Well, it appears some people don’t think so.
I came across one this morning. He’s a heavy hitter. A big wig. A top man in the banking industry.
He’s written an article in the Sydney Morning Herald that suggests property investing may not be such a good thing.
He sets the tone right from the start. He lets us know where he’s heading – his take on property investing – with the hard hitting title, “A place to live, not for speculation”
You see, the author is letting us know he feels property investment is speculation. And, speculation is a word that scares me. I don’t like to speculate. It’s too risky.
Speculation cojures up some fairly ugly images for me. I picture a man putting his hands over his eyes as he jumps off a cliff with the assurance that someone’s going to catch him before the solid ground does. He’s not sure if this is going to work. But, someone has coached him. Someone has told him it’s ok. Then as he jumps, the doubts start to appear. “Maybe I shouldn’t have listened. What if there’s no one there to catch me? Can I do this over?”
Speculation in property investing would be similar. Just as ugly. Not much chance of someone dying, but definately a sure recipe for a financial “bloodbath.”
For instance, if someone buys a high rise Gold Coast apartment based soley on the asurances of the smooth talking, sport coat wearing salesperson, then I’d say this is definately in the speculation category.
I’ve been to one of these sessions. They’re scary. Scary because they come across so believable and convincing.
But, they’re also scary because – to me – this is speculating. Relying on the assurances of the salesperson for the deal to work. Assurances as follows:
- Don’t worry, in 10 years the apartment will double in price.
- Don’t worry, the negative gearing benefits will offset the monthly shortfall.
- Don’t worry, all your friends will be jealous when you tell them you own a piece of the Gold Coast.
And, if this is how you go about proeprty investing, then I agree … don’t do it.
But, if you treat property investing with the respect you would/should give to any business venture, then I’d highly recommend you go for it.
But, then again, that’s just my opinion.
So, now, over to you. Have a read of the article yourself. It’s by Phil Chronican, chief executive of ANZ Bank’s Australian division.