Monopoly Advantage

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Monopoly has been a family favourite board game representing core principles in property investing for over 100 years. Anyone can pretend to be a high flying property tycoon while having fun playing the game. The famous board game can offer plenty of financial education and lessons that can be applied to everyday property investment. Below are eight valuable tips that can help you play a better game at Monopoly, but also help to teach you basic skills and fundamentals of the principles of real estate investing.

01) Always Have a Buffer

Just like in the real world, running out of cash to pay bills can lead to some stressful times. Selling off assets as a last resort should always be avoided by always having a cash buffer for any emergencies.

02) The Impatient will Always Lose

To win the property game, you must have a plan and be strategic. If you just buy every piece of real estate you land on, then you are setting yourself up for failure. Know when to buy and also know when to pass.

03) Cashflow is King

Focusing on cashflow will enable you to have a good chance to be the last one standing. Collecting as much rent as possible will help you win the game. Owning the best assets with the highest returns is key.

04) The Most Expensive Property is Not Always the Best

Owning expensive real estate such as Mayfair and Parklane does not necessarily mean these properties are the best assets to own. The costs of these properties are very high and sometimes forgotten because of the cashflow.

05) Diversify

There is no use buying one property only and loading it up with houses and hotels. Usually a typical winner would spread out his or her properties throughout the board, to help increase chances of capturing multiple rents.

06) Negotiate

Negotiation techniques can help you get through the tough times. Monopoly teaches us the importance of being open and willing to work with others. There may be times you require a life-line from another player or even the bank.

07) Take Advantage of a Crisis

If one of your competitors is experiencing a cash crisis, it’s the perfect time to make a low-ball bid for that property you need to complete a colour group. Just like in the real world, a crisis is the best time to get a bargain.

08) Saving is for Losers

People can take tip one too far sometimes. Hoarding cash will result in a quick knock out from the game. You can only win if you have a decent property portfolio. Cash is safe, secure and very liquid, but the returns are low and you won’t receive the benefits of capital growth. Park your cash into property as soon as you can.

8 Investment Mistakes

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It is an unfortunate fact that many property investors stop after buying one property, because that one-time purchase proved unsuccessful in the current real estate market. This is far too common as many investors fail to prepare and plan for probably the biggest financial decision of their lives. The following are 10 common mistakes made by property investors. If you are able to learn from the mistakes of others, then I truly believe that you are on the right track for success.

01) Overpaying

Searching for the right property can be a time consuming and frustrating process. In today’s market, it is easy for an investor to naturally feel pressured to accept a seller’s offer if the property meets the buyer’s requirements. The problem with this, is that the investor tends to overpay for the property. This can lead to over leveraging themselves and taking on too much debt, resulting in higher repayments that they can’t afford.
Buyers should start searching for similar properties in the area they are looking in that have sold in the last few months. Websites such as realestate.com.au, Domain and RP Data can provide this information. This should give a fair indication of what comparable properties should be valued at. There are plenty of opportunities around, and if the deal falls over due to the seller wanting too much, then you should walk away. Being patient and moving on with the searching process will prove beneficial in the long term.

02) Think They Know Everything

Many buyers think they know everything. They think just because they have bought “a” property before, that they are automatically a property investment expert. Once a bad deal takes place, there is usually no one you can turn to to help fix the unfavourable transaction. Differentiating between investment stock, which is any property to investment grade which is where the true performance lies. Investors should be outsourcing to a number of resources and experts such as accountants, finance brokers, conveyancers, property inspectors, property managers and property consultants to name just a few. These experts should be more than qualified to warn you of any flaws or defects within the transaction. It is important to build a trusted team moving forward while building your property portfolio.

03) Not Saving a Big Enough Deposit

The bigger the deposit that you have saved up, the more options you have in getting into the market. This will prevent you from purchasing any cheap property simply because you wanted to get into the market. Cheap property is cheap for a reason. It usually means cheap returns long-term!
Sometimes holding off purchasing, and continuing to save money can prove better than purchasing a poor performing property. Also, by borrowing more than 80% it will most likely attract LMI (Lenders Mortgage Insurance). This fee only protects the lender in case you default rather than have any protection for you. Therefore, by having the biggest deposit as possible will actually make and save you money in the long term.

04) Getting Too Emotional

Sometimes investors buy property like they are buying their own home to live in. Many factors are important when buying your own home, such as the colour of the kitchen, the fixtures in the bathroom or the brand of your appliances. When it comes to investing however, letting your heart lead the buying decision is a common trap to be avoided at all costs. Allowing your emotions to take control will more than likely result in overpaying for the purchase.
Property investment is a numbers game. You should always purchase property based on analytical data. Factors to consider are capital gains forecast, rental return and location. These factors will help you make a decision on facts rather than feelings. Investing is all about the numbers, not the emotion.

05) Managing The Property Themselves

Many people assume managing a property is easy and think they can do it all when it comes to dealing with tenants, collecting rent or maintaining the property. This can become very stressful and tedious which is a job on its own. There are also increasing legislative requirements that fall upon landlords that manage their own properties.
A professional property manager is able to look after the whole process, from screening potential tenants, conducting regular inspections, maintenance and repairs, filling up vacancies and many other management services. By using their expertise you also minimise the range of risks you might not even be aware of such as legislative changes, smoke alarm regulation, safety requirements and many more.

06) Being Non-Negotiable

Investors may lose money in the short term by staying strong to their original rental asking price. This stubborn approach may result in the property remaining vacant and loss of rental income. For example, if the asking rental is $550 per week, this means that for every week the property is untenanted, then $550 is lost each week.
By slightly dropping the rent by say $20, investors may attract a potential tenant to sign a lease agreement. Instead of viewing this as a $20 loss, it could be viewed as a $530 gain. Then after 12 months, you can increase the rent by $20 after reviewing a new lease for example.

07) Underestimating Costs

There is a lot more to owning a house than just making the mortgage payment. Maintenance expenses can include gardening, attending to the lawn, and painting the fence just to name a few. Then there are costs associated with the purchase including stamp duty, legals and pest and building reports. Determining expenses prior to purchasing an investment property is paramount. All entry costs should be outlined before even making an offer on a property to ensure the property can be held for the long term by the investor. A qualified property consultant can help prepare and plan for these expenses.

08) Impatience

There is always a temptation to sell your property, especially if you can see an increase in value. While this can be beneficial in some cases, holding on to the asset for the longer term is generally the best thing to do. Holding property for the long term will always prove a more profitable outcome. Speaking with a good finance broker and accountant could prove to have better alternatives. For example, refinancing the property and tapping into any new equity that has been formed since purchasing it while still holding on to the asset moving forward.

Location, Location!

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We have all heard the phrase location, location, location! But how many property investors really take this into consideration? With many so called property gurus and experts out there promoting the next “boom area” or “hot spot”, it is hard to determine who actually has the crystal ball to see into the future. Becoming educated on the facts and historical data can help lead you to a better buying decision. There are a number of factors that should be taken into consideration before purchasing investment properties. Ultimately, the right property will hold a strong attraction for both owner-occupiers and tenants as the former maintain market values, whilst the latter covers the cost. To this end, the most important factor to be assessed will always be location as the general rule of thumb is that the location will do 80% of the contributing force behind the asset’s growth. The remaining 20% is relied on the asset selection.

The “80/20” rule should be applied at all times when investing in property as it is always important to select location first. Only then should you consider what property to buy. You’ll want your investment property to have the widest appeal to the mass market – we call this the “owner-occupier appeal”. One-bedroom properties may be cheaper to buy, but they have a restricted audience – mostly students and single persons recently moved out of the family home. On the other hand high end luxury mansions may rent for thousands per month, but they can also potentially stand vacant for long periods especially when the economy slips into a correction. Properties with owner-occupier appeal will attract the majority of the population and therefore will be in greatest demand. Vacancy periods are reduced, and rental income profit is maximised. Also as these properties are bought on emotion through the heart of owner-occupiers, unlike investors who are purchasing based on numbers, these particular types of assets usually rise in value the fastest.

The location is usually the most important factor to a property’s capital appreciation and performance . Of all the boxes that are ticked with purchasing an investment property, all of the components that make up the location – suburb, position, aspect – are one of the few things that cannot be changed. A tired old bathroom can always be redone, another bedroom can be added and a new deck can be built. Even a simple lick of paint can bring an old property back to life. But buy next to an airport or freeway and your options become very limited. So how do we decide which suburb is the right choice to buy, ticking all the boxes for capital growth and health rental yields? The following points are to help you shape your decision on whether you are on the right track to property investment success…

Schools and Universities

Many online real estate services offer proximity to schools as search criteria, and surveys show that distance to a good school is a major deciding factor for where families want to live. The majority of successful property investors will say that local schools and universities are an important part of their selection process of an area. In fact, education is so important that some families begin researching and planning a move long before their kids are old enough to attend school. This is a factor that is only set to grow in importance as the number of foreigners who place a strong cultural emphasis on education increase in Australia. By purchasing property near a desirable school and/or university, you’ll attract high quality family tenants and your property will have fewer vacancy periods.

Convenience

No one wants to live in the middle of no where. Today’s life is lived at a fast pace, and people want to live where it’s convenient. They want to live close by to schools, shops and public transport. Travelling to work and doing the weekly groceries needs to be quick exercise so that they can focus more on their lifestyle doing the things that they love. For investors this is a very important factor to take into consideration, as tenants will typically be more price sensitive to living costs and may rely on public transport. On the other hand, being too close to these amenities such as next door to a pub can actually have a negative affect on the investment property. Having drunk patrons leaving the pub everyday or a whole herd of kids leaving a school at 3:30pm can be very off putting for tenants. Being close and accessible is the key to convenience.

Infrastructure

This is probably one of the most important factors in the location selection. There is historical data to show that new infrastructure projects boost the local economy by creating new jobs and attracting more people to an area. Not only do infrastructure projects increase employment and local property values, but they also provide other benefits to the community such as a boost in the local economy and social benefits of community development which all drive demand. For new infrastructure developments, it is identified that there is often a growth in property and land values in two separate stages. First when the project is announced to the public, it creates renewed interest in the area from investors and developers keen to leverage off the movement, hoping to capitalise on the potential of the area. The second stage is once the new infrastructure project is in place & operational and residents and businesses experience the benefits of the increase in activity within the area, which usually lead to an overall boost in the economy.

Aspect

No matter where you are in the world, the sun always rises in the East and sets in the West. In the southern hemisphere, a northern aspect is favoured as it provides the most amount of sun throughout the year. Even though property orientation might not be on the top of your priority lists when buying an investment property, having a good orientation when it comes to property can make a massive impact on property values and future capital growth. This can go as far as to which side of the street you’re located as well. While one side may catch the sun and the view as it is elevated on a higher level, the other side could be hidden away on a lower block in the dark from towering trees. This will certainly affect the prices between the two properties so getting to know the neighbourhood first is ideal in order to make the right decisions.

Unfortunately, in my experience advising clients, a lot of property investors don’t realise how important ‘location, location, location’ really is. Therefore, they invest in the wrong place and the wrong developments. If they’re lucky, they come out with a profit – but that profit is never as significant as it could have been. Many investors make the mistake of getting very caught up in keeping to a specific budget, that they compromise on location just to get into the market. It’s no use having a 4 bedroom 2 bathroom 2 car garage home in the middle of a rural suburb where no body wants to live. Over time, even though you will be able to make improvements to the property, the location is there to stay, so choosing the right area is vital if you are looking for long-term success in the property game.

Location: Merewether

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Merewether – The “Bondi” Of Newcastle

Properties that are close to the beaches and waterfront will generally be tipped to grow in capital value. Most notably, Merewether, in Newcastle’s Eastern Suburbs has experienced unbelievable growth in the past 12 months. According to RP Data capital growth of the median house prices were up by a massive 19.9%. In the last 6 months the median unit price for the iconic Newcastle beach suburb has sky-rocketed from sub $500k to $600k.

Merewether is located 3km from Newcastle’s central business district with a population of more than 10,000 people. The suburb includes some of Newcastle’s most famous beaches such as Dixon Park Beach which leads south onto Merewether Beach and a little further to the more isolated Burwood Beach which leads to Glenrock Lagoon. Merewether Beach is also home to Merewether SLSC the oldest lifesaving club in the Hunter Region.

The types of properties the suburb includes are period-style homes, boutique apartment blocks and more recently newly built or renovated luxury homes. Merewether’s biggest draw cards are its lifestyle drivers and proximity to schools. This makes it a perfect suburb for families wanting to raise their kids whilst being close to the beach to enjoy on the weekends.

It has proved popular among Newcastle Knights players, with the half back legend, Andrew Johns owning property in Merewether before selling to Newcastle billionaire Nathan Tinkler. Newcastle Knights’ Jarrod Mullen has just completed a $750,000 renovation on his Patrick Street home. The smart renovations together with a strong market has provided the NSW State of Origin representative with a profit that far exceeds his football annual salary. Luxland Investment’s CEO, Zah Azmi also owns property in Merewether helping boost his already strong five million dollar plus portfolio.

Last year Luxland Investment’s Managing Director, Dane Crawford headed a 10-unit apartment block development in Mary Street, Merewether. This enabled Luxland to cement the groups presence in the Eastern Suburbs of Newcastle. According to Crawford, Eastern beach suburbs like Merewether contain some of the most valuable real estate in Newcastle including plenty of highly sought after boutique style apartments. Most of these unit blocks were built in the 60’s and 70’s so the workmanship is of a high standard. Low strata fees due to the absence of pools, gyms and lifts make these assets supreme for investors. “Living close to the beach and city are the main contributors for owner occupier appeal which is resulting in prices being pushed upwards”, Crawford says.

Other capital growth suburbs in Newcastle selected by Crawford include houses in Wickham, which is also located 3km from Newcastle’s CBD and apartments in Adamstown which is part of the City of Newcastle Local Government Area. “Buying residential real estate within 6km of the CBD of Newcastle is a smart move, with the government planning to inject $6.5Billion into the revitalisation of the city over the next decade”, says Crawford.

Financial Freedom

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Financial freedom is much more more than having money – it gives you the power to have choice in what you want to do in life. The truly wealthy people don’t work hard for money. They have money work hard for them. Most Australians spend 50 years or more equipping themselves for retirement, yet 95% of them fail, remaining dependant on the pension as their main source of income. These days, most people don’t have a financial plan to become financially free. In order to achieve success in your plan, they must execute and take action!

This type of financial freedom is most likely achieved by using property investment as the vehicle. In today’s current property market for investors, it is possible to slowly build a portfolio that includes income producing assets that can fund a lifestyle dream. A well thought out property investment strategy and formula can provide you with the choice to do what you love, such as travel, retire from work or spend time with the family, while you can sleep at night knowing that the assets are doing all the hard work.

The first step is to save for a first investment property deposit. This is usually 20% of the property’s purchase price however it is the most important step to begin your journey to financial freedom. Once this initial purchase has settled, and as long as you have bought well, it should start appreciating in value. From here, we build up equity to then look at purchasing a second property. Without having to save up from scratch in comparison to the first one. This process is repeated throughout the accumulation phase of the portfolio.

Property that has been purchased in key blue-chip areas such as Newcastle and The Central Coast generally have a history of doubling in value every 7-10 years and provide solid rental yields. The right investment decision varies depending on the individual’s goals and risk appetite. Everyone is different, whether it comes to serviceability, dependants, occupation, financial position just to name a few. Speaking to a property expert can help you shape your goals and targets with investment property before you commence your journey.

Delayed Gratification

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I have had the pleasure of watching many people in my life embark on major weight loss journeys, including myself. It is a rewarding life-changing experience and if done correctly the people that succeed can take much more than a better physique away with them. It is true test of mental and physical fitness that can only be achieved through strict discipline and will power.

One of the key factors that impact you straight away when trying to shed body fat, is the restriction of your calorie in-take. Usually the foods that are to be cut back or even eliminated are the treats we all enjoy such as chocolate, ice cream and fried foods. Those who slip up throughout the week and can’t help themselves to the packet of Tim Tams will ultimately prolong their weight loss destination, stunting their progress. This is called instant gratification. Part of the diet plan would normally allow one to indulge in a “cheat meal” once per week to those who have been disciplined with their eating. This is called delayed gratification.

Many people think once you lose the unwanted body fat, then you can go about your old ways. This is definitely not the case as you will end up being overweight again in no time! It is a lifestyle of habits and rituals which help you stay in shape for the longer term. The process of making sacrifices now for a better tomorrow is also applied in the world of property investing. It is not so much an event but more so a way of life.

The technology of social media and the world wide web has millions of people wanting nothing more than what everyone else has. Its an expensive lifestyle, trying to keep up with The Kardashians. Platforms such as Facebook, Instagram and Snapchat are used to create a particular image of ourselves. The desire to showcase our spending habits on these platforms are highly important to many, especially Millenials. Most of the time it is not for yourself but to impress others. This particular spending pattern turns your buying priorities over to others rather than yourself.

Delayed gratification means avoiding debt that has been accrued from unnecessary purchases. Did you really need that new iPhone when your old one worked perfectly fine? Did you really need to have dinner at that expensive restaurant last night when there was food in the fridge at home? Most people try and justify these purchases to themselves with silly reasons to help free their minds of guilt. However the cold hard facts are that you can potentially spiral out of control in debt from this type of spending. Avoiding this type of debt trap is crucial. The rich always avoid consumer debt where they can so they can have as much free cash as possible to invest in more important items such as real estate.

Investing in property can teach you to become an expert at delaying gratification. By giving up the toys and luxuries that others are chasing, you get one step closer to achieving financial freedom through property investment. By injecting the majority of your funds into income producing assets that are projected to increase in value over time, will enable you to create a more prosperous future. Sacrificing now by living frugally while the value of your assets increase can help you greatly in the accumulation phase of building your portfolio. It may seem like torture now, but the rewards will be well worth it in the end.

Being overweight is much like being broke. If you live the instant gratification lifestyle, you will struggle to lose weight or forever be broke. Saying no to temptation is key and only strict discipline and good habits will help you achieve your goal. Being financially fit is just as important as being physically fit. If you really care about your future, you will pass on the donut and expensive holiday and start eating clean and investing your money wisely to help GROW YOUR FUTURE.

Boss Status

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As a property investor, being a landlord essentially classifies you as the person in charge. You are in control of all income and expenses, therefore you call the shots. Being in control allows you to determine how well you do in the property game. This is how successful property investors escape the rat race! Property entrepreneurs choose real estate for the following reasons; cash flow, capital appreciation, depreciation, tax and leverage.

Real estate investing has become quite popular in recent years due to rising property values and low interest rates. There is no better time to be in the market other than now. Opportunities are harder to come by, but for those that insist on playing an active role and are willing to do the work, are benefiting from the big profits that property is producing. An experienced property entrepreneur will be able to purchase real estate under market value, be able to add value i.e. through renovations and also know where the best locations are for growth.

At Luxland we concentrate on five main contributing factors that heavily influence one’s success at achieving boss status.

Mindset – We were all taught self-limiting beliefs from an early age usually from our parents. If you want success in property, you have to define your purpose and goals. To some it might be a $10M portfolio, to others, the opportunity to own your own home, a healthy family and enough cashflow to support your lifestyle.

Education – Educate yourself and learn from other experts in the industry through engagement. This means surrounding yourself with a team that is going to help you learn how to achieve your goals. Networking with others who are on the same path as you can have it’s benefits. Read books, find a mentor, create a powerful team and use your shift in mindset to conquer property investing.

Execution – Once you have some solid education and a positive mindset in place it’s time to come up with a strategy plan. With this well constructed plan cusotmised to your goals and purpose, you need to take action and execute on it. This is looked at as the most important factor as many can follow the other four factors however if the plan is not executed then there is no progress!

Lifestyle – Its important to keep in shape and also to lead a healthy lifestyle. It is important to exercise and to follow a healthy diet to ensure a long extended life. It’s not expensive or hard to follow a good routine and diet. We have access to exercise programs online and being educated about what to put in your body is easy these days. The better our bodies are fuelled, the better our minds perform.

Sacrifice – Saving money now to invest is critical for financial freedom in the future. Cutting back on life’s little luxuries today will mean a better outcome for tomorrow. Cancel the daily coffee and bring your meals to work and see how much you save – money that can go towards your education, property investing or gym membership. It is empowering to be in control of your finances, working on building wealth rather than clearing consumer debt.

Words like FEAR, RISK, FAILURE and TAX are all just common words property entrepreneurs deal with throughout their journey to success. These types of words do not phase them, as they are confident on their mission to learn from their mistakes in order to achieve greatness. Experience and time in the market is critical to the understanding of property.

Like any successful BOSS, property entrepreneurs surround themselves with a strong team of experts. Industry professionals include finance brokers, legal experts, property inspectors, property managers and property consultants. Just like football, property investment is a team sport, and everyone must play their role to help you achieve BOSS STATUS.