To the young people that are considering buying and holding property to become independently wealthy in the future whilst on a median income, I have this to say to you.
Be very careful what you hear on these property forums, from both the bullish and bearish camps.
IMO to get the kind of returns that the successful property investors on this thread have achieved over the last 35yrs will be next to impossible if you expect to earn the median income. It just comes down to unrealistic returns on investment over time.
Any property investor entering the game now that is young and has to work their way up the property ladder without assistance will have to be AT LEAST 10X smarter than your role models and predecessors.
The property boom continues in Sydney and it has no doubt been one of the greatest investments in the world in the past 35yrs. Please don't confuse brains with a bull market.
These returns will not be repeated and the people that continue to gloat and encourage new young and naïve entrants into the market have not done even a quarter of the research you will need to do to make it work. You see they are the fat pigs in the trough, they don't need to worry about getting it wrong because they are already on the side of the freehold fence where they can ride out any property calamity. It will be decades before anyone not gifted with an inheritance will even have hope of getting to that side of the fence. In the next 35yrs you will need to see no global wars, low interest rates, and low unemployment, a kind of utopia that exists for the haves and not for the have nots.
The success stories here are generational property investors who, if they have children will pass the property onto them, so it does not matter to them if you make a mistake about what is going to happen to property prices and you happen to have a highly leveraged property debt, their family will own property outright and still be laughing. The existing winners in this game were just lucky to be in the right place at the right time. The really smart property investors have made returns above the returns made in Sydney property in the last 35yrs and that is truly mind blowing when you consider that 2000 - 3000% return was not uncommon in many parts of Sydney.
Lets consider some simple math when it comes to property, and I will stick to Sydney residential property in this example.
In any reasonable suburb in Sydney one can easily part with a cool million for an average house, and I will stick to areas that don't have regular drive bys or drug lab raids.
On this assumption if you buy today and hold for 35yrs, a repeated cycle exactly will see the 1 Sydney home sell for between 16 and 32 million dollars per property by 2050.
In 7yrs from now lets assume you buy your second property will cost you 2 million, and seven years later 4 million. I wonder what the rents and incomes will be by then?
Use your brains and realise that tomorrows investment hero will not be todays hero.
The success story investors will tell you start early i.e before you are 22, find a life partner who is also willing to not travel and live with no carpet or fixtures in the house while you scrimp and save for the next 10yrs using one persons income to pay off the property.
Back in their day people that got together early had a better chance of staying married, but the average 22yo today has little life experience, yet somehow they are expected to have the wisdom to find the right partner who will not divorce him/her.
The most brutal bear market a property investor can have is a divorce, and for every success story on this thread there are probably 3 others who have lost everything they worked hard for, because they "invested" poorly in a life partner.
When you will be working 12-16hr days and you don't spend time with your loved one people can easily grow apart.
One of the greatest "investments" you will ever make is finding the right partner, because there is no way you will ever do any of this on your own with a median income and current valuations. Just pray every day that you don't have children or any other speed bump or "inconvenience".
There is a large social cost for expensive residential properties, and it affects family time as more and more people have to struggle to meet the financial commitments of daily living.
The success stories on this thread are living in the past while rolling in the mud of todays royalties. Unless you inherit money or marry into it, the way to make serious money will not be in accumulating residential properties on a median wage.
People in business or persons who can earn well above the median wage are of course in a different category.
The time where the average person could accumulate 7+ sydney properties before retirement died about 10yrs ago.
