This is what you should invest in
LAND is the thing you should focus on if you want to become a property investor.
Respected Australian property investment adviser John Fitzgerald said too many investors were caught up with the emotion of buying a property without considering the strong fundamentals
Mr Fitzgerald, who has more than 30 years experience in residential and commercial real estate, property development and property investment said land was the best asset an investor could buy.
"People talk about property but they don't actually talk about the real estate side of it,'' he said.
"A property can be a bad investment, if you've got an apartment, one bedroom or studio apartments that it is not a bad investment, but it is barely going to be better than having money in the bank,'' he said.
"Where as if you've got land and you're land rich and your property content is only 40 per cent or 50 per cent then you will outperform any market.''
Mr Fitzgerald said the mantra driven into investors was location, location, location, but that was a myth.
"The mantra for property is land content, timing and then location.''
"You have got to get your land content right, so if you are buying property you need to have a good 40 to 50 per cent of your purchase represented by the land because the land is the only part of that which is going to appreciate.''
Mr Fitzgerald said anyone could invest successfully in property if they took a long-term view.
"They have to study the numbers and the cycles and keep the emotions out of it,'' he said.
"The mistake people make is they get caught up in booms like the Sydney boom and then they think Sydney is the centre of the world. Well Sydney will boom for four or five years and then it will be flat for four or five years, that's the truth of it.''
Mr Fitzgerald said you had to play the long term game.
"And the timing of it means you have to go to different markets, you won't be successful just in the one market over the long term, over a 30 or 40 year period.''
Mr Fitzgerald had three tips for would be investors:
1 - Develop a strategy.
"Build a strategy, what is my income, what is my risk profile and what resources have I got that I can use?''
2 - Get a team together.
"Once you have worked out your strategy then it is really important to properly build a team of people around you that help you along the way. "You've got to deal with real estate agents, you've got to deal with finance people, you've got to deal with just a number of professionals. Build a small team of people that have experience.''
3 - Education yourself.
"As much as possible educate yourself,'' he said.
- John Fitzgerald is the author of 7 Steps to Wealth (Wiley)
Funds raised from the book, will fund another Toogoolawa School for troubled youth.