Episode 17 of the Property Investing Journey brings us Part 2 of the two part episode with Simon Pressley on selecting the best growth locations. This conversation focusses on what investors should be doing when they’re looking to invest, and examines some common misconceptions when it comes to buying more expensive properties and investing in the local market.
As Managing Director of Propertyology and only the third person to be inducted into the Australian real estate hall of fame in 2015, there’s no-one better to talk to the benefits of property research and truly understanding the market, prior to investing. Simon and his team spend their days studying the activity of Australian capital cities and each of 177 regional cities and towns. In this podcast Simon turns his attention to what investors should aim to do when looking for where to invest their hard earned cash.
With the perspective that most property investors know more about shares than they do about property markets, Simon talks to why investors should treat property as they would any other financial investment. Mike and Simon drill down into why city selection is so important and how challenging it is for an individual investor to be across all of the data on their own.
Mike queries Simon on his premise that it’s better to invest in smaller properties across different markets despite the possibility of higher transaction costs, and Simon shares his threshold for property investment. Wrapping up the two part series with Simon, this podcast is not to be missed by anyone with an appetite for better property returns.
Here at MCG, we are passionate about creating a forum and education series for property owners and investors. We do depreciation differently, and offer a set rate for Replacement Cost Estimate reports. A first in the industry. Join our clients saving more on their tax today https://www.mcgqs.com.au/
Episode 17 of the Property Investing Journey brings us Part 2 of the two part episode with Simon Pressley on selecting the best growth locations. This conversation focusses on what investors should be doing when they’re looking to invest, and examines some common misconceptions when it comes to buying more expensive properties and investing in the local market. Wrapping up the two part series with Simon, this podcast is not to be missed by anyone with an appetite for better property returns.
What we cover in this episode
- Treating property as a financial instrument
- Taking the emotion out of property selection
- Borderless investing – looking further afield that your hometown
- The “Dos” of selecting growth locations
- Do treat property as a financial instrument
- Do look across borders for location selection (200x individual cities/towns is akin to companies on the stock exchange)
- Do consider research on the economic conditions of individual cities
- Do understand that an overzealous local construction sector is a capital growth suppressant
- Do know that repetitive investing in affordable properties will always trump investing in 1 or 2 expensive properties
- Do know that sustainable investing consists of small parcels of capital invested in a diverse range of locations across multiple states
- Do understand the difference between ‘lagging’ and ‘leading’ indicators
- Do respect your investment cashflow (rental yields > 4.5%) without chasing yields
- Do invest in your future – the most important question is ‘where’, not ‘when
- The time investment of really understanding individual markets
- The two most important items for property investors to understand
“You need to do your best to adopt the same mindset that the person who chooses to invest in a different asset class – shares“ Simon 0:39
“It’s completely natural to make decisions based on how we feel and how (the property) looks, that’s a natural reaction of human beings. What’s important as an investor, whether you’re honest with yourself or not, is to understand that’s what’s happening beneath the surface“ Simon 2:08
“Whether by just luck or whether by good quality research, if you got the selection of the city correct, the value of your asset may well have doubled over the last ten years. So that is the most important decision, is the selection of the individual town or city. Don’t be that hometown hero, you know, doubling down and just investing in your hometown because you feel you know your property market when you just know your neighbourhood“ Simon 7:08
“Whilst plenty of people might be interested in property market research, this is not something that you can do yourself if you really want to do it well. Propertyology would devote no less than five hours every single day and this is with a foundation of a work/life career behind us as well.“ Simon 8:41
“We always need to respect cashflow. Cashflow also enables us to continue to invest, because just having one or two investment properties for almost everybody will never be anywhere near enough for you to realise the retirement lifestyle that you want“ Simon 18:32
Enjoying the Show? Let us know!
Are you a fan of The Geared for Growth podcast? If the ideas and tips we share in each episode are inspiring you to become a more knowledgeable property investor, subscribe to the show and leave your honest review to let us know!