The day after you bought, your property’s new value was precisely the amount you paid for it.

But given time and other sales (hopefully higher valued comparable sales) then your property might have been valued $150k higher … later. But not when you…[Read more]

I split Australia into 2 groups based on whether a suburb is below or above the national median. Then I compared the performance of the cheaper half vs. the more expensive half over 3 years, 4 years, 5, 10 and 20 years.

For each growth period, the cheaper group outperformed the more expensive. And they…[Read more]

I’ve had a number of people contact me over the years wondering whether they should sell their investment property. Many are apartments that have high body corporate fees. They feel they made a mistake…[Read more]

Never say “never sell”, there may be a time when you’ll be better off
Pick a loan you can easily replace if your lender turns ugly
Good finance doesn’t make for a good investment, it’s only a lever
Research the tenant if the property you’re buying comes with one already fitted
If buying O/S, re-learn ev…[Read more]

It sounds like good advice, an extreme dedication to research. But it actually telegraphs inexperience.

A good market is one in which…[Read more]

I’ve heard some professionals in the industry suggest that investors want a high proportion of renters since it reflects demand. That is…[Read more]

I focus my attention on supply & demand. It’s a well-established law of price growth that’s been around for 400 years.

I’ll admit there are some metrics that can be difficult to classify (e.g. expert…[Read more]

As usual, it all comes down to the numbers: recycle…[Read more]

If location really was the 3 most important things to get right about property investing, then over a short time-frame you’d expect to see a superior located property/suburb/city edge ahead of inferior ones. Over a longer time-frame, that edge…[Read more]

Why, because investors make their decisions to buy or to sell for financial reasons, but…[Read more]

Lifestyle location
Safe & friendly
Special
Appeals to a wide range
Affluent owners
Short walk to amenities
Cafes, parks
Street appeal
Views
Natural light
Privacy
Attractive style
Sound structure
Above avg. historical growth

I b…[Read more]

Let’s say 80% of the properties in a suburb are houses. Some experts would recommend investors buy a house not a unit, since that’s what tenants in the suburb obviously demand.

But the properties in the suburb are those that have been supplied to that suburb – not demanded by…[Read more]

The following chart shows the “total wealth created” for a theoretical $500,000 property over 10 years of constant 7% gross rental yield and 3% constant capital growth per annum.

$180,000 of equity and cash-flow combined.

Now swap the yield with the g…[Read more]

But it could be argued that paying home mortgage interest could be more “dead money” than rent money.

What are the chances that the place you want to live (or need to) also happens to be…[Read more]

“You need to adapt to the new phase in the cycle. What worked in the past won’t work now.”

I’m yet to find a case in the last 40 years where capital growth hasn’t “worked” for property investors.

But imagine you’re a professional operating in a very specific patch…[Read more]

This topic is about buying under the median. You can buy under the median and still pay too much. Conversely, you can buy over the median and nab a bargain.

But a nice case study. Assuming you pay an agent $7k to sell it and your base profit was $75k, then prior to tax you’ve made…[Read more]

You can’t buy an under-valued property and then sell it for market value next month. If that’s the strategy, you won’t make much money. So, what is a useful strategy then?

If you buy under market value AND get capital growth, that would work – but over time…[Read more]

Although it’s deciles within a city, there’s no reason to believe the same concept doesn’t apply to properties within a suburb.

But I dunno about rent. If the market goes pear-shaped, la…[Read more]

Some buy houses instead of units. Some buy houses on big blocks. Some professionals suggest you should aim for a larger than average block size.

I’ve even read one blog, where the apparent expert claimed to have discovered the ideal r…[Read more]

Problem is, I wasn’t alive 230 years ago. Prices have well and truly moved on since the bottom.

Perhaps that’s not the “bottom” they’re referring to. Maybe it’s more of a dip than the genuine bottom.

So, should I buy the 1st month I see any negative…[Read more]

A teenage boy might “demand” a Ferrari, but that demand has no impact on the price of Ferraris.

Historical data shows that exclusive, affluent, nice areas don’t outperform lower socio-economic areas over the…[Read more]

By instead focusing on what happens after the…[Read more]

By instead focusing on what happens after the…[Read more]

But technically you’re not buying, you don’t complete the purchase, you sign the contract but don’t settle.

Real estate agents make money by being involved in the transaction, but they don’t buy. Solicitors too.

Your case is a different role, “securing” the property…[Read more]

But technically you’re not buying, you don’t complete the purchase, you sign the contract but don’t settle.

Real estate agents make money by being involved in the transaction, but they don’t buy. Solicitors too.

Your case is a different role, “securing” the property…[Read more]

As I mentioned in the full article, investors make money when they hold OR ADD VALUE. You’re making money by adding value – not when you buy. The buying part may represent a…[Read more]

As I mentioned in the full article, investors make money when they hold OR ADD VALUE. You’re making money AFTER adding value – not when they buy. The buying part may represent a…[Read more]

It is impossible for the median to “drag” values up.

It’s b…[Read more]

The scatter plot shows a red dot for each suburb in 2012 that had a known percentage of government housing. Some had very little (left) while others had a lot (right).

In the 5 years that followed 2012, some suburbs had high…[Read more]

Here in Australia, you lose money when you buy. Stamp duty is the big one.

You make money when you add value or hold on and receive rental income and capital growth. But when you buy, you lose money..

The full article explains it…[Read more]

For the 1996 correction:

Worst 100 falling markets had a median distance to CBD of 35 km…[Read more]

2% seems to be a much more accurate round number to quote.

But what if the last 10 years was unusually tight? How do we know the entire country wasn’t out of balance for…[Read more]

I calculated the population within a 40-minute commute. I then estimated the unemployment rate for that area.

There were literally thousands of potential job applicants who had no incentive to move one inch. And if they did move, they had a…[Read more]

I’ll send you a private message.

About half the time spent owning an investment property is unprofitable. Here’s a typical example of 30 years of the Sydney median…

And while Sydney was flat, other cities were booming,…[Read more]

…which would you pick?

It seems obvious until you see this…

Sell out of A after 5 years and buy in B.

This will only work if the growth difference between A and B over those first 5 years exceeds the cost of selling…[Read more]

This chart was derived from an examination of over 40 years of growth history for suburbs…[Read more]

The following chart averages growth history from 3 decades of data across thousands of Australian suburbs.

The higher the performance over the last ten years, the…[Read more]

Buyers Agents have told me they’ve seen proof of it working for them. But all they say is they won the auction with a knock-out bid – not proof. A small incremental bidding approach might also have worked.

The only way you can know that it worked is if the other bidder tells you after the auction what their highest bid was GOING TO BE. If you…[Read more]

Buyers Agents have told me they’ve seen proof of it working for them. But all they say is they won the auction with a knock-out bid – not proof. A small incremental bidding approach might also have worked.

The only way you can know that it worked is if the other bidder tells you after the auction what their highest bid was GOING TO BE. If you…[Read more]

Most investors make money when they hold – assuming they’re holding the right asset.

If the focus is on making money at the time of purchase, what’s the point of holding then? If the focus is on holding then, the purchase price will become irrelevant within a few years of decent…[Read more]

Most investors make money when they hold – assuming they’re holding the right asset.

If the focus is on making money at the time of purchase, what’s the point of holding then? If the focus is on holding then, the purchase price will become irrelevant within a few years of decent…[Read more]

If you can claim $10k in depreciation for a financial year and you’re paying 40c in the dollar in tax, then you’d pay $4k less tax. Nothing wrong with doing that,…[Read more]

If you can claim $10k in depreciation for a financial year and you’re paying 40c in the dollar in tax, then you’d pay $4k less tax. Nothing wrong with doing that,…[Read more]

I get a lot of strong opposition on this topic. Mostly from those who derive revenue from selling new. No apology necessary.

The statement about it being mathematically impossible to outperform is on the assumption that all other things are equal. This wasn’t clear early on in the article. So, I take that criticism on the chin.

The…[Read more]

The left black bar represents the per annum growth rate of suburbs with the…[Read more]

The left black bar represents the per annum growth rate of suburbs with the…[Read more]