Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

Who make better property investors – women or men?

Up till now the answer may have depended on who you asked (or what gender they were) but neuroscientists have uncovered evidence suggesting that, when the pressure is on, women bring unique strengths to decision making and make less-risky decisions under high-stress situations.

According to the neurobiologist Ruud van den Bos, men under stress experience a huge spike in cortisol, which degrades their decision-making ability.

Women experience a smaller spike, which creates urgency but doesn't impede decision-making.

Every pundit and analyst in the business world has repeatedly pointed out that today's business world is continually getting more stressful.

The more stressful things get, the better that women (on average) will become at making decision than men (on average).

So, the conclusion I have come to is that when the going gets tough, she gets smarter and you get dumber.

And since disruptive innovation means the going is always getting tougher, if you're not hiring and promoting women, you're only proving how dumb you are.

But back to property investment… Who make better investors?

When it comes to property, men have a higher tendency to gamble and are more easily manipulated while women are usually more cautious, seeking low-risk and long-term sustainable capital growth.

Riskwise found that Property marketers often use enticement by appealing to men's visual senses. For example, it's common practice for female models to be hired to stand beside professional sales people at property expos.

A study of real estate agents who hired models in the past several years is revealing. Typically, the models increased the traffic to their booth by 50 to 100 percent, with a similar increase in the rate of high-quality sales leads, many of which converted into transactions.

It was noted by these agents that even a short absence of the model resulted in an immediate and significant decrease in traffic to their booth.

And you know those so-called free educational seminars which are designed by real estate spruikers to sell off-the-plan, and often low performing, new properties?

Women are more likely to recognise that they are not the client at a free seminar and, in fact, the seminar organiser likely works for a property developer and has a contractual obligation to sell the properties for the highest possible price.

Men, on the other hand, are more likely to be swept up in the hype and believe they are the client, and that the organiser of the free seminar will truly act in their best interests.

Are women really better property investors than men? And if so, why?

RiskWise research shows women are more aware of risks and seek tools to manage it; men tend to ignore the risks.

Women's interest in risk and mitigation strategies is 38 per cent higher than men. In fact, studies have shown men are overconfident and have a higher tendency to gamble.

Of course this is a concern in the property market, where high-risk ventures can have devastating consequences.

Are there differences in the money behaviours of men and women?

• GAMBLING -- Women gamble less than men. Not only do fewer women gamble, but for the women who do gamble, they gamble less frequently.
• RISK TOLERANCE -- Men have a higher risk tolerance than women. This is a good thing and a bad thing. A low risk tolerance is a good thing when it comes to making big purchasing decisions. Women are more apt to study the details of a major purchase than men. The devil is always in the details. So, understanding the details can save you from making a big purchasing mistake.
• READING -- Women read more than men. That's the good news. The bad news is that women read more for entertainment. Men, conversely, read more for learning and self-improvement.
• COMMUNICATION -- Women are better communicators than men. The average woman speaks 7,000 words a day compared to 2,000 for men. Good communication is a Rich Habit. Miscommunication damages relationships, businesses, negotiations and can lead to mistakes and failure.
• CREATIVITY -- Men are more creative than women. This is physiological. Men have a smaller corpus callosum. The corpus callosum is the bundle of neural nerve fibers that separates the right hemisphere of the brain from the left. Recent studies on creativity have shown that those with a smaller corpus callosum are hardwired for greater creativity.
• ORGANIZATIONAL SKILLS -- Women have greater organizational skills than men. Because they pay more attention to details and are more cautious by nature, they tend to do more planning. This makes them better organized when it comes to facts then men.
• SAVING MONEY -- Women are better at saving money. They are more cautious with their money. They comparison shop to get the best deals. They look for discounts.

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"We can't make the big jobs in government or business any less stressful, but we can ensure that when the pressure rises, there's a better balance between taking big risks and making real progress." Michael Yardney

"Gambling is a poor habit. It's one of the habits that hold people back because they don't recognize that it's a tax for people who can't do maths." Michael Yardney

"They come to the party with different talents, different skills, but if they combine them, work well together, boy have they got unlimited opportunities." Tom Corley

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Who do you ask for property advice?

With so many mixed messages and vested interests, who can you really trust?

Our annual Property Investor Consumer Sentiment Survey revealed the many and varied sources that property investors consult for advice.

But since most property investors fail to achieve the financial freedom they deserve, and with less than 8% ever owning more than 2 properties, a better question to ask would be…who should you be asking for advice?

This week's podcast is designed to help you cut through the clutter:

Let's start with who could you ask for property investment advice?

Here are the people you could turn to:

1. No One
2. Friends or family
3. A real estate agent
4. A mortgage broker
5. An accountant
6. Financial planners
7. A property marketer
8. Investment seminars and workshops
9. A property mentor
10. A buyer's agent

When you look at this list you can now see why you need… an independent, unbiased property adviser or strategist.

In my mind, it is critical to have a trusted advisor when making property investment decisions. It's just too hard to do it on your own or by trial and error. There's a huge learning fee involved — of time, money, effort and heartache.

Here's a list of some of the things a good property advisor can (should) do:

1. A good advisor will first start by getting to know their clients' hopes and fears and then be future-focused to help them achieve their long-term financial goals.

1. With so many mixed messages about property investing out there (many coming from parties with vested interests), a good property advisor will help remove his client's anxiety by simplifying the complex.
2. While most buyers' agents or property sales people are transactional and think of the current "sale" or purchase, a professional property advisor will aim to develop a long-term relationship and help their clients understand the next two or three steps even before taking the first step.

1. Many clients come to a real estate advisor looking for the next big thing — some are looking for a shortcut, or the next hotspot, or a way to get rich quickly.Instead, a qualified property strategist will stop their clients speculating by recommending proven strategies that have always worked.

1. A good independent advisor will not have any properties for sale but will have a list of potential options and refer their clients to a buyer's agent who is part of their team to find the best opportunity in the market to suit their client's budget, plans and risk profile.
2. A strategic advisor will never put any pressure on their client to make an investment decision, but their knowledge, research and experience will help their clients select an investment property that is the highest and best use of their funds, and one that will work hard for them over the long term.
3. A wise property strategist will help their clients avoid the big mistakes made by the average investor and will earn their fees simply by helping their clients avoid the devastating errors made by many investors such as those who lost significant amounts of money by investing in mining towns, regional locations, house and land packages or off-the-plan properties.
4. By being a student of history, a good strategist will be able to provide perspective, insights and often optimism at a time when the media is being pessimistic, and vice versa.
5. They will also advise their clients to invest their money the way they do themselves — they must be experienced investors — not enthusiastic amateurs.
6. A good strategist will regularly meet with their clients to objectively assess the performance of their property portfolio and ensure they are heading in the right financial direction.

As you can see — it takes years of learning, experience and the perspective that only comes from investing through a number of property cycles to become a great property strategist.

Let's look at some things a property advisor can't do:

1. Even a good advisor cannot predict the future. They won't be able to tell you how the market will perform, what will happen to interest rates or what capital growth rate a particular property will achieve.

1. They won't be able to find the next hot spot for you, yet many so-called advisors suggest they can. In essence they give their clients what they are requesting, rather than what they need — sound, solid advice.
2. Even the most qualified advisor won't be able to pick the best time to purchase an investment property other than to remind you that the best time to invest was 20 years ago, and the second best time is today.
3. A good advisor won't be able to help you get rich quickly or achieve extraordinarily high returns without taking on extra risks.

What is the difference between a property strategist and a buyer's agent?

• Buyers agents are order takers — they will fill an order given to them to find you a property and will be biased towards the areas they have expertise in, but this may not be in your best interests.

• Only a property strategist has the expertise to design that "order" to suit your specific needs. They will be your long-term wealth creation partner, annually reviewing the performance of your property portfolio, and will provide recommendations on any opportunities as well as when it's best for you to do nothing.

Here are some signs that you're dealing with a property spruiker.

1. They have a one-size fits all approach
2. They don't talk about the risks
3. They talk a lot about investing but don't do it themselves

Beware of someone who:

• Has a stock list of properties to sell you.
• Offers you a property rather than an investment strategy. Red Flags
• Gives "advice" before they've found out all about you, your needs, your plans, your risk profile.
• Offers a "one stop shop." Particularly if they want you to use their lawyers, rather than your own who should vet any contract carefully.
• Tells you that negative gearing is a sound property strategy (because it's not an investment strategy at all — it's a consequence of how you finance your property.)
• Suggests property values always keep rising.
• Offers a rental guarantee to sweeten the deal.
• Pressures you into saying yes quickly to whatever it is they're offering, whether it's deciding to attend a seminar, signing up with their company to gain advice and any other sales tactics.
• Downplays the risks and related costs that are involved in property investing, and/or has an inability to substantiate their claims of profit and success. If they've helped so many people achieve success, where is the proof of that?

Links and Resources:

Michael Yardney

Metropole Property Strategists

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Michael Yardney's Property Renovations and Development Workshop

Some of our favourite quotes from the show:

"While they may know their local neighborhood, that's very different to understanding property markets and property investment." – Michael Yardney

"Some mentors are thinly-disguised salespeople." – Michael Yardney

"Put simply, if the advice is free, you're the product." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

If you want your property investments to outperform the averages, then you need to find locations that outperform the averages.

This means you need to understand how to know how to identifying areas that are gentrifying.

Gentrification is what happens when a poorer suburb is gradually taken over by more affluent residents. This in turn results an increase in rents and property values.

In today's show, I'll explain how to find this type of location.

I'm also going to tell you a story taught to me years ago by one of my mentors – the story of a Fijian fisherman. And, as you might have guessed, it has nothing to do with fishing

Finally, I will have a chat about depreciation with Mike Mortlock. Depreciation is an allowance for the wear and tear of your investment property.

Recent changes have been made in how much depreciation you can claim and what properties you can claim it on, and it's important to understand how this may affect your investment properties.

Areas that are gentrifying have:

• Some of the steps you can take to find a suburb that is improving is to go for a drive and a walk.
• You'll "know it when you see it" because you'll find evidence that people with money are moving in. They will be spending large amounts of money renovating or extending their homes.
• There will be white (the new black) SUV's parked in the driveways rather than old Ford Falcons and Holden utes.
• The nature of the shops is changing. The gyms are offering Pilates; the cafés sell cold press coffee, and the deli's serve goat's cheese pizza.
• As a property investor, if you can pick an area going through gentrification, one that's shifting from dreary to in demand, you can benefit from its accelerated growth.
• And the good news is that you don't have to get your timing perfect — the gentrification process lasts a number of decades.
• Things to look for:
• Growing incomes
• Top-end cafes or restaurants and higher-end stores
• Proximity to the city or the water
• A ripple effect caused by being adjoined to a more expensive neighborhood
• Amenities like access to a good public school or public transportation
• Character features, like older houses that are ready to renovate
• Investment from the local government in infrastructure or beautification programs

What property investors need to know about depreciation:

• In May 2017, the government changed what could be claimed as depreciation.
• There are two types of depreciation – depreciation of the building itself, and depreciations of the items inside the property.
• The changes affected properties purchased after May of 2017.
• Depreciation deductions have been almost halved for people affected by the changes.
• If you buy a new property and rent it out, you won't be affected. However, if you buy an investment property and move in before renting it out, it will be considered previously used.
• Properties built after September 1987 will still have depreciation deductions on the building structure.
• Improvements on homes built in the 60s and 70s will also qualify for depreciation deductions.
• If you renovate the property and install new assets yourself, you can claim depreciation deductions on those.

Links and Resources:

Michael Yardney

Metropole

Michael Yardney's Property Renovations and Development Workshop

Mike Mortlock – MCG Quantity Surveyors

Some of our favourite quotes from the show:

"Over the last couple of decades, the process of gentrifications saw these ugly duckling suburbs transform into graceful swans."

"Just because a suburb is cheap and there are cheap properties there doesn't mean it's destined to become the next growth area."

"Don't chase happiness, recognize it. If you don't enjoy the journey, you won't enjoy the destination."

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

You rarely see psychology discussed alongside business and investment, but I believe that psychology is foundational to entrepreneurial success.

Your mindset matters when it comes to achievement.

In today's episode, I'm going to chat with Pete Wargent and discuss his 6 rules for wealth creation. Some of them may surprise you.

6 Rules for Wealth Creation:

1. Increase Your Self-Esteem – People with low self-esteem may unconsciously sabotage their own success, because they don't believe they deserve it. Work on retraining your brain to think positively.
2. Think Long-Term – True wealth is built slowly over time. Follow this principle and exploit the power of compound growth.
3. Study and Counsel with Wise People – If you want to be successful, learn from successful people. Mentors can help you realize your full potential.
4. Pay Yourself First – Make yourself your first priority. Save and then invest a decent sum first, then pay your other bills.
5. Control Your Expenditures – You need to know where your money is going. Study your expenditures and see how you can close gaps where you're spending money unnecessarily.
6. Take Action – You can't be successful if you never make a move. Take massive and consistent action and refuse to give up.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Michael Yardney's Property Renovations and Development Workshop

Pete Wargent

Some of our favourite quotes from the show:

"You can change the way you think about yourself, you can change your habits, you can upgrade your financial thermostat, and that's through personal development." – Michael Yardney

"Most of what you do all day is unconscious, is at the subconscious level. You don't even realize it." – Michael Yardney

"I think the message is spend less than you earn, and then save that difference, and overtime invest that money." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

Many real estate investors and homeowners worry about the value of their property today. But it's important to take a long-range view and think about what the value of property will be in the future.

In today's episode, we'll talk about what may happen to property values over the next 25 years and look back at what's happened over the past 25 years.

We'll also have a chat with Dale Beaumont about Artificial Intelligence, and how that will change our lives in the coming years.

Where will the real estate market be in 25 years' time?

• While most homeowners and real estate investors worry what the value of their properties today, maybe a better question is "where will property prices be 25 years from now?" And the good news is that, believe it or not, the median house price in Sydney could be over $6 million and the median apartment price in our harbor city could be close to $3.5 million in 25 years' time.
• Over the past 25 years, the median house value nationally has risen by 412% - an annual growth rate of 6.8% or $459,900 -
• Melbourne had the highest average annual price growth – 8.1%
• • Sydney 7.6%
  • Perth – 6.7%
  • Hobart – 6.5%
  • Darwin 6.3%
  • Canberra – 6.0%
  • Brisbane – 5.9%
  • Adelaide – 5.9%
• Think about it - who wouldn't like to buy their parent's house for the price they paid for it 25 years ago?

So, what's ahead for property values?

• If property prices were to rise at the same rate as the past twenty five years, Australia's median house value would reach $2.9 million by 2043.
• Here's what Aussie's report forecasts:
• • Sydney house values $6.3 million
  • Melbourne $5.8 million
  • Canberra $2.9 million
  • Perth $2.5 million
  • Hobart $2.4 million
  • Brisbane $2.3 million
  • Adelaide $1.9 million

How will Artificial Intelligence change our lives?

• Artificial intelligence is already driving cars, reading emails and suggesting replies, and making phone calls
• Digital assistants like Siri, Alexa, and Cortana are already mainstream
• We can look forward to more driverless cars within the next five to ten years
• People might choose to live further from work if they don't have to drive themselves – driving time can become work time or entertainment time.
• Artificial intelligence can be taught to learn from the past and make predictions for the future. This can be applied to real estate trends.
• Artificial intelligence could be used to make phone calls on the behalf of investors to find investment properties that meet certain criteria.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Michael Yardney's Property Renovations and Development Workshop

Dale Beaumont

Some of our favourite quotes from the show:

"Another interesting trend that's occurred – not surprisingly – is that the proportion of first homebuyers in the market currently is less." –Michael Yardney

"What's basically happening is that we're trading our backyards for balconies and courtyards to live close to where all of the action is." –Michael Yardney

"Sydney's obviously growing at a much faster rate than the national averages and is going to add almost 2 million people to its population by 2037. That's the equivalent of adding a new Perth into Sydney by then. –Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

There is plenty of evidence that what we find most stressful as humans is uncertainty, not change in itself.

Why do some people seem to sail gently through all the changes life throws at them, while others get upset if they have to change even their breakfast cereal? The key is in how you view change, and your level of acceptance, uncertainty and resilience.

In Tom Corley's five-year Rich Habits study of 233 rich people and 128 poor people he discovered that we adopt the beliefs of our parents, family, mentors, culture, and environment.

There are two opposing schools of thought that divide mankind.

• School of Thought #1: Self-Determination Drives Life Circumstances
• School of Thought #2: Predetermination Drives Life Circumstances

Those who subscribe to School of Thought #1:

• Believe we are in control of our life circumstances.
• There is no one out there, no higher power, watching over us, guiding us.
• Those in this school believe success, wealth, failure and poverty are manufactured.
• We turn left or right, decide A or B, or do X or Y as a matter of free will, instinct or internal guidance.
• In other words, the circumstances of our lives are dictated by our own decisions, our own behaviors and the choices that we make.
• We, in effect, create our own destiny.

Those who subscribe to School of Thought #2:

• Believe we are not in control of our life circumstances.
• Some higher power is watching over us, determining the circumstances of our lives.
• Those in this school believe success, wealth, failure and poverty are outside our control.
• We turn left or right, decide A or B, or do X or Y because some force of nature acts upon us, directing us in every aspect of our lives.

In other words, the circumstances of our lives are not determined by us, but by external factors we cannot possibly control.

We, in effect, are powerless over the course of our lives.

When you subscribe to School of Thought #1 you embrace the concept that you are in control of your destiny; that you have power over the course of your life.

As a result, you develop a mindset of self-reliance.

Through hard work and personal initiative, you seek to create the life you desire.

You pursue lifelong self-education, take calculated risks, seek feedback from others and carefully weigh every decision you make.

You search for mentors to help you forge good habits that put you on the right path.

When you subscribe to School of Thought #2 you embrace the concept that your destiny is predetermined; that you are powerless over the course of your life.

As a result, you feel you are not in control of your life.

You are a mere victim of the luck of the draw.

Because you feel you are not in control of your life, you do very little to affect the circumstances of your life.

You float along in life like a leaf on a fall day, carried by the wind.

Which are you

Something to think about.

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Tom Corley

Some of our favourite quotes from the show:

"You have a future waiting for you and the future is determined by your habits, the way you think, therefore the actions you take, and therefore the results that you're going to get." – Michael Yardney

"We are where we are today in all areas of our life, whether it's financial, whether it's relationships, whether it's health, diet, because of all the decisions we've chosen to make, and the decisions we've chosen not to make." – Michael Yardney

"The question is, are you an actor in this story that's in your mind, or are you the storyteller whose actually got the right to be able to change the story?" – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

As our property markets slow down, more investors are interested in becoming involved in property development as a way of "manufacturing" capital growth.

The problem is that along with the big profits there are many potential risks.

However with good education, proper planning and a good team around you, property development is a great way to grow your property portfolio and end up having high growth properties that deliver strong cash flow and good tax benefits.

So in today's show I'm going to share:

• 7 reasons you should consider getting involved in property development
• 13 risks you must be aware of if you're considering getting started in property development
• 8 tips for budding property developers

The benefits of becoming a Property Developer.

1. Savings
2. Profits
3. Easier finance
4. Leverage
5. Tax benefits.
6. Higher rental return
7. Security

The risks of becoming a Property Developer.

Some of the significant risks of property development I have come across include:-

1. Buying the wrong property – not appropriate for development.
2. Buying the right property at the wrong price
3. Buying at the wrong time of the cycle and not having the finance to hold on to your project
4. Not doing a detailed pre purchase feasibility study – and missing out lots of figures.
5. Building the wrong end product – too expensive, or not right for market demographics
6. A downturn in the property market leading to lower property values or increased holding costs until the development properties are sold.
7. Interest rates rising during the development process resulting in increased holding expenses and therefore lower profits.
8. Increases in construction costs during the project.
9. Changes in the supply and demand ratio for real estate market as we are currently seeing in the inner city apartment market. This of course depresses property values and reduces your project profit margin.
10. Unexpected disputes with building or trade contractors or unions which can cause costly delays to a project.
11. Changes to the laws relating to property development could adversely affect the profitability and viability of your development project.
12. Unexpected delays and increased holding costs may be encountered when town planning (DA) approval is required for a development.
13. Some inexperienced developers find that some of the improvements they have made to their properties do not result in an increase in value.

As you can see many of these risks are outside the control of the developer.

Hints for budding Property Developers.

Here's some advice for new property developers

1. Some property investors move into the realm of property development not understanding the rules of the game are very different.
2. Property development is a great way of building a high growth, strong cash flow property portfolio but you need to approach development will realistic expectations.
3. Currently the tighter finance climate is making it hard for property developers to fund their projects. It is likely you'll need much more equity and serviceability than you think you'll require to get started in property development.
4. A great place for budding developers to start is by getting involved in property renovations, in fact that's how many experienced developers initially learned their trade
5. You'll learn much of what you'll need to know and you'll make most of your mistakes in the first 3 or 4 projects you undertake so start small and don't overcommit financially for your first few projects
6. Property development is a great way to manufacture or create equity, it's not a way to make an income (a living) from adding value and selling.
7. Get a good team around you.
8. The best tip is last – join us at my property renovations and development workshop on October 20th and 21st – it's a training event not a sales event and comes with my personal guarantee

Why not learn from a team that's currently involved in over 50 medium density developments and has completed over 700 developments.

Join us at our 2-day Property Renovations and Development Workshop, on October 20th and 21st we'll take you through everything you need to know to manage your renovation team, and give you the skills to step up to the big leagues as an investor and property developer. Why not click here to find out more and reserve your seat?

Links and resources:

Michael Yardney's Property Renovation and Development Workshop

Some of our favourite quotes from the show:

"Rather than buying properties at retail, when you become a property developer you can acquire your investments at 15- 20% below their market cost." – Michael Yardney

"The really smart developers don't sell their projects. They refinance them against their new higher value and take out their extra equity, this equity that they have manufactured by developing property and use it as seed capital for their next project." – Michael Yardney

"If undertaken correctly, property development can be very lucrative. If you buy your development site well, your investment will always be underpinned by the security of real estate in a prime position. – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

"Are property prices about to PLUNGE by 40-45 percent?"

Channel Nine's '60 Minutes' ran a feature with the sensational and alarming headline:

"Aussie housing prices could fall by as much as 40% in next 12 months"

It's déjà vu. Every few months, the media finds someone who's willing to stick their necks out and offer a property market doomsday scenario, predicting the end of the world for property owners in Australia. In spite of the fact that such predictions have been proven wrong time and time again...

So, is the sky really going to fall this time?

Well, I think it's highly unlikely that the property market will crash.

But today I'm chatting with 2 experts, Pete Wargent and Dr. Andrew Wilson to bring some sense back to the discussion.

Some highlights from the chat with Pete Wargent

• Different property markets behave differently, but generally speaking, if you own capital city property, you don't need to worry about a crash.
• Australians do have higher household debt than people in other parts of the world, but it's important to understand why that is. The government doesn't own most of the housing stock, so most of the rental properties are owned by landlords. This means that Australia will likely continue to have higher household debt than other countries for the foreseeable future.
• In general, Australia's debt is in the hands of people who can afford that debt – in the upper two quintiles. On the other hand, debt levels haven't really increased in the lower income levels.
• In international terms, the number of people in mortgage arrears in Australia is very low.
• Tighter lending standards have caused an intended slowdown in the market, but a crash is unlikely.

Some highlights from the chat with Dr. Andrew Wilson

• Should we be worried – are our property markets about to crash?

• Looking at the historical data, the most significant fall in house prices since 1986 was 9.6%, and that occurred over 9 quarters. The next highest was 7.2%, and that occurred over 5 quarters. There's no historical precedent for a 40% crash.

• What's the real story about household debt?

• Although debt has risen with houses prices, the proportion of household income required to service higher debt has fallen over recent years despite low incomes growth and low real wages
• Although debt has risen with houses prices, the proportion of household income required to service higher debt has fallen over recent years despite low incomes growth and low real wages
• And since the last Census, wages are up 4.1% and mortgage rates are down 0.5% with house price growth dissipating.

• What about mortgage defaults? Are they really a problem?

• Such a huge volume of garbage is being written, filmed, podcasted, Facebooked, and blogged about mortgage stress right now that it's nigh on impossible to keep up!
• An important metric to watch is the health of the labour market, with jobs growth still firing along and the unemployment rate continuing to decline to the lowest level since 2012, with further improvements expected over the next year or two.

• What about the fear of many interest-only loans swapping to principal and interest?

• Investors who have taken out interest-only loans three or four years ago are in a position where they could repay more because interest rates are lower than when they took them on. Also, they would have more equity in their properties. They have the equity to cover converting into an interest and principal loan and at a lower interest rate.

• What do you see ahead for our property markets?

• We're in for a period where prices growth won't be dissimilar from one capital city to another. It will reflect more local factors, like strong economic performance.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Michael Yardney's Property Renovations and Development Workshop

Pete Wargent

Dr Andrew Wilson

Some of our favourite quotes from the show:

"It's unfortunate to see so many investors buy into this fear mongering and make emotional, sometimes panicking decisions, on the result of this scaremongering." –Michael Yardney

"It's the property market's version of the women's magazines that say Jennifer Anniston is pregnant again or Prince Harry and Megan are expecting a baby." –Michael Yardney

"I see the coming months as a great time of opportunity if you're looking to buy new investment or upgrade your home, because some people are going to sit on the sidelines, worrying and concerned, by all the scaremongering in the media." –Michael Yardney

PLEASE LEAVE US A REVIEW

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You've probably heard me say that I believe that property investment is a game of finance - with some houses thrown in the middle.

Well, in today's episode I'm going to tell you 10 things your banker won't tell you but that you must know to become a successful property investor.

Then Ken Raiss answers a listener's question about whether you're ever too old to invest.

And even if you're not wondering if you're too old to invest, there are some great lessons in my chat with Ken.

10 things your banker won't tell you:

1. Bankers can only offer you limited options – they won't tell you what other banks are offering, even if another bank has an option that's better for you
2. Bankers are salespeople – it's their job to sell you financial products
3. There are three doors into the bank: the retail door, the business branch, and the institutional branches
4. Mortgage rates are negotiable
5. An offset account is often better for you than a term deposit
6. Bank fees make a lot of money for the banks
7. Some fees can be waived – but you have to ask
8. Bankers aren't financial advisors
9. The system will decide on your loan application
10. You should shop around for the financial products that best suit your needs

The 3 Stages of Financial Freedom

Phase 1 – Accumulation. Investing doesn't give you cash flow right away, so you need time to develop your asset base.

Phase 2: – Consolidation. You slowly reduce your debt, increasing your cash flow

Phase 3 – Living off of your cash machine

Links and Resources:

Michael Yardney

Metropole

Ken Raiss – Metropole Wealth Advisory

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"Get a good team of people around you. It's really too hard to do it on your own." – Michael Yardney

"Finance is the key to getting involved in renovation and development." – Michael Yardney

"When people haven't invested by the time they get to their 50s or 60s, deep down they are probably holding themselves back because of a concern with risk or a concern with debt." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

Are you wondering what's going to be the best performing property market over the next couple of years?

In today's show, we'll talk about where the best performing market will be, what to do and what not to do if you decide to invest there.

In my mindset message I'll explain why everything happens for a reason.

And you'll also learn why many Australians are going to remain in debt all of their lives.

What investors must understand before buying in Brisbane

• People are starting to return to Brisbane as employment expands
• Most of the jobs in Brisbane are within a 10-12 kilometer ring, and that's where people want to settle
• Brisbane has fewer auctions and more multi-offer scenarios than the southern states
• Brisbane is prone to flooding and storm water runoff – you need to know what to look for
• Lifestyle is different in Brisbane, indoor/outdoor living is popular.
• Brisbane is not Queensland – you can't just invest anywhere in Queensland

5 reasons you'll always be in debt

1. You only make the minimum credit card payment – when you do this, you end up mostly just paying interest, and you don't make any progress on paying off the principle
2. You spend too much on holidays – consider avoiding people and situations that tempt you to overspend
3. You think debt is just a normal part of life – you shouldn't need to rely on debt just to maintain your lifestyle
4. You don't have a contingency fund – emergencies and unexpected expenses will occur. If you have a rainy day fund, you won't need to rely on credit cards when those situations arise
5. You allow expenses to rise with your income – make sure that you aren't adding to your debt by spending more than you need to just because you're making more

Links and Resources:

Michael Yardney

Metropole

Michael Yardney's Property Renovations and Development Workshop

Michael Yardney's Mentorship Program

Brett Warren – Director Metropole Properties Brisbane

Some of our favourite quotes from the show:

"Remember that people come into your life for a reason, for a season, or for a lifetime." – Michael Yardney

"When we're going through particularly difficult times, it can very comforting to thing that there's a purpose to this." – Michael Yardney

"The thing about getting into debt is that anyone can do it. The hard bit, of course, is getting out of debt." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how