SIG Meeting November 8th - Guest Speaker Michael Yardney
- Thread starter perky29
- Start date
Hi
Due to health reasons I have to cancel as well - my apologies..
Due to health reasons I have to cancel as well - my apologies..
Michael, thanks for coming along!! It was an interesting and informative talk. It was also nice to see Pam and Gavin make the trip as well!!
Apologies for the band downstairs - the PUB has NEVER been that loud before ... I will need to make sure next time there is no band !
Thanks to those who put $1 into the money jar for the hire of the projector (and also the two guys who helped make up the difference)
Some notes I took from Tuesday night.
-Suggested strategy how to find a top performing property.
-Demographics.
-How to get capital growth through renovations.
-How to boost your property portfolio through property development.
-Some finance concepts such as LOE.
Michael asked why we all invest in property (and asked people) - and how many do you need to be financially independent. Some of us found it amusing when he asked the front row person (HandyAndy) about why he wanted more property
- sorry for putting you in the front row!!
Property development - more risk but larger return.
Capital growth - use of time and leverage.
Usually means poorer rental returns (the higher growth areas) - however well located property is a lower risk investment.
How do you buy the next one if no CG - how many positive cashflow properties would you need to retire?
Examples - a 300k property at 12% growth would be worth 3 million in 20yrs.
Same 300k property would be worth 2 mill at 10% - and just 750k at 5%.
Look for properties in high demand areas with limited supply.
Cash flow does not necessarily mean growth - i.e land goes up in value. Showed how Sydney (and Adelaide??) has high land value growth in past 30 years.
Scarcity is another factor.
Michael says property can double in value every 7 years in the right areas. In UK 11% compounding growth over last 30 yrs, and 10% in NZ.
Will it continue ? Best indicator of future is past performance (past growth over time) - look at long term history.
Basics - 1/ Begin with a PPOR.2/ Use equity to fund IP. 3/ Increasing equity - buy more properties. 4/ Add value.
Demographics-
-Changing age structure.
-Ageing population.
-Lower natural population growth.
-Where do they want to live?
There used to be 3 zones with cities - Inner/Middle/Outer.
Now 4 - CBD / Inner /Middle/Outer.
25% of people have 75% of the wealth.
-Sea change and Tree change.
1 in 2 50 year olds will divorce.
30% of population live alone.
6 million rent.
2.53 people per house now.
Out of this - there is a need for smaller accommodation.
In last 10 years or so - from 28% to now 37% of 25-34 yr olds have no partner.
Australia - 5% live in non-detached accommodation - compare that to overseas where trend is up to 40% - Australia will end up more like that in time.
People will end up living in townhouses units in inner city - close to cafe’s, transport etc.
The biggest growth will be for over 60 year olds. Also childless couples.
Biggest group is now Gen X - those born between 1961 and 1976.
Most have or will move out of home.
-Household formation. X'ers buy in growth areas.
The boomers inherit lots of wealth - and will use it to improve their quality of life.
State of the Market. Using ANZ report.
45k shortage of supply (dwellings) around Australia - so not enough supply at present.
Vacancy rates are at lowest for some years - around 2.5% Australia wide.
Sydney and Melbourne are close to fair value - Brisbane is over fair value thanks to large boom.
Owner-occupiers finance is up; Investment finance is down compared to several years ago.
In 20 years, Sydney will have 1 million more people - and another million 30 years after that.
Of those, one third will want to live in inner city.
We are at the bottom of the cycle in Sydney and Melbourne now - but the perception (eg John Symonds and press) is that we are still to bottom out more. Now is a very good time to buy.
What to buy -
Buy properties with a twist. Solve someone else’s problems.
- Add value through reno.
- Don’t buy new.
- Buy older houses on large land (near land value).
- But established houses or apartments (which you can add value to ESP).
AVOID:
- OTP.
- Holiday apartments in holiday locations.
- New apartments.
- New property in new suburb and new locations.
Why Property Development.
With Metropole - you can be an armchair developer.
Benefits include:
-Savings.
- Profits.
- Easier finance (more leverage).
- Tax benefits.
- Higher rentals.
Build your portfolio faster.
What they do -
- Buy land.
- Add value with DA.
Either - sell with DA or go on and develop.
Approx margins for Townhouses around 15% after costs.
Showed and example of an inner to middle ring area in Melbourne where they develop - where 81% owner-occupiers.
On a 400k property purchase - looking at 80k deposit, 10k pre-purchase feasibility, 17.5k DA (including Architect, Town planer etc).
Michael finished off with (one of his clients?) - Dave who talked about how he was Living off Equity (and using Metropoles services?) had a good-sized portfolio wishing he had started earlier in life though as he was 63 yrs old.
Some questions were asked to Michael, and meeting closed/networking.
Apologies for the band downstairs - the PUB has NEVER been that loud before ... I will need to make sure next time there is no band !
Thanks to those who put $1 into the money jar for the hire of the projector (and also the two guys who helped make up the difference)
Some notes I took from Tuesday night.
-Suggested strategy how to find a top performing property.
-Demographics.
-How to get capital growth through renovations.
-How to boost your property portfolio through property development.
-Some finance concepts such as LOE.
Michael asked why we all invest in property (and asked people) - and how many do you need to be financially independent. Some of us found it amusing when he asked the front row person (HandyAndy) about why he wanted more property
- sorry for putting you in the front row!! Property development - more risk but larger return.
Capital growth - use of time and leverage.
Usually means poorer rental returns (the higher growth areas) - however well located property is a lower risk investment.
How do you buy the next one if no CG - how many positive cashflow properties would you need to retire?
Examples - a 300k property at 12% growth would be worth 3 million in 20yrs.
Same 300k property would be worth 2 mill at 10% - and just 750k at 5%.
Look for properties in high demand areas with limited supply.
Cash flow does not necessarily mean growth - i.e land goes up in value. Showed how Sydney (and Adelaide??) has high land value growth in past 30 years.
Scarcity is another factor.
Michael says property can double in value every 7 years in the right areas. In UK 11% compounding growth over last 30 yrs, and 10% in NZ.
Will it continue ? Best indicator of future is past performance (past growth over time) - look at long term history.
Basics - 1/ Begin with a PPOR.2/ Use equity to fund IP. 3/ Increasing equity - buy more properties. 4/ Add value.
Demographics-
-Changing age structure.
-Ageing population.
-Lower natural population growth.
-Where do they want to live?
There used to be 3 zones with cities - Inner/Middle/Outer.
Now 4 - CBD / Inner /Middle/Outer.
25% of people have 75% of the wealth.
-Sea change and Tree change.
1 in 2 50 year olds will divorce.
30% of population live alone.
6 million rent.
2.53 people per house now.
Out of this - there is a need for smaller accommodation.
In last 10 years or so - from 28% to now 37% of 25-34 yr olds have no partner.
Australia - 5% live in non-detached accommodation - compare that to overseas where trend is up to 40% - Australia will end up more like that in time.
People will end up living in townhouses units in inner city - close to cafe’s, transport etc.
The biggest growth will be for over 60 year olds. Also childless couples.
Biggest group is now Gen X - those born between 1961 and 1976.
Most have or will move out of home.
-Household formation. X'ers buy in growth areas.
The boomers inherit lots of wealth - and will use it to improve their quality of life.
State of the Market. Using ANZ report.
45k shortage of supply (dwellings) around Australia - so not enough supply at present.
Vacancy rates are at lowest for some years - around 2.5% Australia wide.
Sydney and Melbourne are close to fair value - Brisbane is over fair value thanks to large boom.
Owner-occupiers finance is up; Investment finance is down compared to several years ago.
In 20 years, Sydney will have 1 million more people - and another million 30 years after that.
Of those, one third will want to live in inner city.
We are at the bottom of the cycle in Sydney and Melbourne now - but the perception (eg John Symonds and press) is that we are still to bottom out more. Now is a very good time to buy.
What to buy -
Buy properties with a twist. Solve someone else’s problems.
- Add value through reno.
- Don’t buy new.
- Buy older houses on large land (near land value).
- But established houses or apartments (which you can add value to ESP).
AVOID:
- OTP.
- Holiday apartments in holiday locations.
- New apartments.
- New property in new suburb and new locations.
Why Property Development.
With Metropole - you can be an armchair developer.
Benefits include:
-Savings.
- Profits.
- Easier finance (more leverage).
- Tax benefits.
- Higher rentals.
Build your portfolio faster.
What they do -
- Buy land.
- Add value with DA.
Either - sell with DA or go on and develop.
Approx margins for Townhouses around 15% after costs.
Showed and example of an inner to middle ring area in Melbourne where they develop - where 81% owner-occupiers.
On a 400k property purchase - looking at 80k deposit, 10k pre-purchase feasibility, 17.5k DA (including Architect, Town planer etc).
Michael finished off with (one of his clients?) - Dave who talked about how he was Living off Equity (and using Metropoles services?) had a good-sized portfolio wishing he had started earlier in life though as he was 63 yrs old.
Some questions were asked to Michael, and meeting closed/networking.
Sorry Perky, i failed to show and failed to cancel.
I will blame the baby, Peter 147
I will blame the baby, Peter 147
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