Episode 297: Would You Buy Your Investment Property Again Today?

Listen and Subscribe:

Omny | iTunes | Google Podcasts | Spotify

Owning a property for a long time doesn't make it the right property. Neither does the fact that it's gone up in value (because nearly all Perth property has).

For years the market ran hot, and a rising tide made average decisions look like smart ones. Now it's cooling, buyers have choice again.

And the difference between a strong asset and a lazy one is finally starting to show.

In this episode of Perth Property Insider, host Jarrad Mahon shares one deceptively simple question that brings instant clarity to every property you own.

From there, he unpacks what your properties should actually be doing for you, and how so many drift off course without anyone noticing.

Inside the episode, you'll discover:

✅The single question that tells you whether to hold, improve, or let go
✅Why a property that's doubled in value can still be the wrong one for you
✅Three warning signs a property needs a proper review, hiding in plain sight
✅What your equity may be doing wrong while it just sits there
✅The four honest outcomes of a review, and how to choose one without fear

If you own even one investment property, this conversation could change how you look at your portfolio.

Let’s go inside 👇🎙️

Episode Highlights:

1. 00:00:00 Intro
2. 01:00:00 Buy now or wait?
3. 00:04:03 Investors on the sidelines
4. 00:07:16 Melbourne's slow comeback
5. 00:11:11 Offsetting your cash flow
6. 00:14:22 Baldivis and Byford update
7. 00:17:39 Free strategic property review
8. 00:21:11 Low price high risk

Our Services:

✅Get your Strategic Portfolio Plan and our help with Buying Your Next Perth Property  (https://www.investorsedge.com.au/invest-in-perth-property/)

✅Get clear on your current property’s outlook and the best strategy for you? Email Jarrad for your Strategic Property Review: jarrad@investorsedge.com.au 

✅For More on our Investment Buyers Agency to buy High Performing property: https://www.investorsedge.com.au/invest-in-perth-property/

✅For more on our Home Buying Service to a hassle free purchase and move: https://www.investorsedge.com.au/home-buying/

✅For more info on our award-winning and highly rated Property Management services that give you guaranteed peace of mind https://www.investorsedge.com.au/perth-property-management-specialists/

✅For more info on how our Property Sales services can ensure you get the best selling price while handling all the stress for you https://www.investorsedge.com.au/selling-your-perth-property/

Tools & Insights:

✅Take our Property Investor Readiness Scorecard to uncover your blind spots and make smarter investment decisions before you buy: https://investorsedge.scoreapp.com/

✅Get your Rental Health Score now to ensure your Perth rental property is optimised for returns and sleeping well at night: https://rentalhealth.scoreapp.com/ 

✅View upcoming property investor webinars, events, and networking sessions: https://www.investorsedge.com.au/events/ 

✅Get suburb intelligence reports and exclusive invites to our webinars, events, and workshops:  https://www.investorsedge.com.au/join 

✅Join the Perth Property Investment Facebook Group https://www.facebook.com/groups/perthpropertyinvestors

Thank you for tuning in! If you liked this episode, please subscribe, tune in, and share this podcast.

Connect with Perth Property Insider:

• Subscribe on YouTube:

https://www.youtube.com/channel/UCgT9-gB6RS69xSgc8J9KrOw

• Like us on Facebook:

https://www.facebook.com/investorsedge

Listen and Subscribe:

Omny | iTunes | Google Podcasts | Spotify

Episode Transcript

[00:00:00] G'day, and welcome to Perth Property Insider. I'm your host, Jarrad Mahon. There's a piece of property advice that gets repeated so often that most investors never stop to question it, and that is buy property and hold it forever. Now, I absolutely believe property is a long-term investment, and I believe great properties often need to be held through different market cycles, interest rate changes, and periods of uncertainty to deliver on their full potential.

But there's an important difference between being patient and being passive, and there's also a big difference between a buy and hold and a buy and forget forever, because not every property deserves to be held forever. Sometimes a property was right for you when you bought it, but your circumstances have changed, and sometimes the market's changed.

Sometimes the property's done its job and created substantial equity, but [00:01:00] you haven't decided what equity-- what you should do with that equity next. And sometimes the property simply isn't doing what you originally bought it to do. So in this episode, I wanna help you think more intentionally about the properties you already own.

Not from a place of panic, not because the market may be cooling, because it is in most areas, and certainly not because I believe everyone should rush out and sell, but because every property should continue earning its place in your portfolio. Now, the question I want you to consider is, if you didn't already own this property, would you buy it again today?

And that one question can reveal a lot So why this conversation matters now. Over the last few years, Perth investors have experienced extremely strong market conditions. Values have risen quickly, rents have increased, [00:02:00] vacancy rates have remained tight the entire period. They should still keep remaining tight.

Um, but in many parts of the market, buyers have had to act quickly and compete strongly to secure a property. And when almost everything is rising, it can be easy to assume that every property is performing well. Because a rising market can make an average decision look like a great one. But as the market begins to moderate, investors need to become much more selective, and properties may take longer to sell as they already are, buyers have more choice, and the difference between a strong asset and an average asset may become much more obvious as it is now.

And that doesn't mean the market is about to collapse. It doesn't mean investors should panic, and it simply means to me that this may be a good time to stop, review, and make sure your strategy is still clear. [00:03:00] Because when markets are moving rapidly, many investors focused almost entirely on what they should buy next.

Very few took the time to ask, "Is what I already own still the best fit for where I'm trying to go?" So that's a much better question to now think about asking. The uncertainty many investors are feeling at the moment is real. There's a lot of investors I speak with that are not necessarily unhappy with their property.

They're uncertain, and they might ask, um, or say things like, "I think it's done reasonably well, but I'm not really sure." "I know there's equity there, but I don't know what to do with it." "The rent has increased, but the property is still costing me a lot to hold, especially with inc-increasing interest rates."

"I bought it for growth, but I don't know whether the suburb still has that same outlook." And, "I'm getting closer to retirement, [00:04:00] and I'm wondering whether the property still suits me." That's a big one I'm hearing at the moment Or I've owned it for 10 years, so I suppose I should just keep holding it. And that last statement is particularly common at the moment.

I've held it for a long time, I'll just keep doing that. And the length of the, length of time that you've owned a property does not by itself determine whether that's still the right property for you, nor does the fact that it's increased in value, because most pers- most Perth properties have increased in value over the long term.

The more useful question is, has this property delivered what you needed it to deliver, and is it still helping you move towards your goals? And that's a very different conversation. So what job was the property meant to perform? Every property in a portfolio, I think should have a role and it should have a job.

Perhaps you bought it for long-term [00:05:00] capital growth. Perhaps you wanted stronger rental yield and cash flow. Maybe you were leaning more towards that, replacing your income sooner. Maybe you saw renovation, subdivision, or development potential as a value add over and above these two things that I just mentioned.

And maybe it was intended to become your future home. Many people have that strategy of buy a property you might wanna live in, um, might not necessarily be able to afford to now or might be your future retirement home. So perhaps the idea was to build equity and use the equity to purchase another property.

You've got the equity, but you haven't revisited that, um, overall plan. Or maybe it was purchased to provide more income later in life and, you know, it helps to make sure that you're still on track for that. But over time, investors often forget about the original purpose, and the property simply becomes [00:06:00] something that they own.

The loan gets paid, the rent comes in, the property manager deals with the tenant, the investor receives the occasional valuation update, um, which I give to people every week, um, and years can pass without anyone asking whether the property's still performing its intended role. So that's how portfolios begin to drift.

Not necessarily because the investor made a terrible decision, but because there's no longer a deliberate decision being made. So the first question is not, has this property gone up? The first question is, what job did I buy this property to perform, and is it still doing that job? So a property can be good without being the right one for you.

This is an important distinction. So a property can be perfectly reasonable [00:07:00] investment and still no longer be the right asset for your strategy. For example, imagine an investor bought a negatively geared property ten years ago. At the time, they had a high income, strong borrowing capacity, and twenty years before retirement.

The property's job was to produce long-term capital growth, and that strategy may have made complete sense. Now imagine that same investor's five years away from retirement. Their priorities have changed. They want less debt. They need stronger cash flow. They need fewer moving parts and greater peace of mind.

The property may not, uh, have become a bad property, but it may no longer fit the investor's current direction. On the other hand, someone may own a property with an average rental yield but excellent land content, strong scarcity, and future development potential. It may be costing them more to hold today, but it could still be doing exactly what it was intended to do.

This is why property [00:08:00] decisions cannot be made using one number alone. It's not simply about yield. It's not simply about growth. It's not simply about equity. The property has to be considered in the context of the investor's overall strategy, and that's so much what I'm about. So there's three signs that I like to look at and help, help, uh, clients look at where it may be time to review a property.

So there's many reasons to review a property, but I wanna highlight the three most common warning signs. So sign one is you cannot clearly explain its role. So if someone asked you, uh, why you still own the property, could you answer that clearly? And not because I've had it for years, or not because property always goes up, and not because, uh, selling feels difficult.

Could you clearly explain what the asset is contributing to your strategy? And if the answer's unclear, that does not mean you need to [00:09:00] sell, but it does mean the property deserves a proper review. Sign two is that the property has equity but no plan. So many investors have acc- accumulated substantial equity without deciding what the equity's for.

The property may have doubled in value, the loan may have reduced, there may be hundreds of thousands of dollars sitting within the asset, but the investor has no clear plan to use it, protect it, or convert it into the next stage of their strategy. Equity on its own is not an outcome, it's a resource, and the important question is what that resource can help you achieve.

That could mean purchasing another property, it could mean improving the existing property, it could mean reducing non-deductible debt on your family home, it could mean strengthening, uh, cash buffers, or it may simply mean continuing to hold the asset with greater confidence that you've checked in on, [00:10:00] uh, if there's a better plan for that equity and is it being used, uh, intentionally.

So the correct answer will be different for each person, but there should be an answer. Now, sign three: the property's creating stress without a clear strategic benefit. Some properties create more complexity than others. They may require ongoing maintenance, they may have difficult strata arrangements, they may be producing weak cash flow, they may be limiting your borrowing capacity, or they simply could be consuming far more mental energy than the investor expected.

That stress may be worthwhile if the property has strong future potential and remains important to your broader strategy. But if the asset's creating significant financial or emotional pressure without a clear long-term benefit, it deserves closer attention. So holding a property should be a deliberate decision, not an [00:11:00] obligation created by history.

Now, what does a strategic review is really trying to answer? What is a strategic review really trying to answer? It's not simply to tell you what the property's worth. A sales appraisal can help with that, and that's what I do for people all the time so that they know how the-- where, where they're placed in the current market, and they can use that information towards a decision.

It sh-- but it shouldn't simply tell you what the property may rent for either, because a rental appraisal can help with that. A strategic review should answer what's the best role for this property from here? And our current strategic property review considers the original role of the property, um, how, um, it has performed over the time you've owned it and the entire history of the, the property.

We look at its future outlook and whether it remains aligned [00:12:00] with your broader goals. And then, uh, it leads to a clearer discussion around whether the most appropriate path is to hold, improve, sell, or potentially revalue and use the equity to buy again. Now, I don't wanna turn this into an episode on the complete technical walkthrough of that process because we've, uh, refined it, and it takes a, a lot of time, and it's best being done one-on-one, not, not one-to-many over a podcast.

So the deeper value comes from how the different factors interact. But I do want to explain the thinking behind it because a review is not designed to justify yesterday's decision. It is designed to help you make today's best decision for your future. So the first possible outcome is to keep holding the property, and that's the most common one.

A strategic review [00:13:00] does not need to end in change. In fact, one of the best outcomes can be greater confidence in continuing to hold the property. So the review may confirm that the property is still performing its intended role, the suburb's fundamentals remains sound, the rental position's appropriate, the level of equity supporting the broader strategy, and the asset still suits your goals and risk profile.

And in that case, the decision may simply be hold the property, manage it well, and stay the course. But that is... Th-there's an important difference. You're no longer holding it because you've avoided making a decision. You're holding it then because you've reviewed the evidence and intentionally chosen to continue.

And that certainty can be extremely valuable, particularly when the market becomes less predictable as it is now. You really wanna confirm your decision to hold The second possible outcome is to [00:14:00] improve the property. Sometimes the property's still the right asset, but it's not reaching its full potential.

There may be a way to improve the income, the value, or the usefulness of the property, and that might involve a renovation, it might involve improving presentation or reconfiguring a floor plan. There may be an opportunity to add an ancillary dwelling, subdivide, develop, or create another use, or the opportunity much, may be much simpler.

Perhaps the rent has not kept pace with the market, and you need to evaluate whether you keep that existing tenant if they can't increase to the full market rate. We're doing that a lot for clients at the moment, especially with the no-grounds termination coming in. We don't wanna be, uh, I guess, forced to keep a tenant, uh, in that situation where, um, we might not have other grounds to, to end the lease.

So worth considering now especially. Maybe maintenance is affecting the tenant appeal. [00:15:00] Perhaps the property needs to be repositioned for a better tenant or a, or a better buyer in the market. And the key is that improvement should be strategic. It should not be, "Let's spend money because renovation feels productive, and I wanna, uh, you know, connect with, uh, what's happening on The Block on TV show at night."

Uh, the question is, will the improvement materially strengthen the property's role within your portfolio? A renovation that looks good but produces little additional value or income may not be the best use of your capital, and I can think of other better ways to use it. An improvement should have a clear purpose So the third possible outcome is to revalue and buy again.

So another possibility here is that the property's done exactly what it was meant to do. It's produced growth, it's created equity for you, its fundamentals [00:16:00] remain strong, and you may be in a position to retain it while using some of that equity to progress further. And this is where many investors become stuck because they know the property's increased in value, but they've never connected that growth to a broader strategy.

And of course, accessing equity is not automatically the right decision. Just because a bank may allow you to borrow more does not mean you should. Cash flow, buffers, borrowing capacity, loan structure, and risk tolerance all matter here. So the investor should also obtain the appropriate finance, tax, and financial advice.

But equity should not simply be admired. It should be considered and looked at, uh, what could it help you achieve? Would it allow you to purchase another asset? Would it help you improve the existing property? Could it help you restructure debt? Could it support a broader portfolio plan? [00:17:00] Do you even have such a plan for the next five, ten, and twenty years?

So the review is not about maximizing debt. It's about deciding whether the equity has a useful and intentional role And putting that to work, if applicable. So the fourth possible outcome is to sell. So for many investors, selling is almost treated as a forbidden word. There's a belief that selling an investment property means the original decision was a failure.

And I don't agree with that because a property may have been an excellent investment, it may have delivered strong growth, and it may have helped you build substantial wealth. And it may still reach a point where selling becomes the most strategic decision. And perhaps the outlook has changed. Perhaps the property no longer fits your portfolio.

Maybe the holding costs have become too high. The investor may want to simplify their life, as is the case with many of my clients at the moment. [00:18:00] Or the capital may be able to produce a stronger result elsewhere, which is a, a big camp that other people are in. So selling is not automatically the right decision either.

There's transaction costs you need to consider. There's capital gains tax that you may need to pay. There's selling fees, financing, um, implications, and the cost of acquiring another property if you're gonna, um, redeploy that into another asset. Any sale should be considered carefully with the relevant professional advice.

But selling should not be dismissed purely because someone once said property should be held forever. Sometimes selling's not abandoning the strategy. Sometimes it's actually progressing it So avoid making decisions out of fear because there's a lot of fear around at the moment, a lot of uncertainty.

Uh, with the market beginning to cool from its previous pace, some investors may become nervous, and they [00:19:00] may hear that listings are increasing or that properties are taking longer to sell, and they immediately think that they need to act. That is not the message of this episode. A changing market does not mean you should sell a good property.

It does not mean you should attempt to time the top of the market. It does not mean short-term market noise should override a sound long-term plan. And the purpose of a review is not to encourage reactive decision-making. It's to prevent reactive decision-making. So when you understand why you own a property, what it's contributing, um, to and what its future role is, you're much less likely to be shaken by headlines or even care about them.

And you can hold with confidence, you can improve the property with purpose, if relevant, you can use the equity responsibly, um, when it's the right time, [00:20:00] or you can sell for a clearly defined strategic reason and do it intentionally to get the best price possible. So the objective here is intentionality, and that's what I'm all about.

So a simple exercise. I wanna leave you with two questions. So for each investment property, go through, spend five, ten minutes reflecting, "What job did I originally buy this property to perform?" And, "Is it still doing that job today?" Don't rush the answer. Digest it. Um, don't judge the property solely by whether it's increased in value.

Think about what is it contributing to your income, to your equity, to your borrowing capacity. What's the risk involved, um, lifestyle and long-term direction? What's it contributing to all these areas? Then I'd consider the question we started with: If I didn't [00:21:00] already own this property, would I buy it again today?

You may answer yes. That may reinforce the best decision is to hold, and, and hopefully for the majority of people, the answer is yes. You may answer yes, but only if certain improvements are made. Great. You can look into those. You may realize the property has built enough equity to fund your next move, and often the best time to make these dec- moves is when everyone else is uncertain.

It's like what Warren Buffett says, uh, "Be greedy when o- when others are fearful." Or you may decide that it no longer deserves the same place in your future that it held in your past. The important thing is that you're asking the question So if this episode has raised questions about one of your properties, we're currently offering a complimentary strategic property review, normally valued at [00:22:00] $165.

And we've just, we've started preparing these for our landlords four months out from their lease end date, and we've gotten really great feedback on the format. And the purpose of the review is to help you understand, uh, the role the property's currently performing, how has it performed during, uh, the entire, um, ownership, the time that you've owned it, as well as the entire history of the property, what's its future position look like, and whether it remains aligned with your broader strategy.

So the objective's not to push you towards holding, improving or selling, it's to help you get clearer and more intentional about making decisions. So to request your complimentary review, visit the Investors Edge homepage, investorsedge.com.au. Click on Request Strategic Property Review, or you can simply send me a quick email with the property you would like us to look at.

That's to jarrad@investorsedge.com.au. My email's in the show notes. [00:23:00] And because long-term wealth is not built by making one property decision and then never questioning it again, it's actually built by reviewing where you are, understanding what each asset is contributing, and making intentional decisions about what happens next.

So every property should continue earning its place in your portfolio, and every review that we do should end with a better decision. So I'm looking forward to helping you with your decisions. If we can, reach out and, uh, we'll get that prepared for you. Uh, we've only got limited spots per week to do it, um, and would love to help with your, um, clarity and making, uh, your next best decision.

So thanks for tuning in. If you've enjoyed this episode, uh, throw some comments, um, either a review on, um, on iTunes or, uh, comments on YouTube are always appreciated, and I get, get involved