Someone asked me the other day on what I thought were some important things I've found over the years in real estate. Thought I'll share some of my thoughts here. Some of these are probably more useful for experienced investors Cashflow vs CG - Ideally both, obviously - But if I had to take one it would be CG - Getting a few hundred dollars a week is not going to compensate for the millions you'll leave on the table by picking the wrong suburban trend - One of the early properties I bought at a young age - many years ago, and a dismal investment - was a resi. I ended up selling it for a small profit. It had fairly decent cashflow, but that by no means compensated for the capital growth. I could've bought in the Chinese suburbs in Syd or Melb at the same time, and probably sold 3x more, despite those Chinese properties renting for barely anything (ah hindsight is bliss) - As a CG example on the other end of the spectrum, an investment that went up nearly 3x just in the last 24 months. It was on sale for around 3.5% yield at the time - Leads me to my second point, not all properties grow equally - There comes a point when you probably want cashflow. But before that, capital growth is by far much more important. The difference between 4% on your $300k equity and 6% is $6k. Location? - Yes!!! Worst house on best street - Have held main road properties before. Probably up 50-70% when a street around the corner is up 100-150%. The only lucky break you might get with a main road is rezoning, and ability to suddenly build high rises (yes got lucky on one of them) - Same rule with commercial. Slightly quieter locations (think your King Sts of Melbourne or Bent Sts in Sydney) can sit vacant for 12-18 months if you're not careful. If you hold your Swanston Sts or Pitt Sts, 5-6 credible groups fighting for the site every time it comes vacant is common. Luckily, in CBD, even the quiet locations get significant capital growth during times like this Timing or Time? - Timing - The best example was when I bought at the last peak (early 2010). Maybe up 50-70% now - I also bought in in 2012-early 2015, these have all doubled and more easily Partnerships - I've been in a few partnerships, and growing up have also seen my parents in multiple partnerships. So certainly have some experience in this regard - Only get into partnerships if you're a very good judge of character. If your wife/husband/family tell you you're not but you think you are, you're probably not. Try to do it yourself, and if you can't afford it, give it a miss because it's obviously too big for you - Sometimes partnerships fail despite everyone acting in good faith, because people may have different objectives or different goals, or see things differently. So set rules early on, and document them - Don't get into a partnership thinking if your partner is well-to-do, things will be easier and capital will be more forthcoming. Sometimes the nastiest and greediest are found in this cohort. Remember the old saying? Money only amplifies a person's true character - perhaps the writing was long on the wall with these people, but it's easy to be blinded when you convince yourself to only see the positives. Certainly met a few in my journey - Control is very important. Either pay a premium and get control, or take such a small stake it doesn't matter. Worst thing is you can do is take a 50% stake (ie you've pretty much paid for control) but don't actually have control (ie you don't have 50% + 1 share). I've been/am in all 3 situations. Nothing worst than the third. In my best partnerships, I either have 50%+, or below 20% - Despite all this, we're all bound to get blindsided, so don't kick yourself too hard if you end in a bad/toxic situation Brokers - I don't have a strong view on using one. I find them convenient, and they have good intel, but you also have to be very careful. Some are quite self-serving too. Are they really giving you the best product or going for the one with the biggest commission? Some guys here seem quite level headed so that's good - When you're in the game long enough, banks are happy to pay you the broker commissions anyway, even if you're not a broker Borrowing - When you're trying to grow, you obviously want leverage (and hopefully you're not taking it out right before a recession) - But banks are a funny creature. If they 'perceive' you to not be desperate, you can bluff them. The number of times I've told a bank I'm going to settle in cash if I don't get what I want (whether it's term, LVR, rate etc), and then the issue being escalated and me getting the outcome I want, will surprise you Legals - Don't skimp on legal advice. Obviously spend according to the size of the purchase. I used to use $500 conveyancers. These days I can spend up to ten(s) of thousands on important purchases to get documentation right. How much is your SANF and legal indemnity worth? Real Estate vs Other - Don't be afraid of exploring other things. Google with words 'lithium asx' and you'll find they've all done 3-10 baggers in the last 12 months. Keep an open mind. - The world's a big place. Did you know Singapore is tanking now? Did you know the Chinese's number 1 target is actually not Sydney/Melb/Vancouver, but Tokyo?