Happy New Year everyone!!
I have been lounging around digesting the food eaten on Christmas Day, spending time with family and catching up on the gossip. Incidentally, I had a rather interesting conversation with my cousin’s wife. One that ended with…
“property doubles in values every 7-10 years anyway!”
At that point I got so annoyed I had to switch the subject however, that conversation inspired this email.
Today, I want to address a common myth in the real estate market: the belief that property prices double every 7 years or whatever the claim is. Recent data challenges this notion, articularly in light of the COVID-19 property boom.
Despite experiencing one of the most significant property price surges in recent history during the COVID-19 pandemic , this increase still wasn’t enough to “double” property prices in any major Australian city.
These figures demonstrate that while there’s been substantial growth, it falls short of the ‘doubling’ myth. This brings us to an essential point: the importance of due diligence in
real estate investments. Some investors might feel they’ve made a smart decision simply
because the value of their property has increased.
However, what if they could have maximised their returns even more by purchasing strategically? The opportunity cost of not buying strategically, even in boom times, can be significant. Great investors make money when they buy – so the question is are you buying well?
It is incredibly easy to spend more than you should, pay ridiculous prices at auctions, rush into decisions and be pressured into paying way more than you should for a property during the boom times. All this does is compromise the quality of your acquisition and puts your profits at risk.
Buying well is easier (not easy but easier) in a slow market or a down turn, like it is right now with the interest rates continuing to challenge affordability. However to acquire great assets for fair prices in booming times takes significant skill.
I acquired multiple properties for clients during the boom time at great prices and helped them avoid over capitalising. Below is a testimonial of a client’s experience I am particularly chuffed about as it demonstrates that even in the insane covid driven market in Brisbane, we were able to acquire property at reasonable prices, add value and enjoy incredible equity growth all by timing the market well and allowing our processes to make the decisions for us.
Due diligence is everything in this game.
Real estate investment should not be a game of chance. Achieving consistent, sustainable wealth in real estate requires a systemic and strategic approach to due diligence. This means thoroughly researching the market, understanding potential growth drivers, and identifying
and mitigating risks.
Remember, the key to successful property investment is not just about buying any property and hoping for the best. Even if you have been in the past, eventually luck does run out.
If you would like to talk to me about assessing your current portfolio’s performance and discuss acquiring the best investment property for you to kick off 2024 strong please reach out to me here. I am available via mobile and email as well.
Until next time Cheers to 2024!
Warm regards,
Shehan | 0466212199 | Managing Director
S & L Consulting | Real Estate Acquisition and Due Diligence Specialists