Here’s how to invest in property like the pros

I was having my hair cut the other day when Joseph my barber said, “Michael – I’m going to get into property investing and I’m going to make a fortune because I’ve learned how to invest like the pros!” piggy bank save mortgage house property gold loan deposit

Each time I visit Joseph the conversation seems to revolve around property, but when I heard him say he learned how the pros do it I was concerned.

I know Joseph has been reading every property book he could get his hands on, listened to all the podcasts and watched all the free YouTube videos.

I also know that while Joseph enjoys his job, he’s sick of the rat race and trading his time for dollars.

He is looking for a level of financial freedom and told me he feels he missed out on the last property boom and wants to make up for lost time.

He wants to get rich quick.

In the past when we’ve discussed property, Joseph was scared to take on more debt and get into the market.

Instead he paid down the mortgage on his home.

Now while he has the “security” of minimal debt on his home, he feels he has to catch up with many of his friends who took the plunge into property years ago and now own one or two investment properties and are slowly working their way out of the rat race.

When our property markets turned the corner last year I recommended Joseph use the equity in his home to get into property investment, but at the time all the property pessimists in the media held him back.

But now armed with all his newfound knowledge, he was feeling confident enough to finally take the plunge into property.

So when Joseph told me he knows how to invest like the pros, I had to ask –  “OK – how are you going to do it?”

“Easy” he said. “I received this email and signed up for a course.”

Then he pulled up the email that attracted his attention on his iPad.

It promised the ability to control millions of dollars worth of property with none of your own money and bypassing the banks.27958551_l

It also explained how the course presenter had made hundreds of thousands of dollars in seven days.

At that point I felt sorry for Joseph and for the thousands of novice (and some experienced) property investors who will be taken by the new breed of property spruikers who are once again out in force.

Sure the promises sound enticing…

The opportunity of getting a life-altering fortune overnight by barely tapping the easy button as you breeze by en-route to your deck chair on the beach.

But why seven days?

Why not seven hours? Or seven minutes?

Of course I am being sarcastic!

You can’t become wealthy in seven days.

You probably couldn’t even read the course material in seven days. Financial Freedom steps

Just look at some of the ads: “We’ll teach you how to buy a property to renovate and sell for a profit – a great replacement for your job.”

Yet they don’t explain how after paying tax and GST on the sale and stamp duty on your next property you are likely to be left with very little, if any profit.

Then there’s a course that teaches you how to buy properties with options.

Nothing or very little down today and own a property in 5 years time.

The problem is; this nonsense that you should expect childishly simple, microwave instant solutions to complex opportunities and when you don’t find them in one place, you rush off after the next pretender peddling it, is what stops the average Australian ever becoming wealthy through property investment.

The idea of instant, simple and easy has risen from being laughed at and ridiculed, to being the expectation and entitlement of a new generation of investors.

Here is what the real pros know…

You can’t create wealth through property overnight, but you can certainly become very rich in the medium to long term by knuckling down and seriously applying yourself in a dedicated, disciplined, persistent way.

You get there by following a proven system and by having a safe property and finance strategy.

You then implement this by buying the right property, in the right location, at the right price and holding it for the long term. location map house suburb area find

Not by adding hot water to a packet of magic beans and counting to seven.

Yes you can and should accelerate the process by learning the strategies of value adding through renovations and development, but you can’t skip the fundamental process.

While property spruikers went quiet during the real estate downturn, unfortunately the new property cycle is bringing out a fresh group of “property pretenders”.

There are now property “experts” out there selling advice and courses despite never having built their own property portfolios.

This makes it timely to remind readers that seminars promising easy wealth through property have all too often led to financial ruin.

It’s just the cycle repeating itself.

I remember when I first conducted property education seminars about 20 years ago I had to compete with the unrealistic promises of Henry Kaye who caused 13,000 consumers to lose around $60 million after attending his seminars.

To be clear and reconcile my position…

I had been conducting educational seminars for around 20 years until Coronavirus stopped live seminars – now I’m teaching through my podcasts, videos and webinars, but I don’t have any properties for sale at the back of the room and I’m not paid to make a particular property developer’s project look favourable.

And I don’t, and never have, promised instant riches.  

Sure I “sell” the services of the team of property professionals at Metropole but they are independent and unbiased and that’s an important differentiatingProperty-Investment-Checklist-300x199tiating factor. 

If you are going to listen to someone’s advice make sure it is unbiased and not self-serving.

Be even more cautious if people are willing to offer advice for free and if it sounds too good to be true it most likely is.

Making things worse today is the Internet and the mindset it has produced, which puts born-yesterday pretenders and academic theorists on even footing with long established experts who have painstakingly amassed their knowledge and have proven it over time in the real world.

Some are just in too much of a hurry

What has happened is that in their haste to hitch on to this new property boom, many beginning investors have chosen to devalue “credibility” in favour of “believability.”

Let me explain the difference….

Credibility requires education, experience, track record and proof of value – all things produced by an investment in time.

On the other hand, believability requires only the ability to create belief – and that’s so much easier to do today with a fancy website and a glossy brochure.

All this sounds too good to be true doesn’t it?

Of course it does!

So what can Joseph and other property investors learn from what happened in previous property cycles? property cycle

Or will they be doomed to repeat it?

My suggestion is to educate yourself and become financially fluent, but be careful who you learn from.

As I’ve already explained; find a credible source, not someone with incredible promises.

This will allow you to be in control of your own financial destiny.

Of course this doesn’t mean you should do it on your own.

To become a successful investor you will need to surround yourself with a team of independent and unbiased professionals – a team of people who are known, proven and trusted.

Then go ahead and take advantage of the new property cycle, because the future is bright for those who invest sensibly in property.

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on in 2021

Metropole

If you’re wanting to take advantage of the new property wave you are not alone, but now more than ever careful property planning and selection is critical.

You can trust the team at Metropole to provide you with direction, guidance and results.

In “interesting” times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3.5 Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.
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Michael Yardney

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


'Here’s how to invest in property like the pros' have 15 comments

    Avatar

    January 12, 2021 Al

    Hey Michael,

    Love the blog!
    Am considering building on a ~300m2 block of land in Bundoora (near La Trobe uni and the tram line). My dad is soon-to-be-retired builder and lives in the area, but I also think it is slowly starting to gentrify.

    Do you think this would be a good investment? Or is Bundoora not on your radar!

    Cheers! Al

    Reply

      Michael Yardney

      January 12, 2021 Michael Yardney

      AI, yes Bundarra is slowly changing, but 300m2 is a very small block – Is this for your home or an investment?

      Reply

    Avatar

    January 12, 2021 Tore R

    Hi Michael,
    Your Blog about “Here’s how to invest in property like the pros” is sad but true. I was also taken by so called spruikers, you listen to their videos, comment and then get a call from a representative (salesmen) and not them. The interesting thing is when you hear a young (30 – 40 year old) property enthusiast whom has made millions in property wanting to sell training courses and when I ask why they do that instead of living the life travelling the world on exotic beaches like in their pics, they all say they want to give back after only being in the game for only 10 year. Now, It is sad that people will take advantage of “desperate” people wanting to escape the Rat Race. This article makes sense and what you do with Metopole well, all experience investors have some what of a income source, so, if you did profit from it well so be it. Its a fee for service and it help time poor people a start in the game. But it is comforting to say that as a reader I believe you that it takes a long time to produce a profitable portfolio because you have been in the game for a bit.
    I just hope we can identify these spruikers and name and shame them for what they are for because taking advantage of hard earning Australians and setting the back in life for a quick profit is not what we (Australia) are about.

    Reply

      Michael Yardney

      January 12, 2021 Michael Yardney

      Thanks for your comment Tore, we’ve all made mistakes – the important thing is to learn from them. I know I’ve made more than my share of mistakes and was taken by a spruiker very early on in my investment career

      Reply

    Avatar

    January 14, 2014 Caleb

    There are definitely good opportunities in real estate investment.

    Reply

    Avatar

    November 22, 2013 Pece Klasevski

    Hi Michael

    Long time reader, first time commenter.

    Thanks for writing this article. It has re-inforced my beliefs and goals in regards to Property Investment. Having started in 2008 at age 23 and now having a sizeable portfolio, it’s articles like this that help re-inforce the investment goals I have set myself.

    Reply

    Avatar

    November 22, 2013 Kelvin Ong

    Hi Michael, thank you for your article. However, I noticed that your blog is mainly for Australian. Do you have any articles for foreigner who would like to invest in Melbourne but do not reside in Australia?

    Reply

    Avatar

    November 22, 2013 Thisbe

    Michael.
    Your article of the sad story of ”How to invest like a pro”‘ is true.
    Beginners are stormed with strange ideas in those free property seminars.

    I have a question and hope you can help.
    Since the Melb property price has risen so much, would you please share your view for
    people has limited capital, want to invest in good capital growth area
    for the long haul for properties like house, villa, townhouse
    (not high rise or medium intensive built units).
    Thank you so much.
    Wishing you success.

    Reply

      Michael Yardney

      November 22, 2013 Michael Yardney

      Thisbe
      You’re right the Melbourne market has moved on, but overall values are just back to where they were in late 2010.
      I agree buying an established apartment in the inner or middle ring suburbs is the way to go for beginning investors and there are still some good buys in selected Melbourne inner northern and western suburbs where the price point is considerably less than in the eastern and bayside suburbs.

      And you can make it even easier on your budget if you buy a 1 bedroom apartment – they make great investments, just make sure the size is a minimum of 50sq.mt of living space

      Reply

    Avatar

    November 22, 2013 Gregory James

    Thanks, Michael, I believe that reality articles like these can only enhance your personal reputation in comparison with the fly-by-nighters. Although I cannot claim to be a property success story yet, I am steadily and slowly developing my own educartion, which did include consideration back in 2007 of a few of the strategies suggested by the spruikers. At the risk of sounding conceited, their methods and materials were quickly relegated into the ‘too good to be true’ basket, even by me back then, and I wrote them all off as a joke. Around this time I also came across yourself and Margaret Lomas, who instantly oozed experience and credibility … as well as independence. I don’t think it is too hard to discover good advice and to weed out the bad – you just need to be a bit sensible and resist those urges of expectation and entitlement that you mentioned. The sensible young ones will be ok; the senseless ones will be their prey and end up poor and unhappy…

    Reply

      Michael Yardney

      November 22, 2013 Michael Yardney

      Thanks for the kind words Greg
      I also speak from experience having been sucked in to a get rich quick scheme when I was young. Yes it sounded to good to be true then, but I was in a hurry to get rich. That lesson cost me $5,000 in the late 70’s – that would have been the deposit for another property. It wasn’t enough money to break me, but it was a very expensive lesson (boy did it bruise my ego) and I sure learned a lot

      Reply

    Avatar

    November 22, 2013 Andrew

    I enjoy reading your blogs, but I find it interesting that on the side of this page is an add for a company that regularly spruiks “pay off your home in five years”, “retire with a passive income of $100,000.00 per year”. Now maybe it’s just Google throwing these pages up, maybe not.

    Reply

      Michael Yardney

      November 22, 2013 Michael Yardney

      Thanks for the kind words Andrew
      You are right Google spits out the ads not me – they provide a little “pocket money” for us as maintaining this blog is an expensive excercise

      Reply

    Avatar

    November 22, 2013 Gail H

    Thanks for the lesson in reality Michael
    I know it has taken me over 20 years to build avery substantial property portfolio, plus lots of hard work, saving, discipline and a few failures along the way.
    Yet many young people seem jealous of this and want similar results overnight. They’ll learn the hard way that if it sounds too good to be true it is!

    Reply

      Michael Yardney

      November 22, 2013 Michael Yardney

      Gail
      Thanks for the comment – Warren Buffet said it well: Wealth is the transfer of money form the impatient to the patient

      Reply


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