Sarah Megginson from Your Investment Property magazine has some news about the winners of 3 strategic investor awards and what she has gleaned from the judging.
Transcripts:
Kevin:   Well, as you’d be aware, the latest edition of Your Investment Property magazine is out now. The February issue is out on the streets. And inside that, three awards for investors: strategic, new, and renovation. To talk about those, and we now know who the winners are, because the publication is out, Sarah Megginson, who is the editor of Your Investment Property magazine.
Kevin:   Sarah, thanks for your time.
Sarah:   Thanks, Kev. I’m always excited about this issue, so I can’t wait to chat.
Kevin:   Yes, and rightly so, too. Some great awards going to some wonderful investors. Can I just ask you, Sarah, in reading through or going through that judging process, were there any themes that emerged, something you notice that they’re all doing?
Sarah:   Yeah. I think it’s really interesting. For these awards, we have an independent panel of judges, as you would know. You’re one of them.
Kevin:   Yes.
Sarah:   At the magazine, we review all the applications before we send them on. I think one of the things that really stood out to me is the fact that all of the investors were committed to taking action, and they were moving forward with their goals, regardless of what is happening in market forces. This is something … I’ve been writing for YIP for almost 12 years. Through that time, I’ve seen the GFC, mining boom, mining bust, Sydney boom, Sydney correction. So many ups and downs. I think that’s one of the things that really stand out to me with these investors is that they know to expect that, that there’s going to be down times, there’s going to be up times. And you have to have a holistic strategy that sees you through all of these different market forces, so that you can have success.
Kevin:   Just in your conversations with them, Sarah, did they raise any concerns about the property market for this year, 2019?
Sarah:   Well, I don’t think any of them were particularly concerned, but they all have their own risk mitigation strategies in place. I mean, one of our investors, our strategic investor of the year … and our strategic investor is someone who’s a long-term investor … he sees nothing but opportunity in the year ahead. He’s actively doing deals, at the moment, where his says he can get great value, because everyone else is a bit cautious, so he’s able to negotiate really hard and get some instant equity in the deals he’s doing. I think the mindset of these types of investors who are doing really well, they are able to take action, and willing to take action, and move past all of the negative sentiment.
Sarah:   There is, of course, the realistic side of it is sometimes it’s hard to get finance in this market, even if you really, really want to move forward. Sometimes, there are physical or boundaries there you can’t cross, because they’re outside of your control. But I think the overall theme or message that these investors are kind of saying is that you’ve got to continue forward with your strategy, have a goal, and if you run into a block, look for ways to go around it. It might be that you can’t invest in the particular area you wanted, so you have to go somewhere more affordable, or you might look at a joint venture, or … One of these winners has started looking at commercial deals, because they have much higher returns, so he was able to get better financing for them.
Sarah:   I think there’s always a way forward. That was the real message that came through with all of these investors is they’ve got really good risk mitigation strategies in place, and they’re always looking for their next step.
Kevin:   Yes. Well, as one of the judges, I must admit I was very impressed with all of the entrants. There can only ever be three winners, of course. But the strategic investor has a portfolio worth 17.5 million. The new investor … I was staggered … amassed 12 properties in just five years. The reno investor created $1 million worth of equity through strategic upgrades. There’s some tremendous reading in there. Just harking back to their experiences from last year, what did they identify were their greatest challenges in what was a fairly challenging year?
Sarah:   Yes. I think last year the challenges for everyone were around finance. Our strategic investor of the year, he looked at some creative ways to get around that, because financing, I think, was a challenge regardless of your position last year. All of the banks and lenders were putting in different criteria, and they were … It was such a difficult thing to navigate. I think even if you were pre-approved for something, and a month later, you went to buy, the goal post sort of changed, so it was a really tricky year in terms of financing for everyone.
Sarah:   I think going through 2019, it’s going to continue to be difficult, but we are starting to see that things are changing there. At the end of 2018, we had APRA lifting, their ban on interest only rates for investors or for banks, so that’s going to help investors get financing again. So, hopefully, these types of challenges are going to abate a little this year, but it’ll be interesting to see it plays out.
Kevin:   Yeah. It was a great move by APRA doing that at the latter part of last year. Interesting to note, too, that in very timely, that in this edition, you’ve got the ultimate guide to how to get a loan when the banks do say, “No.”
Sarah:   Yes, exactly. We had so much feedback, particularly towards the end of last year, from our readers saying they’re really keen to move forward. They want to invest. But the banks are just saying, “No.” Even people who are quite what you would call vanilla, two incomes and for all intents and purposes should be able to get a loan, but even they are struggling. Yeah. We put together a story on what to do if the banks say, “No.” How to avoid getting that no in the first place. But if you do get knocked back, what are your options? Because, that doesn’t always mean that’s the end of the road. There are always things you can do to try and move around that. We’ve got heaps of really actionable tips and ideas in there to help investors get finance in what is a really tricky market.
Kevin:   Yep. Well, great reading, and of course, very inspirational stories in acknowledging the three award winners: the strategic, new, and reno investors of the year in Your Investment Property magazine, which is out right now. Hey, Sarah, congratulations, again, on another great issue, and look forward to catching up with you again soon.
Sarah:   Thanks so much, Kev.