{"id":7014,"date":"2016-02-17T01:00:00","date_gmt":"2016-02-16T14:00:00","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=7014"},"modified":"2016-02-17T01:00:00","modified_gmt":"2016-02-16T14:00:00","slug":"buy-and-hold-strategy-or-flipping","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/buy-and-hold-strategy-or-flipping\/","title":{"rendered":"Buy and Hold Strategy or Flipping &#8211; Nhan Nguyen"},"content":{"rendered":"<p>&nbsp;<br \/>\nWe set about either proving or disproving a common property myth to do with buy and hold or flipping. What is best? In today&#8217;s show <strong>Nhan Nguyen<\/strong>,\u00a0from Advanced Property Strategies,\u00a0will give us his opinion.<br \/>\n&nbsp;<\/p>\n<h4>Transcript:<\/h4>\n<p><b>Kevin<\/b>:\u00a0 I\u2019ve met a lot of investors over the years \u2013 some very, very savvy ones \u2013 and some will say to you that you should never sell a property. In fact, some of the richest people I\u2019ve ever met are people who have still got the first property that they ever purchased.<br \/>\nBut what about the buy-and-hold strategy? Is that the best way to go, or should you be looking at flipping? Has the market changed? Nhan Nguyen from Advanced Property Strategies joins me.<br \/>\nNhan, what\u2019s your view on this? Are you a buy-and-hold believer?<br \/>\n<b>Nhan<\/b>:\u00a0 Look, I think that buy and hold is part of a bigger game, and I do believe that buy and hold is important, however, it\u2019s not the be all and end all and the only strategy. I have two or three strategies, one of which is buy and hold, and the other one is development \u2013 doing land sell divisions or townhouses.<br \/>\nBuy and hold\u2026 For example, Warren Buffett, an American investor, advocates buy and hold and hold forever. That\u2019s great, however, the thing about property is that there\u2019s debt involved and there\u2019s negative cash flow. If you paid everything with cash and you had a lot of money, buy and hold is a great strategy, however because there\u2019s debt involved and people have to go to the bank to borrow money, there\u2019s negative cash flow.<br \/>\nI generally only hold stuff that is positive cash flow and pays itself off or is a strategic land bank for a rezoning in the future, development sites for units, or land sub-divisions.<br \/>\n<b>Kevin<\/b>:\u00a0 Nhan, I sometimes wonder whether the different strategies \u2013 buy and hold or flipping \u2013 is dependent on the property, or is it dependent on what\u2019s happening in the market at that point in time? What\u2019s your view on that?<br \/>\n<b>Nhan<\/b>:\u00a0 I think it\u2019s absolutely both. For example, if you\u2019re going to buy and hold stuff and, one, it doesn\u2019t grow that much, and two, the income is very low, it may be more of a headache than anything else. Positive cash flow is critical. Also the growth is critical.<br \/>\nIn a market that is hot, I do believe that if you have some stock and you want to get some extra cash, selling it is not a bad idea to take in the opportunity of the market being hot. But the thing is you have to replace that asset \u2013 you have to roll that money into another property \u2013\u00a0 and some people are not patient enough to roll that money once the market has corrected.<br \/>\n<b>Kevin<\/b>:\u00a0 It could also have a lot to do with the individual, couldn\u2019t it? Their age, as an example, their income as to whether they can afford to hold a negatively geared property. As I said, what age they\u2019re at: it doesn\u2019t make a lot of sense in your 60s to be buying a property thinking that in 10 or 15 years\u2019 time, it\u2019s going to be worth a lot more than it is today.<br \/>\n<b>Nhan<\/b>:\u00a0 Yes, exactly. Buying and holding or flipping is also relevant to your time that you have in the marketplace and your skill level. Some people are just too busy, so they just want to buy one property a year every year for the next 10 or 20 years. That\u2019s great if that\u2019s where the capacity is at. Other people want to put more time in, and so they want to be more active. If you\u2019re more active, it gives you more opportunities to turn it over and create it as a business not just buy and hold.<br \/>\n<b>Kevin<\/b>:\u00a0 Nhan, when you\u2019re looking for a property, do you look for properties that have a twist \u2013 in other words, you can do different things with them because that probably opens up more possibilities for you as to what you can do with it?<br \/>\n<b>Nhan<\/b>:\u00a0 Absolutely. Look, for example, a townhouse project that I\u2019m going to be developing at the moment, I\u2019m going to be holding. I bought a, let\u2019s say, 700-square meters house at the front, and it\u2019s zoned for townhouses and units. I just got an approval to put a triplex at the back. Once that\u2019s finished, it will have four sources of income \u2013 four tenants \u2013 and that will be a great cash-flow-positive hold for me.<br \/>\n<b>Kevin<\/b>:\u00a0 So this myth is not one that we can necessarily rule a line through \u2013 the myth being buy and hold is the best strategy \u2013 because it really depends on so many different variables, doesn\u2019t it \u2013 the market, the property, even you as the individual, Nhan?<br \/>\n<b>Nhan<\/b>:\u00a0 Absolutely. Even interest rates. At the moment, we have low interest rates. If the interest rates were 10% per annum, I don\u2019t think I\u2019d be holding as much because you\u2019re losing all your rent to the bank, and you\u2019re maybe better off just putting the money in the bank and getting 10% return. It is very variable on suburb, individual, and strategy.<br \/>\nBut overall, the principle is just that \u2013 it is a principle, and you have to adjust it to your personality, your budget, your appetite, your age, your risk level, many things.<br \/>\n<b>Kevin<\/b>:\u00a0 Many things indeed. There are lots of things to be considered.<br \/>\nNhan, I want to thank you for giving us your time today and your wise words of wisdom there as we are looking at these myths, and this one buy and hold being the best strategy. Some people say, \u201cNever to sell a property,\u201d but you heard there from Nhan that it really depends on so many variables, including the market and yourself, as well.<br \/>\nNhan, thank you so much for your time.<br \/>\n<b>Nhan<\/b>:\u00a0 My pleasure, Kevin. Any time.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; We set about either proving or disproving a common property myth to do with buy and hold or flipping. What is best? In today&#8217;s show Nhan Nguyen,\u00a0from Advanced Property Strategies,\u00a0will give us his opinion. &nbsp; Transcript: Kevin:\u00a0 I\u2019ve met a lot of investors over&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":7019,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,36,17,25],"tags":[76,101,107],"class_list":["post-7014","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-property-investment","category-sponsored-channels","tag-flipping","tag-podcast","tag-property-investment-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Buy and Hold Strategy or Flipping - Nhan Nguyen - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/buy-and-hold-strategy-or-flipping\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Buy and Hold Strategy or Flipping - Nhan Nguyen - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; We set about either proving or disproving a common property myth to do with buy and hold or flipping. 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