- Investing in property is much like a military style operation, argues former naval officer Lachlan Vidler
- Don't get put off by perceived short-term gains, plan for the long haul
- Be decisive, courageous and stick to your strategy, he argues
While investors have been coming back into the market this year, buoyed by higher rents once the moratoriums had ended, they are still lagging behind 10-year averages, in relative terms, according to ABS statistics.
Formal naval officer, now buyers agent, author and Atlas Property Group director Lachlan Vidler has warned investors that they could be making “bad decisions” during these times of rapid price rises, especially if they are speculating on future price growth.
“The strong property price growth over the past year has already started to reduce, but some people may be buying thinking that the ‘good times’ will last forever,” he said.
“Unfortunately, they may find themselves buying at the peak of the market, or investing in an inferior dwelling or location, which can have serious long-term financial ramifications.”
Mr Widler says that speculation never has a place in property investing decisions, and could be dangerous during times of “highly unusual” market conditions, as now.
“Very few market commentators this time last year predicted how robustly property markets would rebound, yet the signs were always there that we were about to experience a once-in-a-lifetime market boom with cheap credit, low supply levels, as well as multibillion-dollars being spent on stimulus measures,” he said.
“Property buyers who recognised this early, and had the courage to act, have risen the wave of impressive price growth over the past year the most.”
Lachlan Vidler, Atlas Property Group
Mr Vidler said strategic property investment was very similar to military principles because both required discipline, dedication, and courage to be successful.
1. Discipline
“Property investment requires incredible discipline over a long period because, for most people, investing begins decades before they will be able to realise the benefits of their investments,” said Mr Vidler.
This is very much like military activities and missions, where a similar discipline is required, he said.
2. Courage
Property investors – like military people – also had to have the courage of their convictions, and let their strategies play out for the long term, he said.
“Although the barrier to entry in the property market is substantially higher than other asset classes, such as shares, we advocate for all investors to take a leap of courage and decisive action to incorporate property in their personal portfolio, because of the leverage, reliability, and stability it provides investors for their money.”
3. Dedication
Finally, successful property investors have to remain dedicated to their financial goals, and try to avoid falling into “mission creep” to try to supercharge their returns.
“Savvy investors accept the fact that their portfolio may not generate a profit every single year because this is an unavoidable reality in the cyclic nature of the property cycle,” he said.
“They always remember that the most important days in the market are the day they buy and the day they sell. During the time in between these two days, as long as their suburb incurs more years of growth than decline, their property should be achieving an investment return.”
Unfortunately, some investors may be jumping at perceived short term gains, as they abandon their long-term strategy to chase higher rewards and other glittering objects.
“[This] also have substantially higher risks,” warns Mr Vidler, “such as buying in one-industry towns or speculating on continued price growth by purchasing in off-the-plan high-rise developments,” he said.
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