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!”
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.
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.
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.
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 differentiatingtiating 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?
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
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:
- 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
- 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.
- Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
- 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.
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.