Introduction:
- Hosts introduce the topic: Is property investing risky or safe?
- They tease that they will explore the risks associated with property investment and effective strategies for mitigating those risks.
Opening Discussion:
- Opencorp Group CEO Matt Lewison, set the stage for the conversation.
- They establish that risk is inherent in any investment, including property.
- Matt emphasizes the importance of understanding and managing risks effectively to achieve maximum returns with minimal exposure.
Identifying Risks in Property Investment:
- Matt discusses various risks associated with property investment:
- Direct risks: Building defects, maintenance issues, structural risks, etc.
- Financial risks: Tenant vacancy, rental income shortfall, economic factors, personal financial circumstances, etc.
- Indirect risks: Broader economic conditions, lending landscape changes, personal financial stability, etc.
Perception vs. Reality:
- Hosts address the perception that property investment is risky due to the large capital outlay and associated costs like stamp duty.
- Matt highlights that while the investment size may seem daunting, it doesn't necessarily correlate with increased risk compared to other investment options like shares or crypto.
Mitigating Risks in Property Investment:
- Matt emphasizes the importance of property selection and diversification to mitigate risks.
- Strategies discussed include investing in new properties with builder warranties, conducting thorough building inspections, and choosing locations with high demand and rental yields.
- Diversification across different markets and property types is advocated to spread risk and minimize exposure to legislative changes.
Managing Cash Flow Risks:
- The discussion shifts to managing cash flow risks, especially during the initial years of property ownership.
- Strategies include maintaining buffers for interest rate fluctuations, ensuring stable income sources, and avoiding major financial changes immediately after purchasing a property.
Encouraging Action:
- The hosts conclude by emphasizing the biggest risk in property investment: not investing at all.
- They share success stories and underscore the potential long-term financial benefits of property investment.
- The episode wraps up with a teaser for the next discussion.
Conclusion:
- The hosts express gratitude to the audience for joining the conversation and tease future episodes.
- They invite listeners to stay tuned for more valuable insights on property investment.