26 Feb Investors widen search for better properties
Bryce Holdaway from Sky TV’s Location, Location, Location joins us to talk about how he is seeing more investors going further afield to find the best properties and how you can get comfortable with that strategy.
Read the transcripts here:
Kevin: Bryce Holdaway joins me once again. Bryce, of course, is co-host of Location, Location, Location Australia and is from Empower Wealth, as well.
Bryce, I want to talk to you, this time, about trends. What are you and Ben noticing in terms of trends in the property market in Australia?
Bryce: The biggest trend that I’m seeing is that people are becoming more and more comfortable with not investing in their backyard and, in particular, investing interstate.
The fact that investors have done pretty well in the Melbourne and Sydney markets of late is seeing them equity-wise doing really well on paper, and so they’re shifting their focus to a couple of things.
One, looking for opportunities to retire the debt and look for a yield play. But two, also seeing that Australia doesn’t operate as one big market and seeing that if they’re a borderless investor and open their mind up to investing interstate, they’re going to have the best chance of moving their money into the market that’s going to give them the best chance of having the upward part of the cycle.
I think the fact that there’s better data and there’s better analysis out there to give you more confidence in investing interstate, but what I am finding is people still have a little bit of reluctance. They get right to the edge, but they have a little bit of reluctance about stepping over the line. I guess industries like buyer’s agents come in to help with that.
Kevin: Yes. It’s always much easier when you’re buying in a patch you know, which is the area that you’ve probably traditionally bought in. But a number of the investors that I talk to, they’re very brave, and as you said, there is so much information available now that you can really do a lot of preparation before you even travel to the market.
That raises another question, Bryce. Do you think you should travel to the market and see the property before you buy?
Bryce: If you’re doing it yourself, absolutely.
I always say that buying real estate on the Internet is a bit like checking out your friends on Facebook. They only put the good stuff up. They never tell you about when they’re having a bad day. It’s a bit like that with real estate. You should really check it out if you’re buying it without the help of a professional.
But I’m jumping on a plane more than ever to go into interstate markets and check them out, and run the ruler over opportunities. With a buyer’s agent, I think we’re using data analysis, but I think that is a bit of a double-edged sword, as well.
Not only is there more information out there that people can reach easily, but it actually makes it harder to digest and form it into some form of view on what you should actually do. In essence, there’s a little bit of paralysis by analysis.
Bryce: I guess people still need their hand held, but I’m finding, in general, they’re more open to interstate buying than ever before.
Kevin: At what point do they need their hand held? Is it the investigation stage, or is it the purchasing stage? I was just wondering there as you were talking whether or not it’s frustrating for you if someone comes to use you as a buyer’s agent, they’ve done a huge amount of homework themselves, and they’ve made a decision about what they want to buy and where. Is that frustrating for you?
Bryce: It can be. I get the privilege of having a professional view of seeing the rear-vision mirror on hundreds of portfolios, and I see the decisions that people make.
I always think that when you’re investing, you’re going to pay in one of four ways. You’re either going to buy the wrong asset, you’re going to procrastinate, you’re going to over-pay, or you’re going to prepay for a professional service. It’s one of those four things.
People get to the point where they have a bit of an understanding about where they should buy, but what I find is even if I’m talking to someone who’s got their research spot on, they’ve got the suburbs spot on, they’ve got the actual asset selection spot on, they just lack the confidence of being able to step over the line and do something.
I think amongst a whole range of things that buyers agents can do, essentially, they’re holding the hand, helping them walk over the line, put their name on a contract, and actually buy a property.
Time is usually a very good friend if you’re buying a property in an investment-grade suburb. I always think if you buy an average property in a good suburb, it’s better than buying a good property in an average suburb, because the location will do most of the heavy lifting for you.
Finding that location is often the hard part. There are 15,000-plus suburbs in this country.
Kevin: Bryce Holdaway, great talking to you, mate. Bryce, of course, is the co-host of Location, Location, Location Australia and is from Empower Wealth.
Bryce, thanks for your time.
Bryce: Good on you, Kev. Thanks.