Property Investment, Success & Money | The Michael Yardney Podcast

Would you like LifeTime Wealth? Well…today we’ll explain what that means and how you could achieve it as I replay a chat I had with my good friends Louise Bedford and Chris Tate from The Trading Game and we discuss the concept of true wealth. Hopefully, your New Year’s resolutions include becoming more successful and growing your wealth. If so, you will love this inspiring chat. How to Obtain Lifetime Wealth Michael shares how he bought his first investment property over 40 years ago. He’s made plenty of mistakes, but has still built a substantial property portfolio. He also gives back. To be truly wealthy you need much more than just money. You need monet plus family, friends, health, spirituality, growth, and contribution. Chris shares his background. It is similar to Michael’s but replace the word property with shares. How children absorb things without being taught directly. Legacy and leaving a ripple or something outside of you that carries on when you are gone. We learned about money, wealth, and riches from our parents and culture. What is your financial thermostat set for? You’ll be surprised – it’s set for what you have already got. Your thermostat won’t change until you change and throw away the blame. The imposter syndrome or undeserved success. Not feeling worthy and self-sabotaging. Self-awareness deserving your success. How people believe the tool has something to do with their success, when it is actually the software that makes a success. How people who’s views are mismatched may not be a match as a couple. The disconnect can produce tension and tear relationships apart. Couple’s need to talk about their views about money. Partners need to be compatible on a whole host of issues. In the old day’s people passed their trades on. Now property or shares can be passed to your kids, but it is not what you leave your kids it is what you leave in your kids. How we learn about money from our parents whether it is spoken or unspoken. Replacing non-productive beliefs with empowering beliefs. Teaching kids about training by loaning them money to trade and letting them keep half of the profits. How IQ and socioeconomic status can be linked. The importance of mentorship and getting together with other entrepreneurs. Find like minded people and the isolation disappears. How attending Wealth Retreat can help change your mindset and money habits. Links and resources: Michael Yardney Metropole Wealth Retreat The Trading Game Rich Habits Poor Habits Property Update App Chris Tate Louise Bedford Richard Branson Warren Buffet Donald Trump Robert Kiyosaki Our favourite show quotes: “Wealth isn’t about how much money you have, but what you’re left with if you lost everything and had to rebuild it.” Michael Yardney “You either have to pay the world, the market, or your mentors when learning about investing.” Michael Yardney “If you took all of the money in the world and divided it equally it would all end up in the same pockets again.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

What is ahead for 2018? I will give some of my predictions at the end of the show, but first we are going to talk about this year's Property Investment Sentiment Survey. To help discuss this I’m joined by Metropole Property Strategist Ahmad Imam because sentiment plays a big role in how the property markets perform. 2017 Property Investor Sentiment Survey Over 2,200 Australians have taken part in this year’s Property Investor Sentiment Survey run by Michael Yardney’s Property Update in conjunction with Your Investment Property magazine. Being Australia’s longest-running and largest survey of Australian property investor sentiment, it showcases insights from 2,250 property investors and would be investors across the country. Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time. One of the surprises is that despite our property markets moving to the next phase of the cycle and slowing down 1 in 2 investors plan to buy a property in the next 12 months.  However, they are realistic that they won’t enjoy quick and massive capital growth in the near future, but they still intend to buy more property in the next year. It’s clear that property buyers are intending to remain as active as ever, despite the fact that the boom is now well and truly over in Sydney, and strong growth isn’t widely anticipated in 2018. Our survey reveals that 50% of respondents plan to buy another property in the next 12 months, and 60% believe now is a good time to buy property. This is despite the fact that the majority of respondents (64%) believe that property prices will remain flat, or increase by less than 5%, over the next year. It’s also interesting to note where investors are planning to buy: more than half the respondents believe that Melbourne will exhibit the best capital growth over the next 5 years (52%), with Brisbane not far behind (45%).” Their focus is on long-term capital growth, rather than an immediate equity boost, and they’re looking at property that has potential to add value, Perhaps unsurprisingly, it also reveals that many investors are feeling the impact of APRA-led lending restrictions.  “Around half of the respondents reported that the recent changes to lending policy have impacted their ability to purchase another property, while 36% say that meeting the banks stricter serviceability criteria will be their biggest stumbling block to purchasing a property,” said Sarah Megginson, editor of Your Investment Property magazine. Q1. How many investment properties do you currently have in your portfolio? That fact that 90% of respondents to our survey already own an investment property and more than 50% owned 3 or more properties showed that we are surveying a group of more investment savvy Australians. Q2. What is your preferred investment strategy? Close to 80% of respondents had a long term view of property as a high growth asset – rather than expecting cash flow from their properties. Q3. Is your property investment portfolio negatively geared or does it generate positive cash flow? Despite the vast majority of investors investing for capital growth, only 37% of investors held negatively geared properties suggesting that, over time as rents increase, negatively geared properties become neutrally geared and eventually provide cash flow. Q4. Do you believe now is good time to invest in residential property? ​ 61% of respondents believe now is a good time to invest despite the fact that the majority of respondents (64%) believe that property prices will remain flat, or increase by less than 5%, over the next year. Clearly they are taking a long term view. Q5. Are you planning to buy an investment property in the next 12 months? ​ Half the respondents plan to buy an investment in the next year again showing strong consumer confidence. Interestingly this is much the same as 12 months ago (52%) Q6. What type of property would you buy?​ More than three quarters would buy a property with land – a house, townhouse or villa unit. Apartments (9%) are out of favour at present – and not surprisingly so - as house price growth is significantly outperforming apartments in most capital cities ​Q7. Would you buy​? 42% of these investors saw an opportunity to “manufacture” capital growth by purchasing property with renovation or development potential Q8. Where would you buy for the best capital growth over the next 5 years? Melbourne was seen as the most likely capital city to deliver strong capital growth over the next 5 years (52%), closely followed by Brisbane (45%). These are the same to growth capitals that readers suggested 12 months ago and in virtually the same proportions (50% Melb and 45% Brisbane) Q9. What type of property do you think will make the best investment over the next 5 years? A detached house in the inner and middle ring suburbs of a capital city was seen as the best medium term investment (37%) while 23% will be looking for a property with the potential to add value. Q10. What is your property investment “end game”? ​ Most investors realised they’d need to build an asset base of properties and then live off the rents Q.11 Are you planning to buy a new home in 2018? 23% of respondents plan buy a new home in 2018. This is up considerably from 14% 12 months ago Q12. Have the recent changes in lending policies to investors impacted your ability to purchase another property? ​ Almost half of respondents are finding the recent tighter lending criteria impacting their ability to purchase another property. Q13. What will be your biggest stumbling block to purchasing your next property? Over a third of respondents have found the APRA imposed stricter lending serviceability criteria a stumbling block for their next property purchase. Which if you think about it is exactly what APRA was trying to achieve Q14. Do you think now is a good time to fix interest rates? Around half of the respondents (46%) felt it was time to lock in interest rates, suggesting they think that the next RBA interest rate movement will be up. Q 15. What do you think will happen to overall property prices in 2018? Investors are less confident in short term capital growth than last year -  64% believe that property prices will remain flat, or increase by less than 5%, over the next year. Q 16. Who’s advice do you seek (or plan to seek) for property investment advice? While 26% of respondents plan to seek advice from a property strategist or an advisor we find it surprising that 25% will seek no advice on their next property purchase. Despite the significant amount of research material and information available for free, there’s one thing you can’t get over the internet – and that’s the perspective that only comes after years of on the ground experience.   Q 17. Your gender? I’ve always been surprised that despite our readership being relatively evenly split amongst males and females, that significantly more males complete surveys. Q 18. What is your combined annual household income? About the survey: The 2017 Property Investor Sentiment Survey was conducted online by Michael Yardney’s Property Update and Your Investment Property Magazine    This survey was first conducted in February 2011 and this year 2,239 respondents answered questions at www.PropertySentiment.com.au, making it Australia’s longest running and largest survey of its type and giving us an insight into the way Australia property investors feel and think about the market. Michael’s Predictions for 2018: If interest rates remain unchanged, APRA don’t impose further lending restrictions and our economic growth remains steady, in the absence of any major international surprises this is what our research suggests is likely to occur to capital city property values in 2018:   The Sydney property market has run out of steam, but won’t crash like some are suggesting. Instead it is likely to grow between +4% and 6% Melbourne houses, townhouses and villa units are likely to be the best performing market – +6% to 10% Brisbane’s market will move up a notch, spurred buy jobs growth and infrastructure growth – +3% to 6% Hobart will again perform well – +6% – 10%; encouraged by speculators chasing the next hotspot. But remember how hot spots often become “not spots” – so with few long-term growth drivers, I would avoid the Apple Isle. Canberra will continue its steady performance – +4% to 7% – but excessive land tax is a strong disincentive to property investors in Australia’s capital.  Links and resources: Michael Yardney Metropole Rich Habits Poor Habits Property Update App Ahmad Imam APRA Quotes: “What’s going to happen in the property markets depends on what the RBA does to interest rates and what APRA does to lending criteria.” Michael Yardney “Overall houses are going to do better than apartments in Sydney.” Michael Yardney “I see a little more growth in Brisbane in the coming year then there was last year.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

How soon can you give up your day job if you invest in property? The answer may not be what you really want to hear. In today’s show I discuss this as well as explaining the three P’s of property price growth. Plus I highlight some interesting findings (at least I think they are) from the Census. And in my mindset moment, I am going to talk about the importance of a growth mindset. The 3P’s of Property Price Growth People, Price and Place People: Demographics and how many people there are and how they want to live. In fact household formation is the biggest factor Price : Affordability of property which is related to wages, interest rates and property prices Place: - supply and demand Every five years the census helps us understand the changing demographics. As a property investor, you need to understand what properties will be in strong demand in the future – and the Census gives us clues. The latest census revealed that we add about 1,037 people to Australia every day. Australia has a sparse population density, and people congregate in the capital cities. Our median age is 38. We are slowly getting older. We are a diverse nation - Australians were born in over 200 countries. Almost half of the population were either born in another country or had a parent born in another country. Most of our immigrants come from China and India. The census gives details to where people’s wages have grown. We pinpoint our research to find areas that will have growth. Mindset Message: Why a growth mindset matters. A fixed mindset believes you can’t change your capabilities A growth mindset means you can move towards improving yourself. It all starts with your inner self. With your thoughts and feelings leading to your actions and results. In what areas of your life do you need to move from a fixed mindset to a growth mindset and what are you going to do about it? How soon can I give up my day job as a property investor? It’s not easy to do this. Real estate investment is a slow game that takes 10 to 15 years of growth. You first have to build your asset base – and can do this by investing smartly in high growth properties. Then, slowly lower your loan-to-value ratios. But in the meantime you need to have a real job. Then use your asset base as a cash machine Residential real estate in Australia is a high growth, low yield investment. It doesn't matter how many properties you own. The question is how big is your asset base and how hard is your money going to work for you? To retire you’ll need a 3 -4  million dollars in assets and your own home. Cash flow will keep you in the game, but it won’t get you out of the rat race. House flipping doesn’t work in Australia because of stamp duty and tax rules. It can take 30 years to build a substantial property portfolio, because most investors get it wrong in the first 10 years. Then it takes two or three property cycles to build their asset base. Links and resources: Michael Yardney Metropole Rich Habits Poor Habits Property Update App Our favourite quotes from the show: “Believing change is possible is one of the biggest tenets of personal development.” Michael Yardney “A growth mindset makes change possible, but you still have to take action to achieve your goals and success.” Michael Yardney “Your thoughts lead to your feelings. Your feelings lead to your actions. Your actions lead to your results.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Today, we are going to spend some time talking about the Sydney property market. Even if you’re not interested in investing in Sydney, there are some great lessons to be learned in this information. Of course, many investors want to know what is happening in Sydney. It’s Australia’s largest property market and price growth has stalled. People are wondering if now it the time to buy, sell, or hold. I discuss what’s going on with the Sydney property market with Ahmad Imam, the  Senior Property Strategist of Metropole in Sydney. In my mindset moment, I share with you the secret to living longer which has been proven by research. The secret is probably not what you think. 6 Things Property Investors Need to Know Before Investing in Sydney For some, just hearing the words 'Sydney' and 'Property' in the same sentence makes them cringe. While others will see dollar signs and opportunity. It really depends on your personal experience with property in Sydney and whether or not you are an Amateur investor or an experienced investor that has seen this all before. Let's face it, we receive so much conflicting information on a daily basis from so many different sources that at the end of the day you don't know if your Arthur or Martha.  The reality is, if you don't keep up with the media you are uninformed and if you do keep up with the media you are misinformed. Seems like you can't win.  Don't get me wrong some points are valid and some can be completely dismissed, so let me summarize the points and provide 6 things property investors need to know before investing in Sydney. 1 – Entry Level Price for an a Grade Asset  When investing in Sydney you must be prepared to pay a higher entry level price than Melbourne or Queensland.  Entry level for an investment grade property in Sydney is $600K and climbing. Compared to an entry level of $400K in Melbourne or $350K in Brisbane. That's a difference of $200K in this current climate of affordability constraints and tighter lending conditions.  Keep in mind you can of course buy properties for less than $600K in Sydney but they would not be investment grade assets and you would be compromising on location and as a result the long-term growth potential of the asset.  Do not assume that an A grade asset in Sydney must be a house in the Eastern Suburbs on a big plot of land. An A grade asset is simply an asset that is both strong and stable. Strong in that it has wealth building rates of growth and stable in that it is in a location that does not fluctuate in value. As investors, we like to see nice, stable, linear and predictable growth. As well as detached houses or townhouses we certainly see strong and stable growth in well located apartments in small to medium density boutique complexes in Sydney. Manage your expectations and do not be afraid to buy an apartment in Sydney if that’s what your budget allows – as long as of course it ticks all the boxes. Do not also assume that a house is a better investment than an apartment if the house is 40km away from the CBD and has minimum growth potential. Yes, land is important but do not forget that not all land is created equal. Sydney is now a global city with a population of 5 million plus and as a result we are now starting to see it ‘Manhattanising’, and just like in Manhattan you can’t expect to purchase a big house on a big block, in the right location within your budget. I would much rather an average sized 2-bedroom apartment in the inner middle rings of Sydney with great growth potential as opposed to a large 5-bedroom house 40km away from the CBD with minimal growth potential. This is an investment after all so take emotion and ego out of your investment decision. 2 - Don't Just Look at Rental Returns  In my experience most amateur investors look at 2 criteria when investing in Sydney property - the price and the rental return or yield. Yes, they are both important criteria and you certainly need to secure the asset at the right price but one crucial factor that amateur investors neglect is the average annual growth of the investment i.e. Capital Growth. The reality is there are 2 philosophies for investing in property. You can invest for cash flow, as in your rental return or you can invest for capital growth. One must be compromised. Ideally it would be great to have both but guess what? You can't have your cake and eat it too. Now I'm not going to go into a debate about capital growth vs positive cash flow however it's fair to say the further away you go from the CBD the more likely you are going to find a property with above average yield and you will compromise on capital growth.  And the opposite applies when you invest within the inner middle rings of Sydney, you are more likely to find a property that has above average annual growth but you will likely compromise on the yield. The rental yields we see for the properties we like to buy in Sydney are approx. 3% - 3.7%, however the growth we receive on these assets outperforms the averages in growth of 7.5% in the long term. My advice is to do your research, pull out the calculator and do your numbers. If you have a long-term investment strategy then calculate the projected growth and value of an A grade asset over a 10 -20 year period and compare that to the growth and value of a secondary asset with minimal growth over the same period. You can't argue with the numbers. Capital growth is King. 3 - Do Not Expect the Same Level of Growth We Saw Over the Past 4-5 Years   The last 4-5 years in Sydney has seen unrealistic levels of growth – growth well into the double digits in most cases, that have given many investors a false sense of confidence Growth has been so strong that even secondary assets in secondary locations have seen growth over the past few years – and now that the Sydney market is taking a well-deserved breather you can no longer expect this growth going forward. Sydney is a fragmented market and as a result we have seen stronger growth in the inner middle ring suburbs as opposed to outer suburbs of Sydney and this gap between A grade assets and secondary assets will start to widen more and more. And this will become even more apparent over the coming months as growth in secondary assets start to suffer and those who invested in secondary assets start to struggle due to rises in interest rates, tighter lending conditions and investors being previously on interest only loans now being forced into a principal and interest structure. Sydney’s outer suburbs are no doubt experiencing a growing population but do not assume that a growing population always equates to an increase in capital growth. You must look at the key drivers of growth including migration, spend on infrastructure, the high socio economic demographic and where they are buying as well as areas where people are willing to pay a premium to live – population growth is only one driver of growth amongst many. It is now absolutely critical that going forward you are buying A grade assets i.e. the right assets in the right locations as they will still continue to grow in the long term at realistic levels.   4 – There Is Only One Main CBD   There is only one CBD in Sydney and every other “CBD” is secondary to the main centre. Yes, Sydney is decentralising and there is very clear consensus that Parramatta is being built as Sydney’s second CBD, followed by other large centres like Chatswood, Penrith, Hurstville and Liverpool to name a few, but they will not experience the same levels of long term growth as the inner middle ring suburbs of our main centre.   If you wish to take a calculated risk, than you need to avoid hot spotting and speculation. Stick to the pockets that not only have the growth drivers but have shown evidence of long term growth and stability. 5 - Parking Space Is Preferred Welcome to Sydney, where we spend most of our lives behind a steering wheel. Yes, we have higher density living and better public transport than we did 20 years ago but do not underestimate the impact a parking space has on the growth of your asset. You do not necessarily need a lock up garage but at the very least you should seek a property with a parking space.  A parking space will not only increase the value and long term growth potential of your asset but will also increase the chances of securing a tenant much quicker, reducing the vacancy in your property and as a result increasing long term cash flow.  6 - Sydney Airport and the Flight Path Unlike Melbourne where Tullamarine Airport is 23km from the CBD of Brisbane where the airport is 15km from the CBD, the domestic and international airport in Sydney is only 8km from the CBD and surrounded by residential suburbs. Hence why we have an airport curfew in Sydney which limits take offs and landings between 11pm and 6am.  We of course want to stick to the same strategy of buying an A grade asset in the inner middle rings of Sydney metro but nobody wants a property directly underneath the flight path. So make sure you do your due diligence, no different from ensuring the property has the right aspect and that it receives relevant sun, make sure you're not being impacted by the noise pollution of being directly under the flight path.  According to Sydney airport there are approx. 60,000 passenger aircraft movements per year, that works out to be an average of 164 aircraft movements per day. Given there is curfew between 11pm and 6am and flights are only operating for 17 hours per day that averages out to be 9.6 aircraft movements per hour or an aircraft movement every 6 minutes. Now I don't know about you but I don't want my dinner parties, BBQs and conversations interrupted every 6 minutes.  There is nothing wrong however with being under the flight path as long as you are not impacted by the noise pollution. Mindset Moment: The Secret to Living Longer The number one scientifically proven answer to living longer is relationships. These are three times as powerful as exercise. Being part of a community and work relationships count. Links and resources: Michael Yardney Metropole Metropole’s Sydney Office Rich Habits Poor Habits Property Update App Ahmad Imam Mark Twain Quotes: “An International investor coming back to Sydney after twenty years, just wouldn’t recognize it.” Michael Yardney “You get your investment returns in four ways capital growth, rental yields, manufactured capital growth or renovations, and tax benefits and depreciation.” Michael Yardney “Stop staring at your phone and go out and hug somebody.”  Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Do you want to know why the rich keep getting richer and how to become one of them? Well, today’s show is a little different and should give you some insights. It was part of the launch for my book Rich Habits Poor Habits which I wrote with Tom Corley. We launched the book in Australia last year and it has been doing really well. However we just recently launched in the US and this episode is an interview that Mark Creedon conducted with Tom and me. We all know the rich are getting richer and the poor are getting poorer. So Tom and I wrote this book to share what you can do to be like the rich and increase your wealth. Michael Yardney and Tom Corley are Interviewed by Mark Creedon Mark introduces the interview and shares how this book debunks myths and focuses on the habits of the wealthy. Bad money habits are the reason people don’t get out of the rat race. Tom shares how habits allow the brain to work less. The brain is looking for ways to do less work and be more efficient. Most life long habits are picked up by the age of nine from our parents. The rich keep getting richer because of what they heard and saw at home as a child. These habits start early in life. It also has to do with the people they associate with. Habits are malleable and can be changed. They are forged by the brain. Having keystone habits take root inside the brain. You only need to change one or two habits to completely transform your life. To turn your life around the first thing to do is recognize your situation and why you are there. Your actions are the result of the way you are thinking, so you have to change your thinking. The number one rich habit is the one that will have the largest impact on your life which is dream setting. This is a process of developing your future ideal life. Rich people have clarity of vision. Dream setting helps answer the question of what you want. This book is not just theory. It is from authors that are actually living it. This is an opportunity to tap into extensive experience and research. Links and resources: Michael Yardney Metropole Rich Habits Poor Habits Property Update App Mark Creedon Tom Corley Our favourite show quotes: “Today’s adults still have poor money habits ingrained in their subconscious. ” Michael Yardney “The rich are getting richer because of the they way they think, act, and the information they have.” Michael Yardney “Remove unproductive habits and replace them with good habits and hang around with people you want to be like.” Michael Yardney “If our parents are great success mentors we are going to have a really successful life.” Tom Corley Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

This is a special week for me. It’s my birthday week and I’m turning 65. Yet I’m still working, and I’m still having fun. In fact, I’m having more fun than I’ve had in a long time putting these podcasts together. I’ve had a successful life. I’ve also had some challenges in my life - most of them self created. Today, I am going to share with you some of the powerful beliefs of the mega successful people that have inspired me. Then Ahmad Imam answers a listener’s question - someone who doesn’t have enough money to buy an investment grade property, so she wants to buy off the plan. He explains why not to do this and what to do instead. 9 Powerful Beliefs of the Mega Successful They believe in their own abilities and their potential. They believe that they are in charge of their lives. They are the pilots of their lives not the passenger. Strategy is important, but execution is critical. They take action and execute over and over again. Successful people believe that opportunity is out there and have a mindset of abundance. The believe that they win through hard work and have the grit and determination to see things through. They believe that they can make tomorrow a better place. The past can be reviewed, but the future can be made better. They believe in doing things that no one else wants to do. To be different, you have to act different. Successful people believe in being the catalyst not the barrier to success. They connect with people they trust and care about and people will be there for them. They believe in giving back. Giving back is how mega successful people show their gratitude. You can never be wealthy without gratitude. I Can’t Afford an Investment Grade Property yet, so I’m Buying Off the Plan Buying off the plan is not a good investment strategy. It’s tempting for a beginning investor looking at the glossy brochure with depreciation allowances and rental guarantees that make you feel like a professional investor with a $10,000 discount. There are too many people with their fingers in the pie. You pay for the developers margin, the sales person’s commission GST and marketing budgets. As a result, you pay more than the true underlying value. Because there are so many uncertainties, you should be buying at a discount -  not a premium. It is also a risk for the banks so they won’t lend as much. There is a low “land to asset ratio”. You should try to get the highest land to asset ratio possible. Large developments don’t appeal to owner occupiers. There is a large percentage of overseas investors. Links and resources: Michael Yardney Metropole Property Update App Ahmad Imam The Science of Getting Rich Secrets of the Millionaire Mind Episode 1: What Makes an Investment Grade Property

The Sydney property boom is over. But what should an investor do? And what’s ahead for the Sydney property market? Is it too late to get in? Should you sell? Do you regret recently buying a property in Sydney or is it time to take advantage while others sit on the side lines? This is exactly what we are discussing in this bonus episode of the Michael Yardney podcast. Today, I’m joined by Ahmad Imam the senior property strategist at Metropole in Sydney, and we discuss what’s happening in the Sydney property market and what you should do about it. Today’s discussion includes: Sydney has had peak growth in the last four or five years. How the mixed messages in the media are what is scaring people. It’s common to get mixed messages as the market changes to a new phase of the cycle. When people are fearful they tend to hold back and procrastinate. The market is slowing, but growth has slowed from double digits to low levels of growth. How the restrictions by APRA on the financial industry have affected banks and as a result, there are tighter lending conditions and fewer interest only loans. Established home owners are  putting money into renovations rather than upgrading their homes. There is no property crash in sight. For a crash to happen, there would need to be high unemployment or high interest rates so people would have to sell, but there would be  no buyers. What is likely to happen is a  more regulated slow down. Demographics in the middle and inner ring suburbs will still drive certain segments of the property market. This is not the time to change your property your strategy, but it’s time to have realistic expectations. The importance of getting a good team and advisors around you. Links and resources: Michael Yardney Metropole Rich Habits Poor Habits Property Update App Ahmad Imam APRA Some favourite quotes: “Having to come up with a bigger deposit is making it harder to buy in Sydney.” Michael Yardney “Home buyers who were upgrading because the market was doing well have started to feel a little uncertain and are choosing to renovate rather than move.” Michael Yardney “For a crash to happen there would need to be high unemployment or high interest rates so people would have to sell, but there would be  no buyers.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Real estate is a game of finance with some properties thrown in the middle. And the finance landscape is changing in front of our eyes. So in today’s show I chat with finance strategist Andrew Mirams about the changing world of finance. Clearly there have been a lot of changes brought about by APRA in the last couple of years which have significantly changed the playing field for property investors, creating a lot of challenges. So listen in as finance strategist Andrew Mirams helps us work through some of the difficulties of getting financing today as well as explaining the big difference between serviceability and affordability. We also talk about what is happening with interest only loans, LVRs, and how friendly the banks are, along with how to work the banking system. And Andrew explains what to do if the bank changes your interest only loan, financing for expats, the self-employed, and self-managed super funds. Plus what we discuss what you should and shouldn’t be worried about with the changing financial landscape.   Key takeaways from today’s show - 12 Things Property Investors Need to Know About the Changing Financial Landscape Servicing restrictions have been applied and regulations are being put into place to slow down the property financing markets. The banks serviceability model takes into account how much you earn and how much you spend. Or more correctly how much you could spend, even if you don’t! Affordability – because of the current low interest rate environment, banks want to ensure you can afford your repayments if interest rates increase so they stress test your affordability. Interest only loans are still available, but they’re harder to come by. If your interest only loan period is up, you’ll need to reassess your options – maybe it’s time to swap banks. A property portfolio is about building your asset base and having good debt is not the worst thing in the world. The same rules apply for loan-to-value ratios as have for the last few years, but they are just a little bit tighter. Sometimes it makes sense to pay principal and interest if the payment differential is not great. If you are self-employed it’s harder to get loans today so having a specialist help you with financing to meet the bank's servicing criteria is a good idea. There is more scrutiny on expats. They often have to supply of evidence of their last 6-months income. The servicing requirements are quite restrictive. Banks have implemented restrictions lending to self-managed super funds buying property as they were viewed as distorting the market. Investors shouldn’t be worried just because the interest rates may go up a bit. There is enough regulation in place to make sure safe lending practices are me are met. Links and resources: Michael Yardney Metropole Rich Habits Poor Habits Property Update App Andrew Mirams Intuitive Finance APRA Quotes: “Real estate is a game of finance with some properties thrown in the middle.” Michael Yardney “If you can’t get more finance, you are going to have real challenges moving up the property ladder.” Michael Yardney “We are coming to a stage where double or even single digit capital growth isn’t assured so borrowing discipline is important.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Do real estate agents tell little white lies? And would you like to know how to predict the chance of your future success? Well...in today's Podcast I chat with George Raptis, Director of Metropole in Sydney and ask whether real estate agents tell white lies to make help make sales. We discuss whether agents bend the truth or are they just trying to do their job without being sued. I deal with real estate agents all the time and most are just regular people doing their very best in a very competitive market. I also discuss a really fascinating study that revolves around whether you can predict a child’s future success. Interestingly this study proves that you can predict future success, but it may not be in the way that you think. Today’s discussion points: Do real estate agents tell white lies to make a sale? Playing on your fear of losing out by saying that there are other interested buyers. Never feel pressured. Ask if the other party has signed a contract. “We don’t need to include that because the vendor will be fine with that.” There is no guarantee you’ll get the condition you want without a signed contract. “He told me so” is not a legal argument. Applying deadlines or time pressure. Maybe the agent has somewhere to go but more likely they are trying to rush you. Take all the time you need to make a reasonable decision. What if the agent says: “My client hasn’t told me what they want for their home.” Don’t believe them - agents know the price their clients want. Change your approach to get the information you want. “We are happy to present any offer prior to the auction.” Agents will entice you to test buyer interest. Experienced agents could use this information to set a higher reserve. “You don’t need to look over the contract.” Buyer beware of any financial agreement they sign. Have a solicitor look over all contracts. Mindset Message: This is the best predictor of future success: Grit is the passion and perseverance for long term goals. This is what set the “A” students apart from the other students. Grit is something that you can develop even if you haven’t shown it in the past. In order to succeed, you have to get up one more time and push past your boundaries. Links and resources: Michael Yardney Metropole George Raptis Angela Lee Duckworth Property Update App   Rich Habits Poor Habits Quotes: “Many estate agents just bend the truth a little bit to get you more excited about the property.” Michael Yardney “Sometimes you are going to fail and things are going to go wrong. You need to be one of those that gets out of your comfort zone and pushes yourself foreword.” Michael Yardney “You don’t need to be inherently intelligent or talented to succeed, you just need to have grit.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Successful property investors and successful business people are good negotiators. Today, we are going to teach you how to negotiate like a pro by speaking with a negotiating pro. Of course, the skill of negotiating is important in all facets of life. So today, I chat with George Raptis, Director of Metropole in Sydney, to share his professional negotiating tips. Some people have a natural talent for negotiation, but most learn this skill by practice and by negotiating many deals. There are a few rules that can help with negotiation. Rules for Negotiation   Everything is negotiable. You must remember that everything is potentially up for negotiation. Know what you want before negotiating. Always know your bottom line before getting into the nitty gritty of negotiation. Try not to offend the other party or the agent. Establish what is on their agenda and what is important for them. Build rapport especially in the beginning part of negotiation. Look beyond and find the hidden needs of the other party. Don’t assume you both have the same agenda. They may be similar, but the order may be different. Aim for a win/win negotiation by helping them get what they want while we get what we want. Treat negotiating as a game be involved but not overly invested. Never believe anyone else is entirely on your side trust yourself and your own instincts. Strive to be innocent. In negotiations smart is dumb and dumb is smart. Act like you know less than everyone else. Ask questions. Don’t be afraid to ask the other party for advice or more insight. Common mistakes made when negotiating: Being too emotional. Look objectively at the asset and make sure it fulfils its purpose. Not enough research. It is surprising and scary how many people overlook the important research phase of property investment. Not enough eggs in your basket. Having an additional property in your back pocket gives you investing power. Not submitting a written offer. Only a written offer is legally binding. Submitting a high offer. You don’t want to overpay, or show your hand too early. Sometimes being emotionally invested can lead to overpaying. Submitting a low offer. This can waste time, be insulting and result in a rejection. Not using a buyer’s agent. Trying to do it all on your own and not seeking professional advice is one of the biggest mistakes that you can make. Links and resources: Michael Yardney Metropole George Raptis Metropole Director, Sydney Quotes: “Those who are successful in property investment know how to negotiate.” Michael Yardney “Most people think the final deal goes to the highest bidder, but it often goes to the best negotiator. ” Michael Yardney “There are ways of getting what you want without offending the other party or making them feel like they lost.” Michael Yardney Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes. You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.