Linz’s Musings – The herd mentality…

I was talking, earlier this week, about changing your mentality and treating your property Investment as a business, rather than just an investor…

While this can be a massive change for some, it is just a small step for others, particularly when looking at overseas markets, this generally is a different class of investor.

There is however, another mental change to make, and this can be all the more harder to shake…

And that is to avoid the ‘herd mentality”.

So, what’s that, I hear you ask.

Well, the past 12 months have been classic examples of it…

Herd Mentality, by definition from the Oxford Dictionary, is “the tendency for people’s behaviour or beliefs to conform to those of the group to which they belong.”

That is, when most advice (media, property groups, peers, your uber driver etc) suggest it is a good time to buy, investors buy… or vice versa.

As an example, lets take this time 12 months ago… Pandemic had hit, HARD, and most of the evolving markets throughout the world were caught up in FEAR.

Australia/New Zealand/U.S. was set for recession (at best) or depression (likely) and ask anyone if it was a good time to buy property, you would have been told “Are you Crazy??!!”

When in fact, that was a perfect time to buy…

Now, markets have rebounded (strongly) and in the U.S. alone, are up over 10% year on year.

So, ask ‘Alex from Facebook’ now, and the consensus will be “What, haven’t you bought yet??  Why not?!  Hurry or you will miss the wave…”

When really, now is the time to be cautious.

These past 4 – 6 weeks, I have not got many properties under contract, not because of a shortage of options (so-called ‘deals’ are being sent to be every-which-way) but because many are priced too high.

And while this may seem to sound easy, it is in fact difficult.

Who has been to an auction, and had a price in mind they had determined to pay for a property, but got caught up in the heat of the moment and paid too much in the end?

Yes, most of us have…

To go against the herd, or the flow is difficult.

This is such an important point, I will go into more detail on this in the coming weeks, keep an eye out!

Even as the famous Warren Buffet said:

“We simply need to be fearful when others are greedy and to be greedy only when others are fearful.”

If everyone is doing it, maybe it is a good time to pause and reflect…

If the deal is great, then grab it… but is it really?  Careful not to get caught up in the herd.

To reap the benefits, U.S. property investment must be a business

John D. Rockefeller, considered one of the greatest American magnates, once said, “The major fortunes in America have been made in land.” As one of the most influential and most business-minded men in American history, he probably didn’t come about this realisation through mere chance. He likely came to this conclusion through purposeful and intentional moves, akin to running a business.

This is the approach that property investors need, too. Many are simply relying on fortunate circumstances in order to secure a good property. But this isn’t a viable blueprint to follow. Strategy and foresight will trump luck in terms of property investment and are necessary to succeed in the U.S. property market. So in order to thrive, you have to view property investment through the same lens you would view running a business.

Good businesses succeed with thorough planning and with their eye on long-term success rather than just short-term gain. Sustainability plays a big part in a business because you want it to continue running long after its inception. Good businesses are also consistent and follow a model in order to ensure that they’re reaching their established goals.

Treating property investment in the U.S. like a business furthers your chances of good investments and the maximisation of these investments for success. 

Why is property investment a business? 

 

Getting into property investment without a plan is risky as it leaves you without any success indicators and a pretty flimsy way of going about things. Sure, there’s still a possibility of doing well, but there are no actual guarantees in place—and you don’t want that. 

Being able to operate from a business standpoint at least gives you the stability you need to measure success, identify how you can go about an investment and a business plan you can constantly look back on and revise or review if necessary. This plan should include your goals, what you want for your future, and how you will get there.

Property investment requires consistent work. You can’t just expect it to work out after setting everything into place once, it has to be continuous and constant, with you always reviewing your plan, going over properties, and weighing up if an investment will be a good one or not. Like a good business, you can’t expect it to run smoothly if the work is inconsistent and the quality is lacking. 

It’s also difficult to tackle property investment alone because of how complex it can be. Several experts in different fields need to be part of your team in order to maximise success. In a business, a team works together to reach a certain goal or hit a certain mark. Having a team in a business can ensure productivity and efficiency as different people can work on different things that cater to their skills. 

Investing overseas is a business because you need to be strategic, have a plan in place, and work as a team to succeed. 

 

5 ways to turn U.S. residential property investing into a business 

 

It may sound difficult to shift how you operate in terms of property investments but these five methods can help you turn it into a business. 

1. Capital helps you get started 

Getting a headstart is never a bad thing and one good way to do so is to secure capital. Just like businesses need capital, property investment does, too. You need that money in order to fund any venture, even real estate ventures in the U.S.

Capital can cover the actual cost of the investment and even the fixes or renovations you plan to make to the property. 

Finding capital can be the tricky part. Money can be a difficult thing to procure but there are three possibilities, especially for investing in the U.S: Joint ventures, land contracts, and private equity.

A joint venture is when two people come to an agreement and invest in a property together given that you have complementary skills that will benefit you both when it comes to the property. Say you’re more savvy with the real estate market and pitching the property and someone has the capital and the maintenance power for it. Investing together and using both your skills will help you make a sale.

A land contract is when you secure a property and make payments to the vendor or owner for it over a certain amount of time. More often than not, the house is still in the owner’s name until you’ve fully paid it off. 

Private equity is, as the name suggests, a private pool of money used to directly invest in other companies or ventures. It’s an alternative way of financing that is flexible in terms of loans, making it easier for foreigners to invest in U.S. property. 

2. Be in it for the long haul

Be real, there’s no recipe for instant success when it comes to both business and property investment. It takes a long time to lay out your plans, to set them in motion, and to receive the spoils of your effort. There’s nothing instantaneous about either of the two. So buckling in and being patient is all part of it.

Instant gratification is something we all look for now. We want everything quicker, to get results faster, and for things to arrive on demand. Sometimes we settle for short-term success because we want to succeed right away, shrugging off the possibilities for the long-term. But it goes without saying that if you want long-term success, like a good business aims for, you have to have the tenacity to stick with your plan. The rewards of short-term success will probably fizzle out just as quickly as you attained it, which is why you should aim for something more permanent and sustainable.

Stan Lee, for example, was about 38 years old when he contemplated parting with Timely Comics and creating his own set of superheroes to rival that of DC’s. When he did, he created an entire universe that’s become so well-loved that it paved the way for dozens of movies and series and an entire web of crossovers. With patience and perseverance to create something that he loved, he was able to find success.

3. Time and effort sets up success 

Putting in the time and work every day to research your property/ies is also important.

Just like putting together a business, you can’t haphazardly slap it together. You have to take the time to review the right people for the job, where they fit, how the business model works, and what you count as a success indicator. Effortless, lazy work yields sloppy results. The same goes for property investment.

If you don’t put in the time and effort in finding good prices, identifying the best investment opportunities, making good renovations, and working with the right people, you can compromise your success on a property. By putting in time and effort into these four areas, you can set yourself up to thrive. If you don’t, you will end up paying too much for a property, having shoddy renovations, and even find yourself stuck with an unreliable team. Like we said earlier: Effortless, lazy work yields sloppy results.

 

4. Finding (and hiring) the right help 

No matter how good your vision is in a business or in property investment, you’re only as good as the team you hire. If you get the wrong people, you’ll fail to attain that vision. Being able to find good people to help you in the capacities you need them to will be vital to what you picture the property to be.

Just like in a business, you should screen people, look at their strengths and weaknesses, and the skills they have, as well as any references they can offer. If they align with what you want, they can certainly help you out.

When investing in property in the U.S, you need property managers, maintenance contractors, and real estate agents.  

A property manager will deal with tenants head-on and have the keys to your property. They’ll be the ones to handle the tenant. Having a good property manager ensures that they will have a pleasant relationship with a good tenant, keeping the property safe from damage and both the tenant and property manager happy with how they interact with each other.

A maintenance contractor is in charge of the renovations and repairs and, as their name implies, the overall maintenance of the property. Keeping the property in tip-top shape will keep you from shelling out more money for small fixes that could have been avoided. 

A real estate agent handles the “selling” of your property to a future tenant. A good one will ensure that they buy at the right price and will pitch your property well, showing off all the good aspects and playing up strengths. 

5. Commit to reinvesting 

One clever business practice is reinvesting, the act of purchasing additional shares from what was invested before instead of receiving the profit. It sets up a business for success in the long-term and can help grow profit exponentially.

This goes for property investment in the U.S.

 

Take Warren Buffet’s investing career as an example. He started out in high school with a friend, buying a used pinball machine and installing it in a barber shop. It did so well that the two, instead of settling with the money they’d earned, reinvested in more machines and installed them in more shops, growing their profit. 

 

Instead of cashing in right away, reinvesting can help grow the distributions you’ll receive in cash by an exponential amount. Rather than investing in one property and stopping there when you get your desired amount, use that to invest in another property since the U.S. property market is booming. You’ll definitely find other property investment opportunities that can bring you more profit.

 

Investing in property in the U.S. is a great opportunity right now, but going into it blind and without a plan can hurt your investment in the long run. Being strategic in implementing goals, and going about it like a business will bring you the success you need in the market, promising you even more of it the more you do it. 

If you’re interested in pursuing property investment overseas and need advice, download our guide, specifically on investing in the U.S – “7 Simple Secrets to Investing in U.S. Property”.  Let me know what you think!

 

Linz’s Musings –A time for Celebration and Reflection

Happy Easter to everyone!  It is insane how quickly this year is moving already, with Easter upon us once again.

I love this time of year, while not a huge fan of chocolate, it does give me a great opportunity to pause, relax and reflect on how the year has started.

Footy is back, autumn weather in Melbourne is lovely, and with banks and most businesses closing for a long weekend here in Oz, it’s a great time to take a breath…

How has your year started?

Is it what you expected?

The pandemic is still showing us it is here to stay and Brisbane-ites may even have to face Easter in a lock-down…

But sometimes, with the speed of life now, we can get so caught up in the day to day, the fast-moving pace of business and life, time just drifts past us before we know.

We do not often think to periodically stop, reassess, and make sure we are still headed in the right direction.

What if the wind has changed on us?

Did any of our decisions not turn out as we expected?

Do we need to adjust course?

These are all things that should be reviewed regularly.

Personally, at the end of each month, we take a half day and celebrate the month gone.  Then, first day of the new month, again, spend 3-4 hours reviewing how the previous month went, and planning for the next.

Now while everyone may not have the same opportunity to do this, Easter can be a great time to force us to take a breather and have a quick look on what we have been able to achieve so far, and where we need to adapt to keep momentum going.

It is important in this review, to celebrate your wins, no matter how small.  Celebrate the achievements you have been able to make so far, regardless of how many to go.

Then, we can review what changes, tweaks or adjustments can be made to increase the pace or keep progressing.

Progress and action are important, but equally so is rest, celebration, and review.

So, this weekend, kick the feet up, celebrate what you have achieved so far in 2021 and prep for a big 2nd quarter!

Linz’s Musings – Mindset, Growth & Belief

I did a post recently that got some attention, regarding how RE markets in the U.S. are boom (same as here in AU and in NZ) but yet still, some that keep talking about investing, are just not doing it…

What are they waiting for?  Better growth??

In reality, it is fear.  And the most important thing to focus on is your mindset to overcome the fear.

I say important, because without mindset, growth and belief, all the strategy in the world is useless to you.  Without the belief you can achieve, the mindset to be able to overcome the fear and difficulty (and oh my, there will be difficulties!) you will not be able to achieve success, whether it be in business, investments, wealth, or happiness.

It’s the growth and belief that you develop that allows you to firstly recognise opportunities and strategies that you can use.  It’s that growth and belief that will allow you to take the strategies you KNOW you can apply and run with them.

And then again, when things get tough, it is that growth, belief and mindset that allows you to push through the barriers, get up after the setbacks, and keep moving towards your goals.

If you have read any of my blogs or musings before, one of my favourite sayings – It not knowledge that is power, but the application of that knowledge.

Yes, I agree, we all need knowledge.  Hell, I’m pretty certain that none of us (myself included) put enough of our time each day aside to learn, read and grow (well, maybe my business coach who reads a minimum of 2 hours every day) but you get the idea.  Knowledge is needed, learning is critical, but if you do not have the personal growth to apply that knowledge, if you do not have the mindset to succeed in the adversity, then it becomes moot.

Just another course we bought and placed on the bookshelf; just another book that looks great, but we never open the cover; just another strategy we have been taught that we never implement.

It is growth, mindset and belief that will allow us to take and use the tools we learn and to achieve.  And it’s not something that will necessarily occur overnight, growth takes time.

But sometimes, mindset and belief can be like a switch!  Something will resonate with you, a key that will trigger that inner lock deep in your psyche that suddenly unlocks, and all becomes clear…

Find yourself that key, however long your journey takes and suddenly the knowledge becomes vast and available…it was always there, you just couldn’t see it…

Linz’s Musings – What are you waiting for?

One of the most common themes of questions I get asked, every week, via social media, emails, even during phone calls, is all about growth…

Which areas have the best growth?

What if the market does not grow?

Is the U.S. or AU market better growth?

Its like we are programmed to only look for growth when buying properties…

Now, don’t get me wrong, growth in property is certainly nice.  In this country we have the old saying that every 7-10 years the price of property doubles…  Whether that will still hold going forward, with the price of properties in Australia and New Zealand so high, I do not know.

Even Auckland right now is seeing property prices rise $100,000 in just 1 month!  Crazy.

It seems at the moment we have massive property growth in a number of markets all simultaneously.  That’s what cheap money does.

But, with so much focus on growth (which, by the way, is only ONE of hundreds of ways of making profits in property) why is it that there are still so many people TALKING about investing, but not actually investing?

Waiting for years to see if they can predict ‘growth’ in any particular markets, and when it is jumping up and biting them on the nose, they are still waiting for… something?

Every media outlet, publication, social media group/platform is posting charts about how much growth we are seeing in Australia, New Zealand, United States, and predicting how high it will go, how long it will last, and yet many are still not convinced now is the time to invest.

Now, I get that the AU and NZ markets can be prohibitive due to costs (although there are strategies you can use with little or no money down, but these can be tough to implement) but markets such as the U.S. are quite affordable.

I think it was Robert Kiyosaki who said it best, when asked when the best time is to buy real estate.  His response was “The best time to buy real estate was 20 years ago, the second-best time is now”.  Or maybe that was Warren Buffet?

Anyway, the point is investing in property is a process, not an event.  You are not waiting for a bunch of stars to align, or signals to be all green before “taking the plunge”.

It is a process to firstly get yourself into the right mindset for investing; the right financial position to invest; acquire the knowledge you need or talk to the right people to help you if required.

If done correctly, you will generate wealth through real estate in any market… not just growth markets.

Is the U.S. market growing right now?  Absolutely!  This would currently be the hottest market within the U.S. that I have experienced in my time.

Are we making more now, in this super-heated market?  No…

Yes, properties are selling for more, and one of the biggest benefits of such a hot market is that we can get into and out of the deals faster but our returns using manufactured growth strategies are still around the same – 20-30% nett ROI on a deal.

The issue during hot markets is that while we can sell the properties for more, we also have to pay more to acquire them…

Is now a great time to get into property, absolutely!

But so will tomorrow, and yesterday, and last year…

Nike’s point is true – Just Do It.

There is not much certainty in this world of ours, certainly nothing certain about markets, investing in anything.  But one thing is certain…

If you do NOT invest, you will make nothing.

You got this!

Happy Investing all and have a great weekend!!

 

US Property Investment: Strike while the iron is hot

Let’s be honest: the stakes are too high for any real estate investor looking to enter the Australian property market. With the prices nowhere near affordable, you’re better off investing your money elsewhere.

Like in the U.S.

U.S. property investment has been the cheaper option for real estate investors for a long time, given the price bubble in Australia that we’ve all been experiencing in the past few decades.

But that’s not all. What makes the U.S. market better than others is the size of opportunity and how the market is booming despite the 2020 recession.

Last year, the US housing market’s combined value hit $43.4 trillion AUD, which is almost as much as the combined GDP of the two largest global economies: the US and China. And, unaffected by the current economic conditions caused by the global pandemic, the U.S. residential property market is seeing some of the fastest price appreciation in recent years.

These will lead to significant returns on investment for any property seller. 

Not convinced yet? We have the numbers from some US property investors after working with Star Dynamic:

  • Since expanding their renovation business into the US market, Anne and Catherine have gained an overall return of 39% in just three months.
  • After Bernadette received an ROI of more than 17% on her investment in the US, she purchased two more properties and an apartment block, making her total income per year over US $55,600.
  • Paul and his wife Anne secured a townhouse in Florida, which earned them a yearly return of 12.5%. The couple are now looking to own five US properties in the next three years.

There’s a lot of opportunities waiting for anyone who wants to get into real estate in the U.S. However, no one really knows when the tide will change. That’s why it’s important to make your move now.

So, are you ready to strike while the iron is hot?

How to ready yourself to invest in the US residential property market

Knowing that the current booming market might not last very long, you need to be fully prepared as soon as you can be.

Here are four tips to ensure that you’re ready to take the leap to grow your wealth and invest in U.S. property:

1. Address what’s holding you back

Despite the overwhelming evidence suggesting how U.S. property investment can be a one-way ticket to building your wealth, many aspiring investors still think twice and end up shelving their real estate plans indefinitely.

That’s a big opportunity wasted.

If you’re in the same boat, you need to address what’s holding you back from making that big decision. The first step towards that is to develop the right mindset.

Mindset is a collection of beliefs affecting how you shape your thoughts, attitude, and habits. There are two types of mindsets: the fixed mindset and the growth mindset.

A person with a fixed mindset believes that qualities like intelligence, talent, and skill are unchangeable. So for instance, if you’re bad at maths and you have a fixed mindset, you’ll convince yourself that there’s no way for you to get better.

On the other hand, someone with a growth mindset believes that these qualities can be developed and improved through perseverance, training, and commitment.

Having a growth mindset will help you think more positively and push you to make a move towards progress in reaching your goals.

To improve your mindset, here are five helpful tips, which we explained in detail in a previous blog

  1. Train yourself to be better.
  2. Set goals and be accountable to them.
  3. Learn from your mistakes.
  4. Have a positive support network.
  5. Take action. 

Following these steps will give you more confidence in making big decisions (like investing in U.S. property) that will propel you towards success.

2. Success is a process: Learn what’s required and take action

Success doesn’t just happen, and it certainly can’t be achieved overnight. It’s a continuous process of learning, improving, and refining, which takes a lot of time and effort.

Succeeding in U.S. property investment is no exception. If you really want to succeed in your investment in the long term, it’s important that you set and follow a strategy that works and learn about the mistakes you should avoid making.

There’s so much to learn, so don’t expect that you’ll master it overnight – it doesn’t work that way. In fact, some of the most successful people in our world faced their own doses of failure before they achieved greatness.

Stephen King’s popular book “Carrie” was rejected by 30 publishers before it finally got published.

Oprah, who genuinely went from rags to riches, was told that she was “unfit for television” in one of her first jobs.

And Colonel Sanders, founder of the world-famous food empire KFC, was rejected over a thousand times before his recipe became a success. He was in his 60s by then.

We’re not implying that your investment has to fail hundreds or even thousands of times before you can succeed. You just need to learn to be patient, to trust the process, and to keep learning more about the process behind investing in US property in order for you to ensure that you’re on the right track to success.

3. Have confidence in yourself and have faith in the opportunity

When people tell you that “confidence is key”, believe them, because it’s the truth.

Having confidence that an opportunity will lead you closer to your goals allows you to firmly decide on pursuing it, and having confidence in yourself helps you gain courage to actually take action.

You can grow your faith in the opportunities by learning more about the advantages of investing in the US as opposed to investing in Australia. Things like how:

  1. The U.S. property market is booming despite the economic downturn. Prices for houses across the US demonstrated the fifth-largest gain in nearly 25 years, and is the strongest in 15 years.
  2. U.S. interest rates are currently at a record low – almost near zero.
  3. The value of the U.S. dollar has plunged in 2020, and according to forecasts, there will be a bigger decline in the coming year.
  4. Stimulus packages in both the U.S. and Australia will give you and potential buyers of your future US property a headstart in funding.

Building confidence in yourself is a different thing you’ll have to work on. Believing in the opportunity doesn’t automatically mean that you already believe in yourself. So you need to make sure that you have the confidence to make a move and face any obstacles that come your way.

Here are some strategies in improving self-confidence from Tony Robbins:

  1. Know your values. 
  2. Accept your emotions.
  3. Practice positive thinking.
  4. Change your physiology.
  5. Practice your communication skills.
  6. Reevaluate your blueprint.

Having faith and confidence in both yourself and the opportunity before you will take you a long way.

4. Get help from people who know better

We’re all social beings. Humans never evolved to be “lone wolves”, and that means there’s nothing wrong with getting help.

In fact, we all need help. From the moment we were born and helped by our parents to now being adults who have friends, teams, and networks – help from others is an essential part of life, and of success.

So when it comes to investing in U.S. property, it’s also important that you find the right team to help you take the right steps and make the right decisions.

Star Dynamic wants to help you achieve your financial goals by giving the most effective advice (STARR approach), having our team handle the complicated and tedious processes for you, and supporting you in your investment journey from start to finish.

Through our STARR approach, we can help you create the best investment strategy, build an amazing on-ground team, help you with property acquisition and renovation, and realise impressive ROIs. 

The way that the U.S. property market is booming now is just too hard to ignore. If you’re looking to invest in property, you’ll be missing a massive opportunity if you don’t take the leap and invest in the U.S.

Making that decision and taking action can be daunting, but it doesn’t have to be. You simply need to prepare yourself by developing the right mindset, learning about what to do (and what not to do) of U.S. property investment, believing in yourself and the opportunities in front of you, and getting help from the right people.

Then, the rest will follow.

To find out how U.S. property can secure your financial future, watch our masterclass video.

 

Linz’s Musings – Cash chests and where are they being Invested?

I was doing some ‘market research’ the other day, and came across an amazing article in the U.S from the Economist which was talking about the amazing chests of cash that many households particularly in the U.S are sitting on!

I’ll admit I had to do a bit of a double take, as most of the media across the board, in AU, U.S and NZ is pretty much all ‘doom & gloom’ when in reality, most of us savvy investors know this is not the case.

Firstly though, it was good to see an article finally saying this are not as bad as they seem.  I have been saying for some time, with such low interest rates, virtually worldwide, and billions (or trillions, depending on the market) of dollars being pumped into markets, thing are certainly pumping.

But one area I did not consider, is that will all the lockdowns, fear the negative press over the past 12 months, households’ options, and/or their want, to spend money has been greatly reduced!

Looking at the U.S specifically now, not only are most households up on income due to stimulus checks/packages etc, but they have had little options to spend this money…

Hence… Boom!  Cash chest

And check out this little graph below from JP Morgan Chase Bank, it’s the poorer households who are better off…

Who would have thought…?

So, I started looking into what people are investing in, with investing being the new black this year… (everywhere you turn now, it’s all about where are you INVESTING that cash of yours…)

Watching the Millennials, and while many give them a lot of crap, I have found they are one of the hungriest and switched-on generation regarding wealth, property is not their go-to.

With such high entry points, its not something most 20-year-olds are looking into.

(Although there are many ways to get into the markets & I do have a STACK of low entry, high cashflow investment strategies in the U.S, so hit me up kids!)

The search engines are being overloaded with trading, cypto and share searches, people wanting to know how to do this.

And the Millennials are the most ‘tech-savvy’ of the generations too so trading platforms and crypto/blockchain etc does not scare them.

But, if you no longer 20-something, and don’t know Blockchain from Blockbuster, then where are you looking?

Property

And if you are in the poorer median household income, and suddenly have cash, what do you do…

Buy yourself a house!

And suddenly… Boom!  We have a housing market going crazy…

So right now, for me, the owner occupier flips, are where it is at!

How are you finding this booming market affecting your strategies?

Linz’s Musings – Is Fear holding you back?

Happy Friday, welcome to Autumn and hasn’t summer gone out with a whimper here in Melbourne.  March 5 and already we are getting tops of only 15-18c.  Crazy!

Having said that, we have been busier than a one-armed bricklayer in Beirut… Market sentiment has certainly turned this year and many are looking to the U.S market to invest, is great to see…

I was thinking though, why so many people love the idea of the opportunities and the returns that can be made, but never actually make the decision to start?

I was watching a video on Facebook the other day, from Fearless Motivation (check these guys out on YouTube, certainly worth watching a lot of their videos!) and they were talking about why most people are not successful and it really hit home for me.

One of the main reasons we don’t succeed in anything is FEAR

But often, it can ACTUALLY be the fear of SUCCESS that holds us back…

The fear that we will not fit in.

The fear that we will lose friends or family along the way.

So many are afraid of success, that they deliberately CHOOSE to stay mediocre.

Is it really the fact that you may be afraid of succeeding that is holding you back?  Fear of who you will become by being successful?

The truth is though, you do not need to ‘lose yourself’ to become a success, moreover you actually grow INTO yourself.

Actually BECOME the person you are meant to be.

I can attest that sometimes the life of an entrepreneur can be a lonely one, so few understand the struggles that you go through…

But it is also one of the most satisfying journeys I have ever undertaken, to know that you can become all that you were meant to be – not limited by others’ thoughts and ideas on what or who you SHOULD be.

What is it that you are REALLY afraid of?

You got this!

F*** 2020, Here’s How to Get 2021 Back on Track…

You probably had big plans to make 2020 your best year yet. You had the drive to chase new goals and reach greater heights in your personal life and career.

But as we all know, the year took a bizarre and unexpected turn towards the worst within a few months of us all yelling “happy new year”. 

In what was one of the longest and most frustrating years yet, 2020 put many dreams on hold. And though we’ve made it through to a new year, everyone is still trying to find their way back into some sense of normality.

COVID struck hard leaving many people and societies at a standstill while watching their economies crash and unemployment numbers spike to the highest level in many years. 

To make the situation even worse, people were fed (and believed) divisive conspiracy theories that only fuelled society’s anxiety.  


But as Winston Churchill famously had said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” 

With that mindset, there are good reasons to be optimistic in 2021.

While we can’t undo the changes forced upon, we can look to the future with hope and make 2021 the most prosperous year yet.  

 

What’s your 2021 New Year’s Resolution?

How often have you proclaimed, “New year, new me” as the clock strikes midnight on the last day of the year? Likewise, how long did it take to break your resolution or fall back into bad habits? 

It’s no wonder these resolutions fail, saying ‘I’ll get fit” or “I’ll give up drinking alcohol” sounds great but it’s not really practical if it doesn’t have a plan of action.  

But if anything is to be learned out of 2020, it’s that there’s one resolution that should be introduced and kept – securing your financial future.   

At a time when the world’s economy is down, and the bounce back is expected to take years, it’s the perfect moment to shift your focus to pursuing financial stability. 

And one massive opportunity to achieve it is by investing in the $33 trillion dollars US residential property market

COVID left the housing inventory all over the world in short supply, and this caused prices to rise. But it had seemingly almost no effect on demand. Many homebuyers were set on moving out of the city and into the suburbs. While others were scaling back and seeking to buy cost-efficient homes. And this made the competition tougher than ever, because people needed to act fast. 

Experts say that this will continue in 2021. Investment analysts foresee that the US residential property market demand will only continue to rise because of several factors like lower mortgage interest and a trend among many to relocate away from the city to suburban areas

For example, home values in Detroit increased by more than 92% over the last five years. And in the next 12 months, they’re projected to grow by another 12.2%. Demand continues to rise, because people are now evaluating the places they’ve been living in and assessing it against the future they actually want. 

 

Why your New Year’s Resolution should be investing in the US residential property market 

If you want to safeguard your future financially, consider investing in the US residential property market. After all, it’s never too late to add another resolution to your list for 2021. 

Here are several reasons why: 

1. Low interest rates

Banks worldwide are maintaining low interest rates as a way to help the economy recover post-COVID. The US Federal Reserve stressed interest rates near zero will continue until at least 2023

When interest rates are low, spending is encouraged. Borrowing becomes cheaper, thus making large purchases on credit — such as the purchase of a home — more affordable

The average rate for a 30-year fixed mortgage dropped from 3.62% in January 2020 to 2.68% in December 2020. There has been a consistent 0.7%-0.8% drop each month, and it’s expected to continue in 2021.

Now that mortgage interest rates are set to stay low for the next few years, property investors have more time to prepare for their purchase.

They can carefully weigh up their options and wait for more homes to go on sale. Given that the housing market is competitive and demand is high, it will only be a matter of time. 

Until then, buyers can work on securing their mortgage requirements and pre-approval applications. So, when they finally find a property they want, they can get ahead of their competitors. 

2. Introduction of stimulus package

In March 2020, the U.S. government signed the CARES Act, a $2 trillion USD COVID-relief act given in the form of stimulus checks. Individuals and businesses eligible for tax rebates received these checks.

The stimulus act was designed to help in two ways: 

  • The money provides financial assistance to low-income persons and families to help keep up with their bills.
  • It was given knowing people would spend it immediately, in turn avoiding any stagnancy in the economy.

The initial package included $1,200 USD per adult and $500 USD per child for households whose income was less than $99,000 for single taxpayers and $198,000 for couples.

Moreover, a new bill known as the Consolidated Appropriations Act of 2021, or CARES Act 2, was passed on December 21, 2020. This paved the way for another $600 USD given to qualified individuals and their dependents. 

While this doesn’t directly affect the real estate market, it does have some influence on it. Because a significant percentage of taxes has been waived, people have money to spend. Those who are wise enough are putting that money into purchasing properties. For foreign investors, this shows why now is the right time to capitalise on the U.S housing market, as higher spending will allow it to recover faster, and property value will then increase. 

3. A new wave of growth is emerging 

The global real estate market is headed for immense growth in 2021. 

Australia’s excellent response to COVID-19 has brought back the momentum for the housing market. In 2020, Sydney saw the biggest increase in house prices (12%), followed by Melbourne (10.8), and Hobart (7%). First-time home buyers are coming back, and it’s also attracting foreign investment. 

New Zealand also has a new wave of growth emerging. Rising housing prices in the country are a result of demand outweighing supply and relatively low interest rates which is forecast to sustain until the end of the year. Average prices for a house in New Zealand is now $788,967, an increase of 2.6% in just a few months despite a 6.1% growth in 2020’s final quarter.  

But while the market is hot in Australia and New Zealand, costs are still incredibly high with limited options. The turnover also takes longer, which incurs higher expenses for foreign buyers. 

In the US, home sales increased by 10.5% in August 2020 from the previous year. First-time homebuyers accounted for 33% of total sales. 

During this period, 69% of homes were on the market for less than a month. Properties typically stay on the market for more than a month, but in 2020, the average turnover was only 22 days.

This faster turnover rate means owners are selling quickly and there are numerous buyers available. Anyone who is ready to buy can enjoy their new investment home sooner.

 

Fortune favours the brave: it’s an opportunity to take now

All this indicates that investing in property is a great strategy to achieve financial stability. But succeeding in this endeavour requires learning and, like a New Year’s Resolution, the focus to see it through. That’s what  Star Dynamic client, Katie Potter did. 

When she decided to invest, she didn’t reap the benefits overnight. Instead, she broke her property investment dream into actionable steps and remained committed until she achieved her ultimate goal – two investment properties within nine months.

Like Katie, you have the opportunity to safeguard your future and enjoy passive income. We’ve created a free e-book to help get started on everything you need to know about investing in the US residential property market. 

If you’re interested to know more and want to speak with us, contact us today

 

Linz’s Blog – 5 Reasons Why a ‘Perfect Storm’ is Brewing in the US Residential Property Market

We have finally come to the end of 2020 – a memorable beginning of a new decade… just not in the ways we anticipated.

People can’t seem to decide whether the year has gone too slowly or too quickly. Many seem to have lost their sense of time, but can we really blame them?

Because of the COVID-19 outbreak, millions of people have lost their jobs, and the restrictions put in place have caused a massive change in our lifestyles.

So for a majority of workers, progress for both personal and career plans had since been put on hold.

It was not long ago that we were told that the current global recession will be the deepest since World War II, and with how fast the downturn happened, we had no reason to doubt that. 

Understandably, many still fear taking great leaps to build their wealth. Making big career and financial choices involves a level of risk, which perceivably look much higher given the circumstances we’re in today.

Potential investors are backing out of their plans and waiting for the global economy to return to its previous peak. However, forecasts say that this won’t happen until late 2022.

But wait, don’t go yet! There’s good news.

The situation is different in US real estate. The market has been doing a lot better than expected, and it’s forecast to bounce back at the beginning of 2021 and be even more positive as we enter 2022.

With the US residential market booming, economic indicators are showing that there has never been a better time to invest in US property.

So if you were waiting for an opportunity amidst the economic slump, now’s your chance.

5 reasons why investors should capitalise on the US property market  

Many will tell you that you can’t do much to propel yourself to success given the pandemic and its effects, but the data speaks for itself.

US property investors should be confident heading into 2021, and here’s why:

1. Despite economic conditions, the US residential market is booming

It’s an unfortunate fact that many industries have been suffering since the start of the global lockdown.

Hundreds of thousands of businesses had to temporarily shut down and it will take many more months (or even years) for most of them to recover from this recession.

In the face of tough economic times, opportunities may be limited, but it’s counterproductive to assume that they don’t exist at all.

Because these opportunities ought to be taken, especially if they’re as big as what the US residential market presents.

Despite the economic downturn, real estate in the US is booming. And no, we’re not exaggerating at all. 

Prices for houses across the US demonstrated the fifth-largest gain in nearly 25 years, and is the strongest in 15 years, which is greatly advantageous to sellers.

A September report showed that US home prices rose by 7.8% in the past year, which is the fastest climb in over a decade. Furthermore, the typical U.S. home appreciated by 1% in October alone, to USD $262,604, which was the best monthly gain since 2005. 

Economist Jeff Tucker says that the market is seeing some of the fastest price appreciation in the modern era. “I don’t think this pace of appreciation can go on forever. It’s just too hot,” Tucker says.

By November, the total active listings were down 39% for the fourth consecutive week, keeping the prices up.

And this ‘head of steam’ is being seen in the New Year now as well.

This is a massive opportunity for investors for Australia and New Zealand, considering how our property prices are becoming way too expensive for people to even step into the market.

 

2. Record-low interest rates

An interest rate is the percentage of the amount of money loaned which is charged by the lender for the use of its money.

The bank applies this interest rate to the total unpaid portion of your loan, which you should pay in each compounding period. Otherwise, your outstanding debt will increase despite making payments.

In a nutshell, the lower the interest rates are, the better. 

And right now, US interest rates are at a record low, incentivising buyers to find homes faster, keeping the demand high, and therefore keeping the prices high too.

As someone looking to invest, this means that you don’t have to worry much about paying high interest rates. And as a property seller, this means that there will be more people looking to buy homes (i.e. more potential buyers of your property).

According to the Federal Reserve, this near-zero interest rate will remain until the economy starts to recover from the virus, giving investors all the more reasons to act now.

 

3. Best exchange rate for the Australian and New Zealand dollar compared to the US dollar in more than two years 

The low interest rates, the booming real estate market, and the significantly lower prices of property in the US compared to Australia and New Zealand – you’d think these are all the perks you need to invest, but it turns out, there’s more.

Due to the recession, the exchange rate between the three countries is now very strong. The value of the US dollar has plunged in 2020, and according to forecasts, there will be a bigger decline in the coming year.

This means that you can exchange and spend less of your Australian/New Zealand dollars to buy in the US, which saves you a lot of money, especially for huge purchases like property.

 

4.Stimulus packages in the US and Australia 

According to Investopedia, a stimulus package is “a coordinated effort to increase government spending—and lower taxes and interest rates—in order to stimulate an economy out of a recession or depression.”

The government does this by boosting employment, consumer spending, and investment.

Currently, the Australian government is using AUD $17.6 billion to support up to 6.5 million individuals to keep their jobs and 3.5 million businesses to keep running during the pandemic-triggered recession.

Meanwhile, the US government has approved a new proposal of stimulus packages for their economy as well that numbers in the Trillions of dollars…

 

5. COVID vaccines being rolled out 

Scientists have been working tirelessly on a vaccine since the start of the pandemic which fortunately led to a success.

The Pfizer/BioNtech vaccine is reported to be 95% effective, and 43,000 people have had the vaccine with no safety concerns. Australia is expected to roll out vaccines by March 2021, while the US has started to rollout vaccinations.

This means that we are getting closer and closer to returning our world to as close to normal as we can get.

Having these vaccinations rolled out will boost the confidence of Australians and Americans alike, reducing the fear and stress brought about by the pandemic.

For the US residential market, this means that more people will start buying property again, so you need to be ready to sell by then.

The world’s circumstances have given all of us a reason to fear taking risks and making big decisions. But this doesn’t mean that we should do nothing and simply let time pass us by.

Despite the pandemic and the recession it has led to, there are still many growth opportunities out there – we just need to look in the right places.

The US property market has barely been affected by the COVID-19 situation. In fact, the market is booming and things are looking more positive in the next few years. 

So when the ‘fog of war’ lifts, there will be an abundance of opportunities investors can capitalise on. 

Will you be ready to take advantage of them?