires patience All success requires good daily habits All success requires an optimistic, positive mental outlook All success requires the development of processes that work All success requires adding value to the lives of others All success requires creating a herd of followers All success requires stepping outside your comfort zone All success requires laser-like focus All success requires developing unique skills and the acquisition of knowledge specific to your industry All success requires creating the opportunity for luck to occur All success requires the ability to pivot around obstacles, pitfalls, mistakes and failures All success requires the ability to survive until you thrive So now it’s your choice – who would you rather be like? If you want to be rich do what rich people do. If you don’t then do what poor people do – it’s that simple. Rich Habits Poor Habits Wealth Retreat

Are you concerned that values have dropped since you bought your last property? Wondering how to find investment grade suburbs? That's what we discuss in today's show. Plus I have a very special Mindset Moment for you. If you bought property at the top of the property market and you’re concerned about falling property values, you’ll want to hear my chat with Ahmed Imam. We’ll be talking about what you can do and whether you need to be worried about your property values falling. Even if you didn’t buy at the top of the property market, our conversation will be of interest to property investors and homeowners who have concerns about their property market values. I’ll also talk to Brett Warren about how to find an investment grade suburb. Some suburbs just seem to outperform the others. But are they the ones that show up on those lists of top performing suburbs? We’ll be discussing just how valuable those lists really are. What Should You Do If You Bought at the Top of the Market? Ahmad Imam No one can pick the exact top or bottom Owners who are now realising that they bought at the top shouldn’t panic Buyers need to remember that property is a long-term journey There’s no need to check the performance of the property market frequently. Unless you’re getting ready to sell, once a year is enough Sydney and Melbourne are the powerhouses of economic growth in Australia. It won’t take long for the property markets to rebound in those places Are you looking for an investment grade suburb? Brett Warren You know…one where properties are likely to outperform and I’m not talking about hot spots, but suburbs that will outperform in the long term. Well, they are there if you know how and where to look. Recent property data has shown there are some very mixed results for Brisbane houses over the last 12 months. Depend on where you find your data, the average house price in Brisbane has grown anywhere from 0.1% to around 1%. But there are a number of suburbs that have achieved significantly higher growth than the average. In fact, there are a number of suburbs achieving growth in the double digits. I check to see that: The local economy is providing new jobs. A thriving local economy encourages people to move there and ensures locals have the job certainty and the money to buy or rent properties. Local population is growing Apart from more people, it’s important to have the right demographic moving to the area – people in family formation stage of their lives and people of working age rather than an aging population. Local infrastructure spending When the local council plans to improve roads, public transport options and local amenity this create more local jobs, which boosts the economy and leads to more people moving to the location. The Usual Suspects It’s interesting, but you will be able to identify these suburbs as they make the same list every second or third year. They always seem to be powering ahead. They make the list for two reasons – supply and demand. When I say supply, it means there is less availability of land and therefore properties are in short supply. And demand comes from a number of factors, including: People want to live in these suburbs – They are aspirational suburbs (as opposed to many of the cheaper suburbs where people chose to live because that’s all they can afford. They are close to employment hubs where more high paying jobs are being created These suburbs are gentrifying – people with higher incomes are moving in People living in these suburbs have higher wages growth than the average for the state There are local lifestyle precincts – another reason for attracting a gentrifying demographic There is easy access to public transport There are strong school catchments – a magnet for families Demand does not wane for these types of locations and they are not building any more of them. What about all those new Suburbs? Sometimes new suburbs make the high growth list once, but they rarely make the list again. They start out as acreages or even small farms that are acquired, subdivided and developed into smaller parcels of land – smallish sites for new homes. Growth is these locations generally tends to be more physical growth, with towns, shops and schools, etc. rising from the ground in a short timeframe. One day a large acreage property, 6 months later there are 100 new house and land packages. Because there is an abundance of land still to be developed there is no shortage of land and an abundance of supply, sometimes lasting a decade or more. These areas are generally a lot further out from the CBD and usually have inferior infrastructure and public transport and rarely have any of the investment fundamentals, leading to a lack of capital growth. Sure, these suburbs are more affordable for young families, but the prevailing demographic in these locations tens to have lower wages growth than those living closer to the CBD, another reason these locations suffer from poor capital growth. A Clear Winner  For me, it is the usual suspects that I always look to invest my money. It is the known, proven and trusted locations that will continue to be in high demand and continue to outperform the averages. They will be able to grow your asset base faster and will have wealth producing levels of income one day. Newer suburbs will no doubt appear to outperform from time to time, but you need to ensure that investment fundamentals are strong and avoid areas with more and more housing estates still in the pipeline. These locations may assist with a once of equity boost, but as newer suburbs come up, prices and rents will continue to decline, and that equity will evaporate. There are clear winners once you can interpret the data and understand the fundamentals behind it. And remember that while location does around 80% of your property’s long-term performance, of course, you need to own the right property in that location. Links and Resources: Michael Yardney Metropole Property Strategists Ahmad Imam – Director Metropole Properties Sydney Brett Warren – Director Metropole Properties Brisbane Some of our favourite quotes from the show: ”What you need is the right finances to get you through the property cycle, which is what should have been set up long before you bought your property if you did it right.” –Michael Yardney “What a neat philosophy: to never quit looking for another way to get where you’re supposed to go.” –Michael Yardney “So, infrastructure spending is good because it actually creates local jobs, it uses local materials, but the other thing is it remains there in the long term as a legacy, so it boosts the economy and it helps people.” –Michael Yardney

Do you know that if Labor comes into power, they’re going to make us one of the highest-taxed countries in the world, and there are at least 6 taxes that could affect you. Ken Raiss and I are going to discuss them on today’s show.  But first, I’m going to explain why there are so many property pessimists around predicting a property market crash. You’ve seen the headlines predicting markets crashing and home values plummeting. Now listen in to find out what’s driving the negative news.  Property Pessimists  The property market is going to crash!  That’s the type of headline the media has been using to draw you in, isn’t it?  If they write something like “The long term property market fundamentals are sound,” it’s unlikely you would have bothered to click the link.  So, have you wondered why are there so many property pessimists when long term optimism is the most realistic stance?  The media loves to tell us that the property market will crash and gives plenty of air time to commentators with this view.  Now there’s nothing new about this.  In fact, part of this is natural — we’ve evolved to treat threats as more urgent than opportunities.  Warren Buffett wisely said: “In order to succeed, you must first survive.”  But all the pessimism about our property markets and the economy takes things to a different level.  I’ve found that if you say there’s going to be a property downturn and you’ll get retweeted.  If you say we’ll have a big downturn, the newspapers will quote you.  But if you say we’re nearing the next global financial crisis and that property values will fall 40 percent and you’ll get on television.  However, if you mention that good times are ahead, that certain property submarkets will finish the year higher than they started, or that our property markets are not going to crash, a common reaction from commentators and spectators alike is that you are either a salesman or you don’t understand the true risks.  Here are 3 thoughts about what’s going on here.  Money is universal  So, if something bad happens it tends to affect everyone, albeit in different ways.  That isn’t true of, say, the weather. A hurricane barreling down on far north Queensland poses no direct risk to 95% of Australians.  But a recession barreling down on the economy could impact every single person – including you, so you pay attention.  And of course, this also applies to the property market where around seventy percent of Australian households own or are paying off their home.  Pessimism requires action  Bad new means you may have to sell, or run away, or hide!  On the other hand, optimism is mostly a call to stay the course. It’s not nearly as urgent.  There’s a lot of money to be made in the property advice industry  Currently, there is no regulation of the property investment advice industry and while there are some very professional people and organisation around to help investors, because of the potentially large amounts of money involved the property advice industry has attracted an army of truth-benders promising the moon.  A big enough commission can convince even honest, law-abiding salespeople that the dud properties (we’re looking at you off the plan apartments and house and land packages) they are offering are in their customers’ best interests.  So they promote optimism with stories like properties never drop in value, or (all) properties double in value every ten years, or the tax depreciation and lack of maintenance of your new apartment make it a great investment.  And over the years too many people have been bamboozled by these property spruikers version of optimism.  By the way…most promotions of optimism are realistic But, of course, not all are.  Just so you understand what optimism is — real optimists don’t believe that everything will be great.  That’s complacency.  Optimism is a belief that the odds of a good outcome are in your favour over time, even when there will be setbacks along the way.  I’ve read that the simple idea that most people wake up in the morning trying to make things a little better and more productive than wake up looking to cause trouble is the foundation of optimism.  Now that’s not too complicated.  But it’s not guaranteed, either. It’s just the most reasonable bet for most people.  So, don’t become a property pessimist, despite what the media try to sell you.  Instead, become a property realist.  6 New taxes:  No one likes paying more tax.  With the odds shortening for a Labor government it’s important for real estate investors to understand how a Labor win could affect their property investments. Land Tax  Did you know you’ll have to pay up to 6 extra taxes if Labor comes to power?  If Bill Shorten becomes our next Prime Minister, millions of Australians will have to pay higher taxes. And he’s not just after “greedy property investors.”  If he has his way Australians will be amongst the highest taxed people in the world.  Here are some of the tax hikes the Labor Party is proposing The top tax rate would rise to 49% A higher tax on capital gains Limiting Negative Gearing Retiree tax Taxing distributions from discretionary trusts Superannuation changes You can also watch Ken Raiss and Michael discuss this topic in the following video : Here's how a Labor win could affect your property investments  Links and Resources:  Michael Yardney Metropole Property Strategists Ken Raiss – Metropole Wealth Advisory  Some of our favourite quotes from the show:  ”Currently, there is no regulation of the property investment advice industry, and that’s a bad thing.” –Michael Yardney  “I think what we’re saying is be aware of what could happen and see a good tax strategist who is going to be able to protect you.” – Michael Yardney  “If you can grow your wealth more effectively by legally paying less tax and using the system correctly, at the same time protecting your assets, it’s a great way of doing things.” – Michael Yardney

Want to know what will make me a better property investor in this difficult market? I expect that the property market is going to pick up. And I expect that the Melbourne and Sydney property markets will go gangbusters. I have no idea when this will happen. Now just to make things clear…those aren’t contradictory statements. The first is an expectation, the other is the rejection of a forecast. And if you want to be a successful property investor, you’re going to have to understand this important difference. It’s one thing to look at history and see that the property market cycles with some frequency and then form a baseline of what to expect in the future with this knowledge. However, it’s quite another thing to predict the precise timing of the turning points in the property cycle. And it’s another thing entirely to devise a strategy that reacts to those predictions. Property analysis isn’t black and white, yet some people believe they can predict markets and they tell you about (or sell you into) the next property “hot spot.” There’s an important grey area, which is expecting certain events to occur without having an opinion on exactly when, where, why, or how. I’ve been investing for over 40 years now and in that time there have been 8 significant property cycles. I can use this as a very rough rule of thumb for the future, based on the idea that we’ve got even more positive fundamentals to drive our property markets than past generations had. While there are many sound fundamentals underpinning the long-term prosperity of our property markets, two of the big ones that give me comfort are our significant population growth and the wealth of our nation. This reassures me that my long term plans are sound and based on what has always worked – rather than trying to pick what is right for the current market. Now I have an expectation: If I plan on investing for the next 30 years, I should count on things getting ugly at least six times. Maybe it’ll be a little more, maybe less. But I have an expectation, a rough idea of how the game works. Yet it’s not a forecast. A forecast is, “The property market will turn in the second half of 2019” or “Australia will have a recession in the first half of 2021.” That’s precision, with a disregard for both the history of people making such forecasts and the events that cause these turning points which, a lot of the time, is something that can’t be foreseen. The important difference between an expectation and a forecast is the impact it has on my behaviour. If I expect property booms and property downturns, I won’t be surprised when they come. I know they’re a normal part of the game. But since I’m not sure when they will come, I won’t attempt to do much about it. Attempting to do something about it – trading, timing, buying and selling – is the root of most investors’ mistakes. A forecast suggests that you know when something will happen, which is permission to act on it. There’s little reason for a forecast other than acting on it. But unfortunately this creates two problems: The false hope of knowing exactly when the property market will turn. Even the experts keep getting their forecasts wrong. The high-probability of regret from trading around these forecasts.  Just see the results all the hot spotters have achieved, or the lost opportunity for those who tried to time the market. In other words… Expectations rather than forecasts make me a better property investor. What does the Federal Election mean for our beleaguered housing markets?  So finally we have the federal election campaign underway – what does this mean for our beleaguered housing markets? Home values across Australia’s largest capital cities have been falling since they peaked in late 2017. In fact, it looks like this will be the biggest and longest national decline in home values for almost 40 years (or since records began in 1980). Consumers have lost confidence, first buyers went on strike now sellers are holding back unless they really have to sell And while the property markets have started 2019 with a positive note, with more interest from buyers, auction clearance rates rising, the banks chasing more business another hurdle has been put in our way. A federal election and elections create uncertainty and when there’s uncertainty buyers put their hands in their pockets. Dr. Andrew Wilson and I discuss the likely implications of the election campaign. Election date is Saturday 18 May This will clearly disrupt a recovering market with agents avoiding auction sales campaigns in the next month At the same time the late Easter and holiday period will see a closing down of the property market at least till the end of April This means the current record decline in seller activity will be amplified over next month Buyers will also be wary given until they know who will win the election The election campaign will end close to the winter market shutdown that commences after Queens Birthday long weekend (June 10) The election will act to distract the property market Buyers and sellers wary of election outcome – so will be sidelined The election result is likely to be closer than previously thought based on latest polls. And the market hates uncertainty The significant Labor Tax policy will be the focus of scare campaign exacerbating all the above Watch the video of our discussion here: What does the Federal Election mean for our beleaguered housing markets? | Property Insiders Video  

If you’re a business owner, entrepreneur, or professional, then this show, the first of a new series, is for you.  Do you work 50 to 70 hours a week or more? Not including the time you spend on phone calls and emails at nights and on weekends? Can you go away from your business and return to find that it’s made money while you were gone, or does it stop when you do? Are you sure that you have a business? Or has it turned into just another job?  In this episode, we’ll talk about the concept of a business that works even without you, and how you can begin to get to that point. We’ll also talk about the three levels of business and how you can gain control over your revenue and freedom within your business.  Some of the Topics We Discuss in This Episode:  What can happen when you take a vacation from your own business Whether you really have control when you become self-employed The three levels of business Level 1: When you first launch your business. You have no freedom and no control. You’re working long hours because you have to get things done yourself. The business relies 100% on you. Level 2: You have more control, but still no freedom. The business is working only as long as you do. There’s no additional revenue coming in when you’re not there. Level 3: You have total control and total freedom. You’re the owner of a business that runs even when you’re not there. Three steps people can take to free themselves from the responsibility of everything in your business 1. Know your role in your business 2. Determine your pit crew 3. Delegate effectively  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:  “People leave their jobs to become entrepreneurs, businesspeople, and they don’t really recognize that they’re trading one boss for lots of bosses. They’re called customers, clients, patients sometimes.”  ”I’ve found most people fall into the self-employment trap.” –Michael Yardney  “I actually have gotten to the point of having a business, not a job. But that doesn’t mean I’ve retired. Because I’ve got nothing better to do, I still have fun doing 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.  

Are you considering buying a new home or an investment property? If so you’re probably wondering should you buy now or should you wait? What if prices fall further this year? A better question would be - how important is it to get your timing right and what are the most important factors involved in the long-term performance of your investment property? With my guest today, Stuart Wemyss we’re going to uncover what really makes the big difference in a property’s long-term performance. Some of the ideas we discuss in this episode: Why Stuart decided to study the factors that affected property investment performance Which variables Stuart looked at and which variables were most important What  would happen to your property’s performance if negative gearing or capital gains tax change The importance of choosing the right property How Stuart’s research fits in with some golden rules in his book Investopoly   Play the long game Grow your asset base first and then tilt toward income Set your asset allocation to reduce risk and maximise returns Only invest in ‘investment-grade’ property   Links and Resources: Michael Yardney Metropole Property Strategists Wealth Retreat Metropole’s Strategic Property Plan – to help both beginning and experienced investors Stuart Wemyss’ blog discussed in this show: How important is it to buy property at the bottom of the market? Stuart Wemyss’ special offer: Save 30% off the price of his book Investopoly – Go to https://www.prosolution.com.au/books/ and use the code “Yardney” to get a 30% discount. Stuart Wemyss- Prosolutions Private Clients Some of our favourite quotes from the show: ”We’re all wonderfully different. We’re all unique and we really shouldn’t be measured with the same metrics, should we?” –Michael Yardney “For things to come out differently, you have to do things differently.” –Michael Yardney “If you can’t buy an investment-grade property, the usually the right thing to do is nothing. Just wait until you’ve got enough money.” 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.

Over the years I’ve spent a lot of time studying rich people, and over the last decade I’ve personally mentored some very successful people. Along the way, I’ve become much more successful as well. I’ve written about success in my books and my blogs, and we discuss these topics in this monthly Rich Habits Poor Habits podcast. This is the second in a series focusing on the Success Habits of the rich. In today’s show, we’ll continue to look at some of the main success habits of the rich. Success Habits of the Rich The poor believe money will make them happier, while the Rich know that money has little to do with happiness, but it does make your life easier and more enjoyable. The Rich don’t blame (what’s the point?). They take responsibility for their actions and outcomes (or lack thereof).  They know there is no such thing as a rich victim. The poor believe it’s wrong for a small group of people (the 1%) to possess most of the money. The Rich welcomes the masses (the 99%) to join them. Successful people are not necessarily more talented than the majority, yet they always find a way to maximise their potential. They get more out of themselves. They use what they have more effectively. The poor believe they must choose between a great family life and being poor, or love and being poor. The Rich know they can have it all. Successful people are solution focused, rather than looking for problems or obstacles. Successful people are fearful like everyone else, but they are not controlled or limited by fear. They use it to empower themselves. Successful people get up early. They know there’s no shortcut, so they work hard until they’ve accumulated a big enough asset base (created their own cash machine) so they don’t have to work hard anymore. Now before you get too offended… I’m not making a judgment when I say rich people or poor people – they are terms I use to help clarify the different ways of thinking that 1% of Australian’s exhibit from the majority of the population. It’s also worth realising… We all have some of these successful habits and we all exhibit some dis-empowering habits. The big differentiator in the see-saw of life is: do you have more of these success habits or more of the dis-empowering “poor” habits. Links and Resources: Michael Yardney Metropole Wealth Retreat Rich Habits Poor Habits Michael Yardney’s Mentorship Program Some of our favourite quotes from the show: “I think the point in some ways is that as people get a bit more money, it doesn’t always make them happier, so you’ve got to make your life happier.” –Michael Yardney “When you look at the 1%, most of the people listening to this podcast are already the 1% when you take into account the general wealth in the world.” –Michael Yardney “The other really important point is this delayed gratification. That’s clearly a trait of all successful 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.

While the Labor party have indicated that if they come into power they intend to introduce a number of taxes that will directly affect our property market, the 2019 Liberal Federal Budget made little mention of our property markets. However there was plenty of good news in the Federal Budget and many of the key initiatives will help promote economic growth which will be positive for our property markets. While our economic fundamentals are generally sound, home buyers and property investors are suffering from a crisis of confidence and our housing markets won’t rebound until consumers feel more confident about their job security, our political stability, certainty about the tax treatment of property investment and when the media stops scaremongering about a 40% crash in house prices. Fortunately there was plenty in the budget to boost consumer confidence. The proposed tax cuts and giveaways will add to household disposable income Our economy is back on track with a surplus and there are measures in the budget to give small business incentive to invest, create jobs, hire more people and take on more apprentices. So what does the budget mean for property – that’s the topic of this week’s property insider chat with Dr Andrew Wilson.. Listen as we discuss: Infrastructure investment will help underpin our economic growth not just in our big cities but also in regional Australia as new jobs are created and local resources are used to leave a legacy for future generations. Migration has been reduced to 160,000 per annum (down 20,000) and this is clearly negative for housing and our economy. While these numbers are still robust, it should be remembered that migration has been a clear driver of our economy through jobs growth and better budget outcomes as immigrants are coming here for jobs, they buy goods and pay taxes At the same time the RBA changed its narrative at its April meeting suggesting it is now prepared to support the economy if required. In other words, it will be prepared to cut interest rates if our economy falters or if unemployment rises. This is again positive for property. The bottom line: The Budget will encourage confidence and support house prices, but as it is unlikely to be enough to keep Liberal Party in power at the upcoming election, be prepared for a raft of tax changes that could be negative for our property markets. You can also watch the video -  Is the 2019 Federal Budget positive or negative for property | PROPERTY INSIDERS Your Property Insiders: Michael Yardney – Metropole Property Strategists Dr. Andrew Wilson – My Housing Markets

Negative gearing is set to be a key issue in the upcoming federal election. If elected, Labor intends to reform the practice with the aim of improving housing affordability. The Coalition intends to leave negative gearing as is. The problem is Labor’s proposed policy will affect every Australian home owner and all property investors is designed to put downward pressure on home prices and improve affordability, particularly for first home buyers. But will it really be as bad for property prices as some media commentators suggest? Maybe not! In this week’s show, Property Insiders  Michael Yardney and Dr. Andrew Wilson chat about how the proposed negative gearing and CGT changes will affect our property markets You’ll also learn about: Labor’s tax grab and what it could mean to you. How the proposed negative gearing and CGT changes will affect our property markets Is there really a debt time bomb ticking away? Are migration levels too high You can also watch the video -  Property Insiders | Is Labor’s Policy On Negative Gearing Bad For Property? – Maybe Not So Bad Now Your Property Insiders: Michael Yardney – Metropole Property Strategists Dr. Andrew Wilson – My Housing Markets

History shows us that our property markets move through a cycle. There’s a downturn, followed by a stabilisation phase, then an upturn, then a boom. And then the cycle starts all over again. Now that we’re in a downturn phase of the property cycle, I want to share some valuable lessons that I’ve learned from past property cycles. I’ll be explaining what you can do when you find that the property markets have gone a little crazy. I’ll also talk about how you can make or lose a fortune in 2019. And I’ll share a mindset moment all about acting in spite of feeling afraid. Are you set to gain or lose a fortune in property in 2019? What goes up, as they say, must come down. And segments of Australia’s property market are now in the slump phase of their cycle, catching out some naïve investors who hoped the value of their properties would rise forever. This means you will probably lose money in this property downturn Now hear me out. I’m not one of those doomsayers saying our property markets will collapse. I firmly believe the outlook for Australia’s property market remains robust and when prices rebound, the value of well-located investment grade properties will reach new peaks. That’s because Australia’s real estate markets are supported by two solid fundamentals: Our strong population growth, which ensures consistent high housing demand. The wealth of our nation, which means the majority of Australians can afford a property. But between now and the next upturn there’s going to be a painful learning curve for some property investors. Those who got carried away during the boom, often because of a fear of missing out, and took on maximum debt not understanding how the cycle works. Of course, you could be the exception. In every property downturn, some strategic investors do well. I kept investing during the property slump of the early 1980s because I didn’t know better. At the time there was limited information available and property statistics were only delivered annually – long after the fact. However, in the downturn of the early ’90s, during the GFC in 2008-10 and in the slump of 2011-12 my portfolio performed well because I followed a few simple rules that helped me come out on top no matter what the market is doing. So, here’s my advice to you: Become financially fluent Learn everything you can about how money, finance and property work and start investing early. While a trusted mentor and team will help immensely, you still need a solid understanding of how things work to make sound decisions, otherwise, you’ll be easy prey for the many spruikers. Adhere to a proven investment strategy Follow a time-tested proven system and don’t speculate. The problem is many investors find my strategy is too simple and boring. They’re looking for something more complicated. Your property investing should be boring so the rest of your life can be exciting. Only buy investment grade properties I think that less than 5% of the properties on the market at present are what I call “investment grade” and will deliver stable wealth producing rates of returns. Sure, there is plenty of investment stock out there, but don’t confuse the two. These are built specifically for the investor market and sold by property marketers to naïve investors. They lack scarcity and appeal to homeowners and are sold at a premium with no opportunity to add value. On the other hand, investment-grade properties are in the right location, appeal to a wide range of affluent owner-occupiers, have street appeal and a favourable aspect. Invest for the long term Real estate is a long-term investment, not a way to make “fast money.” Growth isn’t linear so there will be years when values are flat before they rise again. Ensure you factor insufficient financial buffers, so you won’t be forced to sell when the market turns against you. Follow my 6 Stranded Strategic Approach and only buy a property: That would appeal to owner-occupiers as they buy with their hearts (while investors buy with their calculators) and are willing to pay more for a home and consequently push surrounding property values higher. Below intrinsic value – so avoid new and off-the-plan properties which come at a premium price. With a high land to asset ratio – where the land component makes up a significant part of the asset value. In an area that has a long history of strong capital growth and will continue to outperform the averages because of multiple drivers of capital growth and the right local demographic who will be able to afford to pay a premium to live there because they have higher disposable incomes. With a twist – something unique, different or scarce about the property Where you can manufacture capital growth through renovations or redevelopment rather than waiting for the market to grow organically. Focus on value, not bargains Bargains rarely have potential. If no one else wants to buy it today, no one else will probably want it in 5 years’ time. Price is what you pay, value is what you get; so, buy the best property you can afford – the type of property you’d still be happy to own in 10 to 15 years’ time. 7. Surround yourself with successful investors It’s been said that you’re the average of the five people you hang out with the most, so surround yourself with high-performing, successful people to soak up their behaviours, habits, and mindsets. You also gain access to their experience, knowledge, and resources that’ll help you make better investment decisions and financial choices. Sure, a downturn can be a scary time, but there are things you can do to ensure that no matter what happens, you’ll pull through better than most. Links and Resources: Michael Yardney Metropole Property Strategists Wealth Retreat Some of our favourite quotes from the show: ”Booms don’t last forever. Whether it’s property, whether it’s shares, whether it’s bitcoin, booms don’t last forever.” – Michael Yardney “So, putting it all together, there are three legal investment strategies. You can be smarter than other people, you can be luckier than other people, or you can be more patient than others.” – Michael Yardney “If you want to get to the next level, start before you’re ready.” 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.