We’re living in challenging, stressful times with a barrage of mixed messages about what’s ahead for our economy and our property markets.
Everything seems to be stacked against those looking to invest in property, falling values, rising interest rates, and various governments interfering, making it seem like we are losing control of our investments.
The bottom line is investing is getting harder.
It’s easy to see all the risks and problems now, but in five years, it’s likely we will look back and see lots of missed opportunities because the rear vision mirror is always clearer than the windscreen.
Another prediction I’d like to make for five years’ time is that 50% of those who buy an investment property in the next year or two will have sold up.
Why do I say this?
Because that’s what’s been happening for the last few decades.
And unfortunately, many who will have held onto their investment property won’t be owning an investment-grade property.
Meaning they won’t achieve the financial independence they’re looking for.
What can you do about this? How can you end up being in that small group of investors who own a substantial property portfolio?
That’s what I’m going to be asking leading financial advisor Stuart Weymss, in today’s show.
Currently, less than 1% of all property investors own six or more properties.
Now there’s nothing new about this, and as I said in the introduction, most property investors will fail to achieve the financial independence they’re looking for.
However, I believe if you plan and follow a proven formula and avoid the common mistakes investors make, there’s no reason why you can’t fall into that top 1% of investors
Leading independent financial advisor Stuart Wemyss, founder of Prosolution Private Clients, has recently written a number of insightful blogs that should help you down this path.
The argument of investing for cash flow the capital growth has been around for as long as I've been investing.
Now I recognize that most people get involved in property investment to eventually replace the personal exertion income and give them more choices in life, but is chasing positive cash flow really the best way to achieve this?
- You need to maximize your capital growth to build your asset base, while many investors seek to minimize their cash flow cost of holding the investment property.
- Focusing on income and you spend more on the building value
- The opportunity cost of focusing on income
- Many buyers’ agents are mistakenly conditioned to optimize income
- Growth first income second
We all pay a learning fee, sometimes to the market, but hopefully to our advisers to prevent us from making the common mistakes other investors make.
- Buyers’ agents buying outside of their domicile State
- Buying a development site without sufficient due diligence
- Buying newly (or not yet) constructed property
- Placing too much emphasis on rental income
- Not getting any advice
Links and Resources:
Stuart’s Blog - – Focusing on rental income cost you $1million in lost wealth
Some of our favorite quotes from the show:
“Residential real estate is basically a high-growth, relatively low-yield investment, and if you try to make it something different to that, you’re really bastardizing the asset class that it is.” – Michael Yardney
“Smart property investment is part art and part science, and you actually need both bits working hand-in-hand.” – Michael Yardney
“You can make a property development feasibility study say almost anything.” – Michael Yardney
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