Which Properties will Outperform in a Buyer’s Market?| How do your Goals Compare to Other Investors?
Dec 10, 2018
Are you wondering what’s going on with the property market – whether you should buy, whether you should sell, how your property portfolio is performing?
The media is full of mixed messages, so no wonder you’re confused.
There’s no doubt we’re at the next phase of the property cycle, what some call the slump phase. But not all properties are slumping.
Today we’ll talk about what you should do as a property investor in a buyer’s market and which types of property will hold their own. We’ll look at previous cycles and research to determine which properties do better in a buyer’s market.
I’ll also share a mindset moment, with a mentorship lesson from my own mentor Jim Rohn.
Then we’ll have a chat with Ahmad Iman, Director of Metropole in Sydney, about what investors are looking for in terms of their financial goals.
Which properties will outperform in a buyer’s market?
- The property market began to slow down around the middle of last year. Now the market is much softer.
- What happens next is dependent on finance and consumer confidence.
- Property values in some areas of Sydney and Melbourne may keep falling until sometime next year, but not by more than 5%. However, investment grade properties are not falling. They’re holding their value.
- The Perth property market is likely to bottom out sometime over the next year or so. Its recovery is likely to be slow.
- Hobart’s strong property growth is likely to slow down.
- Brisbane will probably be the strongest property market over the next couple of years
- Investment-grade properties and A-grade homes are holding their values even in the weak parts of Melbourne and Sydney.
- If you’re a homebuyer, your family needs should dictate when you buy your next property. This is a good time for first home buyers to buy a new property or for established home buyers to trade up.
- If you’re interested in investing, the best time to buy is when you have the financing to do so and the situation fits in with your long-term plan. Don’t try to time the market.
How do your goals compare to other investors?
- Most clients have an end goal of financial independence.
- Beginning investors are looking for a property profile that generates $100,000 in passive income per year.
- The average Australian couple needs about $40,000-$50,000 just to live a modest lifestyle.
- $100,000 a year gross is very different from $100,000 a year net.
- Another common goal is 4 to 5 investment properties by retirement age or financial independence age.
- The size and value of your asset base and the quality of your investments is more important than how many properties you have.
- Experienced investors often have a goal of a property portfolio that generates close to $200,000 in passive income per year.
- It’s important to consider your own existing lifestyle and spending habits when setting a passive income goal.
- More sophisticated investors look at purchasing developments or blocks of units to renovate.
Links and Resources:
Metropole Property Strategists
Michael Yardney’s Mentorship Program
Michael Yardney's Property Renovations and Development Workshop
Ahmad Imam – Director Metropole Properties Sydney
Some of our favourite quotes from the show:
“And as always, steer clear of the many property spruikers that are disguised as investment advisors but who are actually working for the project marketers or the developers.” –Michael Yardney
“Even the experts can’t time the market.” –Michael Yardney
“As an investor, you need to take a long-term view, do your homework and research carefully and make sure you don’t overpay, and go out and buy that property today – the sort that you would have had to fight much harder for a few months ago.” –Michael Yardney
PLEASE LEAVE US A REVIEW
Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.