Property Investment Education

Hi,

I am new in this forum, joined today.
I am trying to gain some knowledge related to property investment and trying to figure out steps where do I start from in terms of gaining knowledge.

Anybody recently did any property related courses? They are pretty expensive - $5K-$6K? Do they really worth attending for me as I am just the beginner? Or I should consider joining one once I am at least intermediate level?

Can you kindly give me some feedback how do I proceed if I want to know different strategies of property investment? Any book/s to read? any podcast/s to follow? Any YouTube content to watch?

Any feedback would be really helpful!

Thanks in advanced

 

I recommend reading the forum daily for maybe 6 months. It's free and the best education material you can get imo.

 

The forum is a great source of information.

Some other books if interested:


Michael Yardney, How to build a multi million dollar property portfolio

Jan Somers More Wealth from Residential Property

Margaret Lomas How to achieve property success

Margaret Lomas How to Create an Income for Life

I buy Houses, Paul Do



None of them are the holy grail - doesn't exist. But it will give you a lot of basic knowledge, a lot of things to avoid and red flags to look for and really a very good rounded base of knowledge to start with.

 

Thank you so much.

 

Thanks so much. Really appreciate.

 

No probs

 

I agree with this forum being the best beginning. I spent many hours on Somersoft (this forums previous identity) when I started, It gave me the kickstart I needed and saved me making some rooky errors.

Books I like for beginners are
My 4 year old the property Investor
and
Property Puzzle.

Both outline how property investment in Australia works without pushing a particular strategy.

 

Thanks so much @Travelbug

 

Welcome Shoma,

I am pretty new myself to this Forum and what many have said is true: read as much as you can, take your time, and ask lots of questions so you can learn what is right for you.

What worked for some, does not mean it will work for everyone because besides capital, success depends on your risk aversion, and following your gut instinct is often also a good indication of what will be right for you.

I've had 5 IPs and sold 3 of them over the years, but I'm proud to say that although I've not made 'millions', and still have a mortgage on the two remaining properties, I've learnt enough to (hopefully) mentor my children and live vicariously through their success when their time to invest comes.

I recently joined a "free seminar" on property investing, just to see if they offered anything new. They didn't, in my view.
Here is the email I sent them to end their pursuit.
I am sharing it only to express an opinion, but I believe a worthwhile one, hopefully to prevent many 'newbies' like you to fall into the trap of paying through the nose for advice that could mostly be available for free.

It's a long response, I know, but towards the end comes the most important bit: don't get sucked into promises of riches that for the most part only fill the pockets of the "educators".

Enjoy! and keep reading this forum
---------------------------------------------------------------
Hi [...]
Thank you for the emails. I actually joined the presentation on behalf of my son, a young, low income earner.
[...] [...]
It is said hindsight is a wonderful thing - if only we knew then what we know now, which is:
We were probably the “guinea pigs” of that time in history when all these “investment guru” companies began. At least then all their advice was free.

We bought investment properties on our own a few years ago - no help. We made good profits, but wanted to learn more about investing - i.e. educate ourselves and move forward.

In 2003 we joined REIN (Real Estate Investment Network) who only charged $100 per year only and remained so forever.

Their down to earth approach, plus having all professional services under one roof and the offer of “guidance and mentoring” impressed us.

Property prices were at their peak then, but based on the charts and graphs providing evidence of the 7-10 year cycle of property gains and “ongoing free professional advice”, we purchased a property through them:
- off the plan - in Chatswood
- 1 bedroom unit in a “flashy” high rise building with pool, gym, the works
- uninterrupted district views stretching to the Blue Mountains
- ticking ALL the boxes —> 10Kms from the city centre, next to train station, close to ALL amenities and infrastructure
- Price - $390,000 —> rental guaranteed for two years

To cut a long story short, in 18 years a property whose price should have at least doubled, it never did - not even during the two “property price boom” cycles since its purchase.
After much deliberation, following my retirement and faced with lower (pandemic related) rent against higher expenses, we decided to sell at the end of last year.

Yes, we are pandemic victims.Fools for believing the media gloom and doom.
But better off losing 30-40 thousand dollars rather than continue to believe pigs will one day fly - or that this property will deliver any of the promises it never has despite ticking ALL the boxes!

No amount of due diligence could have predicted:
- local government laws (encouraging massive development all around) leading to ->
- local market forces leading to -->
- widespread rental market decline

So here is what we learnt after the event (and were not taught!):

• For all the modelling "and stories of success”,ultimately borrowing capacity is directly related to the ability to service the loans - regardless of equity
• Regardless of equity —> loan repayment capacity is directly related to one’s earnings
• Banks do not take risks —> Clients do —> regardless of financial structures in place

• Brokers willingness to facilitate (up to and above 100% value) loans is self-serving —> the more they lend, they bigger the trailer commission. We learnt this the hard way. In our eagerness to increase our portfolio with “other people’s money” we spent years paying for money we did not need until we woke up to it
• Buying off the plan is no guarantee of higher valuation from the bank upon completion or future profits
• Rental guarantee - no such thing - it is included in the (inflated) price
• On or off the plan —> buying at the height of the market reduces profits in the end and risks losing more in the downturns
• Due diligence is all caveat emptor - (beware) buyer’s risk - no guarantees
• If REIN had thought more about our future success as their client, they would have strongly advised us NOT to sell a property we had in the eastern suburbs. That was not good mentoring - and a regrettable mistake.

But at least, REIN cost us nothing - We eventually managed more and more of our own affairs, including tax returns.

And this brings me to:

• Yes, things have changed since 2003
• Unbeknown to us here were not doubt many things wrong with our purchase and decision process
• We were too trusting
• Victims of a promising trend that couldn't be foreseen
• Negative gearing is not longer the panacea it was purported to be
• We’ve all learnt from our mistakes
• My experience should be a good point to move forward and keep learning what I didn’t the first time and,
• Some would argue “it wasn’t all bad if you still made a profit"
• Checks and balances are different now - or are they…?

Because here is what else we’ve learnt:

• In our pursuit of more education over the years REIN-like schemes now abound
• Promising wealth and with different strategies, organisations like [...] all have the same goal: to enrol clients who will pay for your services
• Nothing wrong with that. After all, it’s a business, right?

Well… here’s the catch - if something is ’too good to be true’, it probably is.
There’s no doubt the business is legitimate, with good intentions.
Unfortunately, the whole sale pitch is lost on me when altruistic spruiking ends with having to pay a fee of thousands of dollars for services that may, or may not result in what statistics predict.
Some simple maths:

• at a conservative average of $8,000 per client,
• gaining 10 clients per presentation = $80,000 (conservatively)
• 20 clients per month = $160,000 and so on…
• This pays a lot of commissions to all and sundry - and the only tip I learnt in the presentation is that good property costs a lot of money which my son cannot afford - not even using other people’s money.

It’s easy to see a lot of money is made from mentoring - and the risks are just as palpable as when we went through [a free] mentoring scheme. So, unfortunately, there is no point in making an appointment to tell my story.

My only purpose is to create awareness. To give you food for thought and perhaps, either charge less fees, OR, be more realistic about the limited “riches” that can eventuate from these ventures.

I don’t doubt some of your clients have gained a lot. But the statistics should also reflect the ’smaller fish’ in the pond as well as possible pitfalls - none of which was mentioned in the presentation.

Since joining REIN, we bought two other properties on our own.
Yes, they are “chugging along” - they are not super performers - but they are no longer negative gearing, and we can sleep at night.
Thank you so much for following up.
Sincere regards,
...

 

Thanks for sharing a lot of eye-opening advice. So looking at all those lessons learned, do you still consider RE investment a good idea? And how should we (newbies) start our journey in your opinion apart from reading books and reading this forum?

 

If you read a few books and read this forum, you will have a better idea. Especially if you are still wondering if property investing is a good idea or not.

Everyone wants to find the ‘best’ and ‘easiest’ (whatever that means) way, but sometimes you just need to put in the time.

 

Agreed. This forum has always been the best source of Australian IP related info for a long time. There's sooooo many helpful contributors.

For the foundations of property investing - the original Jan Somers book is a good start. I haven't read it for over a decade - but I'm sure the principles still remain relevant today.

Cheers

Jamie

 

If you like podcasts you could try the Property Couch. They of course have their particular way / preferences but, particularly the first 20 episodes or so, provide a good grounding in the basics.

 

As everyone keeps saying, it takes time and energy to do the research, but if you are willing to put in the effort and take the plunge with something you can afford in a good location (think amenities, infrastructure and not about to be overdeveloped) then RE investment is definitely a good - albeit long term, idea.
Go for it! Just don't let years go by overthinking it. Remember a journey always starts with the first step... good luck on your journey