{"id":9189,"date":"2016-09-13T01:00:07","date_gmt":"2016-09-12T15:00:07","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=9189"},"modified":"2016-09-13T01:00:07","modified_gmt":"2016-09-12T15:00:07","slug":"the-missing-piece-of-the-property-investment-puzzle","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/the-missing-piece-of-the-property-investment-puzzle\/","title":{"rendered":"The missing piece of the property investment puzzle – Michael Yardney"},"content":{"rendered":"

 
\nWhether you are starting out as an investor or are well into developing your portfolio, the plan is something that most investors do not do.\u00a0Michael Yardney<\/strong><\/a> will explain why this is crazy and he gives the 4 best pieces of advice you are likely to hear about formulating a plan.
\n <\/p>\n

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

Kevin:<\/b>\u00a0 No matter whether you are just starting out as an investor or if you\u2019re a seasoned investor, the words of advice really don\u2019t change. The man who I always turn to, Michael Yardney from Metropole Property Strategists, joins me.
\nHi, Michael.
\nMichael:<\/b>\u00a0 Hi, Kevin.
\nKevin:<\/b>\u00a0 It doesn\u2019t matter \u2013 does it? \u2013 whether you\u2019re talking to a seasoned investor or a new investor, the need to create or formulate a plan is very important.
\nMichael:<\/b>\u00a0 It is, but interestingly, Kevin, most investors don\u2019t have a plan and that\u2019s why they never get to where they were hoping to go \u2013 because they don\u2019t even know where they\u2019re heading. The first word of advice for all investors is understand what you want to achieve and even more importantly, why. Then in your plan, is it a cash flow strategy or is it my favorite strategy, capital growth?
\nKevin:<\/b>\u00a0 Is it a matter, too, of writing all of this down to start to formulate your plan?
\nMichael:<\/b>\u00a0 It\u2019s been shown over and over again that if you write it down and then you annually review how it\u2019s going, then you\u2019re much more likely to get there. If you don\u2019t know where you\u2019re going, any road can get you there but any road can get you lost, also.
\nKevin:<\/b>\u00a0 One of the things you and I have talked about on a few occasions, too, is just who you should be listening to and being very careful about that.
\nMichael:<\/b>\u00a0 Sure, Kevin, because when you start investing, everyone is going to give you advice \u2013 well-meaning friends, well-meaning relatives \u2013 but it\u2019s important to only listen to people who have already achieved the financial independence that you want.
\nKevin:<\/b>\u00a0 A number of the people who you\u2019ve put me in touch \u2013 and these are seasoned investors or people who are just putting their portfolio together \u2013 will tell me that they actually read a lot of books, yours included.
\nMichael:<\/b>\u00a0 Sure, there\u2019s good advice in books, there\u2019s so much on the Internet, but the big problem is you have to be careful who you\u2019re listening to, first of all, that they\u2019ve achieved it and kept it through a couple of cycles and also that they\u2019re not a salesperson.
\nThere\u2019s a big difference between salespeople and advisors, but today, many salespeople are cloaked as advisors and they suggest they\u2019re representing you when, in fact, they\u2019re representing the seller or the property developer. There\u2019s nothing wrong with them being a salesperson but at least they should be honest about what they\u2019re doing.
\nKevin:<\/b>\u00a0 Is that the warning sign? Is that what you should watch out for \u2013 if they\u2019re representing a particular property as opposed to giving you advice?
\nMichael:<\/b>\u00a0 That means they can\u2019t be independent. Now, that doesn\u2019t mean that you don\u2019t buy from an estate agent or you don\u2019t buy from a developer \u2013 sometimes it\u2019s appropriate \u2013 but just understand who they\u2019re representing and that they\u2019re not on your side \u2013 they\u2019re on the side of the developer \u2013 and maybe you need somebody on your side to level the playing field
\nKevin:<\/b>\u00a0 I guess that\u2019s the point, isn\u2019t it? They\u2019re more salespeople; they\u2019re not advisors.
\nMichael:<\/b>\u00a0 Exactly right. They\u2019re salespeople. That\u2019s the point I guess I was trying to make, maybe not as well as I could have, Kevin. Be cautious and understand who are salespeople and who are advisors \u2013 because for advisors, you usually have to pay them yourself so there\u2019s nothing wrong with having good accountants, good depreciation people on your team, good property strategists on your team or even a buyer\u2019s agent, and be prepared to pay because in the long run, it actually saves you money.
\nKevin:<\/b>\u00a0 No such thing as a free lunch?
\nMichael:<\/b>\u00a0 There isn\u2019t. The other clich\u00e9 is that not everything that glistens is gold. Just because it looks nice, pretty, shiny and new, not every property is a good investment. That\u2019s why it\u2019s important to have a plan and make sure every purchase you make gets you one step closer to your end goal.
\nKevin:<\/b>\u00a0 Going back to your earlier point there about being prepared to pay for advice, that would include things like buyer\u2019s agents. I know that this is becoming more the norm in Australia. I know it\u2019s very much the norm overseas, particularly in America. What does it cost to actually have a buyer\u2019s agent represent you?
\nMichael:<\/b>\u00a0 Usually there is a small \u2013 maybe $1000 \u2013 upfront fee to get them to give you as an initial strategy and then they charge a success fee, which is in the order of 2.5% of the purchase price of the property.
\nSome people would say, \u201cWhy should I pay that?\u201d The answer is they can save you time by knowing the market, they can save you lots of time by doing the research for you, they can save you money by negotiating well, and they can save you hassles, also. In many ways, it\u2019s paying for your apprenticeship and getting yourself into a good property.
\nKevin:<\/b>\u00a0 Yes. It\u2019s also someone who you can sit down with as a partner and say, \u201cWhat do you really think about this property? Or what\u2019s good about that?\u201d They don\u2019t necessarily have a vested interest apart from helping me get the best property.
\nMichael:<\/b>\u00a0 They don\u2019t have a vested interest; they represent you. It\u2019s their job to do their best for you to buy a property \u2013 as opposed to a seller\u2019s agent. You\u2019re right, Kevin, in what you said a moment ago. There\u2019s a large proportion of investors now using buyer\u2019s agents and interestingly, an increasing proportion of homebuyers are now recognizing the benefit of having somebody on their side leveling the playing field.
\nKevin:<\/b>\u00a0 That point you made, too, about not everything that glistens is gold is like if it looks like a duck and it quacks, it probably is.
\nMichael:<\/b>\u00a0 The problem is beginning investors don\u2019t have much perspective. They haven\u2019t been around long enough, so they can\u2019t tell the difference. Good buyer\u2019s agents have had 15 or 20 years of experience in the real estate market. Many of them are experienced real estate agents who have now gone on to help buyers.
\nIf you\u2019re an investor, you should be choosing a buyer\u2019s agent who is already a property investor themselves. They have a gut feel, but that\u2019s from years and years of experience, while the average investor, when they have a gut feel, that\u2019s nerves; that\u2019s butterflies in their tummy.
\nKevin:<\/b>\u00a0 Bottom line there from Michael Yardney is make sure that you listen well and seek out the people you want to listen to, make sure you know the difference between a salesperson and an advisor, be prepared to pay for advice, and not everything that glistens is gold : if it looks too good, it may just be too good.
\nMichael, thank you very much for your time.
\nMichael:<\/b>\u00a0 My pleasure, Kevin.
\nKevin:<\/b>\u00a0 Michael Yardney there from Metropole Property Strategists.<\/p>\n","protected":false},"excerpt":{"rendered":"

  Whether you are starting out as an investor or are well into developing your portfolio, the plan is something that most investors do not do.\u00a0Michael Yardney will explain why this is crazy and he gives the 4 best pieces of advice you are likely…<\/p>\n","protected":false},"author":176692471,"featured_media":9190,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34,10,11,13,36,17,22],"tags":[101],"class_list":["post-9189","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-property-investment","category-research-topic","tag-podcast"],"yoast_head":"\nThe missing piece of the property investment puzzle - 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-missing-piece-of-the-property-investment-puzzle\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The missing piece of the property investment puzzle - 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