All your frequently asked question about investing in property are answered by Cohen Handler.
After years of experience as a real estate agent, Simon Cohen co-founded Australia’s largest buyers’ agency, Cohen Handler.
Simon’s first ever property was a brand new apartment in Rushcutters Bay purchased for $920,000 which he sold soon after for $1.1 million. He and his business partner Ben Handler are also the only ones to get a good deal on a sale from The Block, where Simon picked up a three-bedroom Tasman Street semi for $1.37 million.
True to form, mid-interview, Simon had to reject a call on another line relating to his latest ‘deal’.
Here are his top tips for investing in property.
GQ: What have you learnt from your personal experience buying and selling?
Simon: I’ve learnt buying the ugly duckling always creates the best opportunity. So, that means buying a property that structurally is really good, but cosmetically is really bad. If you can make it look great, that seems to turn the property.
The other lesson I’ve learnt is never sell investment property. If I look at the market from one year ago, two years ago, it’s the strongest it’s ever been. Anything I’ve ever sold, I probably should’ve kept because it’d be worth a lot more now.
What type of properties should young people invest in?
Buy properties in areas that are up-and-coming infrastructure wise. A year ago, we were buying properties in Parramatta. A lot of our clients didn’t want to live in Parramatta, they’d never been to Parramatta, but as investments – they’ve stacked up.
We were buying two bedroom apartments for $370,000, and they’re now worth around $550,000 in twelve months.
What should people do when renovating these properties?
Just minimal, minimal work. Paint, carpet, things like that. Cheap, easy, cosmetic work.
What’s the biggest misconception about investing?
That you should invest in the area you live in. You definitely should not. You should invest in the area that has the most capital growth and that’s going to be the safest investment even if the market turns.
What sort of occupations your clients have?
Mostly they’re accountants, lawyers, doctors, bankers… people who have an income to help fund growing an investment portfolio.
Does people’s greed ever stop them from being good investors?
Yeah, absolutely. A lot of people, especially in this market, don’t understand what their money buys them. They’re buying something that would give their ego more of a boost then their financial situation.
By that I mean buying something a posh area to tell their friends rather than buying an apartment in a not-so-posh area which would be a much smarter investment.
How many investment properties do you own now?
Currently three, but that changes every day.
What makes property a smarter investment than shares?
Very easy. I’ve never seen a property go to zero dollars. I see shares go to zero dollars all the time.
Contributor: Natasha Gillezeau