Fear of missing out (FOMO) seems to directly correlate with increases in property prices and is a recipe for disaster for the average property investor!
The mentality of the herd consistently frustrates PPI Advice director Josh Atherton who has experienced this for many years and the current cyclical housing increase is no exception. The trouble with these sorts of markets is that the unfortunate tail end of the heard are always the ones who end up either paying top dollar for new properties, buy the wrong property type, buy in the wrong market or buy at the wrong end of the cycle. “Our experience in analysing the property markets across the country shows us that you can still make good money investing in property no matter what the market dynamics are doing, its about planning, educating and executing on your strategy”.
The issue is most investors don’t have a plan or strategy and simply want to buy anything within their financial budget and borrowing capacity. They then feel that the market will continue to do the work for them and they simply watch the money or equity appreciate. In many instances this is simply not the case and in our opinion is often the reason why a lot of investors decide to sell up within the first 4 years. In fact according to the ATO and recent ABS numbers 73% of all investors own only 1 property and 0.7% of all investors across Australia have 6 or more properties.
The issue that we find day in and day out is that even if you have 10 properties in your portfolio, you need a defined strategy to make sure they are achieving the financial goals and deliver an end outcome and aligns itself to your life-style, life-stage and performs the way YOU need it to. Some investors need cash flow to support or supplement their wage, whilst others are wanting to achieve large equity gains as they don’t have cash flow concerns. Some investors are looking for a path to have their portfolio sustain their lifestyle, others love their day job and simply want to build a long term path to retirement. If an investor has more of an aggressive risk profile and shorter defined timeframe to achieve their goals then developing is often the direction they want to go. No matter which strategy is chosen by an investor, you need to create a bespoke property plan by seeking sound independent advice and action it with a qualified property professional.
When looking to source someone who is sound in this space, there are a number of things you need to look out for.
- Do they have all of the qualifications that is needed to give advice? Ie do they have an AFSL to provide personal financial advice?
- Are they PIPA qualified? This means they hold the highest of qualifications within the property investment landscape.
- Are they truly independent? Many advisors have vested interests in pushing a ‘product’ or defined properties based on often having an agenda that will financially reward them for putting this option forward to you!
- Are they a fee for service business otherwise how are they making money?
- Do they have experience and case studies to back up the fact that they are what they say they are? Can they show you properties or outcomes that have been delivered by their business for existing clients?
A little but about us.
PPI Advice holds an AFS license allowing us to provide property and financial advice to investors across the country. We help to define financial goals and assist to implement a structured defined path forward to achieve these goals. We are a fee for service business which means we are not conflicted with any hidden agendas and provide financial property advice, education, support and direct property strategies for all investors.
We also provide an acquisition division to source the most appropriate properties to fit the pre-defined criteria from the plan and to help implement this strategy. Whether it’s a buy and hold, dual living, duplex, apartment, townhouse, splitter block, small development or an expert team of project managers to create a development outcome the possibilities are endless as a property investor.
As we know knowledge is power and those that are unconsciously unskilled in the property investing industry are going to be left behind! There is no time like the present so speak to an advisor today.