Book Review > Smarter Property Investment

Usually I delight in providing an extended review for our members. In this case, I feel this book is SO basic as to be of extremely limited value to most of us. Unfortunately Christmas is also over, so it couldn’t even be bought as a stocking filler for a first-time property investor close to our hearts. I’m not even sure why we’ve received the book to review in late 2006 when its publication date is listed as August 2004?
Just for fun, I’ll pass on a few of the insights that author Peter Cerexhe reminds us of – none of us are ever too experienced to be reminded of a few of the basics of property investing:

In the Introduction: “Do you crave security? Freedom to bang a nail in the wall, to hang a picture? The feeling of putting down roots? Well, forget it! You’re looking for an INVESTMENT, not a home!”

And who hasn’t experienced this one? “Financial planners’ interest levels fall to ZERO when you say you want to buy property instead of high commission managed funds.”

And why do we continue to invest in property when investing in the All Ordinaries has been proven to produce greater returns over time? “Investing in shares outperforms housing – but the ride is bumpier with shares than with property.”

There were a few updated statistics:

“70 per cent of Australians live in a home that they own.”

“In the boom of 2002, housing loan approvals to investors rose 40 per cent; approvals to owner-occupiers rose only 1 percent.”

“20 per cent of young property investors see themselves moving into the property themselves at some stage.”

“Average household debt is 30 per cent higher than average household income: National ‘averages’ make our society look good but the statistics conceal disturbing measures of homelessness, unemployment, stagnant home prices and poverty.”

“Property appeals to younger investors for tax savings, to older investors for income in retirement.”

With a title like ‘Smarter Property Investment’ I was somehow expecting a more sophisticated treatment of property issues, rather than a basic ‘how to’ guide. Having said that, the book is very comprehensive and would be a handy resource for an investor unfamiliar with how houses work as investments. The explanation of depreciation was particularly excellent in the ‘What the taxman giveth’ chapter. There are lots of property buzzwords and concepts explained, like ‘wraps’ and an excellent reference section at the back of the book.

As a sometime manager of investment properties, it has long annoyed me that I can’t post a property to let or sell or buy on realestate.com. I also assumed as an individual I could not access the tenant default database TICA, which thanks to this book, I now realize I may be able to do (I haven’t done it yet, so I don’t know if it actually works..!). Apparently by registering and buying a block of 10 ‘enquiries’, which apparently have no expiry date, I can make a TICA search on a prospective rental applicant for less than $15 per enquiry, which I think is good value. (Now if only I could access realestate.com so cheaply!)

There is a reminder to property investors to be mindful of the advantages of developing a ‘team’ – from the agent who sells you the property, to the property manager, the loan broker, the insurer, the gardener, the plumber, the electrician, and the handyman – all of them should know who YOU are, because you are the person paying the bills, and you never know when a personal relationship might come in handy to enhance your investment.

And a final reminder that I personally liked: “There is no room in property for the impatient investor but there is a place for the big thinker!”
Here’s to some big thoughts for us all in 2008!

Naomi Cescotto is a member of the AIA.