10 lessons I learned from past property downturns

What comes up must come down.

History shows us that property markets move through a cycle of downturn, stabilisation, upturn and boom.

Then rinse and repeat.

Australia’s property markets have now moved into the downturn phase.

But let’s be clear…we’re experiencing a soft landing.

There is no crash ahead.

So what’s ahead for property in 2019 and beyond?

Given there are a number of markets across the country, all at differing points of their own cycles, I’d like to look back and share 10 lessons I learned from previous property downturns.

1. Booms don’t last forever

Whether it’s property, shares or bitcoins — booms just don’t last forever.

The thing is, booms are just one part of a cycle, so they will always end at some point.

Every boom sets us up for the next downturn, just as every flat period provides opportunities to get set for the next upturn.

The trick is to be prepared for the downturn when it comes and be ready to make the most of softer market conditions.

2. Stick to your strategy

Don’t change your long term strategy because of short term factors.

Look for what’s always worked, rather than what’s working now.

Long term wealth will be created by capital growth of your property portfolio.

Sure, cash flow is important – it will keep you in the game.

But it’s capital growth that will get you out of the rat race.

Let’s be honest, almost anyone could have made money during the recent boom years as the market covered up any mistakes.

But as Warren Buffet says: “You only find out who is swimming naked when the tide goes out.”

In other words, if you’re not following a strategy that works in all market conditions you will be caught naked when the market changes.

3. Get rich quick = get poor quick

Successful property investment takes time.

Be wary because there’s a new breed of spruiker out there looking to lure the uneducated into parting with their money by offering them a short cut to riches.

4. Take a long-term perspective

During a market downturn, fear starts to rear its head.

People who have made poor investment decisions, or those who bought near the market peak, start to panic.

Let’s face it: emotions of any kind are not a good idea when investing.

The secret is to keep your eye on the long term horizon and not worry about any short-term vagaries of the market, because they will pass.

5. Property investment is a game of finance with some houses thrown in the middle

Strategic investors don’t only buy real estate — they buy themselves time by having the correct finance structures in place including cash flow buffers to ride through the cycle.

6. Invest in locations with a future, not a past

Since the bulk of your property’s performance will be determined by its location, rather than looking for somewhere cheap to buy, find a location where local economic growth will lead to jobs growth, wages growth and population growth.

A suburb where the local demographic can afford to and will be willing to pay for their properties because they earn high disposable incomes.

You’ll find that the rollercoaster ride will not be as dramatic in these well researched locations.

Last time round many of the boom time hotspots which did not have underlying economic strength left investors gasping for air during the downturn.

Yet those who bought in locations based on economic fundamentals and research may not have had as dramatic of an upswing during the boom, but their downside was minimised during the downturn.

7. You know less than you think you know

A healthy ego can be a good signal of future success.

However, an over-inflated one will usually mean you end up worse off than when you started.

If you’re the smartest person in your team you’re in trouble, so recognise that mentors and experts can help teach you the things that you don’t even know that you don’t know.

8. Don’t mistake money for wealth

A big bank balance means someone’s rich, right?

Well, no, it doesn’t.

Many high income earners live from one pay to another — and never have enough money “left over” to invest in income-producing assets.

The truly wealthy not only have a capital growth portfolio behind them, they have learned that money is not wealth.

That’s why they make time for their family and their health, and they give back to society and to their local communities, because that is where true happiness lies.

9. The sky isn’t falling

When the good times seemingly turn bad the property pessimists and doomsayers come to the fore.

These “commentators” predict the end of the financial world suggesting we should all sell up and hide under a rock.

On the other hand, sophisticated investors ignore the white noise because they are concentrating on the long-term, where the view is calm and clear.

10. Opportunity is knocking

When opportunity arises, strike.

Remember Warren Buffet’s words: “Be fearful when others are greedy and greedy when others are fearful.”

Sure it’s difficult to take action when others around you are talking doom and gloom, but it is during downturns that life time wealth is made.

The Bottom Line:

Strategic investors don’t really care too much about market phases.

Instead they concentrate on growing their portfolios and investing in the right type of properties, whenever it suits their finance, their strategy and their long-term goals.

That way, when everyone else has hunkered down for the “property winter”, they’re basking in the sunlight of their future wealth creation.

When there is less demand for something, there is less competition, which should mean lower prices.

While investment grade properties will always attract demand, sometimes when the majority of the market is fearful, you can buy below intrinsic value.

Then, because your property is located in an area that has above average long-term capital growth prospects, and you can add value through renovation, that property will soon be worth much more than you paid… regardless of the market conditions.

If you’re looking for independent advice, to set yourself up for financial freedom through property, no one can help you quite like the independent property investment strategists at Metropole.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.

Please click here to organise a time for a chat. Or call us on 1300 20 30 30.

What really leads to success? [video]

What leads some people to be so more successful than others?

Ten years of research and 500 face-to-face-interviews led Richard St. John to a collection of 8 common traits in successful leaders around the world.

In this short, humorous but insightful TED Talk he explains his findings:

Quotes by Steve Jobs that will change the way you work

When you think about what Steve Jobs accomplished, is beyond remarkable.

He changed the way we live.

To help you reach your career goals, we have put together some of his best quotes.

Read them, be inspired by them, and then get out there and make your dreams come true:

1. Have the courage to follow your heart and intuition. They somehow know what you truly want to become. Steve Jobs

2. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. Steve Jobs

3. I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.  Steve Jobs

5. That’s been one of my mantras—focus and simplicity. Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple. Steve Jobs

6. Quality is more important than quantity. One home run is much better than two doubles. Steve Jobs

7. Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful…that’s what matters to me. Steve Jobs

9. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma—which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. Steve Jobs

10.We’re just enthusiastic about what we do. Steve Jobs

11. You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something—your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.  Steve Jobs

13. For the past 33 years, I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.

14. I’m convinced that about half of what separates successful entrepreneurs from the non-successful ones is pure perseverance.

15. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

18. I’m as proud of many of the things we haven’t done as the things we have done. Innovation is saying no to a thousand things.

BONUS QUOTE:

How much does a view add to the value of your property?

How much does a view add to the value of your property?

To find out we undertook a study in 2018 to help provide us with some guidelines and found that certain types of view added a different value to a property.

Our work identified the different views available and then we looked at how much they can increase a dwelling’s value.

Our investigation was also based on an identical new dwelling built in the same area (but with differing views) with a base price of $500,000.

The five major view types: 

1. Ground level, unobstructed view (3% to 5%).

This type of view means that you are located at the same level as many of the other properties around you, but you have the advantage of having a view that allows you to see a large, non-residential space, like open space.

Such a view increases a properties sale price by between 3% and 5% and the new sale price could be as high as $525,000.

2. Rooftop, partially obstructed view (6% to 8%).

A view from above would suggest that you can almost see over all of the other properties around you but there may be a few buildings that partially obstruct your view.

Generally, the higher you are, the more value a view can bring to your home, so a rooftop’s partially obstructed view can bring in an additional 6% to 8%, lifting the potential sales price to $540,000.

3. Unobstructed view from a medium elevation (9% to 12%).

This category is primarily reserved for homes that reside on the top of a small hill.

This particular view can see areas all around a home without any obstructions but aren’t high enough to see far beyond the house’s small community.

Having an open area will always command more money than if you can only see a few houses down, so this type of view has the potential to add between 9% and 12% to the value of your home, so the new sale price might be $560,000.

4. Unobstructed view from high elevation (15% to 25%).

Doing much better than the previous view, being able to see a wide vista from the comfort of your own home can add significant value to it.

Our estimates here have a wide range because much depends on what you see.

Still, the value of the real estate can increase substantially, with the new sale price as high as $625,000.

5. Unobstructed water view (30% to 80%).

The biggest attraction of a view continues to be a large body of water, with the higher premiums being given to salt water.

Also, at the upper end of the premium range the water view needs to be unobstructed and the more rooms it can be seen from, the better.

Depending on the body of water, the residence can increase in value up to 80%.

This would mean that our $500,000 base house has a potential price tag of $900,000.

In summary…

Pricing a view is certainly not an exact science but as more and more properties are constructed in an area, the chances of finding a great view are becoming increasingly difficult.

Hence, properties with a view command a range of premiums now and these bonuses are likely to rise further in the future.

The caterpillar and the butterfly

One of my children’s favourite stories was the Very Hungry Caterpillar.

No matter how many times they heard the ending; there were always gasps of amazement when the caterpillar changed into a beautiful butterfly.

What seemed like a miracle to them is actually a normal part of the life cycle of many insects, but it took me a long time to realise that this is also how the property market often behaves.

Many cities such as Sydney and Melbourne are like a very hungry caterpillars, right now.

They devour their way through our funds, leaving us negatively geared with prices stagnant or falling.

We call these buyer markets, where vendors are competing against each other and purchasers are scarce.

But like the butterfly triumphantly emerging from its cocoon, these markets will suddenly turn into things of beauty with booming prices and soaring rental yields.

They may appear to be changeless like a caterpillar’s cocoon, but hidden from view, the housing market stats are telling us that Sydney, Melbourne and Brisbane, in particular are generating steadily rising numbers of potential buyers and reducing stocks of new properties.

With these trends, demand will soar ahead of supply and housing prices will take off, just like a butterfly triumphantly taking flight.

The success “secrets” of some of the wealthiest people I know

I don’t use the word “secrets” very often.

But over the years I’ve found that the wealthiest people around think, feel and do things that most people don’t know about.

I guess this means if you want have the life very few people have, then you’re going to need to think and do what only very few people do.

And so they are “secrets.”

Today I’d like to share 6 of them based on my 20 years working with many successful investors and particularly working with the successful business people, entrepreneurs and investors who join me at Wealth Retreat on the Gold Coast each year in June:

Secret #1: They don’t really care what others think.

Now this is a core insight.

How many times have you had a breakthrough idea that would 10x your own life in the process, but given up on it the moment someone in your inner circle shot it down.

You can’t get ahead and make breakthroughs in your life, in your business or with your investments by doing what everyone else does.

I came across an interesting concept….this world was constructed by eccentrics and misfits.

I know that’s a bit confronting. but in his great book Zero To One, author Peter Thiel notes many of the Silicon Valley greats have Asperger’s Syndrome, which is on the autism spectrum.

He explains that these people are wired with no need to fit in. And this became their advantage.

Which meant they dreamed up grand visions and got them done, denying the chattering voices of the naysayers around them.

No I’m not suggesting you need to be on the “spectrum” to be successful. Far from it!

What I am saying is trust your gut. Block out those who don’t “get you.” Go ahead and chase your dreams.

And when you do…you’ll be considered a genius at the end.

And if you’re one of the 50 who will join me at Wealth Retreat on the Gold Coast this June you’ll go home with a 5 year plan for audacious goals in all aspects of your life plus a tool box full of tools so you’ll be able to fulfil your dreams.

Secret #2: Emotions power wealth.

Look, a big heart always beats cold logic.

I’m not saying you don’t have to have the bravery of a warrior to win at your goals.

All I’m saying is that the most successful people who join us at Wealth Retreat every year are driven by a cause much bigger than themselves.

And it came from their emotional dimension versus their intellectual realm.

They realise that true wealth is not measured by how much money you have or how many properties you own.

They know money is important in those areas of your life where it is important (like paying the bills) and it’s not at all important in those areas where it is not important.

At Wealth Retreat you will set 5 year goals and plans for all areas of you life so you can create Lifetime Wealth.

You can find out more about Wealth Retreat by clicking here

Secret #3: Your social circle determines your net worth.

You’ll never rise to financial freedom until you populate your life with bigger thinkers and better performers than you.

My life completely transformed when I had  is one conversation with a mentor in 1998 – just over 20 years ago.

It was a game-changer that altered the rest of the way my life unfolded.

And when you join us at Wealth Retreat on the Gold Coast in June you’ll gain a whole new network of positive people who will understand you and help you leap forward.

One of the things that struck me on the first night at Wealth Retreat last year, when we all got together for a special surprise event (the details of which I can’t reveal here, otherwise it would spoil the surprise for the attendees) was how quickly people connected with each other.

Have you ever had that experience?

Where you meet a group of people and feel like you’ve known each other for years?

May I ask you a direct question? 

It’s going to be a bit blunt, but I’m not sure how to “finesse” it so here goes:

• Will your current peer group empower you to reach your deepest dreams goals and your life’s purpose?
• Will they hold you accountable to a high enough standard or will they let you slip back into your old comfort zone?
• Will they feed your ideas and give you input to help you overcome challenges you face along the way?
• Will they support you when you’re having a tough moment?
• Do they inspire you to keep performing at your highest and best capabilities?

If not, what are you doing about changing that?

It’s ultimately up to you to find and create the peer group that will help you live the life you want to live.

Secret #4: Your net worth never exceeds your self worth.

Getting your internal foundation right is what the successful people I work with make one of their top priorities.

As one of my mentors, late great Jim Rohn said: “Income rarely exceeds personal development.”

Without building up an undefeatable mindset, installing a massively fit physical life and releasing the toxic waste of anger and sorrow from your emotional core, how can you possibly walk out into the world and do amazing things?

The world really is a mirror, giving us not what we want but who we are.

That’s one of the reasons I’ve invited my good friend Tom Corely form the USA to join us at Wealth Retreat.

He’ll share the findings of his 3 year Rich Habits study of self made millionaires – boy was this a game changer for attendees last year

Secret #5: The moment you become successful you’re in a very dangerous place.

Few things fail as well as success does.

On the other hand – I’m a real success at failure.

I’ve had more than my share of failures, many of them self inflicted, but each time I got up and tried again.

What I’m trying to say is that it’s so easy to arrive at the summit and then begin to stop doing the very things that got you there.

Oh, and the real trap is getting it right first time or being lucky and carried away by a property boom – the trouble is you think you’re smarter than you are!

I’ve found that masters never think like masters.

The reason they stay as masters is because they think like beginners.

If you’re not as successful today as you’d like to be, my question to you is…

“Where will YOU be in 5 years” – in all areas of your life?

Not just money, business, career and investments – but in all areas of your life?

Once you lay out your plans at Wealth Retreat (and we’ll help you gain clarity in the first 2 days), the expert faculty and I will give you all the tools, training, and support you need to:

• Gain deep insight and clarity into your life purpose
• Design a life that gives you deep joy and fulfilment
• Create a step-by-step blueprint to make your most ambitious dreams a reality
• Identify and overcome the deep blocks that are holding you back from showing up as your best self

And we’ll be doing this life-changing work in a lovely environment on the Gold Coast in June this year!

But don’t count yourself out from coming…

While in general the attendees at Wealth Retreat are already successful business people, entrepreneurs and investors, every year a group of aspiring investors and entrepreneurs joins us and get the type of information that propels them ahead of the pack – the type of information I would have loved to have when I started out.

You can learn more and register your interest here. or call Jo Fitt on 03 9591 8888 or email her – jfitt@metropole.com.au and she’ll answer all your questions.

Secret #6 The key to real wealth is gratitude

Gratitude, or appreciation for the good things that happen in life, is an essential part of building happiness.

When you’re going through a tough time it can be hard to remember to be grateful for the good things, but if you just look around you’ll find there is a stack of things you should be grateful for.

Things like:

• You’re living in a great country at the best time in history
• Your family and friends
• Maybe it’s the job you have, the income you have, the relationships you have

I really hope this blog has been helpful.

And if you’re the kind of person who wants to exponentially raise your game and results and your life…

And if you are really ready to make vast improvements in your prosperity, positivity, productivity, performance, lifestyle and contribution to the people of our world, there is such a valuable opportunity I’d like to share with you.

By now you would have heard about my flagship event, Wealth Retreat

I only do it once a year (and have done so since 2006.)

It’s exclusive (only around 50 attendees plus the faculty attend) – but please don’t count yourself out.

It takes place over 5 days (but it’s a long weekend so you can’t really use work as an excuse.)

I bring along an amazing faculty of investment, tax, business, finance, property, share trading, economic and psychology of success experts.

And each year I’m amazed how the delegates in the room are many of the smartest, most successful, most decent, most giving and awesome humans I’ve ever met.

Those fortunate enough to join us at Wealth Retreat leave:

• Knowing the insights, habits, techniques, hacks and ways of doing what only the top 1% of people in Australia know.
• With new friends and the deep relationships with the kind of people they always wished they knew. People who inspire them to transform and show them models of possibility they never knew existed.
• With a fire in their belly and a newfound mindset that translates into the finest investment, business, personal, social and fitness results they have ever experienced in their lives.

Like anything ultra-valuable, this annual 5 day event with me is not for everyone and isn’t inexpensive.

But every year over 20% of the delegates are return attendees ready to move up to the next level.

THE VERY GOOD NEWS:

This year my faculty includes:

• Me 
• Dr. Andrew Wilson, Australia’s leading property economist.
• Tom Corley, a CPA and bestselling author and speaker who spent 5 years studying why rich keep getting richer. He’s flying out to join us from the USA and last year was one of the highlights of the event. People gave Tom a standing ovation
• Pete Wargent, economic commentator and a chartered accountant who achieved financial freedom at the age of 33.
• Ken Raiss  – director of Metropole Wealth Advisory, who’ll speak on tax, structuring, risk and asset protection for serious investors
• Mark Creedon – business coach to some of Australia’s most successful entrepreneurs –including me and the team at Metropole. Last year he delivered one of the most highly prized presentations, so we’re extending his sessions and there will be special breakout sessions for business people.
• Louise Bedford – a successful share trader and educator. Her presentations was eye opening for many attendees last year
• Andrew Mirams –  finance strategists
• Plus a swag of property experts

So…

If you want to join the others who are returning or the new attendees and you still want to take advantage of the early bird pricing you can express your interest by clicking here

I know that after past attendees have found that it costs more not to be at this event and miss all the learning than to invest in their seat. many wished they had not put off their decision to join us.

So definitely trust your gut – if this feels right to you and reserve your place before it’s too late right here

I can’t wait to meet you at Wealth Retreat 2019 and hang out with you and my world-class faculty for 5 of the greatest days of your life.

The Best Areas of Nottingham to Invest in Buy-to-Let

Nottingham is a centre for high-tech industry and a bellwether for the UK economy, yet is also one of the cheapest cities in the UK. In terms of yield, Nottingham is also one of the most attractive areas of the UK for buy-to-let investment.