{"id":8823,"date":"2016-08-09T01:00:58","date_gmt":"2016-08-08T15:00:58","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=8823"},"modified":"2016-08-09T01:00:58","modified_gmt":"2016-08-08T15:00:58","slug":"the-excuses-that-stop-investors","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/the-excuses-that-stop-investors\/","title":{"rendered":"The excuses that stop investors – Michael Yardney"},"content":{"rendered":"

 
\nIn this show, we preach to the converted about the benefits of investing in property, but every once in a while doubt may creep into your mind about whether you are doing the right thing so today we discuss with Michael Yardney<\/strong> the common excuses that stop investors. That might help re-focus you.
\n <\/p>\n

Transcript:<\/strong><\/h4>\n

Kevin:<\/b>\u00a0 I hear from time to time people who want to get into property investing and they want to do it for a long time, and I guess they\u2019re continually coming up with excuses as to why they can\u2019t do it. One of the things I\u2019ve found is that the longer you delay on a decision, you\u2019re really starting to then look for reasons not to make a positive decision.
\nI\u2019m curious about what some of the common excuses are that stop investors from taking that first step or even growing their portfolio. I want to ask that question of Michael Yardney from Metropole Property Strategists.
\nGood day, Michael.
\nMichael:\u00a0 <\/b>Hi, Kevin.
\nKevin:<\/b>\u00a0 Nice to be talking to you again. You heard what I said there about people looking for reasons not to do things. What have you found are some of the reasons or excuses they use that hold them back?
\nMichael:<\/b>\u00a0 Just before I go through those, may I explain that I think they\u2019re basically based on fear \u2013 fear of the unknown, sometimes fear of debt, sometimes fear of success \u2013 but it doesn\u2019t manifest itself as fear. Most people try to be logical so they come out with reasons, as you say, or excuses.
\nOne of the common ones we\u2019re currently seeing is \u201cI don\u2019t have enough money to buy a property.\u201d Now, the answer is it could be true because currently, APRA is making it more difficult, so even though you can afford to buy a property, sometimes the banks don\u2019t allow you the serviceability \u2013 they say you can\u2019t.
\nBut interestingly, don\u2019t use that as an excuse straight off. Make sure you have the right budgets. Make sure you see an investment-savvy finance strategist who explores all of the options in the market, and don\u2019t be scared of taking on lender\u2019s mortgage insurance because as long as you own a good property \u2013 one that increases in value \u2013 taking those extra steps to get in because as you said at the beginning, Kevin, if you don\u2019t, the market keeps running away and you\u2019ll never save enough to catch up with the market.
\nKevin:<\/b>\u00a0 Sometimes that excuse or that reason could be because we\u2019re looking for something that we probably couldn\u2019t afford anyway. Some people try to outreach their own capabilities, Michael.
\nMichael:<\/b>\u00a0 Very much so, not only with investments but also with homes. A lot of people want their first home to be fantastic like the one they\u2019ve just left from their parents but they\u2019ve forgotten it took their parents 40 years to get to that level, Kevin You\u2019re right.
\nKevin:<\/b>\u00a0 What\u2019s another one of the common excuses or reasons?
\nMichael:<\/b>\u00a0 People are sometimes concerned that the property market is unreliable, that it\u2019s not safe. Again, they\u2019re right. We know that most investors fail because they bought the wrong property and they have not bought an investment-grade property.
\nI think it\u2019s important to remember that some properties are much better investments than others. In my mind, it\u2019s probably in this current market only 1% or 2% of properties that I\u2019d call investment grade, so it\u2019s a valid excuse unless you do your homework and research.
\nKevin:<\/b>\u00a0 It\u2019s not the market, is it? It\u2019s actually the decision you make that makes it unreliable. The market\u2019s not unreliable in itself unless you make the wrong decision.
\nMichael:<\/b>\u00a0 Good point, Kevin, because the risk doesn\u2019t lie in the market; in general, it lies in the investor, in their head space, in the decisions they have made, in the finance they have taken on, not having the buffers to see them through. You can\u2019t separate risk from the investor who\u2019s doing it.
\nKevin:<\/b>\u00a0 Do you think, too, we look for the quick fix, for it to happen too quickly?
\nMichael:<\/b>\u00a0 Yes, I think people are impatient. We\u2019ve become that way. That\u2019s just our society. If they can\u2019t seem to get there quickly, if they don\u2019t make it quickly, they think \u201cOh, it\u2019s going to take too long; I just can\u2019t be bothered.\u201d But it always reminds me of Warren Buffet\u2019s beautiful saying, \u201cWealth is the transfer of money from the impatient to the patient.\u201d
\nKevin:<\/b>\u00a0 You think we\u2019re too impatient. Is that a generational thing? Is that something that you\u2019re seeing come through in the younger generations?
\nMichael:<\/b>\u00a0 I believe it is, because of unrealistic expectations, sometimes fed by the media and often fed by all those e-mails we get in our inbox every day telling stories of rags to riches and instant wealth. But they also talk about the Easter Bunny and Father Christmas, and they\u2019re not true either when you get those e-mails.
\nKevin:<\/b>\u00a0 There is a lot of that, isn\u2019t there? \u201cI bought 100 properties in 18 months,\u201d and when you really dig deep and you find out where they are, they\u2019re not really going to grow much in value and they\u2019re probably geared right to the hilt anyway. It\u2019s not a good strategy.
\nMichael:<\/b>\u00a0 No, it\u2019s not. Therefore, it\u2019s best to start real estate investment with realistic expectations, knowing that it\u2019s going to take on average 15 to 20 years to build a big enough asset base to replace your personal existing income.
\nKevin:<\/b>\u00a0 Those types of people who talk about building those enormous portfolios, they rely very much on the people who just don\u2019t want to do their homework. In other words, they\u2019re looking for that quick fix, that quick answer because the majority of people don\u2019t know what they don\u2019t know about buying property and having tenants or investing in property.
\nMichael:<\/b>\u00a0 That\u2019s another reason that some people use, an excuse they use, not to go forward. \u201cI don\u2019t know about it.\u201d It\u2019s the opposite for some people too who have overconfidence because they live in a house, they\u2019ve rented an apartment, and they think they know it all.
\nBut the answer is for both of those groups, there are answers out there by doing the correct research, by finding a good mentor, by finding a savvy finance broker, and by getting an independent property strategist who\u2019s going to give you realistic advice. If you don\u2019t know it, get a good team around you. Probably, investment is a team sport.
\nKevin:<\/b>\u00a0 Wrapping all of this up, Michael, do you think it\u2019s fair to say that property investment is sometimes delayed or even bypassed as a way to building wealth because people have a lack of awareness around how it really works?
\nMichael:<\/b>\u00a0 We\u2019re not taught how to do this. You\u2019re not born knowing how to do money, and despite 24 million people in the population, fewer than 2 million people own an investment property and a vast majority of those own one or two.
\nWe don\u2019t get the education from our parents, we definitely don\u2019t get it from our teachers, so you\u2019re right, Kevin; the world doesn\u2019t help the average person become a property investor. You have to become the pilot of your destiny, take it in your own hands, learn, research, seek mentors, seek good advisors, and then, most importantly, take action. Do something. Don\u2019t use the excuses.
\nKevin:<\/b>\u00a0 That second to last point you made about seek good advisors is very important in light of what we talked about earlier about people just rushing in and thinking that wealth can be built overnight. It just doesn\u2019t happen that way.
\nMichael:<\/b>\u00a0 No, it doesn\u2019t, Kevin. The landscape is littered with people who have tried it and failed.
\nKevin:<\/b>\u00a0 Indeed. Great talking to you, Michael Yardney. Thanks for your time.
\nMichael:<\/b>\u00a0 My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  In this show, we preach to the converted about the benefits of investing in property, but every once in a while doubt may creep into your mind about whether you are doing the right thing so today we discuss with Michael Yardney the common…<\/p>\n","protected":false},"author":176692471,"featured_media":8825,"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":[101],"class_list":["post-8823","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-podcast"],"yoast_head":"\nThe excuses that stop investors - Michael Yardney - 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\/the-excuses-that-stop-investors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The excuses that stop investors - 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