The Most Valuable Real Estate Is Closer Than You Think

Hey there, I'm Rachel Corbett and welcome to another episode of Small Change, the podcast that's all about the small changes you can make that'll make a big difference to your finances. Now, what's the most valuable thing that you can invest in? A Lamborghini? A mansion by the beach? An avocado farm? Jane Slack-Smith has an answer to that question that might surprise you.

I've been a property investor for over 20 years. I've spent the last 15 years teaching others where and how to buy property, and over that time I've been asked thousands and thousands of times, what is the most valuable real estate to invest in? Is it new properties to maximise tax deductions, buying maybe a house and land package or off-the-plan unit? My answer is no. Is it buying a house in regional Australia, capitalising on the rise of the regions phenomenon that the pandemic and work-from-home revolution brought about? My answer is no. Is it buying an older style unit in a small block without a lot of strata fees? Again, no. Is it jumping on the latest get-rich-quick scheme, the NDIS, the NRAS, the flipping houses, subdividing, buying a block, knocking over the house and building townhouses? Again, no. Well, is it the strategy that I'm known for, the Trident Strategy, which involves buying established properties in good areas with future capital growth opportunity and renovating to add equity and push up the rent? Now, as much as I love that strategy, it is not the most valuable real estate you can invest in. So I hear you say, "What is left?" So after 20 years of investing and having coached, mentored, and taught thousands of students, do you want to know the most valuable piece of real estate that you can invest in? So do you want to be let in on the secret that the most successful property investors know? Where their greatest investment in real estate is? According to CoreLogic's Pain and Gain report, which they release quarterly, the type of real estate that makes the most money for Australians is houses in capital cities that are held for more than 10 years. In itself, that sounds fair enough, but it's still not where the most successful investors know is their most valuable asset. Well, here's a hint: before I started investing, I decided I wanted to know everything about property investing. The good, the bad, the "I lost it all" stories, the "I turned myself around" stories. And over the course of a year, I read almost a book a week on property. I attended dozens of intro seminars. I read articles, magazines, newsletters, everything that I could do to learn about where and what to do with property. Have you worked out my hint yet? Where the most valuable real estate is? The most valuable real estate you can invest in is the space between your ears. Without the financial literacy and the information I've absorbed, I could have been one of those "I got ripped off, I had it all and lost it all" stories. Rather, I read those stories and I learnt from them. And at that time, I only had $45,000 and I knew I had one attempt at getting that right. Now I used that $45,000 as a 5% deposit on an older house in an area that I knew people wanted to live in, and more importantly, where renters wanted to live. And I bought a renovator's delight. I then went and borrowed another $50,000 to renovate. Just 9 months later, that house I bought for $425,000 was worth $900,000, and now today, worth over $2 million. I didn't have a crack. I didn't give it a go. I planned the end result I wanted. I read what could go wrong with buying a property. What happens when you have a great property that you renovate but no one really wants to rent in that area? I learnt what could go wrong with a renovation. How over-capitalising could actually be something that isn't what I want. How blowing the budget, blowing the timeframe would actually lead me to lose money. I applied all the learning to get it right. I hacked the result I wanted. So when people ask me today what is the most valuable real estate they can invest in, I tell them it's the space between your ears.

You heard the lady. Stop thinking about flipping houses and start flipping that brain. And I will see you on Monday for another episode.