Are Property Gurus Always Full of It?

bargain huntress on 18/11/2023 - 16:33

There are people who claim to own tens or hundreds of properties, and sell their system or advice.

What is the moral and ethical situation there? On the one hand they are providing needed rental properties. On the other hand they are preventing people who want to buy a home from being able to do so.

If they make so much so easily why would they want to share? I guess if they genuinely want to help others? Or is it how they really make their money?

If they have a domino of debt, how will they survive a big change?

Surely the Austfalian real estate bubble will burst eventually? If you are living in your forever home, then when it does, who gives a f***. But investors are screwed right?

Financial

Comments

      • jaimex2 on 20/11/2023 - 18:32
        +1

        The system is full of things like this to 'incentives' investors my good man.

        The game starts when you reach the high tax brackets. Look up quantity surveyor if you want to see how the above example works. There's tons of stuff like that.

        Debt recycling is my current favourite.

  • drfuzzy on 20/11/2023 - 17:33
    +2

    It amazes me how few people understand the problem is not with the prices of the assets (real estate, shares, cypto, vintage cars, fine art, etc).

    The problem is with the value of the fiat currency which is being printed into oblivion.

    • drfuzzy on 20/11/2023 - 17:38
      +1

      The fiat currency problem is driven by governments who refuse to spend within their means.

      Austerity does not win votes from a population who wants more services and benefits now (at the expense of future generations).

      • bargain huntress on 20/11/2023 - 18:12

        You are correct i think.

        Its this virus known as Modern Monetary Theory

        It tells politicians that they can spend as much as they want with no consequences
        Its what they have always wanted to hear

  • drfuzzy on 20/11/2023 - 17:49
    +3

    I was a landlord to a tenant who owned one of larger Property Guru businesses in Australia.

    They had the flashy cars, jewellery, clothes, etc that were all far beyond what I could afford as their landlord.

    They had all the flashy advertisements of great wealth and success if you subscribed to their services.

    They promoted what they described as their own personal enormous property portfolio well over $10m.

    Meanwhile they rented their own home.

    They eventually fell on hard times and vacated.

    Now I see the occasional debt collector looking for their whereabouts.

    I wish them well, but I am reminded that all is not always as it seems.

    • Drakesy on 20/11/2023 - 17:52
      +1

      So in short, it's all a facade

    • bargain huntress on 20/11/2023 - 18:09

      Thats insane. Are you willing to name and shame?

      So was he just flat out lying that he owned any property?

      Sounds like the type of person who photoshops themselves into a private jet.

      But actually in places with enough influencers they are now renting out private jets on the ground for a few minutes for people to take photos next to and inside, or even making studios that look like private jets.
      so these people can pretend on the internet that they flew somewhere in it! Why?

      • drfuzzy on 21/11/2023 - 22:58
        +1

        1) No.
        2) I didn't say they were lying about owning property. I suspect they own alot of property, but they also have huge lifestyle expenses and a risky business. The business employs alot of people and has fancy offices. You can imagine what happens during the tough times as interest rates rise and few people want to borrow to buy off the plan apartments.
        3) They do seem to show off more than most people. Material possessions and other virtue signalling.

        Not all of the Property Guru types operate a facade. Six or seven years ago I was involved with engaging a buyers agent in Brisbane who did a really good job of finding a weatherboard investment property that has now almost doubled in value. Very happy with their service. But they aren't selling highly leveraged, overpriced, high commission, off the plan apartments.

  • morebunnings on 20/11/2023 - 19:03
    +1

    A lot of property and business success can be attributed to luck and timing.

    Some people get in a the right time and then things out of their control (interest rates, gov policy, covid) can affect the market propel their moderate success into a big one.

    So they mean well? Probably. Will the thing they are teaching you now work? Possibly, but no one has a crystal ball.

    End of the day, like every celebrity or influencer, they are in it to make money. Weather they help you along the way is to be seen.

  • qwijibo on 20/11/2023 - 19:17
    +2

    The property doomsayers have predicted 11 out of the last 2 property price corrections.

    They started saying it back in the early 1990s, and property in some places has gone up 20x since then. Even shithole properties have more than quadrupled in that time.

    And in a sound money world, they would make sense. And then you realize that money is borrowed into existence (i.e. created), and what drives the ability to borrow/create more money is the increase in property values. It's a "virtuous" cycle of higher prices allowing more money to be created using the property as collateral, which results in higher prices (more money chasing the same amount of goods leads to price increases), which enables more money to be created, which results in higher prices and so on.

    • drfuzzy on 22/11/2023 - 13:19

      I agree. A friend inherited enough money to secure a nice small home in his chosen suburb in Melbourne in 2008 with a manageable small mortgage.

      He kept it as cash as he believed the property market would crash sharply.

      Fast forward to 2023 and he is still renting and any kind of property investment in Melbourne is now out of reach for him as prices have doubled or more while he has waited patiently for the big crash.

  • CanadaAye on 20/11/2023 - 19:20
    +1

    It's quite simple. In the major cities anyway.

    Australia is a highly sought after destination to live for a wide variety of foreigners, many of whom have money. The government wants to allow these foreigners to enter the country to encourage growth. Building supply cannot keep up with the influx of immigrants and therefore properties, in particular houses will continue to go up in price.

    The state of house sales and rental prices tell the story.

    Short of minor downturns it's pretty much a case of the sooner you buy the better, in particular with houses.

  • nikey2k27 on 20/11/2023 - 19:31
    +1

    buy house can afford in area you can afford and live good life have kids and fun day and night in home you own.

  • cannedhams on 20/11/2023 - 19:48
    +1

    Wage growth is still anaemic, and property price increases have well and truly outstripped incomes, so if there is further growth in property prices it will predominantly require more credit expansion. It is possible we might see an increase on the back of capital flight from China, but anything like that extent of flight would require the simultaneous collapse of our export sector, which would probably decrease prices anyway.

    As long as people can borrow, eat 2-minute noodles and piss blood, property prices will go up. Property investors believe in property harder than Christians believe in Jesus. Their faith will never waver. They will not sell until absolutely forced to do so.

    But when they do…

  • Noodles93 on 21/11/2023 - 13:10

    Surely the Austfalian real estate bubble will burst eventually

    As long as local council's keep interfering and trying to limit construction, demand will outweigh supply.

    e.g https://northsidelivingnews.com.au/wp-content/uploads/sites/…

    Refer to the last paragraph in particular and you'll realise the true villain is local councils, not migrants. Yes this is is an article from the North Shore but the problem exists across Sydney.

    • bargain huntress on 21/11/2023 - 13:50

      As far as i can see they are not trying to 'limit construction' - exactly what do you think their motivation to do so would be?

      They are preserving heritage buildings and areas. This is important! In fact the problem is usually not that the council is protecting too much, but that they take kickbacks from developers and protect too little.

      In your example article they have destroyed buildings that were considered worthy of protection.

      Another reason they 'limit construction' is when they dont have the money to upgrade public infrastructure and services to support it. For example would you like to live in a housing estate where the road in is constantly gridlocked? Or where the sewers are overflowing? Or the electricity is constantly browning out?

      Developers should be forced to pay for more infrastructure, and forced to plan areas to be more livable, but they arent.

      • Noodles93 on 21/11/2023 - 15:26

        Please, those are hardly worth preserving - Holt ave is a bunch of old houses WHICH the heritage minister revoked the order for before the council refused the building request. Cremorne is a 15 min bus ride to the CBD (and there's also a ferry) and makes sense to densify.

        Crowy is getting a metro line and people are getting upset about the prospect of building more apartments when the area would be easily able to serve transport needs for fear of losing the 'village vibe'.

        The local councils around here are renowned to be a bunch of NIMBYs (I live here, in a house no less…), especially Gibson.

        exactly what do you think their motivation to do so would be?

        Loss of $ value for the existing homeowners, losing precious 'views' etc. They would much prefer to pull up the ladder behind them when the reality is they live in areas that can support greater density.

        Over in the Melbourne, the councils are busy heritage listing car parks…

        Our cities aren't museums, people need places to live.

        Developers should be forced to pay for more infrastructure, and forced to plan areas to be more livable

        Don't disagree with your sentiment here

      • drfuzzy on 22/11/2023 - 13:24
        +1

        If you want to increase housing supply get rid of all the NIMBYism and red tape associated with developing.

        I developed and increased density in Melbourne inner suburbs.

        Never would I do it again.

        The risk/reward is not worth it. Every neighbour takes issue with you and wants something from you. It is too big. It blocks their view. It blocks their light. It affects parking nearby. There is an easement. The building will kill the trees. It goes on and on.

        You go to council, VCAT and every which way trying to sort it out. Costs escalate and you need to sell for a small fortune to break even.

        No thanks. Next time I'll let someone else deal with the risk. I'm no longer interested in increasing housing supply if I'm taking all the risk.

  • Jules_d1 on 21/11/2023 - 14:33
    +2

    The "Property Gurus" come in all shapes and sizes.

    Those that are running seminars and have a magical list of exclusive properties…stay far away from. They are making their money from getting you to buy from the 'secret portfolio' of properties as they get a cut from it.

    On the other hand, there are legit buyers advocates who will source properties for you that meet your criteria and at a price that makes the cost + their fee beneficial rather than doing it yourself and hoping things are ok.

    Yes there are many dodgy advocates out there but there are some that actually add value for you.

    • samfisher5986 on 21/11/2023 - 16:32
      +1

      In this current market its questionable if a buyers advocate is worth it considering they are unlikely to find any diamonds in the rough, everything is already priced in from the huge spike in Covid as everyone is monitoring the market like crazy.

      Buyers advocates have basically the same access to properties that you have so its just a matter of picking a decent property.

      Because prices are so high and investments are generally going to be negatively geared right now, I don't think there is much incentive in giving away even more of your money on things you can do yourself.

      • Jules_d1 on 21/11/2023 - 16:44
        +1

        I think that is where a good and bad advocate can be differentiated.

        In a good market, everyone can find a deal, just like anyone can make money in a crypto boom.

        The tough markets like we're in now is where the good ones go to work. It's more about the research they put in to find what's coming down the pipeline infrastructure wise and foreseeing shifts. They have the drop on state and council planning. People like that are worth it.

        I think the best measure of an advocate is how many people have used them MULTIPLE times. If they have multiple clients like that it means 2 things:
        1. They find properties that allow the client to invest again and not get stuck like man do with dud deals.
        2. They are likeable

        • samfisher5986 on 21/11/2023 - 16:54

          I do agree but just like everything in the real estate space, the average "professional" seems to be incompetent and knowing that, how do you suggest that to others?

          I would also say that there is simply a lack of stock right now which means people are looking in other states/regional which has its own issues with trusting incompetent people.

          I'll also add that sometimes the best deal a buyers agent can choose, combined with all the other expenses assuming in that choice is simply not going to be a good deal but at that point you've already signed on with the buyers agent and you are probably already made the choice that you are going to let others make the decision for you when they are biased.

          • Jules_d1 on 21/11/2023 - 17:03

            @samfisher5986: All fair points.

            The irony is that the people who want to use advocates usually dont have knowledge of the right questions to identify a good one.

            • bargain huntress on 21/11/2023 - 22:04

              @Jules_d1: How do you find a good one?

              • Jules_d1 on 22/11/2023 - 08:47

                @bargain huntress: I would try and ask around my network for people who have used an advocate they reccomend. The follow up question would be how many times they have used them and/or how many properties they own. What I'm really looking for here is did the BA actually help them find a property that ENHANCED their financial position and allowed them to grow their portfolio.

                If the person says they only used them once/only have one property/have not purchased any after this one….this is where I would be raising my eyebrows. Yes there may be other reasons for not progressing but it may be a situation where the advocate put them into a property which did not perform.

                I'd also want to know how responsive they were through the process and more importantly- afterwards.

                If I was going directly to buyers advocates, I would be asking for any references to client how have used them multiple times. If they can produce many references, that's a good sign. If they can't….red flag!

                That's where I would start anyway.

                • samfisher5986 on 22/11/2023 - 10:12

                  @Jules_d1: I think most people's network of people would have zero buyers advocates which leaves them with people on the internet that often have bias except for maybe places like Ozbargain/Whirlpool etc which the average population doesn't use.

                  I also wouldn't trust client references, these can be people who had their house go up in price because of covid, because the buyers advocate has a nice personality, because the client barely knows the difference between a house and a toaster or because there is some sort of bribe going on.

                  • Jules_d1 on 22/11/2023 - 11:44

                    @samfisher5986: I suggested that look for people who have USED a buyers advocate. Not actually be one :)

                    Yes, some people may have been lucky with covid price increases but this is why I'm asking to find people who have bought multiple properties, not just one.

                    As for references, yes you need to be discerning with the information given but you can say that about references for any product or service.

                    • samfisher5986 on 22/11/2023 - 11:45

                      @Jules_d1: Yes that was what I meant… nobody in my circles have used a buyers advocate and I think that would be accurate for most people.

  • Whomastadon on 22/11/2023 - 10:23

    There's no secret to buying additional properties with your equity, and going further and further into debt.

  • OzHan on 22/11/2023 - 11:13
    +1

    If I had a penny every time i hear real estate bubble will burst…

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