23rd of February, 2021

We have often heard that the way to riches is to “Borrow as much as you can and buy appreciating assets (like property). Then have someone else pay it off”

This is sound advice, with just a few provisoes:

  1. You don’t borrow more than you can afford
  2. You buy quality assets
  3. You are NOT over leveraged particularly at the end of the cycle

Now is an excellent time to be a property investor.

The health crisis that was the Coronavirus is nearly over. The Australian economy is growing again and there has been a significant reduction to the Job-Keeper & Job-Seeker payments. Interest rates have been slashed to record low levels and most importantly governments locally and around the world are stimulating the heck out of their economies.

Capital Works and Infrastructure projects are being brought forward and fast tracked – Governments are doing everything in their power to reinflate their economies.

As a nation we look to have navigated the 2020 Health Pandemic with relative ease, and in doing so have manoeuvred ourselves through the mid-cycle hiatus we were expecting.

This now means we are presented with tremendous opportunity. Now is the time to turbo charge your property portfolio before all the stimulus and economic growth is capitalise back into real-estate prices.

Tapping the “Pot of Gold”

So how do you take advantage of the investment opportunity that is currently before us?

Many people mistakenly believe that only the rich can afford to cash in on this investment property caper – however you would be surprised how many people on average incomes, who owe average amounts on their homes are making a packet from their investment properties.

See the banks don’t discriminate against ordinary mum and dad type investors.  They in fact encourage them to use some of the equity in their homes to leverage up to become landlords.

The trick is to use the equity in your home if you don’t have enough saved to pay the deposit on an investment property.

Equity in your home is what you own – the difference between the “current” market value and what you owe the bank.

Simply stated, if your home is worth $750,000 and you owe the bank $340,000 then your equity is $410,000 ($700,000 – $340,000)

The great thing about banks is that they will typically lend up to 80% of the value of the property, without charging you Lenders Mortgage Insurance (LMI). LMI is insurance you pay that protects the bank against any shortfall between the sale price of the property and the outstanding debt, should it be repossessed and sold due to a loan default.

So, 80% of $750,000 = $600,000

But you already owe $340,000, so this difference of $260,000 ($600,000 – $340,000 = $260,000) is equity you could use as a deposit on an investment property.

Remember, you will still need to retain a deposit of $150,000, or 20% of your $750,000 property, for the bank as security.

Your unused equity is your “Pot of Gold” that if used efficiently can really make you some big bucks – but always remember, never borrow more than you can afford.

Understanding your BIGGEST risk

The thing about Money is it’s like old age, it does not discriminate.

Money doesn’t care who you are. It doesn’t care where you come from.

It doesn’t care about your age or sex. It doesn’t care about your past and it sure as hell doesn’t care about the pictures of your breakfast that you posted on social media this morning.

Money only cares about money and inaction is your biggest risk.

Because if you Never start then you will Never have the opportunity to increase your wealth. You will guarantee your outcome though – that of relative poverty. Harsh but it’s as simple as that.

What’s even worse is that those who do take the investment opportunity before them and invest will create a bigger divide between their wealth and those who don’t invest.

The cycle will continue with or without you.

Property prices will continue to increase in value over time, forever capitalising on society’s productivity gains which in turn lead back into their price.

Inaction guarantees your outcome.

It guarantees poverty!

Because as society becomes more productive and the economy continues to expand, your wealth will forever continue to shrink if you don’t join the ranks of the invested.

Money only cares if you do.

But unfortunately, most people NEVER care.

They NEVER take their investment opportunity, instead living with regret about the house they should have purchased years ago… but never did.

However, it doesn’t have to be this way. Your wealth can grow too – without effort. As society becomes more productive and the economy continues to expand, your wealth can grow along with it without personal effort.

Investing in property will entitle you to receive your Effortless Advantage – the increase in your asset prices received without having to toil.

You can choose to overcome your fears and take ACTION NOW or guarantee yourself a financial future of poverty; directly caused by your inaction.

Who is With me?

Unfortunately, as easy as it is to invest, most never do.

And of those who do take action and start their long-term investment in property, shockingly about 1 in 5 end up selling their investment within the first year?

After five years it’s sad to say that about half have given up altogether frustrated as their get rich quick scheme of becoming a Property Baron hasn’t manifested quickly enough.

It’s even more staggering to think that of those that stay the distance, about 90% never get past collecting two properties in their portfolio….

However, it doesn’t have to be that way, but you need to remember “Money only cares if you do.”

This is why you need a plan. Why you need advice and why you need a team of experts to help to ensure you stay focused and on track, applying discipline to ensure you reach your financial goals.

It is staggering the impact a plan and having a mentor can have in helping you achieve your goals.

A Guide for Investors

Formulate a Plan; Very few people actually formulate a plan BEFORE they start investing in property. They just do, without much thought. However, in life if you want to get somewhere, whether it be to the fridge or Florence, you need to define your destination and the route you will take to get there. Investing is NO different.

Sales v Advice; For those starting out it is often difficult to distinguish between sales and advice. Often sales are presented as advice however, it’s important that you understand exactly the motivation behind any “advice” you are given. Getting the best advice on how to structure your purchase and lending can also save you thousands.

Advice is NOT created Equal; Everybody has an opinion on property. It’s good it’s bad. You should buy here or there. Apartments, townhouses, and corner blocks – you will receive more advice on the action you should take than you can take in. Just remember, many sell within a year. Most within five years and less than 90% get to more than 2 properties. So, seek advice from professionals who know their investment property craft.

Fools Gold; when you first understand the Economic Cycle and Effortless Advantage there is a tendency to see opportunity everywhere, and to some degree there is. However, without experience you will not be able to distinguish the difference between what is a good investment and what is not. So please seek advice and step cautiously.

Time for Action

Now is the time to take action. The Pandemic is subsiding, the economy recovering, major infrastructure spends are underway, banks are increasing the credit they create and interest rates are rock bottom.

There has never been a better time in the last decade to invest in property.

And Calnan Flack would like to help you formulate a plan of attack.


We can help you with your Property Investment plan as part of your overall financial plan.

You may be comfortable doing it yourself or leaning on a family member or friend. Just remember you are talking about a significant sum of money so paying for advice to formulate your plan and mentor you through the process could be the best value investment you can make.

We can help you with key decisions like:-

  • How much to borrow?
  • How to structure your loans?
  • What type of property to buy?
  • Helping you assess your team or introduce and help you to engage our team.
  • Whether to buy in your name, joint names, SMSF, trust or company?
  • Whether to hold or sell your current property?
  • Review your existing portfolio.
  • Plan your purchases and sales within the Economic Cycle.

Please contact us for an obligation free discussion.

Let’s get started

If you want to avoid the mistakes of not understanding the dangers of investing without an understanding of the Economic Cycle, then why not have a chat to us about how we can help?

You have nothing to lose except a few minutes of your time and everything to gain.

So… let’s get started.

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Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any growth rates, yields, rental income, tax rates, interest rates, depreciation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713 ABN 15 123 835 441.