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However, Kingsley reminds investors
that everyone needs an exit strategy and
a timeframe to retire debt.
“You need the income for when you’re
active, not when you’re 95,” he says.
“Property investing isn’t about having 10
properties, it’s about the wealth and the
income it provides.”
The reality is investing today is no easier
or harder than it was 20 years ago.
Property author and millionaire Jan
Somers, who bought her first property
when she was 22, has heard the same
excuses hundreds of times.
“People will say ‘yeah, but you bought
your property when it was $12,000’,”
Somers says. “But we were only earning
$3000 and interest was more than 10 per
cent. Property was never cheap.”
So what do you do if you’re keen to build
a portfolio but not sure about the best
approach to take?
Somers believes by accumulating as
many properties as possible, the longer
you can hold them, the more cash flow
positive they become. It’s a foolproof
strategy and the reason she became a
“It happened over 40 years. The rent
gradually outstripped the interest. You
can’t look at a timeframe of five to seven
years. Young people today need to look at
the next 40 years.”
They also need a plan. But what’s the
best method for each age group?
API has found the eight top property
investment tactics for each generation to
help any investor, young, old, beginner or
experienced, get ahead of the game.
What’s a gen-Y investor?
Facebook is, like, so 2013 if you’re gen-Y.
Instagram is in and forget newspapers –
you’re probably following topics trending
This is gen-Y. They’re social media
lovers, generally born between 1977 and
1994. This mass of Spotify downloaders
is the largest cohort since the baby
boomers. They’re known as being
technology-savvy, less brand loyal and
also more involved with family purchases,
including groceries, cars and properties.
Many gen-Ys would be just starting their
property investing journey.
Typically, they have to consider rental
yield as well as capital growth, as they’re
at an early stage in their career and might
still live at home with mum and dad or
rent a property with friends.
Gen-Y investors are probably still living
at home with mum or dad, hoping to do
some travel and just starting out in their
careers. Kingsley says they usually spend
and live for today, rather than save for
tomorrow. They’re also more likely to be
on lower wages.
“Generally, the gen-Ys don’t have the
cash flow early on, so they have to chase
more yield. If they don’t have the surplus
cash flow, they’re in trouble,” he says.
Although gen-Y investors might have
less cash flow, the benefit is they have
more time, according to Property Tycoon
Finance director Stuart Wemyss.
“The more time you have, the less risk
you need to take,” Wemyss says.
“All you really need to do is play it safe,
invest in quality assets and bet on sure
things. Slow and steady wins the race. If
you have 30 years until retirement, you
can build a massive asset base.”
1 GET INTO THE MARKET
So what should you do if you’re a gen-Y
would-be investor, living off vegemite on
toast and baked beans while renting with
your mates, or eating mum’s spaghetti as
you try and finish a university assignment
Kingsley says for this generation, it’s
all about getting into the market as
soon as possible, even if that means
compromising on some capital growth by
going further out of a CBD and factoring
in rental yield to cover costs.
“It’s still better to enter the market,”
“You have to look at entry-level
property. The majority of gen-Y investors
understand it’s a stepping-stone, so
they’re realistic about what they can
achieve. They’ve worked out it’s far better
doing something than nothing at all.”
Open Wealth Creation chief executive
officer Cam McLellan agrees. He’s a
big fan of land content and advises
gen-Y investors to move further
out and purchase something on a
“You’re better off to drop your price
point. If you only have $370,000 to spend,
move out to the suburbs and just get into
the market,” he says. “All boats rise on
a floating tide. Once a market moves, all
suburbs move, so get in where you can.”
If you’re not too keen on going out to
the ’burbs for your first property, Kingsley
suggests looking at units. Somers says
gen-Y investors need to be prepared to
compromise and settle for something less
than what they initially hoped to live in.
“Don’t try and buy the same property as
mum and dad,” Somers says. “Lower your
expectations and build as you go.”
2 SWEET TALK MUM AND DAD
Another option is to buy your first
property and stay at home with mum and
dad, rather than purchase a property and
move out straight away. This drastically
helps with cash flow and is a smart move,
according to Kingsley, even though
only about five to 10 per cent of gen-Y
investors choose this method.
If you don’t have a big deposit, have you
considered asking your parents for help?
They might be able to use equity in their
own home to help you but this method
is also risky and should be carefully
“Perhaps parents might help them out
and then the gen-Y investor can stay at
home, get a reasonable job and then start
looking at whether or not they’ll sell or
make their next play,” Kingsley says.
3 FOCUS ON CAPITAL GROWTH
Of course, if you have a pretty good job
and cash flow is quite strong, Kingsley
says go for capital growth.
“If there’s no prospect of change to that
strong income position, I’d still look at
capital growth because time is on our
side,” he says.
Hot Property Specialists buyers’ agent
Zoran Solano says gen-Y investors need
to purchase in an area that has all the
fundamentals for capital growth.
“I’m encouraging people not to read too
much into the government incentives, as
far as building boosts (for purchasing new
property),” he says.
æGen-Y is a social generation,
use your social links to your
benefit.Æ Zoran Solano
GENERATION WEALTH \\ COVER STORY
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