um - pass me a phone book and I will highlight some people that haven't been burnt badly in Mandurah. Some places are off 40%+... that can't happen without victims
Michael Yardney's says don't buy in the western suburbs
- Thread starter doozer
- Start date
um - pass me a phone book and I will highlight some people that haven't been burnt badly in Mandurah. Some places are off 40%+... that can't happen without victims
I have to admit in starting this thread that I didn't expect it to capture people's attention like it has. But this is good, it's what the forum is all about. And I have to say even though I disagree with MY on this particular point I admire him for staying so polite amongst the barbs that got thrown around earlier.
I think it's a bit rich when Michael Yardney claims to have no vested interests. His business is targeted toward development in the inner city and making money from increasing density. His buyers advocate arm in reality can't focus on all areas. The development and repairs arm can't travel too far west. Nor can the PM arm extend that far. Finally, when you write a book and you want to maximise your business opportunity, talk up the the inner city because once they buy they might need your services.
I am a client of Metropole on more than one level. Michael can't help me in other areas because his model doesn't extend to those areas.
I own 2 IPs in Melbourne's bayside - neither are very far from Michael's office. They have created wealth for me. But it's my outer IPs that really excite me.
On the "vested interests" scale, Terry has has far less.
I am a client of Metropole on more than one level. Michael can't help me in other areas because his model doesn't extend to those areas.
I own 2 IPs in Melbourne's bayside - neither are very far from Michael's office. They have created wealth for me. But it's my outer IPs that really excite me.
On the "vested interests" scale, Terry has has far less.
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Normailson,
I am curious to see how well your properties which you purchased via Yardney's organisation has performed.
Numbers don't lie... but if you had bought the same amount of Outer suburb properties (in the right suburbs of course) as inner city properties 5 years ago. The return would not be that different.
The only difference is the amount you would have spent in supporting the CF- on the inner city properties, you probably couldn't afford another, and stamp duty paid.
I am curious to see how well your properties which you purchased via Yardney's organisation has performed.
Numbers don't lie... but if you had bought the same amount of Outer suburb properties (in the right suburbs of course) as inner city properties 5 years ago. The return would not be that different.
The only difference is the amount you would have spent in supporting the CF- on the inner city properties, you probably couldn't afford another, and stamp duty paid.
Hi Sash,
neither of the services I use / have used with Michael are the buyers advocacy otherwise I would definitely have posted a comparison.
The comment was to say that I use Michael's services and read his commentary. It's just the "vested interest" comment where I think he loses credibility.
BTW why was my link killed when the same link it exists in other posts quite happily.
Norm
The property market isn't an exact science. Telling people not to buy in the Western Suburbs will in time make it very profitable if you're in for the long-term investment. If it gets a poor wrap, then on sheer affordability people will purchase and create competition and higher prices will come.
Yes, I belive property will always go up. The dollar might be worth less though...
Yes, I belive property will always go up. The dollar might be worth less though...
The MY BAs has 1 main box, buy older unrenovated houses within 10Km for over $500K returns up to 4% rental yield. Assume you need 9% now to hold, so the out of pocket will be $25K pa before tax(as one can't guarantee one won't lose the job). It's simple mathematics that how many of these one can afford to hold.
I think the difficulty with what MY advocates is he has been having a lot of equity for a long time or he has a lot of high income clients, he doesn't appreciate the need of the average investors who don't have a lot of equity or cashflow and require cashflow to build the portfolio. Just like the pollies in Canberra with silver spoons in their mouths don't know how ordinary aussies live. There are so many ways to skin a cat.
I think the difficulty with what MY advocates is he has been having a lot of equity for a long time or he has a lot of high income clients, he doesn't appreciate the need of the average investors who don't have a lot of equity or cashflow and require cashflow to build the portfolio. Just like the pollies in Canberra with silver spoons in their mouths don't know how ordinary aussies live. There are so many ways to skin a cat.
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I think it comes down to a business decision as to who one's next clients will be. Such decisions need to be made since BAs are businesses and need to survive.
Consider that:
* The number of people who can afford to be $25k out of pocket (1 property) is vastly more than the number who can afford to be $50k out of pocket (2 properties).
* The number of high income earners who have yet to buy an IP is higher than those with one IP wanting to upgrade to two, and especially two IPs wanting to upgrade to three.
* Those who have already bought one or two IPs will be more confident about finding the next one independently than those who have yet to buy a first. So they're less likely to need a BA. Admittedly some organisations do other things eg 'armchair development' that an average person might not do themselves. But for this to work higher returns would have to offset the higher risk and likely higher fees.
It's a numbers game - if you have more clients you make more money. Especially if there are add-ons; more on this later.
To me it looks like a larger number of newbies would be more profitable than fewer more experienced clients (who are more selective about cashflow).
I'll add a caveat in that some BAs have finance or brokerage arms. This is smart business since it gives them an insight into their clients finances and allows them to identify the select few with sufficient cashflow to buy a second property (which should help target marketing). And property management should also offer a reliable income stream if they do this as well.
Fringe religions and spruikers constantly need to suck in newbies to grow the businesses, to replace previous ones have been used up or bled dry. Dare I say it but I suspect that similar recruitment is also required by the breed of BA that specialises in high-priced low-yield 'investment' property, since most of their existing clients will have run out of cashflow to buy more.
Hence to keep the dollars flowing they need to flick the switch to Spruikerville and tell the newbies they'll all be rooned if they don't do something about their retirement income, and of course they happen to have something that'll help. And since there's pain (ie massive negative cashflow), it's got to be doing some good, which it probably is if it would otherwise be flushed down the pokies.
The more sophisticated BAs (eg Yardney & Wakelin) don't spruik directly, but cleverly position themselves so they are regarded as property experts and are frequently quoted in the media (bonus points if you have a regular radio spot targeted at the AB demographic and are treated as royalty by a fawning presenter). And yes they are experts, but it is not always let on that their commentary mostly applies to a select part of the market only, even though the media used is typically metropolitan rather than locally-based.
As I said above, BAs are businesses that fill a role so I don't begrudge them the right to legally offer services and market themselves. Just question everything they say - that's all!
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Also the dividend yield quoted refers to the last distribution and does not mean the next will be the same.
But in essence if you buy in cash you will rarely not get an ROI either type of asset.
RE is negative because banks are loose on their finance which in turn
makes people buy on the premise that it "always goes up", "you cant lose in RE" and "it doubles every 7 yrs".
Yes the same loose finance happened for equities as well, but the gov did'nt "stimulate" that market.
The unhappy ending is an obvious (and documented) conclusion since John Law did it a few hundred yrs ago.
Type of market is irrelevant.
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To michael yardney
Just curious after reading both your articles - one which is pro for apartments, the other which is suggesting an oversupply of apartments in melbourne.
So if you were going to buy an apartment in melbourne, would you buy it? and if so - whereabouts? and what type of apartment, 1 bedder? low rise, high rise?
http://www.propertyupdate.com.au/apartments-are-the-way-of-the-future-.html
http://www.propertyupdate.com.au/we’re-heading-for-an-oversupply-of-cbd-apartments-in-melbourne.html
Just curious after reading both your articles - one which is pro for apartments, the other which is suggesting an oversupply of apartments in melbourne.
So if you were going to buy an apartment in melbourne, would you buy it? and if so - whereabouts? and what type of apartment, 1 bedder? low rise, high rise?
http://www.propertyupdate.com.au/apartments-are-the-way-of-the-future-.html
http://www.propertyupdate.com.au/we’re-heading-for-an-oversupply-of-cbd-apartments-in-melbourne.html
he is saying he likes apartments but not in the CBD
Hi Melbournian
I like apartments as a form of investment, because of the large demographic that prefers this style of accommodation. This means that if you buy the right apartment in the right location, there will always be continuous strong demand by owner occupiers and tenants for your property.
But each city has a number of property markets within markets.
Currently there is a vast oversupply of CBD apartments in Melbourne at a time when demand is dwindling, as I explain here:
http://www.propertyupdate.com.au/we’re-heading-for-an-oversupply-of-cbd-apartments-in-melbourne.html
On the other hand there is a shortage, yet still strong demand for one and two bedroom apartments in many inner and middle ring suburbs.
Funny how hostile some of these comments are. I read throughout the thread that "everyone has their own methodology." If that's true, then why keep saying your method is more superior to say Yardney's and throwing up all these figures and hypotheticals to prove that and challenging him to reply? I thought everyone has their own style, so what's there to prove?
Just as some think inner city properties are not necesarilly better than outer city ones, the vice versa is also not necesarilly true - no need to make hypothetical assumptions about those who have bought in the city about how much less money they made compared to you, and challenging them to prove it. As adults some people sure are childish...
Just as some think inner city properties are not necesarilly better than outer city ones, the vice versa is also not necesarilly true - no need to make hypothetical assumptions about those who have bought in the city about how much less money they made compared to you, and challenging them to prove it. As adults some people sure are childish...
MY : "Because I adhere to my rule of only buying properties that are in continuous strong demand, for the last 15 years or so I have only been investing in apartments or townhouses. The only houses I buy are old dumps – one's that I pull down to build new development projects."
Yet their BAs have been telling me and other clients to pay over $500K to buy old timber house (not for development) with rent yield of 4% max ?! Probably to maximize the commission.
Yet their BAs have been telling me and other clients to pay over $500K to buy old timber house (not for development) with rent yield of 4% max ?! Probably to maximize the commission.
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Which state are you talking about? I'm talking about Melbourne and Sydney.
In Brisbane & Perth we buy very different accommodation - we buy houses - the type of accommodation that is appropriate to the area and that is continual strong demand. Clearly this varies by location.
It's in Brisbane. Can't see why apartments in Melb & Syd, and houses in Brissy. But if you have been buying apartments for the past 15 years yourself, your BAs still tell people to buy houses.
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Off the plan Apartments in melb are overpriced however if you're looking for larger sized older apartments build in the late 90s and early 2000s there's still a lot around. Larger older 2 bedrooms 90-100sqm back then are now the size of off the plan 3 bedders 91-100sqm.
