Investment tip: The importance of balance through diversification

The property investor shared: “I [don’t] necessarily … follow everything that he says but I definitely get his opinion.”

“He's just seen the world, many more times over than me. He's now close to 60 and been through numerous property cycles and been through 80 per cent interest rates and had investments and has investments and dealt with the big end of the world and dealt with the smaller end.

“His influence on me … has been a huge portion of my success and having that consistency that [he] provides me with [his] experience has been fantastic as well,” he added.

Risk management

Being a property investor himself, Jeremy’s father understands that as complicated as the venture goes, a good risk management plan will get any investor through. His motto: “Only put on it what you’re willing to lose.”

Jeremy’s father makes sure that he keeps the balance in his portfolio with a variety of properties that serves specific purposes.

Jeremy explained: “He's definitely not [into an] all-in-on-one thing ... There's got to be a lot of potential for development properties, [and] he's got a couple of properties where it's multiple unit sites [as well as] some commercial properties.”

“He's in a lot of syndication—he's got a lot of clients who are property syndicators who deal on the big end of town and Dad will invest his money with that and there's some really, really good returns over short periods of time.

“[He knows that] more money, more profit one can make, more risk one can take as well,” he added.

The importance of maintaining balance in a property portfolio is one of the most important lessons that Jeremy has learned from his father. In the past year, he has successfully grown his nine-property portfolio by adding six more properties from across different property markets in Australia—but not without taking his father’s advice.

According to him, as he was purchasing more properties, he tended to focus on one particularly good and healthy market.

In fact, he’s bought around seven properties in Brisbane, only to see an influx of new investors and get stuck in the middle of a market with an oversupply of rental properties and, therefore, decreasing yields.

Jeremy shared: “[My father] definitely has said to me … ‘Brisbane—maybe [you] put a little bit too much in there,’ and there's about six or seven properties up in Brisbane.”

“He was probably right [because] they have slowed down a little bit as a huge amount of investors [come in] … It’s like downing growth,” the property investor added.

Since then, he diverted his attention to Melbourne and found cheaper areas, where he eventually experienced good growth. The balance worked out in the end: His Melbourne properties have “picked up the slack” for his properties in Sydney and other parts of Australia.

Tune in to Jeremy Iannuzzelli’s episode on The Smart Property Investment Show to know more about the key cities which he has seen grow and decline over the last few years and where he sees these cities going in the future.