I recall a conversation I had with a lovely industry peer. He has been a Real Estate Agent for longer than I have been alive. He has seen market cycles, areas undergo rapid gentrification and he's seen the Great Australian Dream change from the 1970's to where it is today. One thing that he often regrets was selling good property. At the time, he was certain his gain had been sizeable enough to counteract the stamp duty, purchase costs, selling fees and Capital Gains Tax. But looking back, banking that gain was a mistake. If he'd held even just four of those assets he'd have found himself in a different position today.
Market cycles
do exist, but timing them is very difficult. No amount of data scrutiny and demographic change analysis can properly predict with accuracy when it is time to buy or sell. Unprecedented events, natural disasters and policy changes don't always give us warning. I believe in
cashflow investing principles; where investors target the
strongest capital growth assets that their cashflow surplus will
allow. And then they let the market do it's thing.
They hold for the long term.
The recent APRA changes most certainly will create a change to our investing landscape. Some investors will benefit from the changes, while others will find that their plans need to dramatically change. An industry colleague wrote a fantastic explanation of the investment lending changes just last week in his
newsletter. My recent interviews with Smart Property shed light on what sort of
changes I see in store for the market as a result of the increased interest rates tighter lending constraints. For those investors who have existing equity, the coming months are potentially advantageous months to invest given the investor pool will be smaller and buyer competition will be diluted as Spring listings emerge.
Some of our
media interviews and articles this month centred around the new quarterly data released.
Hotspot suburb myths were addressed and
First Home Buyer areas were canvassed.
I was prompted to write about
unreliable data sources this month after three investors in one week suggested that they had previously missed out on property at auction based on an online portal algorithm they'd not questioned. Due diligence is one thing, but
understanding what the data is based on and where it comes from is critical.
And for those investors who appreciate having a friend to lean on for moral support - or someone to help them with their inspections, it's important to select the right support person. My article addresses the
five most emotional mistakes which investors make; the fifth mistake relating to having the
wrong support person.
The three case studies below are just some of our favourite July acquisitions for our clients. Our youngest investor so far bought his first investment property at the age of 22. A fabulous repeat client secured an impressive Victorian cottage on 850 sqm and will commence her development dream in the coming months, and two savvy new investors secured their 50's cream brick renovator for just $471,000.
As our business turns ONE this week we'd like to thank all of our wonderful supporters, valued clients and industry friends who have been giving us encouragement all the way along. It's been a truly exciting year!
