People often ask me how do you make money in property?

There are many strategies that will create wealth through property. They always take time and patience.

To do it successfully, normally takes a certain amount of skill.

Unfortunately building that skill takes time, one way to fast track the skill process is to leverage off other people’s skills and learn from the process. Use someone else’s knowledge, someone who has already put in the time, made the mistakes and learned the lessons.

This is why we pay a tradesman to do a job we don’t have the skill to do. We don’t have the time or patience to learn the trade so we pay someone who has put in the time and the job is done correctly.

I have 3 pillars that I use consistently to make money in property.

They all compliment each other and feed from each other. I have learned over the years that using these strategies works for me and is a faster path to wealth creation than working 9-5.

It takes time to learn and i’ve made mistakes along the way but the journey has also taught me many lessons. Investing time in learning these skills has allowed me to step away from committing my time to a day job to earn an income.

The 3 pillars that I use to create  financial freedom are:

Pillar 1: Long term growth property

Pillar 2: High cashflow property

Pillar 3: Property Development

Pillar 1 builds your capital base over the long term. It bubbles away in the background, growing exponentially and as it fruits over time, you can harvest the equity and feed it into pillar 2 and 3.

Pillar 2 feeds your serviceability requirements. To borrow more money, the bank needs to see that you can service your loans. High cashflow assets like commercial property, regional residential etc. can keep your head above water. Too much of pillar 1 and the banks will eventually stop lending you money.

Pillar 3 feeds both pillar 1 and pillar 2. Small property developments such as renovation and subdivision, selling small lots of land, building townhouses all fast track your capital creation and allow you to buy more property or create cash to do more developments.

If you want any advice or help with these points, book a chat or drop me a message and I will be happy to help :) 

Book a chat here:
https://www.picktime.com/5babbdef-11c3-4be9-b1ee-6df949a66d04

Most negotiations are emotionally driven.

If a negotiation turns into a struggle of power, then at this point you have lost control of the negotiation.

Successful negotiation is about creating a win win situation. Part of the process is building trust, understanding the sellers motivations and meeting their needs whilst creating a desirable outcome for yourself.

Unfortunately when there’s money at stake then emotions are difficult to control.
The larger the perceived value of the investment at stake, the higher the emotional value and expectations.

This tends to cloud judgement and rational thinking.

How do you avoid these emotions costing you money or sabotaging your deal? One way to do this is by removing yourself, the emotional buyer from the equation and getting someone to negotiate on your behalf.

A buyers agent will always:

represent their clients best interests
Remain emotionally detached from the outcome
Be an emotional buffer between buyer and selling agent
Understand the negotiation process
Negotiating in a tough market like the one we have at the moment is a difficult task.
Knowing what price to go in with when there is no guide price, makes it difficult to determine which number is the right one that will win you the deal - without overpaying.

To do this successfully, you need to clearly understand what the value of the house is that you are bidding on.

You need to understand how the market has performed in recent weeks and months to gauge any price fluctuations. You need to have built a rapport with the agent.

Lastly, you need to ask the right questions at the right time to have as much information at hand arming you with the best chance of winning your property.
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Drop me a line if you have any questions!

There are a lot of moving parts when it comes to the decision of whether to buy an apartment or a house.

Firstly, not having a garden or a large costly house to maintain can save on costs. Although this can be offset by high strata fees which you would normally pay to maintain a pool, gym or lift.

Many investors get caught out by the facilities an apartment has to offer but don’t consider the ongoing costs of strata fees.

Apartments can offer a higher rental income in comparison to the value of the asset which can be attractive to a first time investor. Higher rental yields can keep your head above water and may be the saving grace if you come into financial hardship and need to decide between holding and selling. But all costs need to be considered to understand the true net income.

Location. Purchasing an apartment gives you the ability to get into a more expensive area where you may not be able to afford a house. Maybe a beach suburb or inner city suburb where the rental demand is high would typically be difficult for the average investor to purchase a house in gives the opportunity to capitalise on the location by purchasing an apartment in a prime area.

Considering supply and demand. When a new apartment building is constructed this adds a lot of supply to the market. Sometimes too much supply which can affect the values of surrounding apartments.

Check the pipeline of building approvals, is there a lot of land in the area zoned for units that developers can possibly turn into apartment blocks?

When buying a brand new apartment you are paying for the materials at a brand new price, which the builder has made his margin on and the developer has also made their profit on. From day one, the building starts to depreciate in value.

Ultimately, you need to consider your strategy. Most investors are focused on capital growth and the evidence is clear that houses achieve greater capital growth over time.
This is due to the old adage that land appreciates in value, where buildings depreciate in value.

In conclusion, if you decide to invest in an apartment then buy in a prime suburb in a prime location. Don’t buy a new apartment. Consider future supply.

Look for small buildings with under 20 units in the block that have character with a high demand and low vacancy rate and a high proportion of owner occupiers. Look for some sort of wow factor, views and courtyards are always winners.

Hit me up if you have any questions or need some advice on the next step in your investment journey.

Happy Investing!

​RBA: Predicting a 30% House Price Increase?
 
The Reserve Bank of Australia has forecast that house prices could jump by 30% over the next 3 years if the current low interest rates remain.
 
This prediction comes for an RBA report released under the Freedom of Information request putting the effect of ongoing low interest rates under the microscope.
 
What is the basis for this? It’s pretty simple economics.
 
Low interest rates equals low cost of debt, meaning that it’s cheaper to hold assets, causing an increased demand in assets, which in turn causes prices increases.
 
That’s the basics of it, although it gets more complicated than that. Many forces need to combine to create the perfect storm including market sentiment, which tops my list of why assets climb in value.
 
Have a look at Bitcoin. When people trust the market and believe that prices will rise, the prices sky rocket having a self fulfilling effect. When people lose trust in the market, the bottom falls out and values crash by up to 90% historically.
 
This is an extreme case to demonstrate the point but the same effect happens with real estate although to much less of an extreme. One of the main reasons being is that It’s difficult and costly to liquidate property, people tend to hold through the flat spots if they can afford it, which creates stability in the market.
 
You hear these boom/bust predictions all the time - boom suburb, hotspot, prices doubling in 5 years, prices crashing, housing collapse. To me it’s just noise to distract you from your ultimate goal.
 
According to the RBA using 30 years of data house prices increase over time at an average rate of 7.25% P.A. (although this trend is decreasing). If I can capitalise on a 30% price increase, then great, that will help me when my portfolio stagnates after the growth period but over a long period of time it all averages out.
 
You need to be in it for the long game.
 
If you gamble on short term games you are playing in the high risk arena and you could get burnt. Buy with a 15-20+ year outlook and the the odds will move with you.
 
If you play by the rules and take the correct steps, it’s difficult to fail.
 
Educate, work out your ‘why’, master your finances, formulate a strategy, build a team of professionals, research and accumulate the right properties, consolidate your portfolio and retire with freedom.
 
‘Book a Chat’ on my website or DM me if you need help with any of these steps or formulating a strategy. Hapy to answer any questions, I am here to help you achieve your goals.

One word. Leverage.

The reason I believe real estate can be the quickest way to generate wealth, is because the banks are willing to lend us up to 80-90% of the total asset value.

That's how confident they are in the safety of this asset class.

They don’t do that with shares or gold. This is because they see property as a secure long term investment.

If I want to buy a $1,000,000 house, the bank is willing to lend me $800,000 of the cost. This is tax free money!

If I had to work for $800,000 I’d need to earn around $1.3 million to pay for the taxes and this would take me years.

Instead, I only need to stump up $200k of my own money or better still, use the equity from another property.

This is why 3 out of the top 10 richest Australian’s have made their money from property.
Because they use leverage.

The same tools that created wealth for these guys are available to every Australian.
It’s not rocket science but it does take careful thought and skill.

These are the key points to being a successful investor:

- Educate yourself
- Create a clear goal
- Form a strategy
- Build a team to help you achieve your goals

88% of Australian property investors get stuck on their first investment property, mainly due to not taking the correct steps.
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Remember that property is a get rich slowly game.

Historically, real estate has been a stable and safe investment class.

Since 1974 Perth has seen steady growth over the years with only a couple of periods of retractions in price. These events are part of a normal market cycle and as you can see in the graph above supplied by REIWA, our last significant price correction was in 1989.

Following that event we saw steady to strong growth until 2008. We all know the story of flat to negative growth from that point.

Using history as a guide we know that after recessions we enter a period of strong growth.

I believe we are now entering that period which will be magnified by our extended period of price retraction since 2014/15.

Prices are now severely depressed and we are now entering a new cycle of growth with strong fundamentals including record low interest rates, high government spending and an improving economy.
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All indicators are pointing towards a strong recovery during 2021 and beyond.

Desirable school catchments have historically been a clear emotional driver for property price growth nationwide. 

Parents jostling for box seat to be included in school catchment zones creates demand which in turn, push up house prices.

The evidence is clear that proximity to schools are a major influence when buyers are considering to purchase their family home.

Investors wanting to capitalise on potential growth should keep an eye on suburbs within a desirable school catchment. Especially those suburbs that have a lower price point or are situated in overlapping catchment zones.

Top Perth schools such as Willetton SHS, Rossmoyne SHS, Churchlands Grammar and Hale School have been strong performers historically and have shown reslience in the downturn.

According to the Domain '2020 School Zones Report' Perth school zones featured in the national combined capital cities top ten performers with Como Primary School zone seeing a 36% increase to a median of $901,750.

Here at Rise Property Buyers, we undertake an alalysis of school catchments as one of the many factors that influence our decision on property selection when purchasing for our investors.

Feel free to contact us if you are considering a purchase whether it be for investment or your dream home.