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Top tips: How to get real returns on your investment

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What advice are you giving to property investors?
 
Paul Giezekamp:  The advice that we are giving property investors today is to really think about where they are buying in the market and what major capital city.  So you know if you are looking at certain areas that have had good capital growth, we are suggesting to investors to stay away from those ones and to look at areas or major capital cities that have not had any growth, the last 4 or 5, 6 years because that means they are ready for an upswing.  So Sydney and Perth have been flat for a long while now and we are suggesting to our investors to look at those what’s there.
 
What are investors asking you about?
 
Paul Giezekamp:  The main questions they are asking us is, “Paul, what do we buy?”  And so I am very straight down the line.  I like buying development sites, I like buying duplex sites, triplex sites with an existing house on it, that I could add value to.  I don’t want to be looking at buying a unit or an off the plan or a house or land package that’s a finished product because I can’t add value, I can’t add a second rental income.  So I am always looking for properties that I can add value, I am always looking for properties that are development sites, I am looking for properties that have been flat for a long while, so areas that have been flat and they are the main key features that I am looking for my investors and also for myself.
 
How can investors see returns in a flat property market?
 
Paul Giezekamp:  Investors can still make money in a flat market.  They just have to buy better, they have to renovate cheaply and well with good quality.  If they can add you know a granny flat or if they can do a duplex or a triplex out at the back and then maybe sell 2 or 3 of them and own the front house outright, that’s what you can do in a down market.  So you have just got to be a bit more savvy, you have got to get a bit more education, but that’s what we offer for our clients is the free coaching side of things to say okay, “what are we going to buy as far as a property product?”  “Whereabouts are we going to buy as far as a cycle?”  And let’s get into it.
 
Are there any trends emerging at the moment?
 
Paul Giezekamp:  A loft of re-finance is happening, some really good fixed rates that are out there as well, interest rates dropping.  So people want to re-finance to actually get a better rate.  When they re-finance they can actually free up equity as well to go and buy an investment  property.  And if they do go and buy an investment property, we are suggesting to them as mortgage brokers or we actually like to call ourselves mortgage planners to buy something as far as an investment property that’s positive geared or positive cash flow, so it’s not labouring your whole portfolio.  I think the negative geared properties have had their day and I don’t think there is a big appetite for it right now.  So what we are seeing right now is that people are re-financing, get a better rate, they are fixing for one or two years because I think the fixed rate at the moment is 5.74, St. George and RAMS, very good rates and they are looking to buy positive cash flow properties.

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