Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

Where will our property markets be in three years?

We're going through a bit of a rough time in the property cycle at present, which leaves a lot of people wondering what comes next.

The availability of credit has tightened, and we're in the face of slumping prices in some places and slower growth in others.

But don't panic. The market is behaving normally.

Thoughts about where we'll be in three years:

• BIS Oxford Economics suggests that we're in for a soft landing.
• House growth prices in Sydney and Melbourne are falling gently, and that trend looks like it will continue, thanks to APRA's tighter lending restrictions.
• Taking inflation into account, there will probably be modest declines in most capital cities over the next 12 months, and then fragmented price growth over the next three years.
• Although there is housing oversupply, population growth over the next few years should absorb that.
• The downturn in Sydney will probably continue over the next year before starting to rise again.
• BIS predicts Sydney's median will fall by 2 per cent in the next financial year (2018/19), but an undersupply of dwellings will prevent larger price falls.
• Areas that have shown and proven themselves, like suburbs in the middle and inner rings of Sydney, will continue to make the best investment properties.
• BIS predicts that the Melbourne property market will grow by 6% between 2018 and 2021.
• BIS's forecast is that Brisbane will see the strongest growth over the next three years, jumping 13% to a median of $620,000.
• Jobs creation and a low unemployment rate are contributing to the steady population growth driving demand.
• Canberra house prices are forecast to increase 5 per cent over the next financial year before slowing over the following two years, culminating in an overall rise of 10 per cent by 2021.
• Perth house prices have declined by 13 per cent since 2014 but the worst could be over.
• House prices in Hobart are set to rise by 5 per cent over the next year, and then slow in following years.
• House prices in Adelaide are expected to grow by 9 per cent by 2021.
• Prices in Darwin are forecast to remain flat over the upcoming financial year, followed by two years of limited growth.

Guest Experts:

• Kate Forbes – National Director Metropole Property Strategists
• Brett Warren – Director Metropole Properties Brisbane
• Ahmad Imam – Director Metropole Properties Sydney

Links and Resources:

More details of the BIS Oxford Report

Michael Yardney

Metropole

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"Periods of strong capital growth, like we've experienced in many of our capital cities over the last couple of years, are always followed by periods of flat growth, or sometimes no growth, or falling property prices. That's just how markets work." – Michael Yardney

"Meteorologists tend to predict the weather better than property commentators predict future property capital growth." – Michael Yardney

"What pushes property prices up is people's ability to afford more property, and their desire to live in certain locations." – Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Today is the first birthday show of the Michael Yardney Podcast.

Rather trying to come up with something new, I decided to try and distill the information, investment philosophies, tips and tricks that I and my guests have shared with you over the past year.

As you listen to today's show you'll hear some of the most important insights I've shared over the past 52 weeks, all in one episode. I've called it….

The Rules of Property Investment

1. Become financially fluent

The secret to financial freedom is to spend less than you earn, save the balance and then wisely invest your savings in growth assets.

Learn how money, finance and property works and start investing early so you have time and compounding on your side.

1. Adopt a proven investment strategy

Smart investors follow a system to take the emotion out of their decisions and ensure they don't speculate.

This may be boring, but it's profitable.

Wealth is created by building a substantial asset base.

You do this by holding good investments for a reasonably long time, reinvesting the income you're receiving and allowing your capital gains to build up.

Residential real estate is a high growth, relatively low yield investment, so I recommend a capital growth investment strategy.

1. There is not one property market.

While many people generalise about "the" property market there are many submarkets around Australia.

Each state is at a different stage of its property cycle and within each state the markets are segmented by geography, price points and type of property.

1. Not every property is investment grade

Remember that while the location of your property will account for around 80% of its performance, it's also important to own the right property to suit the local demographic.

There are around 9.6 million dwellings in Australia and at any time there are about 250,000 properties for sale.

But not all properties make good investments!

In fact, in my mind less than 2% of the properties on the market currently are what I call "investment grade."

While there are a lot of properties built specifically built for the investor market – think the many high rise new developments that are littering our cities – most of these are not "investment grade."

Some would call these properties "investment stock" – they are what the property marketers and developers sell in bulk to naïve investors, but they are not "investment grade" because they have little owner occupier appeal, they lack scarcity, they are usually bought at a premium and there is no opportunity to add value.

On the other hand, investment grade properties:

• Appeal to a wide range of affluent owner occupiers
• Are in the right location. By this I don't just mean the right suburb –one with multiple drivers of capital growth – but they're a short walking distance to lifestyle amenities such as cafes, restaurants and parks. And they're close to public transport – a factor that will become more important in the future as our population grows, our roads become more congested and people will want to reduce commuting time.
• Have street appeal as well as a favourable aspect or good views.
• Offer security – by being located in the right suburbs as well as having security features such as gates, intercoms and alarms.
• Offer secure off-street car parking.
• Have the potential to add value through renovations.
• Have a high land to asset ratio – this is different to a large amount of land. I'd rather own a sixth of a block of land under my apartment building in a good inner suburb, than a large block of land in regional Australia.

1. Demographics drives markets

Over the long-term demographics – how many of us there are, how we live, where we want to live and what we can afford to live in – will be more important in shaping our property markets than the short-term ups and downs of interest rates, consumer confidence and government meddling.

More of us are going to live in our capital cities, rather than regional Australia and the bulk of the population growth will occur in the big 3 east coast capital cities because that's where the economic growth and jobs growth will occur.

1. Real estate investing is a game of finance with some properties thrown in the middle.

Strategic investors recognise that property is a long-term play, so they use finance to not only buy themselves properties but to buy themselves time to ride the ups and downs of the property cycle.

They set up financial buffers to help you ride the property cycles.

And they also protect their assets by owning them in the right ownership structures. For many this is in trusts.

1. Take a long-term perspective

Real estate is a long-term investment, yet some investors chase the "fast money."

The property market moves in cycles and even though there are a few years of flat or falling property prices every decade, well located real estate has increased in value on average by around 8 per cent per annum over the long term.

Imagine if you could buy the house your parents bought at the price they paid thirty or forty years ago; how many properties would you have bought then knowing what they would be worth today?

8 The economy and our property markets move in cycles

It's a common fallacy that Australian property cycles last 7 – 10 years. They vary in length and are affected by a myriad of social and economic factors and then, at times, the government lengthens or shortens the cycle by changing economic policies or interest rates.

Market sentiment is one of the key drivers of property cycles and one of the reasons why our markets overreact, overshooting the mark during booms and getting too depressed during slumps.

During a boom everyone is optimistic and expects the good times to last forever, just as we lose our confidence during a downturn.

Remember that each property boom sets us up for the next downturn, just as each downturn sets the scene for the next upswing.

And over the next decade or so we'll probably have a recession and we'll most likely have another depression one day.

During the last cycle, most investors didn't really have their downside covered or their upsides maximized.

1. Beware of doomsayers

As long as I have been investing, and that's close to 40 years now, I remember hearing people with excuses why property prices will stop rising, or even worse, why property values will plummet

However, in that time, well located properties have doubled in value every 8 to 10 years.

Fear is a very powerful emotion, and one that the media used to grab our attention.

Sadly, some people miss out on the opportunity to develop their own financial independence because they listen to the messages of those who want to deflate the financial dreams of their fellow Australians.

1. Follow my 6 Stranded Strategic Approach and only buy a property:

• That would appeal to owner occupiers. Not that I suggest you sell the property, but because owner occupiers will buy similar properties pushing up local real estate values. This will be particularly important as the cycle moves on, as the percentage of investors in the market is likely to diminish.
• Below intrinsic value – that's why I'd avoid new and off-the-plan properties which come at a premium price.
• With a high land to asset ratio – this doesn't necessarily mean a large block of land, but a property where the land component makes up a significant part of the asset value.
• In an area that has a long history of strong capital growth and that will continue to outperform the averages because of the demographics in the area. These suburbs tend to be areas where more owner-occupiers want to live because of lifestyle choices and where the locals can afford to and will be prepared to pay a premium to live because they have higher disposable incomes.
• With a twist – something unique, different or scarce about the property, and finally;
• Where you can manufacture capital growth through renovations or redevelopment rather than waiting for the market to do the heavy lifting.

1. Don't focus on bargains – they rarely have a future

In today's informed market there are very few bargains. Properties that no one else wants today will probably be the type of property that no one else will want in 5 years' time.

Price is what you pay, value is what you get; so buy the best property you can afford – the type of property you'd still be happy to own in 10 to 15 years' time.

1. Don't try and do it in isolation

Very few property investors can successfully build a true property investment business without having a core community of peers with whom they can associate, share ideas, get candid feedback, and soak up new ideas.

If you want to change your outcomes, have you considered upgrading your peer group?

The top 2 reasons why your peer group matters so much:

• Your peer group's attitudes, beliefs, and behaviours are contagious. They impact on the way you think, your ability to spot and take advantage of opportunities and your behaviors as you go after (or don't go after) your financial goals. Alone you are vulnerable; connected we are strong.
• We all have blind spots and limitations, but your peers can help you bridge these gaps and share resources that help you make better decisions and financial choices.

1. Allow for an X factor

Every year there are a few "X factors" - unforeseen event or situations that blow away all our carefully laid forecasts away.

These X-factors can be negative or positive and can be local or from abroad.

1. There will always be a reason not to invest

Every year brings its own set of crises and lots of reasons not to invest.

Sure, some years are worse than others but there is always bad news and much of it is unexpected.

Where investors get into trouble is that rather than focusing on their long-term goals, they see these crises as once in a generation events that will alter the course of history, when in reality they are just the normal path of history.

1. You know less than you think you know

There is a nearly insurmountable amount of material to learn about in the fields of property, finance and economics.

The big lesson is that I know so much less than I think I know. Always continue learning.

1. Don't mistake money for wealth

I've often said that any problem money can solve isn't really a problem.

While this means money will make your life easier to a certain degree, if you let money own you it will make you miserable.

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"The worst thing that can happen to a property investor is to get it right the first time, because they think they're smarter than they are."

"Patience is an investment virtue."

"True wealth is what you are left with when they take all your money and properties away – your health, your family and friends, your knowledge and mindset, your spirituality and your ability to contribute to society."

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Are great property investors born or made?

Can anyone achieve success in property investing? That's one of the topics we're going to discuss on today's show.

I'm also going to share a lesson I learned when one of my mentors asked, "where are you going to be in 10 years' time?" Are you walking down the right road to arrive at the place you want to be?

Finally, Ken Raiss of Metropole Wealth Advisory is going to join us to answer a question about ownership structures.

Are great property investors born or made?

• Napoleon Hill discovered that successful investors, entrepreneurs, and business investors share common characteristics
• Successful investors aren't born with these characteristics. That means you can learn them by doing what successful people do
• In order to become successful, you need to put in the work. It takes time and practice to develop success strategies.
• Successful investors learn the rules, gain experience, and refine and improve their strategies
• You can gain expertise by getting a mentor and learning from their successes and mistakes. Study their mistakes and emulate their behaviors.
• You'll know you're an expert when you can consistently outperform the averages

Where will you be in 10 years?

• You can't kid yourself about where you're going, because you're going to wind up there eventually. Look around and be honest with yourself about the path you're on
• Avoid engaging in disillusion. Don't hope without acting or wish without doing
• Ask yourself you can be doing to get the things that you want
• Take advantage of the wealth of information available. Read books and blogs, listen to podcasts, attend seminars, watch videos, get mentors
• Avoid disinformation. There's a surplus of widely available information, but not all of it is good. Choose successful mentors and seek out good information

What are the benefits of owning an investment property in different entities, such as in a personal name or a trust?

• When choosing an ownership structure, it's important to understand what you're trying to achieve
• Buying in a personal name is the simplest path, but that doesn't mean that it's always the best
• Owning in a company is rarely the best way to own investment property
• There are three types of trusts: a unit trust, a discretionary trust, and a self-managed superfund
• A trust is only as good as the words used to write it, so it's important to have someone who is skilled with writing trusts write yours
• Begin with the end in mind. Consider which ownership structure will best suit where you plan to be in 5, 10, or 20 years and go with that, even if it isn't optimal in the moment.

Links and Resources:

Michael Yardney

Metropole

Ken Raiss, Metropole Wealth Advisory

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"The way to become an expert is to do one thing 100 times, rather than 100 things once." -- Michael Yardney

"The main thing that separates successful investors from the wannabes is the ability to consistently outperform the averages. And yes, to get to this level of expertise, it takes time, patience, and practice." -- Michael Yardney

"Where are you going? Because 10 years from now, you're surely going to have arrived." -- Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Yes it's true that 1% controlled 82% of the wealth in the world.

I just finished reading an article complaining about the rich.

In the author's mind, there was something inherently unfair about this wealth inequality.

The author, like many who are not in the 1%, felt that the wealth the 1% created didn't necessarily belong to them and offered government solutions to cap or redistribute the wealth of the rich.

The problem is... the top 1% will always control most of the wealth until the other 99% figure out how the 1% go about cultivating wealth.

So, how do the 1% cultivate wealth?

The top 1% cultivate wealth by doing certain things:

Read to Learn Every Day — 88% of the rich in my Rich Habits Study read 30 minutes or more every day to learn.

Reading is work. But it's work that is necessary if you want to become rich.

Rich people read because they know that knowledge can be leveraged to gain wealth.

The more you know about your field, career or industry, the more valuable you are to those you service or sell to in your field, career or industry.

Deliberate Practice — 69% of the rich in my study practiced some specific skill for two or more hours every day.

Deliberate practice requires conscious practice as opposed to unconscious practice

Conscious practice is practice in which you study everything you do that goes into the skill you have.

It's about studying the intricate details that enable you to become a virtuoso at what you do.

Pursue Long-Term Goals or a Dream — 70% of the rich in my study pursued some long-term goal or some dream.

This is what really drives the disparity between the 1% and the other 99%.

Pursuing big goals or dreams creates the opportunity for good luck to happen.

The majority of the 1% are beneficiaries of good luck – but good luck they put themselves in a position to receive.

Focus on Daily Goals — 62% of the rich in my study focused on their daily goals.

Save — 94% of the rich in my study saved 20% or more of their income every year.

Be Frugal with Your Money — 67% of the rich in my study were frugal with their money.

They spent their money thoughtfully, not emotionally.

They buy the best made quality products at the cheapest prices.

This requires study and patience and delayed gratification.

Forge Rich Relationships — 68% of the rich in my study forged relationships with other upbeat, success-minded people.

These are people who can open doors for you.

They are individuals who are either trying to become the 1% or are the 1%.

These 1% have powerful relationships with other 1% individuals. dream-clock-time-business-man-life-motivation-happy-dream

Volunteer — 72% of the rich in my study volunteered 5 hours or more a month.

Why volunteer?

Most of the boards and committees in local non-profits are run by successful people within the community.

5 AM Club — 44% of the rich in my study woke up 3 or more hours before they began their work day to pursue dreams, goals, read, be productive, etc.

Waking up early is important.

It allows you to get things done first thing in the day that help move you forward in life.

Become a Decision Maker at Work — 91% of the rich in my study were one of the decision makers where they worked.

If you want to control the outcome of your life you need to be a decision-maker.

Do Work You At Least Like — 86% of the rich in my study liked what they did for a living.

When you like what you do, you will devote more time to doing it.

More time in honing your skills.

More time in reading to learn everything about your vocation.

More time in building relationships with other success-minded people within your industry or field.

More time devoted to improving yourself makes you more valuable.

Everyone wants to be on top of the mountain, but few are willing to make the climb.

The 1% control 82% of the wealth because the 1% are willing to climb the mountain.

If you want to be one of the 1%, you need to start climbing.

You need to do the things that cultivate wealth.

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"One of the things the papers forget to mention is, if you're listening to the podcast or reading their articles, you're probably already in the top 1% in the world."

"School's not out when you leave school or leave college. You have to keep continuously educating yourself." – Michael Yardney

"It's often said that you're like the five people you spend most of your time with." – Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Success is not a miracle.

Nor is it a matter of luck.

Everything happens for a reason, good or bad, positive or negative.

And it's the same with success in property investment. While real estate is generally considered a sound investment, only a small number of those who get involved eventually develop financial independence.

It probably won't come as a surprise that when you study those who have achieved financial freedom through property investment, you will find they come from a variety of backgrounds, walks of life and educational standards, but there are certain traits shared by all these successful property investors.

If you want to join the ranks of these investors you need to model them - you need to copy those who have achieved the success you desire.

So, in this week's show I am going to discuss the habits these wealthy investors share in common.

18 Habits Shared by Successful Investors:

1. Successful investors have a strategy. Defined goals and a wealth creation plan help investors see the big picture, maintain focus on their goals, and make purchases based on proven criteria rather than emotions.
2. Successful investors treat their investments like a business. Investors who approach their property investments with a business plan are able to identify their objectives and define strategies to meet those objectives while successful navigating financial, tax, and legal systems.
3. Successful investors keep educating themselves. Learning by making mistakes is a slow and demoralizing process. Investors who invest time and effort into their continuing education and into learning from mentors and mastermind groups can achieve more in a shorter period of time.
4. Successful investors think big. Financial freedom is a big goal. Successful investors aren't satisfied with small achievements and aren't afraid to paint a bigger picture for themselves
5. Successful investors know their markets. Sound investment decisions are based on facts, not feelings. A greater understanding of a particular market allows the investor to make smart decisions within that market.
6. Successful investors develop a focus or niche. There are many ways to invest in real estate. The most successful investors don't try to do all of them, they learn everything about a certain type of investment and focus on becoming an expert in that niche.
7. Successful investors understand the risks. The business of property investment comes with fluctuating interest rates, changing property cycles, and various "X factors" that can derail otherwise good plans. Successful investors understand these risks and take precautions to mitigate them.
8. Successful investors take full responsibility for their lives. Blaming others for your circumstances leaves you feeling out of control. Taking responsibility for yourself allows you to take control over your circumstances and reduce the number of bad situations you encounter while increasing the good.
9. Successful investors are decisive. Indecision leads to inaction. It's impossible to make good decisions one hundred percent of the time, but you should make the best decisions you can at the time and stick by them. Successful investors deal with problems when they arise and move on from them, rather than beating themselves up over bad decisions.
10. Successful investors find opportunities where others see problems. Instead of focusing on the problems with an opportunity, look for ways to make the situation work. Successful investors are those who find hidden opportunities that other buyers don't see.
11. Successful investors embrace change. Change is inevitable. Successful investors find ways to take advantage of the opportunities presented by change, even when it means moving out of their comfort zone.
12. Successful investors invest, they don't speculate. Speculation is based on hoping that you correctly pick out the next hot spot or big trend. Investment is based on known facts. Investment may be less exciting than speculation, but it's also considerably less risky.
13. Successful investors build a competent team around themselves. No one can be an expert in everything. Successful investors surround themselves with trustworthy people who know more than they do, so they can focus on their own areas of expertise.
14. Successful investors have learned to use debt wisely. Learning how to use other people's money to grow a substantial property portfolio is a hallmark of successful investing.
15. Successful investors belong to a mastermind group. When you surround yourself with like-minded people who are successful, you'll learn from them. Successful investors surround themselves with winners and copy their habits.
16. Successful investors act with integrity. Standing by your claims helps you stand out from the crowd. Successful investors make commitments and stick to them.
17. Successful investors see the big picture. Property values can take time to increase. Successful investors have the patience to see the end goal and wait for it, rather than trying to cash out fast for a quick payout.
18. Successful investors think very differently to average investors. The vast majority of property investors are not successful. Successful investors are often those who look at what average investors are doing, and do the opposite.

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"I know I have made more by saying "no" to so-called opportunities than by saying "yes" to them." – Michael Yardney

"Successful investors realize that it's not how much money they make that matters, it's how hard that money works for them and how much they keep that counts." – Michael Yardney

"People create their own luck by putting themselves in the right frame of mind to accept success." – Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Everyone knows that location is critical when selecting an investment property that will outperform.

But what makes a good location and why are some locations better prospects than others?

When I started investing around 40 years ago the emphasis for homebuyers was largely affordability and proximity to infrastructure.

The outer fringes of our capital cities were developed in the wake of freeway extensions on all sides and commuting from vast, newly born suburbs into the CBD became commonplace.

As far as amenities went, as long as you had a relatively easy drive to your place of employment, as well as nearby shops, healthcare services and schools, life was pretty good.

It's different today

Nowadays the property choices Australians make are still driven by lifestyle, but how we think and function in today's world has changed.

With more than half Australian households having only one or two people in them, more of us are:

• Choosing to start a family later in life.
• Enjoying the opportunity to work flexible hours and from home offices.
• Seeking better work-life balance and prioritising downtime before overtime.
• Opting to live within walking distance from not only infrastructure necessary for daily living, but also cafes, restaurants and recreational facilities, as lifestyle moves to the top of the owner-occupier and tenant wish list, alongside affordability.
• Downsizing to easily maintainable and cost-effective apartments and townhouses, with smaller gardens and more efficient, compact design.

A short stroll to success

This means that "walkability" has become the new buzzword on the property investment block.

Of course, proximity to amenities such as shops, parks and public transit that allows local residents to either walk or take a short train, bus or tram ride, has long underpinned property values in inner city neighbourhoods throughout the developed world.

But now we are witnessing a similar trend across an increasingly cosmopolitan Australia.

In fact, it is common for a considerable premium to be paid for properties that are a short walk to the beach or café strips and long-term capital growth figures show that in Sydney the city's most "walkable" suburbs have outperformed the averages by up to 20%.

Where it's "at" – the café culture

It should come as no surprise that as our lives become busier and time is in increasingly short supply, cafés have become a kind of transition point where we meet up with friends, family and often business associates for a "catch up".

Many city dwellers have their favoured haunts, where they're on a first name basis with the local barista and have a "regular" order.

The serving and consumption of coffee has become somewhat of a ritual and many of us fancy ourselves as coffee connoisseurs.

Given that more of us are living alone or in smaller households, it's not surprising that the relaxed, "home away from home" vibe of inner city cafes is becoming an increasingly popular draw card for those seeking a familiar social outlet.

Lifestyle locations dominate

Yes, lifestyle has undeniably become the fundamental force in today's residential real estate market.

Culturally, we have become a nation that enjoys strolling to the local corner eatery to catch up with friends or just enjoy some time out with a latte.

But it's not only suburbs close to the beach and bay that command premium. Proximity to schools with a good reputation is a must for many family buyers, with some purchasers prepared to pay extra to be within a particular school catchment zone so their children can either walk, bus or "train it" to school.

In fact, in my experience, parents are more willing to spend half an hour or more driving to work if it means their children can safely walk to an esteemed, local school.

Australian cities have now been ranked by Walkscore

As our population grows and our major cities increase in population by an estimated 10% over the next five years, the walkability of an area will be become an even more important consideration for property investors seeking locations that will outperform into the future.

Well, now you can find out how "walkable" your suburb is. Walkscore.com, which measures the number of typical consumer destinations within walking distance of a dwelling, with scores ranging from 0 (car dependant) to 100 (most walkable) has recently ranked more than 100 Australian cities and 3000 suburbs.

And the good news is that walkable neighbourhoods were recently recognised for their health and economic benefits afforded to residents by the University of Melbourne, where a 10 year study found good access to local infrastructure encouraged more people to ditch the drive and adopt "health-enhancing behaviours".

For property punters, the cultural transition that Australians are undergoing is important to note.

It signals an end to the suburban McMansion "fad" and demonstrates just how crucial demographic waves of change can be to planning and executing a successful, long-term property portfolio.

While affordability will always be a factor in our property decisions, lifestyle is the fundamental key in our marketplace today.

Inner city, bayside apartments filled with character and complemented by flowing, commonsense floorplans, with excellent nearby lifestyle amenity have become the "new black" in residential real estate for many buyers – young and old.

This is where investors would do well to focus their property investment activity in years to come.

Productivity hacks to make you more efficient

• Start your day by asking yourself what one thing you could do in 30 minutes or less that would have the biggest impact on your life. Do that first.
• Set aside a block of focus time to work on high-value activities
• Do the hardest task of the day first
• Narrow your focus to the few things that will truly make a difference
• Consider getting a personal assistant
• Hire people to take on less valuable tasks, like cleaning or yard work
• Prioritize your emails
• Avoid using your inbox as your to-do list
• Use a program that will schedule your appointments
• Have multiple email signatures that contain information needed in recurring emails
• Get to the root of recurring problems and solve them permanently
• Grow your capacity to tolerate leaving lower-value tasks undone

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Michael Yardney's Mentorship Program

Some of our favourite quotes from the show:

"It's important to find out how walkable a suburb is because as our population grows the convenience to amenities, the walkability of suburb is going to be more and more important." Michael Yardney

"If you understand the sort of property that's going to be in continuous strong demand in the future, that's going to underpin the success of your property portfolio." Michael Yardney

"Getting and becoming are so closely intertwined that what you become directly influences what you get." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Have you ever considered a joint property venture to help you get into property or get yourself to the next level?

Many people are having difficulty getting into property or getting to the next level, and some people are considering joint property ventures as a way to get involved in property development. In today's episode, I'll discuss the pros and cons of getting into a joint property venture.

Later in the episode, we'll talk to Stuart Wemyss about how the Reserve Bank sets interest rates. If you've ever wondered what the RBA does every month and how it affects banks, this will interest you.

Finally, we'll hear Ken Raiss answer a question about depreciation. The information he shares should be of interest to you if you're a property investor.

What to consider before you get into a joint property venture:

• Money can change relationships. Don't proceed with a joint venture if you're not sure the relationship with a friend or family member can withstand the pressures of investing together.
• Put everything in writing before you get started. That includes your goals, each person's responsibilities, who is contributing what, and how profits will be divided.
• Make sure that not only are you financially capable of taking on the investment, but the people you're investing with are financially capable as well.
• Consider how the venture will affect your credit standing. You'll get a third of the income, but you'll be considered liable for the whole mortgage.
• Make sure that you've documented your exit strategy as well as your entry strategy.
• Protect yourself with life insurance and income protection insurance, in case of unforeseen complications.
• Property ventures aren't necessarily a bad idea, and you shouldn't rule them out. But look at them very carefully before proceeding.

Some of the things I discuss with Stuart Wemyss about how the RBA sets interest rates:

• The Reserve Bank's role in managing inflation and the exchange rate
• Why the Reserve Bank is unlikely to raise interest rates until inflation picks up
• How interest rates have changed over the years
• How the reserve bank decides what interest rate it's going to charge
• The importance of interest rates when it comes to choosing a lender

Can you still claim depreciation on the purchase of an established property?

• There are two types of depreciation: depreciation on the building, and depreciation on the fixtures and fittings
• On an established property, you can claim depreciation on the building, but not the fittings and fixtures
• If you do a renovation, you can claim the depreciation on the new cost that you've spent upgrading the property
• If you buy a new property, you can claim both types of depreciation
• If you have multiple earners on the title, you need a different type of depreciation schedule

Links and Resources:

Michael Yardney

Metropole

Michael Yardney Books

Rich Habits Poor Habits

Stuart Weymss

Ken Raiss

Some of our favourite quotes from the show:

"Like it or not, when money comes into the equation, relationships sometimes change." Michael Yardney

"Rainy days can happen, so you may as well own an umbrella." Michael Yardney

"In the 80s and 90s, I managed to take part in some very, very significant property developments by choosing the right joint venture partners, and now I'm in the position to help my children get into property by partnering with them." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

If you want to become a better investor, this week's show is for you.

Today I'm going to chat with you about two important topics that will be relevant whether you're a beginning investor or a seasoned pro.

Firstly, I'll talk about the 7 habits of highly effective investors.

I'll look at the 7 habits of highly effective people and explain how these approaches to success also relate to investing.

Then, I'll go through an exercise of deciding what I would teach my 21-year-old self if I could go back in time with the knowledge I have now.

You may want to try the same exercises. Chances are, the lessons you would teach are some of the same lessons you should focus on today.

7 Habits of Highly Effective Investors

• Be proactive. You can choose to take control or be controlled. You're where you are because of all the things you've chosen to do and all the things you've chosen not to do.
• Begin with the end in mind. By focusing on your desired outcome, you'll lead yourself toward those goals. Set long-term goals, make a written plan, and devise a strategy to get there.
• Put first things first. You need to learn how to prioritize actions. Take a step-by-step approach. Keep the big picture in mind, and don't be afraid to say no when an opportunity doesn't fit in with your plan.
• Think win-win. There is more to be gained from cooperation than competition. Learn how to be happy with what you have while you pursue what you want.
• First seek to understand, then be understood. Really listen when someone is speaking, instead of just formulating a reply. Avoid confirmation bias. Be skeptical of your preconceptions.
• Synergize. Creative cooperation allows us to uncover new solutions. Surround yourself with consultants and mentors that will lift you up, not drag you down.
• Sharpen the saw. Your greatest asset is yourself, so you need to look after your mind, body, and spirit, and maintain a healthy balance. Don't be afraid to spend or invest money on your education and learn from your victories and mistakes and those of others.

21 Lessons I Would Teach My 21-Year-Old-Self

• Learn from your mistakes. Mistakes are inevitable. Learn from them and keep going.
• Love change. Change happens for a reason, so learn to be ok with it.
• Say "no" more often. You don't have to say yes to everything someone asks you to do.
• Focus on becoming good at one thing. Successful people specialize.
• Tell people how you feel. Never underestimate the power of a good compliment. Don't be afraid to be honest, and to apologize when necessary.
• Don't worry so much. Most of what we worry about never happens.
• Be honest with yourself and with others. Honesty gives you peace of mind, and that's priceless.
• Remain curious and keep learning. Ask lots of questions. Invest in yourself by investing in your education. Continued personal development is the key to success.
• Get good mentors early in life. Don't be shy about doing this. We all need to learn from somebody. Why not learn from the best?
• Be grateful. No matter how much money you have, you won't be wealthy unless you're grateful and enjoy life.
• Love yourself. You can't be fulfilled until you're happy in your own skin.
• Don't compare your Chapter 1 with someone else's Chapter 20. Everyone has their own problems. Concentrate on being a better person today than you were yesterday.
• Help others become successful. When you find yourself in a position to help others, bring them up to where you are.
• Enjoy the journey. If you don't enjoy the journey, you won't enjoy the destination.
• Stop making excuses. Don't be a victim or blame others.
• Take risks. Don't be reckless, but don't let your fears stop you from taking calculated risks.
• Choose your friends wisely. The people you surround yourself with will rub off on you. You're more likely to be successful if your friends are like-minded and motivated.
• No one owes you anything. If you want something, work for it.
• Think long-term. You need to think 10, 20 ,30 years in advance. Great things take time.
• The 80-20 rule. The people who work the hardest aren't necessarily the most successful. You can work little and be smart about it and get what you want.
• Make investing a priority. Invest time in learning how money works, how it's made, and how it grows.

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Some of our favourite quotes from the show:

"You've got to become the pilot of your life, not the passenger." --Michael Yardney

"Learn how to be happy with what you have while you pursue what you want." --Michael Yardney

"I've made more by saying "no" to things than by saying yes to all those perceived investment and business opportunities that have been put in front of me." --Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

Have you ever wanted to sit me down in a corner and ask me all of your questions about property?

That's what Liz and Marc from Finder.com.au did. Earlier this year, they asked me all their questions about property.

The interview had so much good information in it that I asked permission for you to hear it on my show

Listen to the episode to hear about the major forces driving our property market, the effects of APRA, what I see ahead for interest rates, how rising interest rates might actually make it easier for new investors to enter the property market, and much more.

They spoke with me about a variety of property related topics, including:

• The major driving forces behind the property markets in 2018
• APRA's effect on the property market in the past and going forward
• Where I see interest rates heading
• How rising interest rates make it easier for new investors to enter the property market
• Where I see price growth in 2018 (Hint: It's not just Sydney or Melbourne)
• How the infrastructure boom will drive price increases
• My advice for dealing with property investment advertisements
• Lessons about property spruikers
• My view on Australian population growth
• My view on Sydney, Melbourne, Brisbane, Hobart, Canberra, Adelaide, Perth and Darwin
• Why I think you shouldn't invest in Hobart, and what lessons potential Hobart investors can learn from Darwin
• Why I think many investors will sit on the sidelines this year

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

The Finder.com.au Money Podcast

Some of our favourite quotes from the show:

"Looking forward, I see a number of outside influences that are going to make a difference to what happens to our markets." – Michael Yardney

"I think meteorologists and weather forecasters get a better result of the weather than property forecasters do because the property market has multiple drivers, and it's not just the fundamentals." – Michael Yardney

"I guess my message is: don't compare your chapter one to somebody else's chapter forty. Your parents' first house was not the same house they have now." – Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.

When the world of finance changes, property investors must be prepared to change with it.

In today's episode, I'll be chatting with property analyst Pete Wargent about recent changes in finance and how they have affected his investment strategies.

Changes in the market and new regulations affect the property cycle, and investors must adjust their strategies at different phases in the cycle.

These changes also affect different segments of the market differently meaning you may want to avoid certain segments and focus on others.

The changes in bank's lending policies may also affect your endgame - of your investment strategy of how you will live off your property portfolio.

Listen to our conversation and learn more about how the markets are changing and how you can tweak your investment strategies to keep up with the phases of the investment cycle.

Some of the things we discuss:

• How the APRA (The Australian Prudential Regulation Authority) introduced macro prudential controls have caused banks to change their lending criteria
• The concerns about high levels of debt and speculation that prompted regulators to make changes.
• How new regulations are affecting serviceability, including stress-testing mortgage applications and slower levels of investment lending below certain imposed caps
• How lending controls have changed since the Global Financial Crisis
• What APRA's restrictions on how quickly banks can grow means for the housing markets
• Which areas of the housing market are most affected by the recent changes, and which are still solid investment opportunities
• How management of personal finances affects the way that regulations will impact borrowers
• Why rentvesting is sometimes a sensible option for people looking to begin growing their investment portfolio
• Why now might be a good time to sell an underperforming property
• How having a large enough pool of equity enables you to have more choices

Links and Resources:

Michael Yardney

Metropole

Rich Habits Poor Habits

Pete Wargent Daily Blog

Pete Wargent on Property Update

Wealth Retreat

Some of our favourite quotes from the show:

"I love the old saying that a rising tide lifts all ships and that's what happened in a lot of our property markets, especially the booming markets of Melbourne and Sydney, and then once the tide goes out, you can see who's swimming naked." Michael Yardney

"Human nature is to think that when things are going great they will always continue to do so, but of course there comes a point when valuations are too stretched and that's arguably what we'll see over the next year or two." Pete Wargent

"I'd rather you own one or two good investment grade properties, rather than a bunch of secondary properties, because the stability of the good properties is going to give you the peace of mind and the ability to sleep at night rather than the volatility of the less sound residential real estate assets." Michael Yardney

Never miss an episode and keep up with all the good things going on at the Michael Yardney podcast by subscribing on iTunes.

You can also subscribe to MichaelYardneyPodcast.com to keep up with the latest information including bonus material that comes out between the podcasts.