Do you have a combination of big-picture thinking and great attention to detail?
Well, you might have what it takes to be a successful property investor.
Recently, EBM RentCover chatted to one of Australia’s leading property and wealth creation experts about what makes a successful investor.
In part one of the interview, Michael Yardney shared what not to do when it comes to property investment. You can find that great read here.
In part two he gives insight into the traits of a good investor and chats about the importance of protecting assets with insurance.
Michael Yardney has built a multi-million dollar property portfolio (one he manages in his spare time) and is the founder of Metropole Properties – a company that gives its clients strategic property advice and that has been involved in over $3 billion worth of property transactions.
So, what makes for a good investor?
The property expert says one of the foundations of a good property investor is to have financial discipline and that means delayed gratification.
“You need to have a long-term view of where you want to head and what you want to do,” he says. “And then forgo some things today to give you some comfort in your golden years. This means spending less than you earn, saving the balance, building up a deposit and then buying appreciating assets.”
“The truth is not all properties are worthy of investment,” he says. “So, investors need to be able to do the research or outsource this to someone who is specialised in this area.”
HOT TIP: “I don’t invest in what works now, at this stage of the cycle or the next year, I invest in what has always worked and that way I do not get caught in the ups and downs.”
What about Insurance?
At EBM RentCover, we think investors who understand the importance of insurance are a step ahead… does Michael agree?
Michael says one of the great benefits of residential real estate is that you can insure against a whole lot of risks so it makes it safer than investing in shares or in business.
“You can insure your property, your tenants, and even your income earning capacity that is generated through property,” he says
“Because your property is going to be your biggest asset over the next 20-30 years, insurance is very important and is one of the things that make residential real estate a safer investment.”
“And like your property, insurance is not a cost or expense; it is an investment. You would be silly not to think about insurance.”
True story…
Many years ago Michael’s parents owned an investment property in Elsternwick in Victoria.
They didn’t use a managing agent because they thought they could look after the property and it would be cheaper.
They also didn’t take out insurance.
The tenants had a perfect record of paying rent on time so no inspections were held.
Michael’s parents thought they had won the tenant lottery.
However, things started to get dark…
When the tenants eventually moved out, it turned out they had painted the whole inside of the property black.
The end result was the landlords had to repaint the whole property.
And, because it was black, it didn’t take one or two paints of coat.
It cost a fortune!
Had they took out the right insurance, they may have been able to recoup the costs for the damage.
Under EBM RentCover policies, Michael’s parents would have been able to claim up to $65,000 under accidental tenant damage.
What does Michael think about EBM RentCover…
Metropole manages more than $2 billion worth of assets for clients.
Unfortunately, because there are a number of things that can go wrong, the business must work with a number of insurers, brokers, agencies and companies to best protect the investments.
“Having the right wording in a policy is important, but most important is the service that comes with it,” says Michael.
“That is why we work with EBM RentCover, because they do the right thing by our clients when we have to make a claim. This is much more important than any wording in a policy – we actually know that EBM RentCover has the back our clients.”
Every investor wants a secure investment and reliable tenants. But not everything always goes to plan. And some events cannot be controlled. What can be controlled is whether you have landlord insurance.
Guest author:
Sharon Fox-Slater is the Managing Director of EBM RentCover and was part of the core team that helped launch one of Australia’s first landlord insurance policies into the market. As the first woman in Australia to complete the Advanced Diploma in Insurance Broking, she is well equipped to educate property investors about protecting what is important – their properties and incomes. For more info, visit RentCover.com.au
from Property UpdateProperty Update https://propertyupdate.com.au/traits-of-a-great-property-investor-insight-from-wealth-creation-expert-michael-yardney/
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