It’s always a good time to buy property so long as you’re well placed and willing to take a “calculated punt”.
Speaking on the latest episode of the What’s Making Headlines podcast, which aired on Facebook Live on 30 April 2020, Tom Panos and Phillip Tarrant shared some insight on the investors benefiting most from property.
“My feelings and sentiments are it’s always a good time to buy property if you're well positioned and placed to buy a property. And that means being able to, number one, secure financing through the bank, and that’s getting harder purely because of the current market,” Mr Tarrant said.
“There’s a lot of industries now whereby there are shadow policies within lenders where they just won’t lend, irrespective of how safe your job is. Aviation, for example, [or] hospitality. They’re very cautious about lending money to people that operate in those sectors, even if you do have a safe and secure job.
“So, if you can be in the market right now and you have the capacity to be in the market and you’re prepared to be in the market, it’s a good time to be in the market. But that doesn’t mean you should buy anywhere. You should be very selective about where you’re buying right now and why you’re buying it and how it lends itself or builds into part of your portfolio decision making.
“It’s in times like this, in times of crisis, times of flux when in 20 years’ time, people talk about the good days, they’ll be those people who are in the market. But there’s going to be a lot of people right now that also blow their dough and find themselves in a negative position. So, horses for courses.”
Mr Panos said that while some in the market think it best to capitalise off of the investments that have seen the highest price drop, that isn’t necessarily the best strategy.
“Someone said to me yesterday, they said, ‘Look, it’s obvious what you should do is buy things that have dropped the most because they’re the ones that are going to go back’. And I said to him, ‘Well, I don’t necessarily agree with that’, because you might look at, for instance, let’s look at airlines, right? Even look at Qantas where you say, ‘Hey, they’re in a better position than Virgin, and they’ve had a big drop’. And you say, ‘Well, they’ve dropped so much, so they’re going to come back. The government’s going to look after Qantas. They want an airline in Australia. It’s never going to go down’.
“But then, on the other hand, you listen to Scott Morrison say [recently], ‘I want to be really clear, I see overseas travel, we’re a long way off there’, right? So, that sort of says to me, don’t just take it as a given if something’s gone down that it’s going to go back up again,” he said.
“You’ve got to take a bit of a punt, but you should be taking a calculated punt and be researching as much as possible.
“But that’s why I reckon I have less insomnia than people in the sharemarket because I always think to myself, ‘Hey, I’m not checking the share price of real estate every minute of the day’. And that actually gives you a bit of peace knowing that your wealth is not in your face every day. So, what do you do? You just buy property in good spots that are going to be good long-term.”
Mr Tarrant said the best investors are being “reasonably conservative” in their approach.
“But irrespective of whether you’re a real estate agent servicing buyers and sellers or you’re actually in the game of investing yourself, you can’t outsource decision making, right? You’ve got to be responsible for making your own investment decisions,” he said.
“And a whole bunch of people, you see them all the time on ‘Today Tonight’ or any of these other programs and they’re happy to point the blame at lenders or unscrupulous property spruikers for fooling them into making an investment, and they didn’t know what they were doing.
“The key thing with all this is that, know why you’re doing it, make decisions yourself. Yes, seek advice, and pay for advice. Be careful who you get advice from. But make sure you know what you’re doing. And if you’re unsure, just don’t do it.”
Mr Panos added: “The best ever real estate advice I was ever given in my whole life, I remember asking someone, ‘What’s the best piece of advice you can give me about property?’ He said, ‘Be in a position where you don’t have to do anything’.
“When you don’t have to buy and you don’t have to sell, right? Where you can do it because you want to, not because you have to.”