Where NOT To Invest And WHY ‼️ Despite Hundreds Of Property Investors Buying Here Last 5 Years

Summary

In this video, PK discusses two Queensland locations, Leichhardt and Mango Hill, that have been poorly performing in terms of property investment despite being heavily marketed by agents and advisors. He emphasizes the importance of analyzing data rather than relying on marketing narratives, highlighting factors such as rental yields, days on market, and online search interest. PK advises viewers to do their homework and learn to interpret real estate data to make informed investment decisions, suggesting that understanding this data is crucial for predicting short-term property growth and achieving both positive cash flow and capital appreciation.

Takeaways

• 🏠 The speaker warns against investing in certain locations, such as Leichhardt and Mango Hill, despite many agents and advisors promoting them.
• 📉 Leichhardt's median property value has declined, and it has missed out on recent property booms in other areas.
• 🤔 The speaker emphasizes that factors like population growth, infrastructure, and schools are less important for short-term growth (within 5 years) compared to equity uplift and capital growth.
• 📈 The speaker advises that high rental yields can be misleading as they may not translate into capital growth, which is crucial for generating equity for further investments.
• 🔍 Data and statistics are highlighted as the key tools for predicting short-term price movements in property, rather than relying on marketing or general advice.
• 🚫 The speaker discourages solely focusing on positive cash flow stories, population growth, or proximity to infrastructure as indicators for property investment.
• 🏢 High rental yields in areas like Leichhardt and Mango Hill may come with higher tenant turnover, damages, and insurance premiums, reducing the net yield.
• 📊 The speaker provides specific data points like days on market, online search interest, and vendor discounting to illustrate why certain areas may not be good investments.
• 💡 The importance of doing one's own homework and learning how to analyze property data is stressed to make informed investment decisions.
• ⏰ The speaker suggests that with the right data analysis, it's possible to generate a significant passive income and potentially retire or reduce work hours within 10-15 years.

Q & A

What is the main reason why many agents and advisors are recommending properties in Leichhardt, Queensland?

The main reason is the high gross rental yield, which is around 6.31%. This is attractive because it suggests positive cash flow, which is an easy story for agents and advisors to sell to their clients.

What are the potential issues with investing in Leichhardt despite the high rental yield?

Despite the high rental yield, there are issues such as the median value of properties having fallen, a high percentage of rental properties leading to increased competition, longer days on market indicating soft demand, low online search interest, and high vendor discounting, which are all signs of a potentially poor investment.

Why is the sociodemographic of Leichhardt a concern for investors?

The sociodemographic of Leichhardt is a concern because it is lower than normal, which can lead to higher tenant turnover, more tenant issues, and higher insurance premiums, thus reducing the net yield after maintenance and vacancy.

What is the significance of the high percentage of rental properties in Leichhardt?

A high percentage of rental properties, over 60%, indicates a lot of competition for tenants, which can lead to difficulties in renting out properties, increasing days on market, and potentially lower rents.

What does the speaker suggest about the property market in Mango Hill and Deception Bay?

The speaker suggests that despite the popular narrative of these areas being good investments due to their proximity to the ocean and potential for growth, the actual data shows that they have not performed well, with flat prices and high supply of developable land.

Why does the speaker emphasize the importance of doing one's own homework before investing in property?

The speaker emphasizes the importance of doing one's own homework because relying solely on marketing or general recommendations without analyzing data can lead to poor investment decisions. Data and statistics are crucial for predicting short-term price movements and identifying areas with potential for both cash flow and capital growth.

What are the key data points the speaker suggests looking at when evaluating a property investment?

The key data points include median property value trends, percentage of rental properties, days on market, online search interest, stock on market, and vendor discounting.

What is the speaker's stance on using buyer's agents for property investment?

The speaker suggests that while buyer's agents can be helpful, investors should not blindly follow their recommendations without doing their own research. They should ensure that the buyer's agents are focusing on data and not just marketing narratives.

What is the speaker's advice for investors looking to build a property portfolio without relying on buyer's agents?

The speaker advises investors to learn how to analyze data themselves, focusing on key indicators that predict property performance. This can be achieved through self-education and spending time learning about property market trends and data analysis.

What is the speaker's final message to potential property investors?

The speaker's final message is to learn the data, as it is the key to making informed investment decisions and potentially achieving financial success through property investment.