If you were Starting RE again in 2021 what would you do ?

1) I'd tell myself to buy as much as I could with the borrowing capacity I had
2) Don't over think things/keep it simple
3) Don't overcomplicate things
4) Don't worry too much - it will work out
5) Take opportunities that come up and don't be frightened! (I've missed some great buys because I've been too conservative)
6) Don't invest in things I don't understand - ie gold warrants
7) Buy ETF's instead of direct shares
8) Diversify my super (don't buy property trusts justbefore the GFC!)
9) Don't fix loans just before the GFC!!
10) Don't sell IP's!
11) If you do, get proper tax advice to avoid paying CGT
12) Be happy!

and probably a whole lot more that I can't remember now!

 

I heard conflicting advises. "Buy when you can afford" and "time in the market is important than timing the property". Stressful to decide. Any guidance?

 

Those two sentences mean the same thing. You don’t buy immediately when you can afford only if you want to time the market.

 

My 2 cents.

Buy 'value'. If you buy value regardless of the market you are in, you can't go too far wrong.

Then if you're a smart cookie, you'll want to also buy 'add value'. So you're not completely reliant on organic growth.

Buy when you can afford to and stick within your risk tolerances.

I can tell you there are no guarantees you'll do well regardless of when or what you buy. All you can do is try and stack the probabilities in your favour to give you the best odds of doing well in the medium to longer term.

Imho there are definitely many things which reduce your chances to do well, and things which increase them. You wanna try and stack as many positives as you can with each purchase.

 

Thank you for response. Can you pls give a few examples for Buy value and Add value just to make sure that I dont interpret wrongly.

 

As @Sackie said, you can find value in any market. It's harder to do so in a booming market because everybody is buying. Listings can only be for a few days. The more experience you have, the easier it is to identify what has value.

I'd like to say that I've never bought in a booming market, but that isn't true. In fact I bought one not too long ago. However probably 95% of all properties that I've bought have been bought in a lull, probably half of them at auction, with me being the only one bidding (my favourite), or through an agent that is from out of area, and being unresponsive, or having opens at stupid times to save the best time slot for their own area,

 

Briefly, some examples of 'value' to me is buying in high demand markets during a retraction in prices and some sellers are forced to sell. Usually I wait until the dust settles and then place multiple low bid offers on 10-20 places and wait for a bite. I've secured some great value this way.

Ripple markets also can offer great value and I believe many middle ring suburbs in Brisbane had explosive growth due to their proximity to inner ring suburbs. When the price disparity grew sharply, those middle ring ripple suburbs started to fly as they offered great value considering their close proximity. It wasn't too far a stretch for the demand to show up. The further you buy away from high demand areas, often the longer it will take for demand to be willing to buy in those locations. And you need high demand buying for values to grow organically.

Some examples of 'add value' including buying a place that can be renovated, room added, extension possible, subdivided or developed.

My perfect mix is buying an asset which I believe is undervalued with add value ability.


The interesting thing is often, the broader market takes time to realise an area has value. The individual if savvy enough, can come to that conclusion much sooner than the broader market based on historical trends which repeat over and over again.

As long as there is only one kind of human, markets will for the most part behave the same over time. Human psychology doesn't change and really what ultimately propels markets is shifts in the collective sentiment.

 

@San2018 I have adopted this advice hook, line and sinker for almost 15 years now and it is absolute gold.

 

So good.

 

I wouldn’t do anything differently at all. I was always single minded, never doubted the magic of real estate.

As a low income student/writer/teacher (with little loan approval as I worked overseas at the UN most my 20s) I bought houses on east coast for under 100k renting for over $150pw

by age 25 I was able to finally start buying in Sydney - studios in darlo/rushy. Finally I got a terrace in Redfern opposite the block, loved how colourful it was but my tenants were freaked out by being mugged so often.

I then bought 3 OTP apartments in Sydney and made a LOT just during the building period. It’s been fine. Great investments.

my beach house where I live has gone from 2.5mil to 4.5mil in 3 years

I’ve had such a fun adventure
My best advice is buy where you know and love
Take big risks.
Always always borrow maximum amount
Invest in education as no one can ever take that away from you and that’s where you get satisfaction and self esteem.
Have lots of kids and always put friends and family first not work.

my grandfather’s advice was best: when someone owes you money it’s your problem. But when you owe someone money it’s theirs

 

I have a different opinion on that. I'm all for taking risks but risk needs to be measured against the potential rewards.


Keep taking big risks (relative to the upside) and eventually you'll be hit so hard you may take a decade or more recover.


Disclaimer: when I first started I too took big risks and they paid off but with experience now I know some of those decisions were clearly wrong despite having done well. Risk needs to be evaluated with respect to the potential upside and your individual financial position. Especially if you want longevity in the markets.

My 2c.

 

I also took a few big risks, but I was in a 'no win' situation at the time, and my thought process that I had nothing to lose, and if I actually pulled it off, I may actually get out of a bad situation with a few assets intact. I did! Fast forward & I'm now very risk adverse. Of course, you can't eliminate risk with investing, but you can minimise it.

 

Yes, Definately been a few people on PC that I know who got wiped out.

Took on Too much risk

As per Robbins, most successful investors look at what the downside is before taking on any investment.
Got to pass the stress test, protect your capital

 

Take big “calculated” risk. Most recently, can you still pay for the mortgage if you run an Airbnb during COVID? So real…

 

Airbnb , hotels , movie theatres, pubs , restaurants , Events organisers , airlines , airports , travel agency . So many businesses that have lost a substantial amount of revenue.

 

yet, look at the shares.

 

Lots of pain here

 

Got to 35 properties at the peak...now down to 30 (27 owned...3 blocks to settle and 1 to be under contact to be sold). It ain't easy but it can be done....

Rules
1. Don't lose your shirt
2. Keep it simples - don't try to land the big kahuna...jump to subdivision etc.
3. Cash flow does not make you wealthy.
4. Don't follow the herd or believe what is being posted...most of them are full of BS. If people can't share the details of their purchases run a mile....social media is full of fake it till you make it types. Most will give some sort of excuse about their privacy. Hint: Code for I owe nutin' or daddy/mommy own it...not me and I don't want you to cross check what I own.
5. Find people who have made a lot of money over time in property and emulate what they do. Be respectful of their time and don't disagree with them..because you will look like an idiot.
6. Just because you have made over $1m in equity in Sydney or where ever...does not make you a super star. This is like 10% of the network of many.
7. Finally.... people over estimate what can be achieved in 1 year but under estimate what can be achieved in 10 years.

Hope this helps....

 

Home - EVENT Hospitality & Entertainment
I looked up the share price of the event entertainment.
This is a company that has really suffered and is losing money due to covid but the price of the shares have doubled and at their peak.
That's something I cannot understand.

 

Lots of things I understand today

I was expecting all markets to crash due to covid and go figure shares

Oh well, make hay while the sun shines