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How to Make your First Million Rich Harvey

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Mark Traversband | 20 Oct 2012, 06:05 PM Agree 0
Well done guys for an excellent article in Novembers YIP with loads of figures and real stratgies to find that 1 million in 10 years. Its great to see the figures but it also exposes some people who claim to be an expert.
All the other experts had great info but Rich Harvey's was full of mistakes and bad advise.
The recommended properties for $250K in western sydney will be in some of the worst performing areas that have had no growth in 8 years.

For the $250K price range in western Sydney you are looking ABS mediums at:
Shalvey 2003 $240K to 2011 $268K
Willmott 2003 $220K to 2011 $225K
Bidwill 2003 $238K to 2011 $250K
Whalan 2003 $227K to 2011 $245K

Interesting stat is that this areas have the highest percentage of Single Mother households in NSW, High crime rates, drive buy shootings etc

So he is recommending people buy in areas of No capital growth. The figures show no supply connection fees or extras to the Granny flat and a $70K shoe box will be worth nothing after 10years.

Interestingly, Harvey credits 6% capital growth to each property but has the same price for buying properties 2 and 3 years later?

The example couple can clear their existing mortage in 8 years comfortably and atleast they will an un-encumbered $700K property without following this advice

  • Rich Harvey | 23 Oct 2012, 12:49 PM Agree 0
    Hi Mark
    Interesting comments in your post above.
    The scenario for the YIP case study was designed around finding the couple positive cashflow properties that would achieve their goals.
    OK – the stats are from 2003 to 2011...2003 being the last peak of the cycle. If you purchased in 2007 (this is when we started buying) prices for typical homes have increased from $160K to $220K (in 2012) – the growth stats can be manipulated but the bottom line is we are buying in an area with steady growth (as Residex/SQM/ APM have written). By the way its "Median Price" not meduim price.) From a perspective of buying over 500 properties for clients in the last 5 years, most tenants are families with jobs and do not create problems. They are screened by good local agents for employment/rental history, there is also a computer database of bad tenants which is checked. Finally you should have Landlord insurance so the ‘single mother/bad tenant’ comment is not only offensive but totally incorrect if one bothers to actually go to these areas.

    Drive by shootings? As far as I know this happens in Bankstown/Auburn where median prices are $6-700K’s so not sure where this comes from. Sure there is petty crime like any other suburb but again the reality totally refutes these ill informed comments.

    The $70K for the flat is totally inclusive of connection of electrical/plumbing and is ‘turn key’. There are some companies offering inferior products and smaller dimensions however we believe in building granny flats that tenants will want and we have nil vacancy. We have actually filled a niche demand in the rental market for single people and this can only be positive for vacancy and rental return. They are designed to last a lifetime (normal builders warranty etc) but can be moved if necessary – no slab is laid

    The suburbs we recomend to clients are coming off a lower price base. Affordabilty will be a key part of picking areas with the potential for capital growth along with other key criteria.
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