Riding the real estate wave as an investor is like finding the best surf break according to surfing schoolteacher turned property expert, Paul Glossop.
Find the right location before you paddle out, master the right mindset and get a dream team on board says Glossop, who was able to retire from corporate life at 33 thanks to property investing, and you’re on the right path.
The Sydney-based founder of Pure Property Investment has written A Surfer’s Guide To Property Investing, a manual outlining how to monitor the current climate and when to dive into the deep end of bricks and mortar.
After studying architecture at university before transferring his focus to education, Glossop found himself teaching at one of the roughest schools in the UK for several years. From there he returned home for a stint working in a pharmaceutical company during which time he caught the property investing bug.
Over the last 10 years Glossop has been involved in more than 500 property transactions for clients and has seen the right and wrong way to surf the property wave.
Too many wannabe investors, according to Glossop, fall victim to confirmation bias or tunnel vision when starting out and therefore risk drowning in debt.
“Confirmation bias suggests investors will try to unearth information that confirms their pre-existing beliefs, and discount information that refutes them,” he writes.
With many markets sinking across Australia, it can be difficult for first-time investors to consider parking their cash in real estate, but Glossop says act now before the tide turns.
“People really have to remain confident. We’re probably entering pretty close to perfect buying conditions in Sydney and Melbourne right now as long as you can borrow the money and you can afford the repayments,” he says.
“Property is as cheap as it’s been in years in a lot of areas and if you look at it holistically, we’re at that point in the market where you just won’t get this replicated,” he adds.
“Even if the market is quite soft and might even come off the boil another 3 or 4 per cent, it’s still going to be historically the best buying market in Sydney and Melbourne we’ll probably ever see in our lifetime,” he says.
The challenge for first-time investors, says Glossop, is playing the long game.
“I think the biggest drama that we all seem to have these days, and especially Millennials, is we want a lot more in a shorter period of time. Often in property, the more time anyone invests in the game, typically the better outlook they’ll have,” he says.
“Don’t think it’s going to be a five, eight, or 10-year race to the exit. It might be that it’s 30 years, but just make sure you can find a way to enjoy your life during that time as well rather than being a slave to the desk and just worrying about paying off the mortgage. Maybe rent-vesting is the best strategy for you,” he says.
“To be honest, I’ve rented for the best part of the last decade and I’ve invested in multiple markets outside of that to make money. If I’d gone the opposite way around I wouldn’t have gotten to where I have because the bank would’ve turned off the tap. If I’d gone off and bought a $1.5 million to $2 million house in The Shire where I live, then it just wouldn’t have allowed me to do anything else. So, it’s about reverse engineering it and figuring out a way to do it that’s still going to make sense. And most of all, a way that still allows you to live where you want to live and have the life you want to have,” he says.
Glossop says the way to keep your head above water as an investor (or rent-vestor) is to start big and end small when drilling through the data to find the right location at the right point in the property cycle.
“We live in a huge country and our options for investing are spread far and wide. After all, there are about 550 local authorities in Australia and each contains multiple suburbs where markets are operating at different speeds,” he writes, adding that the key is to look at the whole picture and then focus in until the right buying opportunities reveal themselves all the way down to possible postcodes and streets.
“There’s always a good and a bad time to buy in Australia; but you’ve just got to know what and where and how that fits your own personal criteria and budget.”
A Surfer’s Guide To Property Investing, published by Major Street Publishing is out now and retails for $29.95.