What is the 2 per cent rule in real estate investing?
What is the 2 percent rule in real estate? We look at how this investing guideline works, and how it can be practically ...
Chinese investor Eric Wu has gone from Sydney to Queensland in a span of a decade to build his nine-property strong portfolio worth $5 million. His inspiring investment journey might lead one to believe that he has it all figured it out, from the right place to the perfect property to purchase.
However, the property market remains a risky business, even for seasoned investors like Eric. After all, there is no perfect place for an investment. There is only a right mindset and the correct strategy.
According to him: “I don’t really believe in a hotspot, to be honest. I think if you buy at a fair price in a fair market, if you’ve got all the fundamentals right, if you don’t buy in the peak market, it’s okay.”
For him, the right purchase could be based on three factors: when you get in the market, how long are you going to stay in the market, and how big your portfolio is.
“As long as you don’t buy in the peak, as long as you can hold onto the portfolio and as long as you have risk management strategies in place, you should be okay,” he said.
While he’s currently letting his portfolio settle for now, Eric is also reassessing his next moves as a property investor.
Personally, he is looking into buying in the metro capital cities.
He explains: “I think there’s more population growth and job growth as well. There are more industries supporting capital cities. I’m not a big fan of regional. But some people do really well with regional. But for me, say if you buy in a regional city, your rental returns have all the expenses. You might have given like $20 posted every week. Over years, that’s $1,000. That’s good. But if you break it down, your whole year’s profit is gone. At the same time, you don’t see much capital growth. What do you do with that?”
While the state of Australian property market and all the factors affecting it are quite hard to predict, Eric’s secret to his success as an investor remains simple: Think long-term.
“You’re not looking to make a quick profit and leave. You’re looking at the long-term,” he concluded.
Tune in to Eric Wu’s episode in The Smart Property Investment Show to find out how he’s accumulated and managed his nine-strong portfolio and how he plans to double his assets in under 10 years.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.