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Two ways of getting pricing disparity #sourceit
I think there’s a lot to be said for perseverance when you’re purchasing. It’s like you knock on so many doors and you get slammed in your face and then eventually one gets opened.
It’s a bit like that with property deals: if you search long enough and hard enough, you’ll get a good deal but it takes a bit of effort. And that pricing disparity, you can overcome that in two ways.
One is finding a suburb that’s got that big stretch of values, which is naturally higher in the market at a higher price point and higher median. Or you can buy under market just by either seeing a higher and better use that everyone else doesn’t see, or getting a good deal by being in the right place at the right time.
If you’d like to know more about renovation and how to save you time and make you money, download my ebook Renovation tips and tricks http://investorschoice.com.au/renovation-tips-&-tricks
Over the last few months you will know that recently I have been subjecting my family to 80’s movies – yes Melbourne lockdown has been hard and long.
We recently watched The Pursuit of Happyness. (Ok, I know it’s not an 80’s movie, but the story is truly inspiring…) How a single Dad did everything possible to secure the future he wanted for him and his son …. and to the say the least…it was tough – living on the streets type of tough.
It makes you realise that, despite all the things we have been dealt this year, we are still fortunate, more than most.
Melbourne lockdown has been tough. Today we hear that we can now travel 25km… although this feels like a relief I am not sure there is anywhere I really want to go for walk that is within 25km, regardless it is nice to know I can. Maybe for excitement I might visit a supermarket for my weekly grocery shop which is outside the 5km limit I have been under for the last few months.
All these impositions and changes to our familiar routine makes us resilient. Just like the character that Will Smith plays in this movie – he never gave up – he had a goal and he was focused and although things got tough – and sometimes he just had to have a good cry – he kept going.
I have just finished a one day (virtual) mastermind with my mentoring clients, hence why this email was not sent earlier.
We have explored the stories we are being told by experts and media about the property market, the economy and the future. We have explored who benefits from the stories being told (and even a conversation about the documentary Social Dilemma). We explored the stories we tell ourselves, the stories that could try to derail us achieving our goals. We then jumped forward and redefined the goal we are trying to personally achieve and we defined the path to achieve that goal. Just like in the movie…
There are 3 remarkable scenes that stood out to me from the movie Pursuit of Happyness (not a spelling mistake).
The Drowning Man scene: this is similar to a story I used to tell when I used to speak at seminars. Essentially, there is a drowning man, 2 boats come by and ask if he needs help. He says “no, God will save me”. He drowns… He goes to heaven and says “God why did you forsake me?” God says “wow! what do I have to do? I sent you 2 boats…” (click see the clip)
So here is the thing.
For some, you may feel like they are in a situation outside your control, and you can do nothing, but take the time to look around because their will usually be something to support you on your journey through. A random act of kindness, an incredible sunset, a call from a friend. Even when things are dark if you look you can see the light.
In the last few months I have been thinking a bit about what it takes to push through, to be resilient, to not give up.
Because I get it, life is tough for lots of people at the moment.
So I wondered, could you ‘rehearse’ resilience, could you prepare for the worst-case so when you faced it you were ready to act?
In all my property investing teachings I risk-minimise everything I can. I have used this technique for over 20 years and I have taught it for nearly as long. So why not apply that to life?
My philosophy has been, if you know the worst-case scenario, you can take action to minimise the risk.
So I started researching how would you prepare yourself, and your children, for a downside event, maybe another pandemic, the next big cultural shift, the next spanner in the works?
What do we need to make us more resilient?
Does anyone practice the skill consciously of resilience?
Who does this and how can I learn what they do?
I didn’t have to look far.
I had been following my cousins’ cycling over the last few months. He and his brother and their folks moved to Colorado, USA, over 10 years ago, so the boys could have the best opportunity to develop their cycling skills. Both brothers raced in competition teams and were successful.
However, at one point they lost the love of cycling.
So they took off on an adventure and made a film cycling the 2500km from Port Macquarie in NSW to Ayers Rock, and then they did it again across the US.
Lachie (one of my cousins) then decided to enter a few off tour and off road races. The kind of race without the 10 person support crew rather the type of race where you carry your bike over fences, sleep when you are tired, sometimes in ditches, get lost in the wilderness… he literally took to the wild.
Riding hundreds of kilometres without sleep for days. This was real Bear Grylls meets cycling stuff. And he won, twice. Last year he cycled 1,803 Kms from Lands End to the top of Scotland, in the GBDuro, covering over 260km a day and leading the pack usually by about 500kms.
After that ride, he said:
“It’s about pushing the envelope to where your boundaries are. Something like this, you’re going to find them. It’s all about how you deal with them, and hopefully how that helps you grow out of it.”
And then last month, he completed another one of these epic adventures, The Badlands… 700km in 2 days.
Here some excerpts from his interview about that race:
“It’s about putting yourself in difficult situations often enough that they’re no longer difficult… I specifically went out three days before this race with my bike fully loaded and tried to get myself lost in the Pyrenees, which I did very successfully. And then it involved a two-hour hike off a mountain to get out of it.
I did that to try and sort of frustrate myself in the difficult situation, but just make sure all those mental cues are there to calm yourself down, bring yourself back and be like, “It’s fine.” Because that ultimately is the limiting factor is how you deal with that difficulty.”
(full interview here)
Seriously, he got lost on purpose!
He faced the biggest fear, getting lost, and then learnt how to deal with it so he was prepared in case it ever happened when he really needed to be level headed…when it counted.
I recently attended a talk by Mark Mathews, a big wave surfer. His biggest fear is drowning… so, in an attempt to overcome his biggest fear, he had one of his support team submerge him underwater until he passed out, so he could know what his worst fear would feel like. So this is going a bit extreme, in my opinion, but it demonstrates what elite athletes will do to be the best. **WARNING: DO NOT DO THAT AT HOME**
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So ‘The Pursuit of Happyness’ – the movie, Lachlan Morton – the cyclist… What does it all mean?
To me, it all comes down to how you deal with tough times. How you look at the situation, how you react, how you prepare yourself for the worst and take action to build resilience to be able to face anything thrown at you. Having the confidence to back yourself.
These last 7 months have been tough. Take a moment just to acknowledge that you have had a horrible time. It is fine to recognise this, even whilst knowing others might have done it tougher.
However, it is how you come out of this that will make you better.
Tough times will come again and you now know what having your life turn upside down feels like, you have practised for when it happens again and you will be better prepared for the next time.
Regardless of what you read, these are not unprecedented times. Pandemics have been happening and being recorded for over 2,000 years.
Just remember, this too shall pass and you be ready for the next difficulty that life serves you.
During our wrap of my quarterly mentoring session on Sunday, I asked everyone to share their key take away. Was it the Vision exercise, the real market data analysis, the professionals and experts who joined us to discuss the on the ground intel? As good as they all were what kept coming up was this quote:
I encourage you to focus on what you can control, set yourself a goal, be vigilant and resilient and congratulate yourself on how much you have learnt and how far you have come.
And as always here is to Your Property Success
P.S. Oh so you want to know the other 2 scenes I loved from the movie?
1 Why you should no one ever steal your dreams https://youtu.be/dPEdwaLQLag
2 If you are dedicated on being more efficient and being the best you can be to get done what you need to do, then sometimes a little change can make a bit difference https://youtu.be/xPBBnS4br9w What would you do with an extra 8mins a day? How could you get to the top of your list without going through the process everyone else does?
P.P.S. If you are wondering what young Lachie is up to at the moment – well, he is back on gravel and one of the 18 Aussies in the 3,497 km Giro ditalia race that will take place between the 3rd and the 25th of October. If you are like me and know nothing about cycling, apparently this is the Italian version of the Tour de France – if you are really keen you can track him – a different type of dot map this time 😉
If you would like to checkout helpful information then you might find the following useful.
When you start dotting the capital growth in the last 10 years of those areas, you start seeing that ripple effect in action and you start seeing that pricing pressure where you find that affordability does become an issue for people and they move into the next suburb.
So if you’re talking about your concerns about population growth and employment, I would be less concerned about that. But I would be more concerned about finding the opportunity of where the next kind of hotspot is.
I would be less concerned about the population growth and employment but more interested in targeting where you can make the most money and the most profit which is anticipating that next area that takes off.
Download the ebook buying process to know more about it. Don’t make the common mistakes that could cost thousands of dollars.
https://investorschoice.com.au/buying-process/
#sourceit #propertyinvestment #mortgagebroker #buyingprocess
Most people in Australia live in houses. So when we talk about low risk property investing, I’m always looking about minimising my risk.
Often we talk about looking at the number of sales, the vacancy rate, the population demand, and the type of property because we’re minimising your risk over time. [This is] making sure that maximum amount of people are going to want your property.
I personally think that land goes up in value and, obviously, the property depreciates. So I want to have a land component.
But I don’t want to have a thousand square meter block in an area where the typical properties are 500 square meters unless I was going to subdivide, and that was my whole strategy.
So I’ll look at what the typical size block is and what the typical property is. And I want to look at the demographics and the typical number of renters.
If you’d like to know more about the buying process. Don’t make the common mistakes that could cost thousands of dollars.
Download the ebook buying process https://investorschoice.com.au/buying-process/
#sourceit #propertyinvestment #mortgagebroker
It’s October and Spring is finally here. This is always a wonderful time to get out in the garden or in nature, on foot or on your bike, even if travel restrictions mean we need to stay closer to home this year. In Melbourne we are virtually under lock and key but we are making the most of it! In the last 5 months the Investors Choice team has worked hard in re-imagining and re-engineering our entire business systems to make it easier to work with us. We have heard your feedback and have developed an entire encrypted online portal, no more fact finders! When you come back to us again to discuss your finance I think you will be delighted with what we have created.
Over the last 8 weeks I have participated in over 25 webinars, training sessions or summits on what impact Covid-19 will have on the economy. I have never trusted the media with reports and have always gone to the source to secure the raw data and information. I have to admit there has been many mix messages and I was definitely in a wait and see after the previous months of webinars that I had attended.
However on Friday, in my monthly call with my mentoring private clients, I pulled it all together and showed how all the messages are pointing to optimism. There is too much to summaries here re the rise of remote working, affect on regional house prices, changes in home design, reduction in immigration, increase in domestic travel, the bubble effect, industries that have innovated, new fin and property tech companies that will change how we buy real estate – so much, and that was just the first 5 webinars. Later this month we are going to be spending a day together combing through the data and looking for opportunities, in property, business and personally. I look forward to sharing some highlights next newsletter.
Normally I am a positive person but I have to admit I had a ‘go slow’ on many of these clients throughout April, May and June whilst I monitored what lay ahead but July and August started showing signs that things were not as bad as forecasted. Economists started indicating they over stated the downside, even the banks started pulling back their 15% property market drop predictions to 5% – less than what most markets went up last year. And Westpac is predicting 15% growth in 2021-2022.
Even the budget leaks are indicating this is a BUILD and GROW budget – this is all about jobs and stimulus. The markets are predicting an interest rate cut, but it has not come through this month, and the RBA have said they are not putting rates up for possibly 5 years. There is pent up demand and those with secure employment and a buffer of savings are now on the starting blocks. Yes 2021 will be one of repositioning and recovery and small businesses (especially us in Melbourne) are really going to have a tough time keeping staff and trying to recover but with interest rates so low, Australia being one of the safest countries in the world, and a vaccine getting closer and closer, if you are in a position to do something please contact us.
As most of you know I spent 20 years as a mining engineer and I have been speaking to friends in the industry and it corroborates what I am seeing with many of the countries rebuild plans and I think we might just see our commodities leading the way to a better economy. This is also good news for WA and NT and Qld mining towns that have had negative growth for many years – however this is not an endorsement to buy there – this is just a glimmer of hope to those who have – I encourage you to possibly get ready to sell.
Gold companies profited from rising gold prices, up almost 30% this year due to gold’s status as a ‘safe-haven’ investment. Iron ore miners benefited from a lift in demand from China and rising iron ore prices, up 46% this year. Every major world economy will be spending on infrastructure – in short they need our iron ore.
While homewares and electronics retailers and those with a strong online presence enjoyed increased demand from Australians staying close to home. Australians have saved more in the last 6 months with savings ratio up to 19.8% the highest since 1974. Yes we are in a recession but it has been artificially created. Previously we were riding on a wave of economic growth, 29 years without a recession, prior to Covid-19 we were not heading to recession. Australia is truly a lucky country and we are uniquely placed to open the boarders late 2021 possibly sooner with a vaccine, and we will welcome highly skilled and International students back to Australia.
Challenges remain, however. Unemployment rose to 7.5% in July, the highest level in 22 years, but no-one expected it to fall to 6.8% last week. The budget will also address this and I predict no ‘economic-cliff’ will emerge.
There are headwinds but there is also an underlining optimism. One conference I attended had Sir Richard Branson speak… let’s be clear on this he has a hotel business, an airline business and he launched his cruise business the first week of March 2020 …. if anyone had a reason to curl up into a ball it would be him. BUT wow! The disruption and speed of development of technology, societal change, education and so much more has him excited for 2021 and beyond. If he can draw positives from now then I am sure most of us can.
Optimism is the undying belief that the future is bright, but it’s not a denial of the current state. Its about having a vision in a time of crisis, when it’s OK to feel your way in the dark because you have a direction and you’re moving forward.
We are moving in the right direction.
I have also been reading from some of the works of Marcus Aurelius, he was a Roman emperor from 161 to 180 A.D. During his reign there was the Antonine Plague, it lasted 14 years, it killed 5 million people (and him). His writings follow the virtues of the Stoics. One of their common slogans of Stoicism is:
“Fear does us more harm than the things of which we’re afraid”.
And to someone a bit more recent Warren Buffet:
“Be fearful when others are greedy, and greedy when others are fearful.”
For those who have a safe job and savings….this just could be your time.
If it is make a time to talk to us today www.investorschoice.com.au/bookacall
As always here is to Your Property Success.
Jane Slack-Smith
Director Investors Choice Mortgages
On October 6th the Government will outline one of the most important Federal Budgets in living memory.
The biggest government stimulus program since WWII has resulted in a budget deficit of $85.3 billion in the 2019/20 FY, with more spending on the cards to drive economic growth.
The Reserve Bank has kept the cash rate at its current record low of 0.25%.
Please get in touch if you’d like assistance with your personal financial situation. Click here
Interest rates in Australia have hit their lowest in history, and are unlikely to head in an upwards direction for some years to come. Philip Lowe, Governor of the Reserve Bank of Australia indicated the cash rate would be likely to stay at 0.25 percent for some years, and the board would not increase the cash rate until there is progress towards full employment and the target range for inflation. i
Refinancing your home loan is a great way to take advantage of this low interest rate environment. For those with a mortgage, it’s a golden opportunity to save thousands, if not tens of thousands, of dollars over the life of your mortgage and is definitely not to be missed!
Refinancing on the rise
According to figures released by the Australian Bureau of Statistics (ABS), there has been a 52.1% increase in refinancing compared to June last year. The current low interest rate environment, together with changes in financial situations for many due to COVID-19, could be driving the significant increase compared to the same time last year.
So don’t get left behind, talk to us about refinancing your home loan as soon as possible to take full advantage of the low-interest home loans now available.
So why refinance?
Refinancing is replacing your current home loan with a new one, usually with a different lender. Whether you’ve taken out a home loan in the last 12 months or have been paying yours off for some time, it can be worth assessing if there is a better loan for your current circumstances.
Most homeowners refinance in order to save money and reduce the term of their home loan, however there are many ways refinancing can be used to improve your financial position or lifestyle.
By refinancing, you can access the equity you have in your home, which can then be used to renovate and add value to your home, buy an investment property, invest in shares, fund your children’s education or even start your own business.
Some homeowners are motivated to refinance in order to get a home loan that is better suited to their circumstances and access features such as a redraw facility, offset account, flexible repayment arrangements, or to change the type of loan, eg from a variable to a fixed rate.
Refinancing can also be a strategy to consolidate your debts including credit cards with high interest charges or personal loans into one easier to manage, lower interest rate payment. If you are suffering financial hardship we can help you negotiate with your lender. They may agree to charge you a lower interest rate, not charge further interest payments for a period of time or other options that could improve your ability to manage your financial situation.
What to watch out for when refinancing
While refinancing can save you a great deal of money over the long-term, it’s important to be aware of some of the potential costs and downsides when replacing your existing home loan. These include:
How can we help?
Refinancing a home loan is a big step and the home loan environment is complex but we are here to guide you through the whole process and find a solution tailored for your needs. Make a time to talk to Lisa today, Click to Book a Time
i https://www.rba.gov.au/speeches/2020/sp-gov-2020-08-14.html
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