Beware of the property expert

BY JUSTIN WOOD

One of the great things about Property Toolbox is it is100% independent, so I can basically write about whatever I feel like. And today feels like one of those occasions.

There are hundreds of so called ‘experts’ in Australian property. There on TV, radio, magazines and of course the internet. Basically if you have bought a house you can be a ‘property expert’. Now there are some excellent commentators out there, don’t get me wrong but the majority just spill rubbish. For some reason to get the inside scoop you have to buy their property report or service, and if you don’t your investment will be met with certain doom.

When did property investing get to be so complicated?

Just like the banking industry it only got complicated when many property commentators realised they could make more money. Their basic mantra goes something like this:-

  • Don’t educate yourself
  • You will get it wrong
  • It’s far too complicated
  • You take all the risk and all we ask in return is a small fee or commission.

Sounds great where can I sign? Yeah right!

What if every expert is wrong?

Every property commentator has their own view on how you should invest: long term, cash flow, flips, capital gain, renovate for profit – the list goes on. But they can’t all be right?

Firstly I’m definitely no expert in property. I’m also not a property spruiker. If I believed property would half in value tomorrow, I would be the first to move my money to another asset class. Of course I don’t believe a property crash is on the cards…yet.

It’s important to get advice from people who either dont have a vested interest in the property market continuing to rise or who have done exceptionally well financially by investing in residential property.

Let’s be upfront, many commentators give out information that can really harm your financial position.

For example if I listened to one particular ‘celebrity expert’ I wouldn’t have used my equity to invest in additional property, instead I was advised to save all my extra cash to pay off my principle place of residence sooner.

If I followed that advice I would be many thousands of dollars poorer today. That’s no joke and is scary to even write about.

If I listened to another well known commentator and bought in ‘hot spot’ locations, I would now own property’s which achieved little capital gain and modest rental returns. Once again my net worth would be seriously diminished.

Would the real property investment expert please stand up?

For every course and seminar I have been too I am never advised to take my newly found information (which cost a small fortune) and start looking for quality investment deals myself. Oh no instead you have to use their services, whether it be a property report, buyers agent or even advised to purchase a particular companies off the plan investment properties. For some reason this part is always at the end.

Basically most seminars I have been too is like one of those ads where you don’t know it’s an add until right at the very end.

Now I’m not saying you can’t take advice from courses or seminars. There are some great speakers out there that can help you on your way and also confirm your own research.

In-fact two well known commentators I use and recommend are:

1.       Michael Yardney
2.       Jane Slack-Smith

Why I like these two speakers is because they keep property investing simple, the way it should be. In-fact they follow the same basic system of most wealthy people I know ‘Buy the best property you can afford in an area that will see increased demand.’

I followed this advice for my first purchase and bought what I could afford, a simple dated two bedroom unit 3kms from the Brisbane CBD. And what good advice it was.

Your taking all the risk, why not keep your cash

Now the industry would hate me for saying this but of all the successful people I know not one has used a fancy hot-spotting  report, buyers agent or put their faith in a company to do all the leg work for them.

Instead they educate themselves through books, courses and online articles to empower themselves and be a true active investor involved in every decision.  There’s nothing like a bit of skin in the game to make you sit up and take notice.

Have a great week, talk soon!

Justin Wood is the director of Property Toolbox Australia, a successful investor and a leading expert in wealth creation through property, businesses and commodities. Justin has educated himself to build an extensive investment property portfolio through a safe strategy of buy, hold and renovate.

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