This blog is dedicated to all the hardworking property investors that I either know as customers of NextGen or met over the years.
Targeted by the politicians, often blamed by the media, regularly taken advantage of by the banks, and almost always frowned upon by the general public, unlike other types of investors – property investors never seem to get a fair break.
In my travels as an investor over 2 decades but also speaking to our customers daily, I feel compelled today to try and shed some light into who these faceless so called “property investors” really are.
This article published on the ABC website last year, reports that the typical property investor is in their 40s, has an income of 80K to 100K a year, is possibly a professional, probably in a management position, quite likely a small business-owner, or possesses a skilled trade.
The typical investor is in their 40s and have an income of 80K to 100K per annum
The latest ATO statistics, indicate that approximately 2.1 million individuals are identifying themselves as having an “interest in a property” other than the home they own. That means that there is a very good chance that one or more of your neighbours, friends, workmates and family members are probably one of those 2.1 million ordinary Australians and you probably don’t even know it.
And whilst the media will take every opportunity to portray them as evil – case in point this article published only recently and referring to a creepy landlord living on the other side of the world with no relevance to our reality – I can confidently and categorically report that none of our many customers or the numerous investors I have come across, fits that profile.
The property investors I know, are your non descriptive next-door neighbours, living in any ordinary working class suburb – who most likely mowed the lawn at the same time as you did last Sunday or passed you at the supermarket isle. They were brought up in a society where being “rich” is bad and I guess having a rental property, makes them “rich” even though their property may have dropped in value since they bought it and they owe the bank huge sums of money – enough to make the previous generation cringe at the thought (true story my amazing mum was so worried when I bought my first investment property that didn’t sleep for a week she told me later!)..
So, conditioned to feel bad about being investors, the property investors I know choose not to talk about the fact they own one and God forbid that they happen to collect rent. They live ordinary lives, drive average cars, and go to work every day – many using public transport – just like everyone else. They don’t have a choice in that matter, given that it takes decades for their “investment” to return anything meaningful enough to make a significant difference in their day to day lives!
I also have no doubt that the property investors I know are exceptionally brave. It is not easy to commit to a debt of hundreds of thousands of dollars when there is no guarantee their property will be always rented OR that they will continue to be employed or have a viable business – hence being able to subsidise their mortgage repayments (which in a lot of cases are on top of their home loan). Just think for a second how brave a property investor would need to be right now, given the negative – almost daily – media commentary which is unjustifiably trying to make us all believe that the world as we know it, is about to end! Property investing is a lifelong commitment in an environment completely out of anyone’s control, and that says a lot about the character of the person that decides to give it a go.
Property investors are typical everyday Australians
And that’s the other thing… property investing is a lifelong commitment with long periods of time when nothing seems to happen! Other than the odd few years of growth in between, the rest of the time, the life of the property investor is pretty boring. Actually, let me correct that… Other than the odd few years of growth in between, the rest of the time property investors are stuck with a deteriorating property where dishwashers, cooktops, taps, blinds, door locks, dryers, fences and just about anything that can possibly break – will break!
Not to mention of course the odd property investment disasters whereby a property investor’s cherished property is discovered to be in a building covered by flammable cladding and they are casually served with a special levy of $30K or instances that they are informed of thousands of dollars worth of repairs from their last tenant who decided to trash the place on the way out! And I won’t even mention, their bank deciding to put up their interest rate (out of cycle and while the official cash rate is steady), adding hundreds, if not thousands, of dollars onto their mortgage repayments each year.
Property investors are faced with numerous risks
These are all part and parcel of being a property investor, which probably explains why the property investors I know, all seem to be hard workers with great work ethic and most seem to be surprisingly “good” with their money. They know they have to be extra careful with their money because one day, they may have to dig into their savings. The minute a property investor commits to an investment property and a 30 year mortgage, caution sets in and whether they realise they do it or not, their first priority becomes building reserves as deep down, they know at some point they will need them.
And the list goes on…. The property investors I know are risk averse, humble and respectful. They understand their responsibilities as landlords and most were tenants themselves at some point or still are. They understand that it is important to “look after” their tenants because if they do, their tenants will look after their property in return and will stay there for longer. They are also required to be resilient and patient, as problems arise regularly. It is not uncommon for property investors to be faced with conflicts and disputes through no fault of their own, whether it is to deal with unreasonable tenant requests, body corporate disputes and legal battles, neighbour conflicts as a result of a tenant action, tribunals or local councils charging them extra, just because their properties are rentals (some local councils have more expensive rates on rented properties!).
The property investors I know are brave, risk averse, humble, respectful, hard working, “good” with their money, resilient and patient.
And not to mention that not every investment property does well for itself. It is not uncommon for property investors to lose large sums of money… Think of those that bought the wrong property, or those that bought in WA or Darwin a few years ago, or those that bought at the peak in Sydney and Melbourne who may not see a return for years all while rents are static.
Yes, real estate investing can be a good way to set yourself up for your later years, but the life of the property investor is not for everyone, which probably explains why out of the 2.1 million investors, 1.5 million stopped at one property and 2 million at 3. Bad seeds exist everywhere and I am not in denial that creepy, dodgy landlords exist.
The one thing I will say though is that all the property investors I know are model citizens, humble, genuine Australians, who placed their faith in the security of the bricks-and-mortar, all while providing a shelter for people that cannot otherwise afford it or have chosen not to. Two million of these battlers have decided to stick their necks out, so that in retirement they will not be such a burden on the next generation. And I see nothing wrong with that.
Who we are:
NextGen Property Mgmt (www.nextgenpm.com.au) is a boutique Real Estate licensed agency that specialises in property management. NextGen Property Mgmt does NOT has a sales team unlike most other agencies that specialise in Sales and have Property Management as a side business.
Our area of focus is residential property and we operate in Inner and South West Sydney, as well as St George.
NextGen was created from its infancy to cater for investors as it was founded by investors who quickly realised that in a highly regulated industry like Real Estate – competence, expertise, care and service by property managers varies greatly.
As an investor, you need to have trust for and feel valued by your property manager. You need to know that your property is being looked after with minimal disruption and you are getting maximum return for your investment. At NextGen we understand that because we are investors living busy lives ourselves, so our promise to you is that you will no longer have to worry about your most valued asset because we will make sure to take care of it as if it is our own.
If you want to learn more about us just click here to organise a time for a chat. Or call us on 0414 494 840. We would love to hear from you and to share our story.