House prices to add another 20% if banks don’t slam the brakes
Chatter about the possible introduction of macro-prudential controls to slow house price growth is increasing, while rep...
As an accountant, Munzurul Khan has been instrumental in building and maintaining Phil Tarrant's 11-property portfolio at Smart Property Investment, which yielded 49 per cent of compounding return over five years.
Although it sounds too good to be true, Munzurul said that there really isn't anything extraordinary about how he and the rest of Phil's financial team have been working on the portfolio to get such good returns, and neither are they doing anything that could be deemed too risky.
According to him, Phil and the team just took action at the right time in the right cycle.
"If I look back into [Phil's] portfolio, the first few properties ... you bought them back in New South Wales," Munzurul said.
"There was a market at that stage. New South Wales and Sydney [markets] in particular [were] quite expanding, so you bought it. You've taken that sort of growth, then you knew when to stop in New South Wales, which you did."
Munzurul added: "Then you moved outside New South Wales because you said, 'Well, you know, there's not so much value in New South Wales anymore.' So ... you moved into Queensland at that stage, right? You've seen the value on the Queensland [market], and then the Queensland market's done really well. So, I suppose, when we say forty-nine per cent compounding growth ... is it really bullshit?"
While many would call the team lucky for landing such investments and getting high returns, Munzurul said that there certainly are always risks involved, but it only takes due diligence to make sure that the risks to be taken are well worth it.
Here's his advice to property investors: "Get a team of trusted professionals, study the markets with them, and just take action and 'manufacture your own luck'."
Munzurul said that the manufactured luck is that you make the decision. "It's the opportunity that you have taken.
"You know, I sit down with investors all the time and the investors ask, I ask, 'What is the risk?' And we go through a ‘what if?’ calculation ... We look through many 'what ifs.' We look through overseas (and) international 'what ifs.' Then I ask a very last question, 'What if you do nothing?' The answer is that, nothing will happen, right?"
He concluded: "Any action arguably is better than no action, provided that we have our level of due diligence and care."
Tune in to The Smart Property Investment Show's special episode on Phil Tarrant's 11-property portfolio to know more about the realities of managing a large portfolio.