Property Investment Rules For Troubled Times

If recent times have shown us anything it’s that troubled times can hit and we need to know how to successfully invest during these times. Today I read through the property investment rules to keep in mind in troubled times.

Book a Free Property Strategy Session

Advanced Suburb Research Course

Property Update Article:

0:00 – Introduction
1:00 – Troubled times show who the real great property investors are
2:50 – #1 Become financially fluent
4:00 – #2 Adopt a proven investment strategy
6:44 – #3 Not every property is investment grade
8:30 – #4 Don’t believe the hype
11:15 – #5 Location does the heavy lifting
12:30 – #6 Demographics drive markets
12:57 – #7 Real estate investing is a game of finance
14:21 – #8 The economy and our property markets move in cycles
15:33 – #9 Follow my 6 Stranded Strategic Approach
17:40 – #10 Don’t focus on bargains
18:14 – #11 Allow for an X factor
18:49 – What did we learn from this
20:08 – What I would add to this list

Recommended Videos:

15 Habits Self Made Millionaires Have

2 Properties to Financial Freedom

The $1,000 Project Book Review (By Canna Campbell)


Ryan 0:00
In recent times have shown us anything, it’s that troubled times can hit. And we need to know how to invest during those troubled times. So today, I’m going to read through an article from Michael yard news website, property On the property investment rules to keep in mind in troubled times, we’re going to go through this article talk about some of the things that they say, I’ll comment on it, we’ll discuss it together. And we’ll try and learn together, I did a previous one of these, talking about the 15 habits of self made millionaires. I really enjoyed it. I learned a lot from it. And I know a bunch of you did, as well. So let’s go through this. Let’s learn together. And let’s work out okay, what are these property investment rules to keep in mind during the troubled times, okay, so they start by saying that everyone seems like an investment genius, when the property markets are booming. But when times gets tough, it’s important to really know what you’re doing. I saw an example, I heard an example of this, I think it’s in the book, great by choice by Jim Collins. It is in the book, it’s one of my favorite books of all time. And he talks about this idea of companies that succeeding in troubled times. And he uses this metaphor of if you have just a regular person going for a hike versus someone who is a world class hiker, adventurer, mountain climber survivalist on the same hike. But let’s say that it’s an extremely pleasant, sunny day, no issues anything like that, would you notice the difference between the two, you might notice a bit of a difference between the gear or the way they hold themselves when they walk or their fitness level. But really, they’re both going to look like great hikers. But when the storm hits, and when you’re in that emergency life or death situation, that’s when the skills of the advanced mountaineer adventurer are going to come into play and the everyday person, we’re probably going to die in that situation. But that’s where it will come out. So when you got the market that’s booming, you know, everyone looks like a successful investor. I just bought three properties in Sydney in 2012, let’s say as an example. And you know, in 2017, you’re looking like a genius. But let’s say you bought those same properties in 2017, in Sydney, and the market went down for the next 18 months, you know, you’re not looking. So genius. Obviously, with everything that’s happened in the market due to COVID-19. Things have, you know, really kind of looking at troubled times for a lot of Australians. So saying here, I’ve learned not to change my strategy, every time the economy or our property markets get challenged, I invest for the long term and don’t get thrown off by the good or bad phases. So let’s go through some of these rules. Number one, become financially fluent. The secret to financial freedom is to spend less than you earn, save the balance, then invest widely, then wisely invest your savings in growth assets. Get mentors become financially for fluent. This is I think this is really important. And something that’s not talked about enough. It’s definitely something that I learned from Robert Kiyosaki his books, which is there’s a lot of language around finances. And there’s a lot of conceptual understandings around finances. Getting good at managing finances, getting good at investing is a skill. And it’s one that we don’t learn in school, it’s one that we don’t learn on our career path. It’s one that you have to learn yourself. And by educating yourself listening to things like listening to today, reading articles like this, following other podcasts, practicing it yourself as well, getting mentors, all of that because to become financially fluent, is super important. And the more you learn, and the more you understand about finances, market cycles, investing, the more money you can make easier, with less risk. So definitely think being financially fluent, is super important. Number two is adopt a proven investment strategy. Remember that 90% of property investors never get past the first or second investment property. So don’t follow the herd don’t follow the strategy that most property investors follow. Now, I was scanning through this before. And I found this quite amusing because they say, you know, 90% of people don’t get through the first or second one. So don’t follow the herd don’t follow the strategy most property investors follow. And then the next sentence is, you know, I recommend a capital growth investment strategy, which is what 90% of property investors do is a residential capital growth investment strategy. So they say, don’t follow the herd, but follow the herd. So I don’t know if I’m down

with that. They say well, cashflow is important to keep you in the game. It’s capital growth that will get you out of the rat race. I just think this is so narrow and small minded to say this, because it’s putting capital growth and cash flow in life. either or baskets you can either get cash flow or you can either get capital growth why not get both why not get both and they’re saying you can achieve you know financial freedom through cash flow and it’s just completely untrue you can even in properties where you don’t get capital growth it’s purely a cash flow play you can actually invest in that way to achieve financial freedom it may not be as quick as landing on a property that is in a capital growth area but you can definitely do it so i just it frustrates me when people write articles like this and they say you know cash flows not a thing that you can only you know live off the capital growth and it’s just it’s just untrue and so i definitely agree with get a proven investment strategy one that you can implement within your skill set so development building massive high rise apartments is a proven investment strategy people have made it work but is that within your skill set probably not but there are some simple proven investment strategies within your price range in your skill set so get one of those i like the two property to financial freedom strategy because you’re combining capital growth and cash flow so you’re purchasing in a good suburb in a metro market like brisbane that’s likely to grow in the future in the long term but you’re also getting a good rental yield off the bat and then if you want you can go and build a granny flat on that to get a better rental yield a positive cash flow your tenants then pay off your property for you basically and then you own the property outright in a good growth area and you can live off the cash flow so you know 90% of property investors aren’t doing that so that is what i would do and it just annoys me number three not every property is investment grade i would definitely agree with this there are millions of properties on the australian market and not all of them are investment grade where you can just buy it put a tenant in and have success with it you’re going to want to find the best properties that you can in the best markets that you can

sell it’s not just about going out there and buying any property in any market that looks good location is going to be super important you know you’re going to need to look at that and research that understanding your market cycles understanding your suburbs understanding the rentability of it is going to be important so yeah not every property investment out there is a good one in fact a very small sliver of the market is going to be good for you and what’s good for one investor might not be good for another so it’s very tailored to you and to your strategy as well now if you don’t currently have an investment strategy then we do offer free strategy sessions where you can get on the phone to one of the team over at pumped on property and talk to them about your situation where you’re at where you want to be what’s holding you back and they can help guide you to create a property investment strategy that’s right for you that’s a complimentary session if you go to onproperty forward slash strategy you can learn more about that over there complimentary session at the end of the session you can decide to take what you’ve learned and go and implement it yourself and that’s completely fine or if you want you can actually decide to hire punt on property as buyer’s agents to help you actually find investment properties and invest in property so you can hire them if it’s a good fit for both of you or you can go and do it yourself but again go to onproperty com au forward slash strategy to learn more about that number four don’t believe the hype be careful who you listen to for advice there’s some great independent advisors out there but the market is flooded with developers property markets real estate agents who don’t really have your best interests at heart definitely agree with this in fact i got an email today from someone saying i’d love to be on your podcast ryan or maybe shad this person on your podcast so i always do a bit of research when i get emails like that because i love talking to people in the industry i love learning from other people but then i look into these people and they’re like we you know we help people invest we do it for free which is a red flag and they’re like we only do new builds and they always say we only do new builds because it gives us the best appreciation but really the i think they only do new builds because their business relies on it they get you into it they get commissions from the build and so it’s just like ah if you’re not offering to also buy existing property for a client you’re only doing new builds then and funneling down that path and it just screams at me you’re doing that for the commission so so many times that happens if there’s someone out there that’s a buyer’s agent that helps people buy good quality investment properties and does existing properties as well as new builds please send them my way i’d love to talk to those people but if you just doing new builds so often they’re just overprice so i just i don’t want to have those people on don’t believe the hype yeah don’t believe the hype don’t listen to anyone always do your own research always stack it up yourself and that’s why i’m so keen on learning myself teaching myself but also teaching you out there to be able to do all this stuff yourself because it’s not actually that hard and even if you get someone to help you even if you get someone like pumped on property to buy a property for you who is someone that i actually trust they buy existing properties they’re going to do a lot of research but you should be able to do the research yourself you should be able to double check it yourself you should be able to look at how does this suburb actually compared to other suburbs how does the price of this property actually compared to other properties within this suburb you should know all of this yourself and it’s not that hard to learn and to know so at least you can check up with your invite advisor to make sure they’re doing the right thing i do have a course on this it is paid you can go to onproperty com au suburb to learn how to do some research but i’ve also got heaps of free videos on the channel as well you can learn this stuff so don’t believe the hype don’t just believe when anyone says follow it out with your own research learn how to do it yourself so you don’t get sold into a lie so you don’t overpay for the property number five is location does the heavy lifting location will do 80% of the heavy lifting for your property’s performance and that’s why i only invest in certain suburbs of our three major capital cities like where do you get the 80% from i love how they just make up these percentages

location will do exactly 80% of the heavy lifting now i know that just trying to make a point location will do the majority of the heavy lifting buying in a good city that’s at the right time in its market cycle buying in a good suburb that is primed for growth is going to decrease your risk increase your chances of return and if that suburb goes up in value your property will go up in value and so finding a good suburb super important so location is extremely important and i would agree with this looking at jobs wages growth population growth happens in majorly in the biggest three capital city so that’s sydney melbourne and brisbane that doesn’t mean that there’s not opportunities to be had in other cities it can just they say it can decrease your risk investing in those major cities but you know perth looks like it’s bottoming out at the moment so who knows that may have a run in the future and hobart’s just had a huge run so you can definitely still have success in other cities but yeah pick your markets number six demographics drive markets over the long term demographics how many of us where we live where we want to live where we can afford to live will be important in shaping our property markets so yeah understanding those demographics short in the short term immigration will be slower but over the long term understanding demographic trends ensure you have the right property in the right location yeah understanding demographics important i’ll agree with that number seven real estate investing is a game of finance with some properties thrown in the middle i really like this spin on things because it’s so true investing in property you can’t just go out there with a spare change that you have an investment you can’t do something like $1,000 project that kind of campbell recommends with shares where you do extra things to build up income up to $1,000 and then you invest $1,000 chunks into your share portfolio i absolutely love that concept i did a review on her books i’ll link up to that down below but real estate investing is very different because it’s a game of finance you need to save deposits you need to be able to get finance from a bank or a lender in order to purchase your property and i say today more than ever having the right finance strategy is important so it’s little to do with low interest rates and much more to do with having the correct finance product and setting aside financial buffers not just to buy a property not just to buy a property to buy you time to ride the ups and downs of the property cycle but yeah i just think being able to get finance to start with is important being able to set up your finance for the first property so that you can buy it the second being able to get finance so you can build those granny flats that all comes into play so you need to play that game you need to have a good advisor in your corner that can help you understand that so good mortgage broker is definitely a must number eight the economy and our property markets move in cycles how long have we been talking about this one definitely one of the most significant trends i’ve seen over and over in the past almost 50 years of being assumed that economics is an investment markets constantly go through cyclical phases of good and bad however it’s a common fallacy that australian property cycles are seven to 10 years they vary in length blah blah blah look that’s just a tiny snippet of cycles there is so much you can go into in cycles ben absolutely loves learning about market cycles and what areas are likely to grow i think it’s very simple to think about this when you’re buying in property you don’t want to buy at the top of the market think buying sydney melbourne back in mid 2017 at the peak of the market where you see a 15% decline on your property over the next 18 months it’s not something that you want to do you want to buy a property that’s going to grow in value over time that then decreases your risk if you need to sell it also increases your ability to leverage off that property to invest and grow your portfolio faster so understanding cycles is very important number nine follow my six stranded six six stranded says strategic that’s a tongue twister six stranded strategic approach and only buy a property okay this is six things that he recommends so let’s have a look that would appeal to owner occupiers definitely agree with this one you don’t want to buy a property that only and will appeal to investors you invite in areas where owner occupiers want to live you want to buy a property that appeals to owner occupiers because someone’s going to live in it and so you want it to emotionally appeal to them so they pay more rent and then when it comes time to sell your property you want it to emotionally appeal to someone as well so that they overpay for your property so appeal to owner occupiers below intrinsic value says that’s why i avoid new and off the plan properties which come in at a premium price so yeah get it below value if possible

with a higher land to asset ratio doesn’t necessarily mean a large block of land but a property with a land component makes up a significant part of the asset value so rather than buying something where the asset is an expensive build on the property and you don’t have much land looking at the land of the value because that’s what’s going to go up in value over time in an area that has a long history of strong capital growth and will continue to outperform the averages because of demographics definitely agree with that as well get a property with a twist something unique different or scarce about the property i agree with this as well and it’s one of the downsides of buying and big unit blocks when all the units look the same when it comes time to sell or come time to rent there’s likely a couple available in the one block at one time and yours doesn’t stand out so person will often rent the cheapest one or the one that’s available when they want it but if you have a house that is completely unique or has something special about it then people are more likely to want it and they’re less likely to compare apples to apples because it’s so different and lastly where you can manufacture up capital growth so definitely agree with that i think what’s missing in there is cash flow and that’s obviously my slant and what i find important number 10 don’t focus on bargains they really have a future i think this is important because it’s like sometimes we focus so much on getting a property under market value that we’re not thinking about the long term of that property so don’t just buy a bargain that’s cheap in a dodgy area or a property that’s 10 grand under market value because you you making 10 grand off the bat but thinking about the long term how that’s going to perform over the long term so don’t just focus on the bargains focus on what the property’s going to do in the future and number 11 allow for an x factor every year there’s a few x factors unforeseen events that blow away our carefully laid forecast so you know going back we’ve got the changes without bra we’ve got the election that could have changed things either way and obviously liberal guardian that led to growth in property prices as well now we’ve got Coronavirus happening at the moment there’s so many things that can happen throughout the year and throughout each and every year so being prepared for that is really important so look what did we learn from this property investment rules to keep in mind by i think it’s most of it’s all really good stuff i can’t say that i’ve like oh that’s really interesting when i did the video on like the 15 things self made millionaires did i definitely learned some stuff they’re becoming financially fluent i feel like i’m already working on and continue to work on adopt a proven investment strategy that was funny where they said don’t do what everyone else does but do what everyone else does but yeah definitely having a proven strategy is important not every property is going to be great don’t believe the hype so don’t just listen to anyone location does exactly 80% of the heavy lifting no but location is extremely important so important in finding your property demographics will drive that market and location investing is a game of finance definitely important economy and property markets move in cycles and follow the approach don’t focus on bargains i feel like they’re less rules i don’t know it was good it was a good article i like you to see extracted strategic approach just misses cash flow but overall in troubled times like for me what would i add to this i like this article i really like property update i’ll link up to this article down below but for me what i would add to this is to like probably investment rules will in troubled times you’re looking at okay we need to have financial buffers in place so some savings that if someone can’t pay the rent or moves out or something like that happens then you’ve got buffers for that you want to have good cash flow so that if you lose your job during troubled time if you’ve invested you know in just capital growth property that’s negatively geared if you lose your job in that time how are you going to afford the property in that troubled time chances are you’re not going to be able to so i think like cash flow and money management is really important and they talk about being financially fluent but yeah money management so you don’t have to sell your property in a troubled time so

you can wait out the storms is really important and i think looking at ways to minimize your risk with why i guess i talked about it in the six stranded approach but you want to minimize your risk by buying in a good suburb buying a property with good cash flow and buying a property we can manufacture value so that way the market does go down you can create value through manufacturing to make up for your loss or if the market stays flat you can manufacture value to get profit or if it goes up you can manufacture it to make any more money so i guess i would add a couple of things to that when it comes to finance i would add don’t over leverage or don’t get yourself in a really tough position where you’re right on the end of what you can afford because interest rates obviously historically low at the moment but will eventually likely go up over time and so not kind of putting yourself in a bad position preparing for the future is important as well and i think in troubled times being prepared that we might not have significant capital growth in the next couple of years so if you’re investing just for capital growth and negatively geared is that going to be a successful strategy over the next couple of years i’m not sure so there’s a few things that i would have added to that but overall an interesting article with some really good points again if you’re looking to invest during this time if you’re thinking that okay yep it’s troubled times at the moment but that can be one of the best market opportunities to get in to buy a high quality property in a metro market with good long term chances for growth as well as getting some cash flow to them we do offer free strategy sessions so head over to onproperty forward slash strategy you can learn more about those sessions over there you can book in a time that suits you get on the phone to someone get clear on what your property investment strategy is going to be what your next steps are so that you can go ahead and take those next steps those strategy sessions are booked out weeks in advance they’re currently for people who actually have the deposit they’re looking to invest in the near future because they’re the people that we feel like we can help the best otherwise if that’s not you keep saving keep learning through this free stuff and then get one of those free strategy sessions when you’re ready to go so again go to onproperty forward slash strategy to learn more about that i’m going to link up to the previous video i did where we read through one of these articles that was on the 15 habits of self made millionaires i really liked that one and learned a lot from that so link out to that go ahead check that one out don’t forget to like and subscribe to this video and until next time stay positive

DISCLAIMER No Legal, Financial & Taxation Advice
The Listener, Reader or Viewer acknowledges and agrees that:

  • Any information provided by us is provided as general information and for general information purposes only;
  • We have not taken the Listener, Reader or Viewers personal and financial circumstances into account when providing information;
  • We must not and have not provided legal, financial or taxation advice to the Listener, Reader or Viewer;
  • The information provided must be verified by the Listener, Reader or Viewer prior to the Listener, Reader or Viewer acting or relying on the information by an independent professional advisor including a legal, financial, taxation advisor and the Listener, Reader or Viewers accountant;
  • The information may not be suitable or applicable to the Listener, Reader or Viewer's individual circumstances;
  • We do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth) and we are not authorised to provide financial services to the Listener, Reader or Viewer, and we have not provided financial services to the Listener, Reader or Viewer.

"This property investment strategy is so simple it actually works"

Want to achieve baseline financial freedom and security through investing in property? Want a low risk, straightforward way to do it? Join more than 20,000 investors who have transformed the way they invest in property."