Challenging the advice that hurts investors
This series aims to refute a lot of the rubbish that might ruin an investor's financial future. It re-assesses long-held beliefs with historical evidence.
Hosted by Jeremy & Damien
All Episodes
EBS 36 Why Rates, Land Tax & Insurance Matter Less Than You Think
Some investment advisors suggest avoiding property markets known for higher than average expenses. Higher council rates. Land tax. Higher insurance premiums. The suggestion is that these expenses will have a big impact on your success. They will not. Capital growth is what makes investing all worthwhile. Every expense is small in comparison.
EBS 33 Proportion of Renters: What is the ideal mix of tenants and owners?
Some investment experts claim a suburb with 65% to 70% owner-occupiers is the ideal market for an investor. Too many renters and the suburb suffers. Too few and renters apparently do not like the area. The claim has been repeated for a decade without evidence. We have the evidence. The experts have been wrong.
EBS 32 Information Overload: What to Focus On and What to Ignore
Some industry professionals say investors get too much information. They call it analysis paralysis. Their cure is to ignore the data or summon courage and buy. That is bad advice. The problem is not the quantity of information. It is the quality.
EBS 31 Buy & Never Sell?: Why That’s Bad Advice
Experts tell investors to buy and never sell. Stamp duty, capital gains tax (CGT), and agent fees eat into profits. That advice was rational once. Forecasting capital growth was unreliable. It is no longer the best advice. Data analysis has changed what is possible.
EBS 30 Location vs Timing
You may have heard the old adage: the three most important things in property investing are location, location, location. The idea is that if you find the right location, you are set. You cannot change the location of a property once you have bought it, so you need to get it right at purchase. Historical data tells a different story. The three most important things in property investing are timing, timing, timing. It does not matter so much where you buy. It matters when you buy there.
EBS 29 Be Greedy When Others Are Fearful: Was Buffett Right for Property?
Warren Buffett's famous quote pops up whenever there is fear in the property market. Talk of war, economic mayhem, an interest rate cycle, or a real estate professional spotting a slow-down and reaching for the maxim: "Be greedy when others are fearful, be fearful when others are greedy." Buffett's advice is good for share investors. We tested whether it works for property in Australia, across 35 years of historical data. It does not.
EBS 28 Buy in an Overheated Suburb? Yes!
Some investors and even some professionals call some markets "too hot" or "overheated." They warn against buying in such locations. There is no such thing as a market that is too hot. The phrase describes a buyer's discomfort, not a market's condition. A hot market is what an investor wants.
EBS 27 "Investment Grade" Is a Myth
Fake experts use the term "investment grade" to describe suburbs and properties they say are destined to outperform over the long term. Cafes nearby. Privacy. Views. Affluent owners. Above-average historical growth. Buy these, the story goes, and the market will do the rest. Historical data has something different to say.
EBS 26 Demographic Deception: Why the Majority Doesn't Matter in Property
A lot of experts read demographic statistics as a guide to demand. If 80% of properties in a suburb are houses, they say the demand is for houses. Buy a house. Do not buy a unit. The statistic does not say what they think it says. 80% houses is a fact about supply, not demand. Confusing the two is one of the worst mistakes an investor can make.