06 Aug Silver Hair, Platinum Tips: Kevin Turner’s Secrets to Becoming Recession Proof
This week, we’ve got Kevin Turner as a special guest, industry veteran and host of Real Estate Talk Podcast. He has been in the industry for over 30 years, and more importantly, he’s seen a lot of deals.
We run through his tips on the art of negotiation when dealing with real estate agents and a few tricks of the property trade including:
- The good times and bad times
- Recession and what would happen in the future if it happened again
- How to recession proof your portfolio and protect yourself from the downside
Kevin, could you please give us a background on yourself?
I’ve been in real estate since 1988, and I’ve seen a lot of tough times. I’ve been a real estate agent as well as an investor and my background is broadcasting. Having been in radio for quite some time, I combined those two careers, I’ve still got a licence but I haven’t sold in quite a few years.
Being so involved in real estate, I had a recent scenario with a client of mine and they were buying their first owner occupied home and they didn’t know how it all worked, what are some tricks that agents use to help you as a buyer, purchase quicker? How can our listeners arm themselves?
I wouldn’t call them tricks that agents use, but there are negotiations strategies. Real estate agents work for the seller and they’re there to get the most they can for them, but first home buyers look at it in an emotional sense. Agents try and make you proceed with early offers, so make sure you go in with a plan, think about how much you want to spend and stick to it. The bottom line is that there’s always another property. Don’t get caught up, as if this is the only property, think of it as a commercial exercise.
That’s the secret.
Don’t get caught up in commentary and emotion, and plot your own path.
If you are going to into the market as a first home buyer, get help from a buyers agent and even consider taking a negotiation course so you learn how to hold the high ground.
When there are dual offers, how can people navigate that situation and work through it?
Well, this means you’re buying at a good time, but you could be caught in it. This goes back to understanding the true value of it and being prepared to pay what you want. There is a requirement where if there’s a competitive offer, the real estate agent can’t show you the offer. But good agents will get you to sign a competing offer form and you can make your best and final offer, then if you miss out on it, walk away and don’t get caught up in the emotion of it.
You make money out of real estate when you buy, not when you sell. Don’t pay extra when you buy, because you can’t expect to make up for it when you sell. It was reported that Australia now has the record of longest time without a recession in the economy.
What are your thoughts on ways people can arm themselves against recession because you can’t go up forever?
I remember when mortgage rates were 18% that was hard. Plan for the best but expect the worst. Rates will go up they cant be the lowest they’ve been forever that scenario will change. The banks build a buffer whenever you borrow, so make an allowance for rates to change up to 5%.
Make the sacrifices early in life and be prepared to go without, a lot of smart young investors that I meet and talk to are happy to go and rent in a place they like to live in but invest where they know will go up (Rentvesting!).
Smart investors also understand that having a plan is set and has a strategy behind it, whether you’re looking for capital growth or turning it over.
You also need a team of experts around you, buyers agent, good accountant, real estate agents, tax accountant. When you’re starting to build a portfolio you need to have the right tax structure, think about your plan and your team and build it as soon as you can.
Where can we find you?
- 4BC regular show on Saturday and Sunday morning.
- Call me anytime for a chat about real estate!
- Negotiation – realise that the agent is working for the vendor and not working on your side, arm yourself with this information
- You make money on the buying, if you pay a bit extra on the buy you won’t make it up on the sell. So go hard and negotiation well because you won’t make that money back up
- Don’t be afraid to walk away
- Recession proof your portfolio, don’t be too over levered if you get that down. The market is a cycle and that’s just a part of life