In our weekly Real Estate Talk shows I’ve been running a series of interviews with leading experts asking: “the best and worst advice you’ve ever been given.”
Read the transcript here:
Kevin Turner: What’s the worst advice you’ve ever been given in the arena of property investment?
Michael Yardney: Early in the piece it was suggested to me that property investment is easy.
Clearly that’s wrong, because most property investors fail.
Kevin Turner: How did this relate to you?
Michael Yardney: In the early days, I didn’t understand the benefits of finding a good mentor, someone who would guid me and pointed me in the right direction.
I thought I’d try and do it all myself, but when you look at the facts, they suggest that about 50% of those who get into real estate investment sell up their properties the first 5 years.
Of those who do stay in property, most never get past their first or second property.
However, over the years, I’ve found that property investment is simple.
It’s not easy and that’s not really a play on words.
Kevin Turner: How do we prevent ourselves from failing then?
Michael Yardney: It’s simple if you follow a proven strategy.
If you do, and if you find a mentor, somebody who’s already achieved what you want to achieve, and follow their footsteps, then it works.
I’ve put together a 5 stranded strategic approach that helps investors avoid the common mistakes and ensures I buy properties that outperform the market averages.
Kevin Turner: There’s a lesson in there too about selecting a mentor.
Michael, what are your tips on finding a really good mentor?
Find somebody who’s achieved what you wanted to achieve and kept it in the long-term.
Michael Yardney: When I realised that I didn’t have to do it all myself, I didn’t have to reinvent the wheel, that I could stand on the shoulders of somebody who had already achieved that, then it got me going much better, much faster, and much more safely.
Find someone who will challenge you and inspire you.
The problem at the moment is that there are so many people putting themselves out there suggesting that they are mentors, when they haven’t done the hard yards themselves.
You should be prepared to pay for a good mentor, but make sure that if they do mentor you, they’re not selling to you, that they’re unbiased.
Kevin Turner: Is it also important to make sure you don’t pick a mentor who necessarily has your same point of view, because you feel comfortable about that, someone who can challenge you, do you think?
Michael Yardney: A mentor should be having some transformational conversations with you and should take you out of your comfort zone.
Kevin Turner: Okay, so that’s the worst advice you’ve received.
What about the best advice?
Michael Yardney: I guess the best advice I learned, and it took me a while to realise it, is that you should really treat property investment like a business.
Over the years, I’ve seen a small group of investors, those who treat their property investments like a business, become very, very rich by growing multi-million dollar property portfolios.
To do that, they have a system in place.
They get the right finance.
They set up the right ownership structures.
They get the right asset protection for their assets.
They know how to legally use the tax and legal system to protect themselves.
They hold themselves accountable and regularly review their portfolios and they also do is have a good team around them.
They’re not a one-man business.
Kevin Turner: I know in your case you do treat it very seriously.
It is a business for you.
At what point of your career or life did you decide that it was going to become a full-time career for you?
Michael Yardney: It doesn’t have to be a full-time business.
That’s the great thing about this.
It can be your business on the side while you have a full-time job, and you slowly build your property portfolio, your property business, one property at a time.
By calling it a business, I’m saying you treat it in a business like way with a system to make it reproducible and with accountability.
This means you’ve got to understand the world of money, finance, real estate, become financially fluent.
Because if you were going to invest $500,000 or $600,000 into the Gloria Jean coffee shop down the road, boy you’d be doing all the homework and due diligence and understanding what’s involved.
You’ve got to treat property the same way.
Not emotionally, not because you like where it is or the color of the property.
Kevin Turner: There you go.
The great lessons from Michael Yardney.
Michael, thanks for your time.
Michael Yardney: My pleasure, Kevin.
If you don’t already do so, please subscribe to Real Estate Talk by clicking here.
We’re not just a weekly podcast – we regularly update our site with audios, videos and articles from Australia’s leading property experts.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.