by Marshall Cobb - Principal
This afternoon I met with one of our referral partners sales teams, and I thoroughly enjoyed their enthusiasm about educating their clients about property investment. Late in the meeting, one of them asked me why I got into real estate. I always love that question!
I explained that after graduating with an economics/accounting degree way back in 1990, my first job was doing people's tax returns. Some of my clients were share market investors. They turned up with arms full of newspapers, magazines, and charts (no ipads back then!). When I asked about their investments, they knew exactly what was in their portfolio and what each share was worth.
I also had clients who were property investors. They turned up with a few scraggly pieces of paper, mostly receipts for interest and council rates. They were a much more relaxed bunch and they always received terrific tax refunds. When I asked about their properties, most of them said "Oh yeah, I hardly ever think about it - I just collect some rent and pay the mortgage and that's pretty much it." And they had absolutely no idea what their property was worth, and didn't really care. All they knew was that over time it would increase in value. I asked how they knew that? They said, "I just know."
After my first tax season I thought - property is the investment for me!
Ever since that time I have been fanatical about property as a set and forget investment.
I couldn't care less (and neither should you) about the bad news bears out there at the moment telling us how terrible the property market is. Are we at the bottom? Will it go down further? Will we all go broke? I don't know - no one does.
But here is what I do know. If you purchased a property in any capital city of Australia 10 years ago, you would have made money today. The median house price in Sydney today is $980,000. Just 10 years ago it was $505,000, in 1998 it was $257,000 and in 1998 it was $141,000.
Makes you think doesn't it!