How property investors can survive the ‘stormy’ market cycle

Mr Gunning said: “I think it'll be in the background because they're going to be very cautious. One thing that both governments are aware of is the fact that there are groups like us who will be getting in there and hammering them. I think they'll let us sit in the background and let it percolate along.”

“I think it's popular politics at the moment and we're not sure where it's going to end up. We're listening to the economists, but the government is definitely going to be a little bit concerned.”

Long-term investments

While the property market is currently on its softening phase, faced with interventions that aim to achieve a balance and ultimately alleviate the issues that affect the housing market, Mr Gunning reminds investors that this is most definitely not the end of the line.

Most major markets in Australia may be up to a long, stormy path in the near future, but at the end of the day, these fluctuations are all part of a normal market cycle.

In the 20 years that he has spent in the real estate industry, the only thing that has made investors succeed through market cycles, no matter how dismal, is their long-term commitment to the asset.

According to Mr Gunning: “You get lucky when you hold real estate for a long time. Anyone who comes in and talks to us and says, ‘I want to make a quick hit and get out,’ we'll say, ‘Good luck.’ I've been in the game for years and I haven't been able to pick a market precisely the market.”

“Personally, at the moment, as I'm selling real estate, I think is a great time to trade real estate. You don't back out and say, 'I've just dropped $100,000 where I could've got more two years ago.’ It's only relative if you're not going to buy.

“In markets like this, the seller loses a bit of momentum, but the purchaser has all the momentum,” the property expert highlighted.

No matter the state of the market, success comes down to how well an investor buys, Mr Gunning reiterated. Location, in particular, is one of the most important factors to consider when choosing an investment property to purchase.

Despite the noise brought by possible government interventions, particularly on negative gearing, the only time that it can do real harm is when the investor sells their asset. Successful investors will not sell their properties unless they really have to.

“My era have children who are going to inherit plenty because we don't sell real estate. We've got clients of ours who have millions and millions of dollars in property, and I say, ‘Why don't you travel and spend some money?’ to which they reply, ‘Why would I do that? I'm working with my children. My children will benefit from it,’ ” Mr Gunning said.

'Business as usual'

His advice to investors who are looking to continue capitalising in the current property market: Don’t look at the prices every now and track your investment’s progress every chance you get. This is not the shares market.

Avoid getting carried away by the doom-and-gloom headlines that have been running rampant nowadays. Stick to the long-term strategies you have set out for yourself and run your wealth-creation business as usual.

According to the property expert: “Put it away, listen to your tenant. You're going to ride the wave with your tenants, too. Then, you'll be surprised, in five year's time, six years’ time, it bounces back very well. That’s a big thing with real estate.”

At the end of the day, property investment is a long-term game and those who come out as winners are the ones who hold it out for as long as they could.

“It's a cash flow game. Don't look at your prices every single day to see whether it's going up or down. Wait 10 years and then review your prices. You'll probably see it in a very different position.”

“Stay your course, know your numbers, and making sure that your cash flow position is fine. Don't get carried away. Property is still the biggest asset cloud in Australia,” Mr Gunning concluded.

Tune in to Malcolm Gunning's episode on The Smart Property Investment Show to know more about the secrets in thriving in the changing property market.

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