Buyers Agent Miriam Sandkuhler says that property investing is not all about price. She says it is the last thing you should consider.
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Kevin: We hear lots of great advice about what properties you should buy. Is it all about location? The saying about you only make money when you buy property, not when you sell it. What about “Buying property is not all about price?” That’s what we’re going to talk about now with Miriam Sandkuhler who’s a buyer’s agent with Property Mavens.
Good day, Miriam. Nice to talk to you again.
Miriam: Hi, Kevin. Nice to talk to you, too.
Kevin: If buying property is not about price, then what is it about?
Miriam: Price is obviously a factor, but that kind of comes in at the end. That’s one of the last things that we would consider when buying a property. There are a number of things buyers or investors want addressed all the way through.
They want to make sure that they have a plan in place. They need to be clear on whether they’re investing for capital growth or whether they’re investing for cash flow, and what that property needs to do for them. So, they have to have their budget resolved as well at that time when they’re putting that plan together.
They need to understand their own personal risk profile and make sure that it matches the property type that they’re looking at and the risk associated with that property type. We know things like buying off the plan is very high risk compared to buying an established property, because obviously it’s a concept and there are many reasons that it can fall over.
Obviously, it’s about getting the right experts engaged at the right times. So, that’s your building and pest inspectors, your conveyancers. I speak to conveyancers a lot of the time and they hate it when someone rings them after they’d bought a property at auction and says, “Can you have a look at the contract for us?” Because then it’s too late. But it happens a shockingly regular amount of time.
They want to make sure that… Again going back to the experts, the right expert at the right time can help them maximize their return and certainly help them minimize the risks. So, there’s a reason to bring them on board.
And the thing that also leads into determining price ultimately is doing the right research. That includes looking at the right growth drivers and considering multiple growth drivers, not just one such as population growth. I need to be clear here that searching on the Internet and having a look on RealEstate.com is not research; that’s called searching. There is a distinction.
Also, just be a little bit wary of free advice. Often, free advice is sales advice that’s been disguised with a bit of smoke and mirrors and it’s not necessarily to the benefit of the investor.
Then all of that together will take them down to the point of the negotiation part of it, and that’s where things like recent sales evidence will help them form a picture of what the price of that property will be.
So really, all of those steps need to happen to get to that point ultimately where they decide what price they’re going to pay for it.
Kevin: Let’s unpack a little bit of that, because there’s some tremendous advice inside there. You mentioned about research and looking on RealEstate.com.au and Domain. And I agree with you: it’s not research; that’s just searching.
Are you a believer in getting your feet on the ground, or would you actually consider buying a property with a team and doing it remotely?
Miriam: No, I’d never not view a property. There are so many things that hide and don’t show, and my experience in buying real estate is that photos can make the property look amazing and when you get there in reality it’s not that good. Or sometimes they can under-represent the property. It can look crappy online, but when you get there it’s actually a lot better.
So, there’s a massive risk in doing that. And in all reality, come on, if you’re spending hundreds of thousands of dollars, don’t tell me you can’t afford $200 or $300 or $400 to go check it out and see what it looks like. I just think that’s a really foolish way to go. I’d never do that.
Kevin: And building the team, you mentioned getting the right team members in at the right time. That’s all part of that planning process, because really what it comes down to, Miriam – and you just laid out for us a beautiful plan – is you have to have a plan or a strategy. You can’t just wake up one morning and decide you want to buy an investment property.
Miriam: That’s right. Often if some prospective clients ring me, I ask them, “Are you investing for capital growth or cashflow?” and they sit there and go, “I want both.” But that’s sitting on the fence, and it’s not a clear strategy in terms of how many properties they need to buy, what their timeframes are, how much equity they need to achieve, what income does it have to deliver for them? It’s more complex than that.
And typically, people who are accustomed to buying property because they’ve been listening to selling agents for decades over-simplify the process and dumb it down and spread myths like “All properties double every seven years and everyone gets rich out of property,” and it’s just not true.
It’s really a case of understanding it’s far more complex and there are lots more steps involved in the process to actually buy well. And it’s actually much easier to get it wrong than it is to get it right.
Kevin: That’s a great saying, too, and it’s very true: much easier to get it wrong than it is to get it right.
Miriam Sandkuhler from PropertyMavens.com.au always makes a lot of sense. Thank you for your time, Miriam.
Miriam: You’re very welcome, Kevin. Thank you.
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Originally published as: https://realestatetalk.com.au/dont-focus-just-on-price-miriam-sandkuhler/
Kevin Tuner worked in radio as General Manager of various east coast radio stations. He started in real estate in 1988 and was ranked in the Top 10 Salespeople in the state until he was appointed as State CEO 1992.
He operated a number of real estate offices as business owner and was General Manager of several real estate offices in Christchurch.
He now hosts a real estate show on Radio 4BC and a weekly podcast at www.realestatetalk.com.au. He is the host of a daily 7 to 10 minute podcast show for real estate professionals at www.reuncut.com.au.
To hear more podcasts by Kevin Turner, click here
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.