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Should I Buy Now or Wait

8/6/2022

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Recently, I have heard a lot of people saying that they were going to hold off until the interest rates rise and house proces soften.

To me, this is an expensive gamble.

Firstly, the gambler is betting against the natural movement of the market.  Markets generally move upwards over time and have done in Australia for many years.

​Many factors influence a market to rise or fall over time but it’s normally a combination of factors working together to have an effect. Normally one factor of influence in isolation won’t have too much effect on the market.



In the 6 year period from 2002 to 2008 there were 22 increases in the interest rate from 6.5% to 9.5%. During this time, 6 out of the 8 capital cities doubled in price.

Perth having increased 147%. Admittedly, way more than it could handle but the fact still stands that interest rate rises have shown to have less effect in the past than the media would have you believe.



Sometimes it’s not as cut and dry as noting a citing a direct correlation between rate rises and house prices. Human emotion comes into play, which translates into market sentiment.  As well as affordability, which is the relationship between income, cost of debt and the current price of houses in a market.


The WA market is at an incredibly high level of affordability at the moment, with the median house price at around $527,000 (REIWA) compared to Sydney at $1.39m. Our average wages are slightly higher than in Sydney which paints a picture of the disparity of affordability between the two cities.


Predicting the market is a complex beast with many layers affecting the outcome. But I always advise my clients to stick with the fundamentals. Long term investing can be boring and the common sayings such as ‘time in the market rather than timing the market’ will always ring true in the long term.
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40% Government property ownership?

3/5/2022

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Why go halvesies buying a property with your mate when the government will pay for 40% of it?

Is this a solution?

Maybe? Probably not.

But who knows. I don’t think the government even knows how this could pan out.

Are they buying votes or is this a genuine solution to a growing problem of lack of affordable housing?

What I do know is, that when the government messes with the economy with schemes like this, it can backfire.

Think the building grants; the government throws some money at the building industry and all of the vacant land is snapped up. Builders become too busy, prices rise exponentially, builders go bust, people are stuck with blocks of land and can’t build their houses, people have built houses that are now worth less than what they have paid for them when they are handed the keys.

This isn’t all to do with the grants but it certainly hasn’t helped the situation.

This is such an interesting drawcard by the labor party, which has so many layers to explore. Personally, the government owning a 40% stake in the the property market and where that could end in 10-20 years, (50%, 80% ownership?) has a slight smell of communism in a pretty dress.
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Money Makes Money

22/2/2022

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​We were programmed to save money from a young age. In primary school we were given a little piggy bank to collect our coins ‘for a rainy day’.

We were taught how to save money, not how to make money. This saving mind set has been taken with us into adulthood. We constantly find ways to save our money, Woolworths points, fuel vouchers, EOFY sales.

We are taught how to minimise tax, not how to create wealth. School doesn’t teach you how to make money. We pull all the strings to reduce how much we pay in tax. We pay our accountant to minimise tax but we never pay anyone to teach us how to create income.

What happens when we minimise our tax? We pay less tax right? Great!

But now the bank won’t lend us money because our income is low. We have cut out our ability to MAKE money because we were too busy SAVING money.

I’m going to teach you three wise words that the face on the US $100 note, Benjamin Franklin, taught me:

Money Makes Money.

We borrow money from a lender, invest in assets using leverage and wait for the assets to grow in value and produce an income so we don’t have to work for it. To borrow money we need to prove to the bank that we have a strong income.

Much to my accountant’s disappointment, I don’t try very hard to minimise my income through tax deductions. I pay more tax, but now I can purchase that property that has since grown 30% in value.

I’m not saying go out there and pay notax, but if you are in the accumulation phase of your property journey, then talk to your broker, your accountant and your buyer’s agent about what you want to achieve financially and align your finances to allow you to achieve your goals.
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You see, money makes money. To become financially free you need a money making mindset, not a money saving mindset.

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Perth Boom & Bust?

14/1/2022

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I often hear on property forums or general market commentary about people advising not to invest  Perth as it is a boom or bust town, too reliant on iron ore.

Yes, it’s true that Perth was swept up in the largest historical iron ore boom we have seen.

As the boom slowed down, we saw the longest period of negative property price growth in history. This was an unusual event and one that we hope to never see again.

Looking historically at 60 years of Perth property price data (REWA) we’ve only seen 5 isolated years of negative growth before the boom of 2008. The worst year being 1961 of around -5%, then 1972, 1979, 1982 and 1991 all seeing less than 5% of negative growth.

Each of these periods were followed by solid periods of sustained capital growth, with 8 of those years being 20% or above and back in 1975, more than 40%. None were followed by long periods of negative growth.

If you look at the 10 year average price growth data over this 60 year period, the 10 year averages have been steady around 8-12% until things went a little crazy from 2004 and then of course we saw the correction from 2014 to 2019.

As always with statistical data you need to look further back than recent memory to get a true understanding of a market.

While all eyes are on the east coast with their historical record growth over the past few years, we need to look where the next opportunities are.

As the worlds greatest investor Warren Buffet once said “be fearful when others are greedy, and greedy when others are fearful” 
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What Even Is Money?!

30/11/2021

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When was the last time you held a $50 note in your hand? Unless you are renovating and paying your tradies cash, then probably quite a while ago.

These days, it’s just a digital number in your online bank account that goes up and down. Down when you spend it, up when you work for it.

The up part is directly proportional to the amount of time and energy you put into your job. So, you could say money is a measurement of energy, right?

That’s exactly what it is to me, a measurement of energy.

You can create ‘money traps’ to harness that energy and put it to use. Like you would a solar panel to harvest the suns energy or a wind turbine to catch the winds energy.

Property is one perfect example of a money trap. Once you set up a great investment property then it produces ‘energy’ without you having to spend any energy. That energy grows over time and increases exponentially.

Once you have accumulated enough energy from your money trap, you can use it for whatever you choose.

If you harness enough energy, then this is where the real power of the energy comes to life.

This is where you can begin to have the power to change people’s lives, starting with your own.

Imagine the feeling of walking into a children’s cancer ward and paying for the end of life wishes for all of the children in that ward. Or having enough money to build a new school for a village in a 3rd world country. This has been a dream of mine since travelling the world and visiting remote surfing destinations like the one in the photo above.

Were you told as a child that:

Money is the root of all evil
Money doesn’t grow on trees
You have to work hard for your money?

Then if you still repeat these words and hold onto these stories as your money mantra, then this is a money block and by holding onto this belief you will never be able to create enough money to build freedom for your family or pass on a legacy to your children.

These beliefs are a clear misunderstanding of how money works and is a belief centered around fear. You will never hear a philanthropist say ‘money is the root of all evil’ as they hand over millions of dollars to their favourite charity.

I mean, if you wake up every single day and pull yourself early out of bed to go to work and spend your entire day working, every weekday, for 46 weeks a year for 40 straight years, then you do place money at the top of your priorities list.

So, your new ‘money story’ is: Money can empower me to create freedom for myself, my family and anyone who I choose to help and share this energy with.

Your decisions can break the beliefs that the amount of money you earn is directly proportional to the amount of time and energy you put into a job. Create some money traps. If property interests you, then learn about property, understand how it can benefit your future and start the journey to set yourself up to be free from having to work for your money.
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As I always say, making money from property is a long term process, the best time to start is now, the second best time is tomorrow.
 

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How to Buy Property in a HOT Market

19/10/2021

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Wow, this market has definitely stepped up a gear since the end of winter!

I’m seeing frenzied home opens, offers WAY above asking, one property had 30 offers. Another selling in the $900’s sold for around $1.25m

So how do you buy in this market?

The first step is acceptance.

Understand that it’s a hot market and try not to get frustrated.

Frustration leads to irrational decisions. Keep a clear head and don’t get rattled.

You need to build relationships with the selling agents. Contact them regularly so you are at the top of their mind when a property gets listed.

Find out whether the seller would consider an early offer. Presenting your offer midweek may allow you to potentially close the deal before the 1st home open if the offer is at the right price.

Which leads me to my next point.

Accept that you may need to pay above asking price. You want to be slightly ahead of the market rather than constantly chasing it and end up paying more after you have reached the “I surrender, I’ll pay anything!!” stage.

Trust me this stage exists and I’ve seen it plenty of times recently.

Lets say you paid $10,000 over in February this year. Well the value of your property would be well and truly above that now and you saved yourself the pain of searching for months on end.

Be available. You need to be ready to pounce when the opportunities arise. Jump in your car and go and inspect during the week and try and close the deal.

You need to have your finger on the pulse.

Work your conditions. What are the sellers needs, do they want to rent back? Maybe a long settlement?

Dig for these pieces of information.

And finally, have your finances in order. See your broker and get pre-approval. Strong finance means a strong offer.

Searching for a house in this market can be a time consuming and draining process.

Reach out if you want some advice, always happy to chat 
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How Many Properties Do I Need to Own?

29/8/2021

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If your goal is financial freedom, then the straight answer is…More than one.

Owning only one property that you live in is potentially slowing your journey.

I’ll explain why.

Let’s say ‘John and Mary’ currently live in a $700,000 house and have a goal to work hard and upgrade to the neighbouring  suburb and buy a house worth around $1000,000.

The market moves 20% and their house goes up in value, they’re feeling pretty good right?

But realistically everything else around them has gone up in value at the same rate.

This is called inflation.

Now their $700,000 house has gone up to $840,000 and the house they planned to upgrade to in 5 years time, has gone from $1M to $1.2M.

So the upgrade gap has widened from $300k to $360k. Effectively, John and Mary have moved $60k further away from their goal.

So how do we stop falling behind inflation?

To move closer to your goal, you need to outpace or ‘outsmart’ the market. Accumulate carefully selected property assets that increase in value to bridge the gap between where you are now financially and where you want to be financially.

Understand that your home is not an income producing asset.

To repay your home debt requires your time and labour. If you stop working every single day to pay down your debt, then eventually you will have to sell your home because no one else will pay it off for you.

That sounds like a treadmill to me.

So how can you plan to get off the treadmill? Have a tenant that runs the race for you paying down your debt while your asset increases in value.

Then, rinse and repeat.

So what’s the next step?

You need a defined goal, a defined plan and strategy to achieve that goal and a professional team to help you implement the plan.

That’s the short of it. But there’s more detail.

As I always say, property is a long term game so the best time is to start now.

If you’re interested in learning more about how owning an investment property can help you achieve your goals, then feel free to reach out for a chat at anytimeHow many properties do I need to own?

If your goal is financial freedom, then the straight answer is…More than one.

Owning only one property that you live in is potentially slowing your journey.

I’ll explain why.

Let’s say ‘John and Mary’ currently live in a $700,000 house and have a goal to work hard and upgrade to the neighbouring  suburb and buy a house worth around $1000,000.

The market moves 20% and their house goes up in value, they’re feeling pretty good right?

But realistically everything else around them has gone up in value at the same rate.

This is called inflation.

Now their $700,000 house has gone up to $840,000 and the house they planned to upgrade to in 5 years time, has gone from $1M to $1.2M.

So the upgrade gap has widened from $300k to $360k. Effectively, John and Mary have moved $60k further away from their goal.

So how do we stop falling behind inflation?

To move closer to your goal, you need to outpace or ‘outsmart’ the market. Accumulate carefully selected property assets that increase in value to bridge the gap between where you are now financially and where you want to be financially.

Understand that your home is not an income producing asset.

To repay your home debt requires your time and labour. If you stop working every single day to pay down your debt, then eventually you will have to sell your home because no one else will pay it off for you.

That sounds like a treadmill to me.

So how can you plan to get off the treadmill? Have a tenant that runs the race for you paying down your debt while your asset increases in value.

Then, rinse and repeat.

So what’s the next step?

You need a defined goal, a defined plan and strategy to achieve that goal and a professional team to help you implement the plan.

That’s the short of it. But there’s more detail.

As I always say, property is a long term game so the best time is to start now.

If you’re interested in learning more about how owning an investment property can help you achieve your goals, then feel free to reach out for a chat at anytime
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TIPS on how to buy in a HOT market!

1/8/2021

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A lot of people are coming to me because they are continuously missing out on properties, tired of burning their time at home opens and property hunting or are just having trouble navigating the entire process.
 
There’s no denying it, the market is still hot and most properties that sell are leaving a wake of disappointed buyers back out in the market looking for the next property to bid on.
 
So, I thought I’d dish out some tips to help you if you are currently looking to buy or thinking about buying.
 
Get finance pre-approval
 
Before you step inside your first home open, you should be stepping inside a finance brokers office. You need understand your financial boundaries so you can confidently make offers knowing that you won’t lose the property in the case that your finance fails.
I’ve snapped up numerous properties where the initial buyer has failed finance, other buyers have moved on and my finance ready client has won the deal. Don’t be that guy who misses out.
 
Be ready to pull the trigger
 
You need to know the market. Look at what similar properties have been selling for in past so when you are placing your offer you know what the true market value. Many buyers are overpaying in this market and many buyers are missing out as their offer is falling short of the mark due to lack of knowledge.
 
Work with the agent, not against them
 
The agent holds the key in the whole transaction and your goal is to have them hand you the keys. Don’t play hardball, it doesn’t work in this market. Find out the sellers motivation and build your terms and conditions to meet with their expectations. They might want a longer settlement or maybe they want to rent back until they find a house they can move into. You need to create a win win situation for all parties.
 
Build relationships
 
Get to know the agents in the area you want to purchase in. Build a connection, so when they do an appraisal on a property that suits you, they are calling you straight away.
 
Get in early
 
If there is an opportunity to inspect a house early, then jump onto it.
Most homes will go through the home open cycle but some agents don’t want the hassle of dealing with opens and will be keen to close the deal early if the price is right and the seller is also willing.
 
You need to have your finger on the pulse and be flexible to get the deal done. You need time to build relationships and time to research and educate yourself  on the market. If you don’t have the time or patience for this, then maybe you are better off outsourcing the entire process to a Buyers Agent. An industry professional. Someone who is working full time on the search mission and has already built up the connections from years of searching.
 
Reach out if you need some help or want to have a chat about anything property!
 

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How Do You Make Money In Property?

20/7/2021

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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
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Will house prices fall?

7/7/2021

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There are multiple factors that affect house price increases.

One key factor we need to look at is, who are the buyers driving the current market. The current upswing in house prices is supported by the fact that owner occupiers are driving the sales, not investors.

Current Investor activity is well below the 10 year average. For example, W.A. historically sees around 26% of property transactions going to investors, we are currently sitting at around 16% of investor transactions. 

All other states are seeing the same trend, although investor activity has seen recent increases.

What does this mean? 

When a market sees a high influx of investors this can create a vulnerable market. When there is a change in the economic climate, this may trigger a sell off amongst investors which in turn creates an oversupply and subsequently, a fall in house prices.

Owner occupiers tend to hold property through tough times which creates a support for house prices and reduce fluctuations in the market.

Predicting the future of the market is complex and there are many factors that affect the outcome. We can look at various metrics, leading indicators and lending policy amongst many other things that may give us some foresight to what the future has in store. 

At this stage I believe the current house price increases still have some track to run in many markets and also hold a strong support base. 
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Let’s just say we are safe as houses :)

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    Written by Adam Nyeholt

    The Founder and Director of Rise Property Buyers, passionate property investor and lifestyle designer.
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