Andrew Crossley has 11 properties to his name and he’s written three books on property investment, but told Bushy Martin on the Get Invested podcast he was actually late to the property party.
The early years of Andrew’s career were spent in the Cayman Islands, UK, Italy and the Netherlands working in private banking, before he entered the share market.
“I really liked the liquidity side of things,” he said.
“What I didn’t quite understand at the time is the volatility side of things. I probably invested $300,000, probably lost $200,000 of it. And that gave me a sour taste in my mouth.
“I’m still trying to play catch-up. So, shares, in my opinion, for me, was not the best thing. And I think the biggest mistake I made is lacking the knowledge, and not doing the work and the research, before, and not having someone that knew what they were doing acting for me.”
With lessons learned from the experience, Andrew sought a more reliable and predictable form of investment. And this led him to the Australian property market.
“In Australia, the opportunity has been facilitated where you can build a property portfolio and you don’t have to put in as much money as with shares,” he said.
“If put $100,000 in property, and I borrow $400,000, let’s say hypothetically with that property it also makes 10% a year, I’m making 10% on the $500,000.
“And property … has much less volatility than the share market. Where the share market can go up and down very rapidly, the property market … it does have its cycles, and prices do vary, but it’s much slower juggernaut to manage. I think in the Australian context, there’s no better asset to build wealth than property, and the government continues to make it worth our while to do that.”
While Andrew has had great success in property, mistakes have still been made.
“I’ve made mistakes in perhaps buying a property that didn’t suit my risk profile,” he said.
“Or I didn’t have a plan initially, and I started haphazardly investing in property, thinking that if I buy two or three, somehow, some way, in the future, I’ll be better off. And I realized that … And I learned from that mistake.”
Andrew also has three Masters degrees alongside financial planning, mortgage broking, estate agent and property advisory qualifications, to go with wealth of investment experience.
He warned property investors about the risk of borrowing too much in the current Australian economic climate.
“Only buy what you can afford to buy, tomorrow,” Andrew said.
“So, you’ve got to look at, what if interest rates did go up a percent? What if the loan did become principal-and-interest? Can you afford the loan? And so many people have made the mistake of myopically or with their blinkers on buying a property on an interest-only loan, and only thinking about today and not the cost of debt tomorrow.”
Most importantly, Andrew believes savvy investors must work with experts instead of going it alone.
“The best piece of investment advice is, hire someone that’s reputable and knows more than you and does all the work for you, and do your research, and understand the opportunity cost with what you do versus what you don’t do,” he said.
“Imagine if you got a buyer’s agent that’s negotiated on hundreds of properties, versus perhaps the client, who’s bought one or two or three properties in the their life. I would like to say that the person with the more experience in negotiating has the opportunity to save what could be a considerable amount of money on the purchase.
“And often, a lot of value in that property can not only be achieved through capital gain; it can also be achieved through the price you pay.”
Listen to the full interview here.
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