As they say - every cloud has a silver lining.
So, what can we take out of the last couple of years of Covid to make our futures better?
Well, in my last podcast I was chatting with Ken Raiss, Australia’s leading property tax strategist and director of the Metropole Wealth Advisory and we started to share 20 insights we’ve learned from Covid-19, in the hope that if you learn from these lessons you could be a better property investor, business person, and entrepreneur and that could be your silver lining.
There were so many things to discuss we didn’t get through the list, so in today show we’ll continue with our thoughts
Whether you are a beginning property investor or experienced professional, I’m sure there’ll be something in my chat with Ken that will be of benefit to you.
More Property Lessons
Don’t try and time the market
- You can’t time the market and investment-grade properties give more options even in periods of downturn
The importance of investing in resilient large cities.
- Look how well Melbourne survived over 200 days of lockdown and six lockdowns
- the fact that Melbourne has a range of different industries is proof of the resilience of investing in large cities
The importance of neighbourhood
- One thing I know many of our Melbourne friends have been missing in their “third place”. If our first place is home and our second place is work or the office, it has been the ability to go to a third place that was taken away. It may be a favorite café, a gym or a place of worship, and even local shops and pubs.
- So, all these features combined will be a major requirement and will create huge demand moving forward. These are all features of the 20-minute neighborhood, that will be built around convenience.
The importance of owning the right assets
- A-grade asset held their own during the downturn of 2020 Maintained value and or quickly clawed back any losses in both value and rents. Improved exit strategies and were easier to rent
- Moving forward A-grade homes and investment-grade properties will continue to outperform.
Houses outperformed apartments
- The gap between house prices and unit prices has never been so high
- Family-friendly apartments in medium and low-density complexes in lifestyle locations may make good investments for those on limited budgets
This cycle was led by home buyers
- Millennials are moving to the family formation stage of their lives and buying houses (moving out of apartments) many taking out the various grants - unfortunately many bought in c and d grade locations and won't get the benefit of capital growth many of these didn't have savings and good money management.
Disappearing middle class
- Look at the demographics of where you invest - look for affluence score of neighborhood
After this boom, we'll enter a 2-speed property market.
- Some have not been affected by coronavirus and others have not
- The neighbourhood is important - avoid dormitory suburbs
- don't be left with a secondary property at the end of this cycle - maybe it's time to swap
Immigration is not as important as we thought it may be
- Despite our borders being closed property value to keep rising, and this was mainly because of upgrade is taking advantage of low-interest rates and Covid changing our requirements for accommodation.
- This also suggests that in general and markets are slightly undersupplied and when the borders open will be significantly undersupplied and this will underpin property price growth
The social transformation of work from home
- Again reinforces the importance of neighbourhood
- Need bigger accommodation and a zoom room
The benefits of maintaining good health both physically and mentally and not being afraid to reach out
Building costs will rise
- Understand your real strengths particularly in business and learn to be flexible to leverage these skills
The power of being a good negotiator.
- Wage growth, business supply agreements, finding the low hanging fruit ie renegotiated interest rates on loans
Links and Resources:
Some of our favourite quotes from the show:
“If you want to become wealthy, you really have to use the power of compounding and leverage.” –Michael Yardney
“There’s a whole range of new gurus – that happens every time the property cycle moves on.” – Michael Yardney
“Unless you grow out to where it is, you end going back to where you are.” – Michael Yardney
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