Ignore the media hype – Veronica Morgan

Veronica Morgan’s day does not start with checking what the media has to say about the property market.  Here is why.
Kevin:   It seems to me that every day you pick up a paper, you’ll hear that there’s either a property boom or the market is about to crash. What do you read into this? I mean, how do you actually make some good solid decisions? I was talking to Veronica Morgan, from Good Deeds Property Buyers, the other day about this issue. Veronica joins me to have a quick chat.
Kevin:   Veronica, is that how you start your day? Do you pick the paper up to find out which way the market’s headed?
Veronica:   Absolutely not. It annoys me when I see these headlines. I think it annoys most people in the property game but, because look they are all largely useless. For starters, they generally refer to the Australian property market and I think we all know there’s no such thing.
Kevin:   Yeah, what amazes me is that, even though there are some experts who’ll talk about how the market’s going to crash, or how the market is going to boom, there’s no middle ground. And most of the market, there I’m saying the same thing, but most markets tend to sit in the middle, you very rarely see them on the peaks or those troughs, but they’re the ones we focus on.
Veronica:   Well, because lets face it, you know, saying “Oh, ho hum. It’s business as usual here.” Doesn’t sell papers, it doesn’t attract clicks, and people aren’t looking for stories about business as usual. And we’re as liable as the consumer, as the reader of this stuff, and so they’ll actually generate the content. Unfortunately we all play our part in this game and it’s rather irritating, but it is a fact.
Kevin:   One of the things that amazes me, is that I’ll pick up, you know, there are good publications like your investment property magazine, which is one that supports us and we support them. And you’ll read through the magazine, a lot of the success stories are from people who’ve approached the market very intelligently, have stayed in it for a long time, and they don’t look for the quick bucks. Yet, that’s what a lot of investors actually focus on achieving.
Veronica:   Unfortunately, I think, and I don’t have any accurate data to support this claim, but what I’m about to say is that I think that most people investing in property, in this country, are actually not that educated, as to the property market.
Veronica:   So they do believe that you have to find the next place, that’s going to take off. They think that that’s the secret. What they fail to understand is the secret really is understanding the fundamentals and buying up quality assets and let time do what time needs to do. And that’s boring though. That’s a very very boring method. But in ten, twenty, thirty years time, there isn’t anything boring about having that sort of investment portfolio.
Kevin:   It’s that thinking though, that has actually brought on spruikers, that’s why spruikers can be so successful, because they work on that gullibility. The fact that they’re selling that dream. Which in all the cases will never ever materialise.
Veronica:   It’s exactly right. I hear so many terrible terrible stories that people have gone on to an investment seminar, in inverted commas, educational seminar, but it’s really just a massive, big, very sleek style pitch and they come away with this idea that, because fundamentally a lot of people can’t actually afford to buy quality assets, and so they go on to that.
Veronica:   And they’re told, “Yes you can, it’s only going to cost you a cup of coffee a day” or it’s basically with negative gearing and this is only going to get worse of courseif Labor get in and put forward their new policy. But with negative gearing, and depreciation, and rental guarantees, and oh, I might even throw in a car and some frequent flyer points, and all the rest of it, you too can be a property investor, this whole, great Australian dream, not just about owning a quarter acre block now, but it’s being an investor. And unfortunately, what these people are actually buying are liabilities.
Kevin:   We talked there about seminars and there was once a time, Veronica, where we would say, “If they’re selling you something, be wary.” But it’s actually deeper than that. Some seminars will, I was talking there about selling you a property, but some seminars will do nothing more than try and get you into some educational programme, that will then, in effect, sell you something. So you really do have to be very careful.
Veronica:   Well you have to be on your guard. And look, the thing is, and it does come back to investment fundamentals, and if you don’t understand them, you can fall into the trap of buying with these incentives and, you know, lured by incentives and lured by tax breaks, and a lot of other things,, nothing to do with what makes a good investment or not. For those who’ve never really spent the time or dedicated themselves to actually understanding what makes a property market tick, and what actually are the fundamentals that makes a good investment, then they’re easily conned. Easily conned because it’s a very powerful, very very compelling message.
Kevin:   Veronica Morgan, it’s always great talking to you. How’s that podcast going? To the Elephant. Is there any elephants in the room?
Veronica:   Well we did, talking about this in terms of headlines and media and all that sort of stuff, we actually released a “Full or Foolcaster” report on April Fool’s Day. It is available for download on the website. There was an episode that goes with it, which is theelephantintheroom.com.au. That has been fascinating because we have really been looking into all these sort of claims in the media, and the doom and gloom, and the amount of people, we’ve been looking at who is successful in making these claims. And look, I don’t want to be, spoiler alert here, but not many is the answer.
Kevin:   That’s right.
Veronica:   So we’ve researched a lot into what goes on, why this is the case, why these headlines are so prevalent, why we react to them. It’s quite interesting stuff.
Kevin:   Okay, Elephant in the room. Is it elephantintheroom.com.au
Veronica:   It is, theelephantintheroom.com.au
Kevin:   Theelephantintheroom.com.au. It’s a great podcast, check it out for yourself. Veronica Morgan from Good Deeds Property Buyers, thank you so much for your time. We’ll talk again soon.
Veronica:   Absolute pleasure.

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