\nOur feature guest this week is successful investor and talented property industry entrepreneur Shannon Davis. Shannon tells us about his philosophy, how he started, why he wasn\u2019t content to be an outsider but wanted to actively influence the industry.\u00a0 He has done that and a lot more as you will hear.
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Kevin:<\/b>\u00a0 Our featured guest this week is a man who we\u2019ve spoken to on a number of occasions, but we\u2019re going to take a little bit of a different tack with him today in trying to find out a little bit more about what makes Shannon Davis tick.
\nShannon Davis is, of course, from Metropole Property Strategists and also the genius behind Image Property Management, one of the most successful management companies in Queensland for property.
\nShannon, welcome to the show and thanks for your time.
\nShannon<\/b>:<\/b>\u00a0 Thanks for having me, Kevin.
\nKevin:<\/b>\u00a0 What got you involved in property investment to start with? Tell me about where it all started, Shannon.
\nShannon:<\/b>\u00a0 I think I was a frustrated property investor. I had the profession of a schoolteacher \u2013 and enjoyed that in my 10- or 11-year career \u2013 but I was just wanting to be more hands-on with property and found my way in the real estate industry and, specifically, the property management side of things.
\nKevin:<\/b>\u00a0 Looking at it from the outside, you said you were a bit disenchanted as a property investor or property owner from the management of your property. How different was it when you actually got into the industry? Was it different from what you thought it would be?
\nShannon:<\/b>\u00a0 Yes, it was. There is a lot to it, to be honest. A property manager has to be a lot of different things as far as collecting rent and looking after the financial interests of an owner, but there\u2019s a human side of things, as well. It\u2019s not just bricks and mortar.
\nThere are people who fall on tough times. There are tenants and owners who do that. It\u2019s the environment. There can be extreme weather scenarios that cause a lot of displacement of people, such as the 2011 floods.
\nThere\u2019s always that working with people in their homes and their privacy being respected and communicating to both parties in a fair and equal measure between the both.
\nKevin:<\/b>\u00a0 You\u2019re a very successful buyer\u2019s agent as well as running a very successful property management company. Obviously, there are some things that you\u2019ve done differently from others, because we\u2019ve seen a number of companies start up that appear to be very successful but then they just don\u2019t have that continual growth that you\u2019ve been able to have in your company.
\nWhat is it that you do differently, do you think, that the others don\u2019t do? I\u2019m talking about property management now.
\nShannon<\/b>:<\/b>\u00a0 I think we really have a service culture. I think we part ourselves last. When we give our owners and tenants and everyone what they want, we get what we want. It\u2019s a bit counterintuitive. I think if you don\u2019t operate on service, you\u2019re going to be prone to digital disruption, the way taxi drivers were prone to something like Uber. But in real estate, again, it\u2019s people, not bricks and mortar. If we compete on service and the culture of adding value, then no website will ever be able to replace us.
\nKevin:<\/b>\u00a0 Tell me about your own property investment journey. What was your first property deal?
\nShannon<\/b>:<\/b>\u00a0 With my parents, I bought a quarter of a house in Red Hill, which we proceeded to do up.
\nKevin:<\/b>\u00a0 Red Hill in Brisbane?
\nShannon:<\/b>\u00a0 Brisbane, yes. We did up to sell like a lot of people who want to flip, but we were disappointed on auction day and ended up keeping the property. That ended up being the best thing that ever happened to me because there was the boom of 2003 where properties nearly tripled in value in a short time. What was bought for $165,000 was eventually sold for $865,000.
\nKevin:<\/b>\u00a0 I was going to ask you whether you still owned it. Are you a flipper, or are you a property investor and holder?
\nShannon:<\/b>\u00a0 I am a buy-and-hold person, but that doesn\u2019t mean you never sell. I had to sell in order to secure a business opportunity and have no regrets on that.
\nKevin:<\/b>\u00a0 What was your second property? Did you do that on your own or, once again, with your family?
\nShannon:<\/b>\u00a0 Again, with the help of mom and dad, we bought a block of flats near Enoggera, and again, that appreciated really well within a short time \u2013 about nine years. We sold that one, too, but I would have preferred to have kept that property, but when you invest with people at different life stages, they have different goals and priorities. My parents were looking to withdraw, being close to retirement, and I was looking to still accumulate. I think that was a lesson I learned on that one.
\nKevin:<\/b>\u00a0 A great lesson to learn, too \u2013 isn\u2019t it? \u2013 that when you go in with other people, you have to understand they have their own agenda.
\nDo you invest with other people now, or is it very much building your own portfolio?
\nShannon<\/b>:<\/b>\u00a0 It\u2019s just my own portfolio now. I have made one strategic relationship with a builder that I can add things that he can\u2019t and vice versa. But we\u2019re at similar life stages. I think if you can have that scenario where you both bring something different to the table and you have your exit strategy clear, it makes sense.
\nKevin:<\/b>\u00a0 That\u2019s the point, isn\u2019t it? You have to have your exit strategy there. I guess you have learned a lot from being in partnership with other people, albeit family or friends, to make sure that you have a clear exit strategy.
\nShannon<\/b>:<\/b>\u00a0 Yes, definitely. It can definitely work better to your advantage working with people rather than on your own, but it can be a hindrance, too, if for some reason, there\u2019s life dramas \u2013 death or divorce or unemployment \u2013 as well.
\nKevin:<\/b>\u00a0 Apart from the buy-and-hold or flipping strategy, what other strategies do you use to build your portfolio?
\nShannon<\/b>:<\/b>\u00a0 I think adding value. That\u2019s the biggest thing with property. You can\u2019t go down to Woolworth\u2019s, paint the walls, and hope your shares go up, but with property, you can add value.
\nI know a lot of people are attracted to new property for depreciation reasons and things like that, but I would always prefer to buy existing and add value \u2013 be it through renovations, development, subdivisions, or strata titling. That would be a better way to go, because you can actually manufacture the equity and be in control of your own path rather than just waiting on the economics of the day for appreciating prices.
\nKevin:<\/b>\u00a0 My guest is Shannon Davis from Metropole Property Strategists \u2013 a buyer\u2019s agent \u2013 and also Image Property Management in Brisbane, one of the most successful property management companies in Brisbane.
\nShannon, what was the best property deal you\u2019ve ever done?
\nShannon<\/b>:<\/b>\u00a0 The best one is probably when I was at an auction and I saw that there was a block of flats. It wasn\u2019t an on-site auction; it was actually in a pub. There were about five or six flats being marketed that day.
\nFor some strange reason, I was there for market research but there was a real immediate sale and it was way under in my opinion. I had it priced at early $2 million and I managed to buy that for $1.475 million, so a good immediate equity and there\u2019s value-add that could be done there as well. It was in an excellent position such as New Farm, which is one of Brisbane\u2019s premier suburbs.
\nKevin:<\/b>\u00a0 You have to be pretty sure of yourself to be going along to an auction like that \u2013 or any auction at all, I guess \u2013 and be able to seize on that opportunity. Did you have yourself set up for that in terms of your finances?
\nShannon:<\/b>\u00a0 I knew there was capacity, but I wasn\u2019t there to buy that day. Sometimes you just have to take the opportunity when it comes. I wrote a 5% check and spoke to the bank on Monday, but again, I was in pretty good knowledge that it would all go through.
\nKevin:<\/b>\u00a0 And went home and said to your wife, \u201cI know I went out to buy a loaf of bread, but I just bought an apartment block.\u201d
\nShannon<\/b>:<\/b>\u00a0 Yes, that\u2019s right.
\nKevin:<\/b>\u00a0 How do you pick the suburbs that you\u2019re going to invest in? What\u2019s the strategy you use?
\nShannon:<\/b>\u00a0 I look for a high owner-occupier percentage because these people love their houses more. They\u2019re emotionally attached, and they\u2019re always improving them because that\u2019s just what us humans do.
\nIf you buy in the so-called investor hot spots, you tend to get less renovation, extensions, and improvements \u2013 hardly even maintenance kept up. The tenants don\u2019t treat the properties as well, and you\u2019re more prone to a correction in prices.
\nIt all sounds well and good to get ahead financially and buy properties for investments, but when there\u2019s a downturn in the economy \u2013 thankfully, Australia hasn\u2019t had too many downturns in 25 years \u2013 even when there is just a bit of a hiccup or a GFC, you see a run on prices. That\u2019s when your values collapse, especially in those investor-prone suburbs.
\nKevin:<\/b>\u00a0 In the early days, Shannon, when you first started out, new to the industry, who did you network with? How did you get going in those early days?
\nShannon:<\/b>\u00a0 I think having to find truthful people\u2026 People who walk their walk and are good to their word are hard to find, but when you do find them, it\u2019s great. A mentor is probably the biggest shortcut to wealth, I think.
\nI\u2019ve been fortunate to have mentors such as yourself, Kevin, and Michael Yardney, and Andrew Reece as far as a business mentor, as well. That really does help you. If you learn from your own mistakes, you\u2019re on a good path, but when you learn from someone as being ahead of you in the game, you\u2019re standing on the shoulders of giants, really.
\nKevin:<\/b>\u00a0 Thank you for that.
\nYou spoke there about your investment properties. The ones you\u2019ve mentioned are around the Brisbane area. Would you invest outside of Brisbane? Would you also then invest outside of Australia?
\nShannon:<\/b>\u00a0 Yes, I have invested into London. I love London as a real estate place that draws a lot of people in from other countries \u2013 pre-Brexit. But there\u2019s an M25 that hems in the development and they don\u2019t deal to me skyscrapers, so you always have that scarcity. You have that pent-up demand, which is good for capital growth.
\nI am interested in investing into Sydney and Melbourne capital cities, as well. They\u2019re true international destinations. That adds a little bit more market depth. I haven\u2019t done it yet just because I\u2019ve seen better value closer to home and those markets have been really hot in the last three years. For me, when I\u2019m buying, I prefer to buy when there\u2019s more value and not when everyone is cramped in making it a hot market.
\nKevin:<\/b>\u00a0 You\u2019re at the front line. You\u2019re talking to investors all of the time. You\u2019re a successful investor yourself. What is the most common question you\u2019re asked by investors, and what is your answer?
\nShannon<\/b>:<\/b>\u00a0 I think a lot of people are in a rush. They\u2019re in a rush to leave their day job, buy properties that are in the short-term going to add to their lives \u2013 be it positive cash flow, or be it that it\u2019s off the plan and heaps of tax benefits, or they enjoyed a really good holiday and they think that\u2019s a great place to buy some property.
\nI would just caution against those things and not be in a rush. I think the best way to get rich is to not get rich quick. You have to be there for the long term, and there have to be lots of reasons for people to live there and market depth.
\nIf you pick that long term and you have those reasons underpinning your property, you can\u2019t get burned like the people did with the mining boom in the past where it was a fickle crowd, and now they\u2019re looking at 60% off their property prices.
\nKevin:<\/b>\u00a0 Are there any books that you would recommend people should look at or read if they want to learn?
\nShannon:<\/b>\u00a0 The bloke with the beard, Michael Yardney, first bought out How to Grow a Multi-Dollar Property Portfolio in Your Spare Time<\/i>, and that was one of the ones that really shaped my property investing philosophy.
\nKevin:<\/b>\u00a0 That was even before you knew him, I guess.
\nShannon<\/b>:<\/b>\u00a0 Yes, definitely. Back in the late 1990s or early 2000s, I attended a seminar. I\u2019m fortunate enough to work with Michael now in that company, but it\u2019s funny how things happen.
\nI think there are a lot of people in that wealth-generation business who are trying to sell you vehicles that are bound to be around that wealth generation but in reality, they don\u2019t actually get you there and could be taking you further away from your dreams and goals.
\nI think always see where the benefits lay, and I think fee for service is more ethical and genuine than someone who is getting undisclosed commissions from a builder or a developer.
\nKevin:<\/b>\u00a0 Yes. Tell me about personal development. What do you do to develop yourself and keep your knowledge space growing?
\nShannon:<\/b>\u00a0 I\u2019m always interested in leadership and business and entrepreneurship, so I\u2019m always listening to audio books, Facebook feeds, and things like that or people who inspire me and have walked a different direction. You find that they\u2019re mostly generous risk takers looking to add value to the world and solve the world\u2019s problems.
\nI think trying to keep your head positive, motivated, and inspired is half of the battle. It\u2019s all between your ears. If you think negative thoughts and negative outcomes, that\u2019s probably what you\u2019ll attract into your life. But conversely, if you think the other way, you\u2019ll probably get some good benefits and opportunities coming into your life.
\nKevin:<\/b>\u00a0 You mentioned earlier in our chat that you have a very supportive family and you\u2019ve invested with them. Obviously, the conversations you had with your folks were very supportive. I know you have a young family. What is the kind of language or education you\u2019ll be taking them through to instill in them this mindset of investing?
\nShannon:<\/b>\u00a0 I think the concept of making money work for you. I think that time is more important than money. Every currency known to man at one time has been worth practically nothing. I think time is really more important than money and how you leverage that time is really important. You do that through investing, making money work for you, and delayed gratification.
\nI suppose schooling institutions don\u2019t really make our children financially literate; it\u2019s up to us, as parents and primary educators, to take that role.
\nKevin:<\/b>\u00a0 What\u2019s the most important piece of property investment advice anyone has ever given you, and who was it? Who gave you that advice?
\nShannon:<\/b>\u00a0 I think when I learned that the money is in the dirt and they\u2019re not making any more land. I can\u2019t really remember where I first read that, but it made me think much differently about property.
\nI think people can get carried up with the shininess of property and things like that, but it\u2019s really about dirt \u2013 and not all dirt is equal. There are some properties that even though it\u2019s a much smaller patch, it\u2019s worth a lot more than, say, an Anchorage farm or something if it\u2019s far enough away.
\nWhen you learn it\u2019s about dirt and demographics, it\u2019s a bit of an eye opener for you.
\nKevin:<\/b> \u00a0Finally, the worst piece of property advice you\u2019ve ever been given?
\nShannon<\/b>:<\/b>\u00a0 Probably when I was a bit of a novice investor, taking advice from a sales agent. I think that\u2019s probably the exact worse person to take advice from because they\u2019re not working for you; they have a vested interest.
\nI remember this particularly ugly two-bedroom apartment with a triangular bedroom. Triangular bedrooms just don\u2019t make sense when you have a rectangular bed. But how this would be a great investment and I should take it on and allow the tenants to live there in very much under-market rent. That\u2019s all the wrong type of advice to be taking. It should be just glanced over really.
\nKevin:<\/b>\u00a0 Shannon, thank you for sharing your thoughts with us today. It\u2019s been great talking to you, mate, and I always enjoy our time together. Shannon Davis, from Metropole Property Strategists and also Image Property Management.
\nThank you for your time, Shannon.
\nShannon<\/b>:<\/b>\u00a0 No worries, Kevin. Thanks again.<\/p>\n","protected":false},"excerpt":{"rendered":"
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