[Podcast] 19 Brutal Truths about Property Investment That No One Else Will Tell You with Brett Warren

In today’s episode, I’m not holding back.

I’m going to tell you some brutal truths about property investing.

That includes some of the things that can go wrong.

Some of the frustrations of being a property investor, and some of how slick marketing can lead you astray.

Stick with me, though, because it's not all negative.

Brett Warren, National Director of Metropole, joins me to help you understand what could go wrong to ensure you know what to avoid so things don’t go wrong.

That way, you can enjoy the success a small group of successful property investors enjoy.

Understanding the Hard Property Market Truths

My conversation with Brett today revolves around debunking common myths and establishing a long-term strategy for wealth creation through real estate.

Our aim isn’t to discourage you from investing, rather, we want to help investors understand the importance of patience, financial discipline, and strategic planning to achieve sustainable success in the property market.

• Property markets go through cycles.
  • This means there will be flat periods – sometimes long ones – as well as booms.
  • There can even be periods when your investment property’s value decreases.
  • There will also be booms.
    • Property investment is a long-range plan, not a way to make quick cash.
  • You need a significant amount of money to invest.
    • You do need money to invest in property. You hear about no-money-down plans that allow you to bypass banks, but these strategies tend to be risky.
    • You also need to have the financial discipline to save a deposit. Otherwise, you shouldn’t be borrowing money to invest in the first place.
  • It takes the average investor 30 years to become financially independent through property.
    • Often, investors spend the first 10 years making mistakes and learning from them
    • You can cut this time short by choosing the right mentors and the right properties and avoiding mistakes.
      • You’ll still need 2 or 3 property cycles to achieve wealth, however.
    • Saying "I'll be fearful when others are greedy, and I’ll be greedy when others are fearful" is much easier than doing it.
      • It’s easy to be optimistic during booms when you should be cautious, and pessimistic during downturns when you should be looking for opportunities to take advantage of
    • No one really knows what the property market will do in the short term.
      • That’s why forecasts are so often wrong.
      • However, sticking to the fundamentals and taking a long-term view remains a successful approach
    • Real estate investment is a game of finance with some properties thrown in the middle
      • You can buy time in the market by having financial buffers that can carry you through booms and downturns.
    • In property investment, boring is good
      • When investment is boring, you’re creating wealth you can use to do exciting things with your life.
      • Make your investing boring so the rest of your life can be exciting.
    • There is more free property information available today than ever before
      • The problem is, most of it is useless and much of it is harmful to your financial health.
    • Be careful who you listen to
      • The people who are willing to talk about their mistakes and how to avoid them are better sources of information than those selling get-rich-quick stories who won’t admit to their mistakes.
    • There is virtually no accountability for the many property gurus and their hot spot predictions.
      • Some areas are highly regulated, but this is not one of them.
      • Some commentators find that they can keep an audience simply by telling people what they want to hear, even if they’re consistently wrong.
    • The more comfortable an investment feels, the more likely you are to be taken by marketers or salespeople.
      • Just because the marketers or salespeople know your pain points and how to address them doesn’t mean they're honest or correct.
      • Be wary of anyone promising certain results.
    • The biggest difference between successful and unsuccessful property investors isn’t down to investment secrets.”
      • Instead, a wealth mindset and rich habits set successful investors apart.
    • If you have credit card debt, you’re not ready to be thinking about investing
      • You have to learn how to manage money and debt before taking on the debt involved in property investment.
    • Residential real estate is a high-growth, relatively low-yield investment, so don’t buy real estate for cash flow
    • Just because a property goes up in price doesn’t mean it’s a great investment
      • When the market is booming, almost any property can make money,
      • But an ordinary market is fragmented, and it’s important to buy the right property for consistent increases in value
    • There are 3 stages of your property investment journey.
      • An asset accumulation stage
      • A slow reduction of loan-to-value ratio
      • The ability to live off your “cash machine”
    • You should double the number of properties you think you'll need to provide cash flow for your retirement
      • That will bring you closer to what you really need
    • Tenants have more rights than landlords
      • There are things you simply can’t do with your property when you have tenants
      • There are also things tenants can do that you may not expect
    • There is no guarantee your property will go up in value
      • Even good properties don’t go up every year
      • The property market moves very slowly

Links and Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Brett Warren - National Director Metropole

Get a bundle of free reports and eBooks – www.PodcastBonus.com.au

Join Brett and me at Wealth Retreat – www.WealthRetreat.com.au

Some of our favourite quotes from the show:

“The reason people buy property is not to own the property, even though that's the fun and exciting bit for many beginning investors, but it's to have choices in life, to have a level of financial freedom, to have a cash machine.” – Michael Yardney

“Make your investing boring so that the rest of your life is exciting.” – Michael Yardney

“You see, extraordinary results are simply the macro results of tens, hundreds, or thousands of tiny daily actions.” – Michael Yardney

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