PROPERTY CYCLES Finding The Growth “Sweet Spot”

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Learn how to put your investment properties to work for you. When you understand the rule of 72 and the fact that most property cycles do most of their growth in just 1/3 of the cycle, you can get clearer on your understanding of the “sweet spot” that tells you the ideal time to buy.

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Transcription

Phil Anderson:

G’day team! I'm Phil Anderson from Life Corp. The home of street smart property investors. Today we're going to talk about putting our properties to work for us. I've been talking over the last couple of weeks about some very simple, but highly powerful techniques that we use to double, if not triple the potential performance of our properties within our property portfolios. I want to show you some really great insights, and today I want to show you how to put the property to work for you. It's a principle I call duplication.

So how do we get our properties duplicating for us? How do we get one property to turn into two, two to turn into four and so forth and so on? Well it's actually interesting because I think there's a lot of similarities to planting a fruit tree. Let me show you why.

I look at the property cycles all over Australia. You've heard me mention, in recent videos, how I've noticed that most property cycles in Australia follow a very similar characteristic. I've been watching for more than twenty years, and I've been watching property cycles unfold and most cycles around Australia two-thirds of the cycle nothing happens. One third of the cycle, everything happens. This is where all the capital growth appears.

Now if you're going to plant a fruit tree, obviously you're going to want to plant it in great quality dirt. You're going to want to go "where's the best area to plant it", but also, "when is the rain going to happen"? When are we going to get the best seasons for growth? That is exactly the same way I look at a property market.

Of course we're going to get all quality area. We want all the quality indicators that it is a proven market, it is a great market. I'm not going to get us some little pretend area, some remote mining town or something and hope I'm going to get a miracle rainfall. I want to go to quality markets. I want to also position myself like if I was planting a fruit tree, that it's at the start of the best part of the season.

So for me I would plant that fruit tree, I would buy that property right here, in what I call a seven o'clock market. Now seven o'clock markets is actually a whole topic for another video. But just on this topic alone, getting duplication working for us, if we can just identify the turning point, where it's likely that the seasons are going to come to play, and we're going to get this fruit tree bearing fruit as soon as possible.

Sooner or later there will be enough equity in that property. Enough fruit on the fruit tree to be able to harvest that equity, and buy another investment property. Maybe even within one cycle there'll be enough growth to purchase two investment properties. Now it's obvious that you won't buy those properties in the same market. Let me tell you why.

Because when you get to this point, it's no longer going to be seven o'clock. It's more than likely going to be ten or eleven o'clock, and this one may be right at the peak of twelve o'clock. So of course when you can add an additional property, when this property's produced enough equity to allow you to go back to the market and buy another investment property, of course you'll use that equity to buy these properties in other seven o'clock markets. That's duplication.

Now there's one more layer, as I bring this all together for you, and on my next video I'm going to show you something that I've never shown before. A new way of looking at how you use these factors to double, if not triple your investment property portfolio. I look forward to seeing you very soon with that new way of looking at this particularly exciting way of getting new properties working for you. So we'll see you soon, and until then remember, if you can't buy a property with your lunch money, don't buy it.

Comments

  1. Dheeraj says:

    Love to hear more techniques

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