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Property and The BBQ Advisor

Sep 02, 2013

From time to time Australians are accused of having a ‘tall poppy’ syndrome. That is, we seem to enjoy tearing down those around who are more successful than us in our chosen field. As a consequence of the ‘tall poppy’ syndrome the successful people amongst us then tend to become a little reserved in sharing successes. A knock on effect of this is that the vocal ‘BBQ’ experts tend to get too much air time and the sharing of information is distorted. Because of this we are all poorer because of the lack of quality information and guidance.

Let us look to major sporting fields, and look at the various coach appointments, for some guidance. Almost without exception, coaches at the top echelon of major sporting competitions in Australian have enjoyed success as a player at that same level. In effect they bring their previous playing experience, tweak it and establish a coaching doctrine based on their personal experience.

I can hear you thinking, what does this have to do with property? In short, a lot!

If you are seeking property guidance then a free piece of advice I will give is to make sure you are speaking to someone who is walking the talk rather than one of those ‘BBQ’ experts. By doing this it means you will be ‘coached’ by someone who can bring direct experience to the conversation rather than being forced to listen to someone who may wield a convincing argument based on half-truths or urban legends.

Even though there are some who say otherwise, property is not as easy as falling off a log. If it was, everyone would be doing it!. At the same time it doesn’t have to be overly complicated provided some key understandings are followed.

My observations, based on experience, are;

Property is not simple and it does take time. It is common knowledge property is a long term investment. Despite this, many investors sell within five years and give away any future growth.

Property is a business – it is not a hobby. Successful businesses are built through a clear set of goals and by attention to detail. Property is no different. Giving property a go is not an option - there needs to be a focus on getting the basic fundamentals in place and extending upon these is of paramount importance.

Property is not a ‘cookie-cutter’ strategy where one size fits all. We are all different and come to the property table with different gross and disposable incomes, family situations, career circumstances, levels of equity, risk profiles and property goals. Matching these factors with an over-arching strategy is critical to your success.

If I can share some key principles for success and hope you are able to apply them in your own journey.

1.       Try and buy property below market value, or one that you build equity into ahead of market rates. The creation of 'quick' equity is of paramount importance to property investors. Spare, and increasing, equity and sufficient income are fundamental to your ongoing success.

2.       Wealth is created through asset growth so buy with growth in mind. Buy in areas with a proven track record. All asset classes go through cycles. Property is no different. Risk can be minimised by buying in areas with a proven track record.

3.       Equally, buy with cashflow in mind. Property investors do need to have a suitable cashflow to sustain their property portfolio. Without this you are exposed to interest rate fluctuations and may have difficulty building a buffer for the times when your cashflow may be impacted.

These key principles have been used to guide and develop the Eos Wealth Equation. These principles are the basis of our Armchair Developer® program and will work for most investors, particularly those with sufficient equity to get started.

We have developed the Eos 'Wealth Equation' after looking at what happens when investors adopt strategies that don't consider all the key principles of research, growth and cashflow. The Equation has evolved over a number of years and grew out of our personal ‘hands on’ experience and some observation of the failings of other, less robust, strategies.

Category: BBQs