What Properties I Buy And Why.
What properties does Nathan buy? Ones that fit in with his overall strategy, of course.
And, while he now has a diverse mix in his portfolio, he still can’t go past those good old bread and butter properties that got him to where he is today.
Here’s what properties to buy and why.
Opportunity costs have been his biggest teacher.
When he started out as an investor, Nathan thought that houses were the only way to go. He didn’t invest in units as he thought they wouldn’t go up in value over time.
Boy was he wrong.
He soon started to see that his opinions were costing him big. If he had pulled the trigger on the apartment deals he turned down in those early days, he would be even better off than he is now.
The same can be said for interstate properties, which he also shied away from at the time.
After some time, he realised that all different sorts of properties go up for all sorts of different reasons.
Coming up with a sound strategy.
At the end of the day, it was Nathan’s early mistakes that enabled him to grow as an investor. They enabled Nathan to develop the right strategy to get where he wanted to be.
A big part of this was buying properties below market value with a good prospect for growth. After they grew in value, Nathan was able to use his equity in order to buy further properties. Since he always purchased ones that had a neutral to positive cashflow, he didn’t have to worry about forking out his own income each week to cover the mortgage repayments.
The type of properties he bought.
Nathan built his foundation portfolio with the sort of properties he knew would always be in demand – affordable ones.
He still prefers these sorts of properties now during this volatile economy, as they are ones that more people can budget for.
A recent analysis from RP Data shows that despite property prices going down throughout 2019, there was no increase in the numbers of properties worth less than $400,000.
Nathan says this is because there is enough pent up demand at the bottom of the market to ensure properties at this price point get snapped up.
When you think about it, he says, there are way more people out there that can afford to buy a house or unit worth less than $400,000, than there are who can afford to buy a property for $1 million.
Become your own financial advisor.
Nathan says, when choosing the right investment property, it is essential to have a well thought out strategy in place.
But before you can create one, you need to educate yourself about the property market and the broader economy. He says, everybody should strive to be their own financial advisors – that means tireless research into economic and social trends.
This is exactly what he has done over the past couple of decades – and as you can see by his portfolio, it has certainly paid off.
Have you identified any recent market trends you think other investors should note? Please share your experiences in the comments section below.