Actually, it could be 14 or 21 or 99 but we’ve developed a bit of a habit of condensing things into relevant stuff – cutting out all the noise and fluffy-ness..
The vehemence with which you might agree or disagree with our list would depend on how much of a conformist you are. As for us, we have a pretty radical approach to property investing. So cutting to the chase… let’s get on with the list in no specific order or the gravity of un-learning you need to do.
1. You should buy the type of property you would wanna live in yourself
This is a big one. Have you ever had someone tell you that they’re considering buying an investment property in “that” suburb at “that” sort of a price point, which, almost always happens to be in the “median + 20%” range. The rationale being, “I don’t want to buy some cheap shit in one of those petty, low income suburbs…” – after all, ‘I have standards and I can afford to buy a property in an upmarket suburb… appreciation there is higher than the low income places…” – if you’ve been on the listening end of this garbage, do the universe a favour – smack the daylights out of this person the next time they open their mouth with such garbage.
There couldn’t be a bigger mistake you could make in the world of property – buying where you would wanna live. Don’t believe me? Here, read this – Tells you all about the market tiers and where demand is persistent.
2. The only way to get into buying a property is by saving up a deposit
Well you’ve got all the banks and their little yellow boxes they gave you in pre-school to blame for that one. Look… saving is a good thing… but the fact is, none of us do. IF we did, our households wouldn’t be carrying 169% and 200% debt to income ratios across NZ and AU respectively. It is true that as a first home buyer, you’ve got to come up with a cash deposit of anywhere from 5% to 20%, depending on market, climate and income. However, it is not true that that deposit needs to be “saved’ – it could be “created” from using SMART thinking.
3. A Sale & Purchase agreement is the only way to execute a property transaction
This is an easy one to bust and to be honest, I find the subject of S&P rather boring…so I’ll keep this one really short. There are plenty of other options for executing a transaction – OPTIONS being the most powerful one.
4. Anytime is a good time to buy property – it will only ever go up in value
Oh dear! How do I say this politely… If you’re carrying this kind of mindset and are considering buying a property – please do it ASAP and email me. Because, I will be happy to take the property off your hands at a massive discount when the proverbial hits the fan for you. My dear… the property market, just like every other asset class, has a cyclical nature, and while no one can predict the cycle with god-like accuracy, as an investor, you’ve got to be mindful of what you’re buying into and discounting timing is probably the worst thing you could do. SMART Property investors have a knack for buying at the right time, for the right price, in the right location.
5. Why pay rent when you can use it toward your own mortgage
Someone please kill me right now… take that knife… and stab me right through my eyes…do it and when you’re done with me, please go ahead and disown the family member who planted this idea in your head, quite possibly while you were very young and didn’t know shit from shit. Consider this: Life is a business. You have cashflow, you have money in and money out, you have assets, you have debt, you have shareholders (your family), you have directors (possibly your partner along with you), you have bills and as a consequence of all these, a balance sheet.
Do yourself a favour. When you go to work tomorrow, ask this question to someone wise in the office, probably the boss if you can: “Yo! Boss… why did we lease this printer or that company car or this office… why don’t we just own them all instead of paying someone else rent for it”?
You will have your answer…If not then make a comment below and I’ll give you a better answer.
6. Apartments in the CBD are a great buy – especially off the plan. So cheap!!!
No land component. So what goes up in value over time? Its fluff and hot air. No solid market force behind this except dumb money buying where smart money already sold out. Nothing more to add. Its a silly idea. Full Stop.
EXCEPTION: Air BnB rentals. That’s it.
7. When everyone around me is buying, that’s the universe telling me that I need to be in the market too
Aah… I was waiting for this one. Did I introduce you to FOMO? Its a nickname
for an old friend acquaintance for someone from before I went to Uni… I never really liked her but she always seemed to have the ability to capture everyone’s attention and just steal the limelight – you know? She was mildly attractive (and no, I’m not being judgmental), but we never really hung out much – it would never have worked out anyway.
Turns out, that in recent years, I’ve kinda been bumping into her randomly every now and then and its beginning to become a bit of an annoyance… She carries huge power over people, a bit of a vodoo child of sorts, instills fear in the hearts of men (and women too) and leads them to do terrible things, only to satisfy her sadistic appetite for watching other people in pain – what a total b***ch.
FOMO is who shows up at your doorstep when everyone around you is buying. FOMO is the one that disguises herself as the “voice of reason” and the “universe’s gift to you” and the “answer to your prayer” when you get this feeling that “everyone around me is buying”.
Everyone… meet FOMO – Fear of Missing Out
Need I say anymore?