Janet Schlarbaum Investment Research By Liz Koh

As most of us have owned a property at some stage in our lives, it is a form of investment we are familiar with. If we own a property we can choose to live in it ourselves or let it, we can drive past it, touch it, admire it, show it off to our friends and use it as security for a loan. Of course, there’s also the popular belief that “land must be a good investment because they’re not making any more of it”. It is not surprising then, that when investors set about creating wealth or establishing a retirement fund, property investment is often at the top of the list.

It is astounding how often people plunge into property investment without doing their homework. Many property investors – usually the less successful ones – cannot tell you what rate of return they are getting on their property. Good professional advice is essential before you purchase an investment property so that you can estimate as accurately as possible the likely income, outgoings, tax liability (or tax benefit) and overall return (net income plus capital gain). While higher priced properties can produce better capital gain, they often generate a lower income return, as rent is determined more by the physical characteristics of a property (eg the number of bedrooms) than the value of the property. Advice should be sought on the best ownership structure for an investment property and research should be done on the best location to invest in.

Owning property directly gives an investor control over their investment, but brings with it all the hassles of bad tenants, midnight calls to fix the plumbing, and the risk of having a lot of money tied up in one asset which might take some time to sell if funds are required.

Property investment can, however, be hassle-free. Two alternatives to investing in property directly are listed property trusts and managed property funds. Listed property trusts are investment vehicles which are listed on the stock exchange. These trusts raise funds from investors which are then pooled to purchase a diversified portfolio of investment properties. They generally pay excellent dividends to investors and are a good source of retirement income. Investors can convert to cash quickly if required by selling their holding on the share market. The value of the investment is determined by a combination of the value of the underlying property assets and the dynamics of the share market. Managed property funds, of which there are many available, operate in a similar way except that they are not listed and the value of the investment is determined by the value of the underlying assets rather than being influenced directly by the share market.

When you are acclaimed for excellence during times of crisis you may not feel so good in a non-crisis environment. You may not shine so bright, perform so well, be quite so acclaimed. If crisis is how you satisfy your personal need to be needed, to feel accomplished, to be respected, to be heard, to be noticed, blah blah blah, then you will naturally seek out, create, attract, be drawn into situations that will allow you to meet this need. Your environments and relationships will be filled to the brim with one crisis after another.

Perhaps there’s a better way to get your need met. Perhaps there’s a way to feel needed and still exist in peaceful, cooperative, and synergistic environments. It’s amazing to watch the content and features of a person’s life break apart and rebuild with almost the same irreverent qualities. People change mates but the essence of the relationship is the same. People change jobs and the same complaints emerge as before. People get out of debt, lose weight, move to different cities, and nothing really changes. It’s a scary thing. I’ve seen the inside view and it’s very scary.

This déjà vu type phenomenon has left me baffled and disheartened. Here’s the deal; when we treat the symptoms, the root cause remains unaffected and it emerges again and again. Our outer lives tell the same story over and over like a broken record until we finally get it. The outer reflects the inner. The outer is a symptom; the inner is the root cause. The outer is the image in the mirror; the inner is the real object. You would not stand in the mirror with the intention of washing your face and wash the reflection of your face in the mirror, would you? … I didn’t think so. Well that is exactly what we are doing when we focus on treating our symptoms.