Invest
Building a moat: How to defend your property against adverse effects
A successful property portfolio is one that is not reliant on you, as the investor, to dictate its performance, a property guru has said.
Building a moat: How to defend your property against adverse effects
A successful property portfolio is one that is not reliant on you, as the investor, to dictate its performance, a property guru has said.
The ultimate goal for a property investor is to have a property that is neutrally or positively geared, and in demand from tenants, so that it is able to ward off negative scenarios seen throughout 2020, Pure Property Investment’s Paul Glossop said on a recent episode of The Smart Property Investment Show.
“What stops a market from growing? Typically, it’s going to be things like more expensive money, additional supply. And if those two things alone happen to a property and you don’t have a good answer to say what happens when these things happen...
“Firstly, you’ll have a lot of fixed costs such as high strata, high running costs. If your interest rates go up because the market has actually stalled, that’s what’s causing it, as well as additional supply, because that is what typically happens on the backend of a boom, then that’s really when people are left hugely with those issues,” Mr Glossop explained.
For Mr Glossop, the definition of a successful property investor is one with a portfolio that effectively, over time, is not reliant on the investor to dictate its performance.
And when it comes to building that resilience to stand the test of time – i.e. a moat around one’s property portfolio, Mr Glossop shared an interesting analogy.
“It’s essentially like raising children,” said Mr Glossop.
“They require a lot more attention, a lot more need, early in the piece. Firstly, they need more money, you need to save more. They take a lot of time, they’re harder work, until you actually raise them to a point where your intention is that they become self-sufficient.
“Good property portfolios are effectively geared that way, where you know that you put effort and time into it initially, and it probably won’t take 18, 25, 30 years to get to maturity. It would probably be more like, in a good fast case, two to 3three years, and in some cases maybe seven to eight years.
“But you’re trying to build it up to eventually say, ‘Take me away and you got to do what you go to do, which was my intention from day one’,” said Mr Glossop.
Speaking about building a moat around a property portfolio, Mr Glossop noted the property investors when putting pen to paper needs to consider two factors – where to get the fastest growth in the shortest period of time, and their defence when that growth inevitably stops.
For more information about building resilience, tune in to Mr Glossop’s podcast here.
About the author
About the author
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
