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Property Investing Q&A - How long should you hold a property investment for? (Transcript)

At a recent event, Dale Alcock, Managing Director, Alcock Brown-Neaves (ABN) Group together with Peter Gianoli, General Manager, Investor Assist, addressed a crowd of keen property investors who threw a lot of hard hitting questions their way. Here is the first of a series of five questions asked. This question was about how long to hold on to an investment property.

Transcript: Dale Alcock and Peter Gianoli discuss how long investors should hold on to an investment property

Peter: Hello this is Peter Gianoli, the General Manager of Investor Assist. Recently, Dale Alcock and myself were asked how long should you hold a property investment for? Here is our answer.

We like to talk seven to ten years, to be brutally honest. You can do very... there is a gentleman in this room who probably bought the fourth property we sold as Investor Assist; and before he got the keys to the property, he spent $525-$530. And by the time he got the keys, his property was worth probably $670-$680. Yeah, lucky. Really. He had one very important skill, that gentleman. He said yes.

But that’s lucky. You don't bank on that. But if you’ve got a seven to ten year time horizon in your mind, and you have a look at all the ups and all the downs, all the crises, but if you're feeding average West Australians, mums and dads, with property… And I'm talking four bedroom, two bath, or three bedroom, two bath, nothing exotic. None of those properties have dramatically plummeted. None of those properties have, you know, had long times in undervaluation state.

So that’s why we emphasize the mums and dads stuff. And if you've got that seven to ten years... Look, I'm never going to say you'll never go wrong. But if you are doing, I mean, highly sought-after communities, with all the right fundamentals, and in-particular get in at below median house price, seven to ten years would be very nice, probably to double what you’ve invested.

Dale: And look at, I'd say to you one thing, if you look at what’s been happening in Sydney, just as an example, just giving insight there, that a lot of the loans that have been chased down by investors there are interest-only. So what they’ve been looking to do in a hyper market is just to flick the property on. And, that’s an out of control market.

In other words, they’re actually looking to purchase a property, pay interest only, and flick it out the door and make a return. That’s short-term, that’s real short-term thinking and that’s heading for a very big accident. And, you know, there’s one thing that I've always stood by, too, is that whilst every one’s zigging, you’re better zagging. So if everyone’s doing it, taxi drivers are talking about it, stop doing it real quick.

3 min 3 seconds

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