Are you poised to make (or lose) a fortune in the current property market?

What goes up, as they say, must come down.
And segments of Australiaโs property market are now in the slump phase of their cycle, catching out some naรฏve investors who hoped the value of their properties would rise forever.
This means investors will probably lose money in this property downturn.
Now hear me out. Iโm not one of those doomsayers saying our property markets will collapse.
I firmly believe the outlook for Australiaโs property market remains robust, and when prices rebound, the value of well-located investment grade properties will reach new peaks.
Thatโs because Australiaโs real estate markets are supported by two solid fundamentals:
But between now and the next upturn thereโs going to be a painful learning curve for some property investors โ those who got carried away during the boom, often because of a fear of missing out, and took on maximum debt not understanding how the cycle works.
Of course, you could be the exception.
In every property downturn, some strategic investors do well.
I kept investing during the property slump of the early-80s because I didnโt know better.
At the time there was limited information available and property statistics were only delivered annually โ long after the fact.
However, in the downturn of the early-90s, during the GFC in 2008-10 and in the slump of 2011-12, my portfolio performed well, because I learnt to follow a few simple rules that help me come out on top no matter what the market is doing. So hereโs my advice to you.
Learn everything you can about how money, finance and property work and start investing early. While a trusted mentor and team will help immensely, you still need a solid understanding of how things work to make sound decisions, otherwise, youโll be easy prey for the many spruikers.
Follow a tried and tested system and donโt speculate.
The problem is many investors find my strategy is too simple and boring. Theyโre looking for something more complicated.
Your property investing should be boring so the rest of your life can be exciting.
I think less than 5% of the properties on the market at present are what I call โinvestment gradeโ and will deliver stable wealth producing rates of retuns.
Sure, there is plenty of investment stock out there, but donโt confuse the two.
Investment stocks are built specifically for the investor market and sold by property marketers to naรฏve investors. They lack scarcity and appeal to homeowners and are sold at a premium with no opportunity to add value.
On the other hand, investment-grade properties are in the right location, appeal to a wide range of affluent owner occupiers, have street appeal and a favourable aspect.
Real estate is a long-term investment, not a way to make fast money.
Growth isnโt linear so there will be years when values are flat before they rise again.
Ensure you factor in sufficient financial buffers so you wonโt be forced to sell when the market turns against you.
Bargains rarely have potential. If no one else wants to buy it today, they probably wonโt in five yearsโ time either.
Price is what you pay, value is what you get, so buy the best property you can afford. You want to invest in the type of property youโd still be happy to own in 10 to 15 yearsโ time.
Itโs been said youโre the average of the five people you hang out with the most, so surround yourself with high-performing, successful people to soak up their behaviours, habits and mindsets.
You also gain access to their experience, knowledge and resources, which will help you make better investment decisions and financial choices.
Sure a downturn can be a scary time, but there are things you can do to ensure that no matter what happens, youโll pull through better than most.
NOW READ: โShould I buy now or wait?โ: A property Q&A for first-home buyers and investors