By Al Lewison
Cam and I are often telling people to buy property now because in ten years’ time it’s going to double in value and you’re going to have all this fantastic equity and be able to live the dream. I’ve been buying property for the best part of 20 years now, so let’s look at some proof.
When Cam and I started buying property together, we bought a couple of properties two doors apart, down in the golden mile, in Bayswater. We loved this theory of doubling every 10 years and it actually happened faster than that.
If you are looking at your portfolio daily, it is actually like watching grass grow! Everyone talks about this magical growth you’re going to get and if you look back ten years you can actually see it but when you look at it day-on-day, month-on-month or year-on-year, you’re only seeing these tiny increments and it’s very boring.
If I go right back to one of the first properties I bought, for $120,000, 18 years ago: I had a recent valuation and that property is now worth $450,000. It is a two bedroom, brick veneer, single garage townhouse. I like to buy new properties and it was brand new when I bought it. I think the rent at that time was $110 a week and the current rent is $380 a week. So, if I look at my year-on-year $5 or $10 rental increases or I look back at the little bit of capital growth year-on-year, it’s not very exciting, but if I go right back 18 years – wow, that’s a pretty impressive story! From the day I bought that property to today, it has gone up approximately $341 every week.
We promote that properties are going to double every seven to 10 years and waiting seems painful for most people but down the track you can look back and realise, the reason I’ve been able to continue to duplicate is because I’ve taken advantage of those small market growth cycles and bought again.