Leading Wealth Educator Stuart Zadel shares his views on using cash and why we are at risk if we go 100% digital.
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Welcome To Your June 2022 Newsletter
Big opportunities are fickle and very rarely give you a second chance.
But that’s exactly what’s happened, so be sure to check out our urgent and time-sensitive Gift of the Month!
Now, winter is finally here as the temperatures fell significantly this week and the property market is starting to cool too.
After 22 consecutive months of growth, both Sydney and Melbourne (and now Hobart) have been the first capital city housing markets to record negative monthly growth rates.
This in itself is of little concern to any of our clients using ‘The New Way To Make Money In Property Fast!’ strategies, however, the broader economy is not so insignificant.
There’s a high degree of uncertainty and lack of confidence, higher interest rates, rising stock levels, ongoing supply chain issues and not to mention a very disappointing election result for anyone interested in integrity and freedom.
It’s true, many builders are going broke right now, both big and small. My accountant has a client who has lost $2.5M this financial year through no fault of his own – fixed price contracts, inflation and time penalties have squeezed him into a large loss. Ouch!
Project financing is falling over on new-builds, as time limits expire on previously secured loan facilities, because builder after builder is going broke or bowing out of the tender process.
This may not affect you too much is you are just doing one cosmetic reno at a time, but, it still doesn’t help overall market confidence.
It certainly is a time to be very wary of your downside risk, play strong defence, be sure not to overpay for a deal and consider smaller, niche projects the way to go.
In light of all this, there is still certainly plenty of opportunity in the right locations with the right strategy and the right skill levels.
If you are experienced in any of our ‘active’ strategies, you should be fine to continue, but don’t get sloppy.
Whilst property in general is usually very forgiving over time if you make mistakes, at this stage of the cycle, I think you’ll be waiting longer to recover from any, so be more discerning and conservative with your figures before going unconditional.
I personally believe a debt-free, positive-cashflow, moderately-sized Airbnb / Short Term Rental business focused on certain coastal hotspots to be a very rewarding and valuable asset worth building right now.
They can be very low cost to start up, positive cashflow almost from the first month, and above all low risk should things not work out for whatever reason.
Defence is the name of the game right now.
With all this uncertainty, maybe its time to do what bears do at this time of year, stock up the cupboards, sure up any weaknesses in your business / finances, and hibernate for the winter.