Topics covered today:
1 – Turn yourself into a property pro
- Went to a live event, Modern Wisdom with Chris Williamson. While it mostly targets creatives and artists, some of the messaging hit home.
- Property investment is a business, in effect, and you should aim to treat it accordingly.
- Different personality types.
- But, should still take a professional approach to mapping out your investment strategy for the decade ahead at least.
- What does this mean in practice: A 10-year property plan with balance sheet and P&L
- Some of my most successful clients over the past decade have included those who take massive action, and those who are really across their strategy and the cashflows etc.
2 – Book and call with a broker or lending professional
- Property is a game of finance with houses in the middle.
- We’ve been through a very unusual period for lending.
- Interest rates fell to unprecedented lows and have now rebounded to contractionary settings.
- Many borrowers are paying more than they need to as banks aim to claw back returns.
- Lending assessment buffers are tight but this doesn’t always apply to refinancing.
- Think a decade ahead and get buffers/offsets in place.
- Need to have a strategy which makes you unbreakable.
3 – Think in decade chunks
- Media commentary is now daily, focus is on clicks.
- But a full property cycle might take 7 to 10 years to play through.
- What happens over the course of a week probably has very little bearing on the prospects for a property investment over a decade time horizon.
- Our key investing years might be, for most people, between the ages of 25 and 65, so about 3 or decades.
- Could be 4 to 6 full property cycles, if not more if you invest in different cities, states, or countries.
- If you aim to invest for 20, 30, 40 years or longer, then there will be summer and winter seasons. High and low interest inflation, high and low interest rates, undersupply and overbuilding, high and low vacancy rates.
- So you need to think about long-term fundamentals.
4 – Wrap
It’s an interesting time for property investment. In 2025 we will have high population growth, a chronic housing shortage and falling interest rates. All good fundamentals for property. Yet, as with every decade, there will be those who succeed and those who fail to progress as they hoped. The best way to ensure you’re in the former group and not the latter is by taking a more professional approach to your investing to managing risk, and take a sensible approach for the decade ahead, with the appropriate buffers in place.
