[Podcast] Sorry, Owning 50 Properties is Almost Impossible Now with Daniel Gold

When I wrote the first edition of my book How To Grow A Multi-Million Dollar Property Portfolio – in your spare time, way back in 2006, it was outsold by another author who promised the secret to going from 0 to 230 properties in three and a half years.

Subsequently, the same author wrote another book, 0 to 260 properties in seven years.My Podcast 220 Can't Buy 50 Properties

Now who wouldn’t want to be able to achieve that?

But the question is, is that realistic?

And the answer is – No.

And the author didn’t own that number of properties either.

He was using a form of options financing that is  now illegal (not that I’m suggesting he did anything illegal at the time.)

Anyway, there are still people out there claiming that you can build significant property portfolios in a short amount of time.

But my guest today, Daniel Gold, who’s a finance broker, will explain why owning 50 properties is virtually impossible today.

Now clearly, it’s not how many properties you own that’s important.

More important is the size of your asset base and how hard your money’s working for you.

I’d rather own one shopping center than 50 properties in regional Australia.

When we dug into the latest Australian tax office data that showed how many property investors were in Australia and how much they owned, the statistics were telling.

Most property owners never get past their first or second property.

Less than one percent of all property investors owned 6 or more properties.

That’s it.

In today’s conversation, I’ll show why it’s really hard to grow a portfolio of 50 properties.

Then, after my conversation with Daniel Gold, I’ll share a mindset message with you.

Why is it harder to own 50 properties now?

  • The credit environment is now completely different from what it was 10 years ago Property Price
  • This is largely due to the National Consumer Credit Protection Act 2009
  • The NCCP changed the way banks assess rental income and expenses
  • Most banks are discounting your rental income by 20-30%
  • The bank assumes that interest-only commitment is a principle and interest commitment
  • Banks buffer up the interest rate by as much as 2.5% more than the actual rate
  • You need more cash flow to hold onto your properties than you did in the old days
  • Right now, a cash-flow neutral or even cash-flow positive property will hinder new borrowing in some way
  • Everyone has a borrowing or credit ceiling

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

Daniel Gold, director Long Property

Daniel Gold’s article –  Sorry – owning 50 properties is near impossible now

Some of our favourite quotes from the show:

“I guess the reason behind this is, some people were lent a bit too much money, they got a bit ahead of themselves and got themselves into financial trouble.” – Michael Yardney House Model On Top Of Stack Of Money As Growth Of Mortgage Credit, Concept Of Property Management. Invesment And Risk Management.

“You’ve got no choice at the moment; the banks are actually forcing us to become good money managers.” – Michael Yardney

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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


'[Podcast] Sorry, Owning 50 Properties is Almost Impossible Now with Daniel Gold' have 2 comments

    Avatar

    November 6, 2020 Leigh

    You are obviously referring to Steve McKnights book 0 to 260 properties,he has always sold his courses on the platform that negative gearing is the worst strategy for owning properties and positive cash flow is safer,especially when interest rates increase.

    Reply

      Michael Yardney

      November 6, 2020 Michael Yardney

      Imterstingly Steve McKnight changed his property investing strategy in his 3rd book

      Reply


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