BLOG: What property investors can and can’t control about their portfolio
If you read the papers, it would appear that property markets are going to fall through the floor, and everyone’s going to go bust. In reality, things are just fine, and our portfolio’s proof of that, writes editor Phillip Tarrant.
If you believe what you hear from the mainstream press, lately it’s all about if the big banks fail, if the Australian economy fails, our GDP and growth in development will fail. To be honest, it's irresponsible journalism trying to sensationalise this situation. The strained banking system is built a lot stronger than the American banking system was prior to the GFC. It is fundamentally different.
My view is that a lot of the noise is based on scare-mongering and misaligned or ill-informed opinions, maybe even some ulterior agendas.
But you got to remember, we just ticked over 25 million people in Australia, about a generation before it was supposed to happen. And I see massive population growth: Sydney and Melbourne are huge global cities. In short, there is demand.
Now, since our last portfolio update, we got a new Prime Minister. Scott Morrison has taken over the reins from Malcolm Turnbull, and if you listen to skullduggery of politics down in the Canberra bubble, it’s all about what the promises are, and the Liberal government is reporting GDP growth, job growth, huge increases in company profits; all really good economic indicators. Meanwhile, Labor’s talking about the slowest period of wage growth in decades.
There’s half-full, half-empty, there's black and white, there’s however you want to look at it. At the end of the day, markets will be driven by sentiment, and I say that based on my own experience with the Smart Property Investment portfolio. We’ve created this portfolio in this public persona, so that people can actually see what we’re doing. I’m happy to share, the idea of it is to see just how we see the world and how we are reacting to all of this stuff that's going on. And my view of it is: I can’t do anything about politics, but there are things I can control.
Where can I be proactive? Well, I can know what interest rates I’m paying right now. What can I do about that? Well, I can look to extend my interest only rates by doing something right now or I can fix my rates for a period of time, so there are some tricks up my sleeve that I can use to influence the outcome of our portfolio.
What Canberra does, what the economy does, what APRA does, what the banks do: Can’t do anything about it.
It’s important to look forward what's next, what’s the future, but if you look at our portfolio, it’s had great growth.
Whether we were extremely lucky that we bought in the right places at the right time, or we were bloody smart and understood what we were doing as property investors, which was to buy at the right place at the right time, things have worked out and they often do for strategic investors.
If there’s any luck in there, I’m happy to claim it, but I’d like to think also some of it was good strategy as well, and good advice from my team as well. That’s the stuff that’s in your control, that’s always in your control.
More from this writer:
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How this teacher and farmer chooses his investment properties
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The key to keeping up with changing policies
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INSIDE COMMERCIAL PROPERTY – WITH RETHINK INVESTING: Crunching the numbers
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INVESTING INSIGHTS WITH RIGHT PROPERTY GROUP: Going back to basics
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Getting the most out of your mortgage broker
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Q&A session with Paul Glossop
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A broker’s perspective on current opportunities for savvy investors