All posts by sash@theateampg.com.au

Property Investment Dominates 2017 Rich List

If you are still looking for proof that property investment is the key to building wealth, check out the Australian Financial Review’s 2017 Rich List.

Not surprisingly, the Rich List is currently dominated by property moguls. Five of the ten people who have been included are stemming from the property sector.

If you’re looking to see why property is the best vehicle to generate wealth and want to be inspired by what’s possible, then you’ll love this infographic.

It reveals how dominant property is, and who are the big 5 billionaire property investors, as well as other industries from the 2017 Rich List:

Numbers don’t lie.

A huge chunk of Australians who reached the upper echelons of financial success are in the property industry. Though some of the them are also involved in other industries, property investments are what helped them build their fortune and reach the top.

Property is the highest-earning sector in this year’s list. 58 out of the 200 people on the list are from the property industry. Property investors, managers and developers are included on the rankings.

Some property investors on the list have been there for decades, which proves that property is a stable and consistent investment.

As you probably know by now, investments that promise quick and easy money rarely bring in profits. If you want long-term wealth and consistent growth of your money, property investment is the way to go.

While some people on the list may have inherited money, most of them started out with a small property investment that they were able to grow through brilliant strategies. Some of them started from scratch after losing everything. Property investment takes time and patience, but those who are willing to take the leap will be greatly rewarded.

There is nothing more inspiring that reading the stories of people who made it happen. Below we list down the top 5 property magnates on the list:

Top 5 Property Moguls On The Rich List

No. 2: Harry Triguboff, $11.45 billion

Managing director, Meriton

Also known as “High-Rise Harry,” Triguboff has overseen construction of over 75,000 residential properties since the early 1960’s. He was only 30 years old when he founded Meriton, now considered as Australia’s largest apartment developer. His company is responsible for some of the tallest towers in Sydney, Brisbane and the Gold Coast. Prior to joining the property industry, he owned a taxi fleet and a milk run. Triguboff has been consistently on the Rich List since 1983.

No 4: Frank Lowy,  $8.26 billion

Principal, Westfield

Lowy is the chairman of the Westfield Corporation, which owns shopping centres in different parts of the world. Lowy built his first mall in western Sydney in 1959 and from there, he continued expanding his wealth. In June 2017, he was knighted in the U.K. for his contributions to the U.K. economy. He  also ranked fourth on the 2016 Rich List.

John Gandel,  $6.10 billion

Principal, Gandel Group

Gandel took control of his parents’ thriving clothing business in the 1950’s. Along with his brother-in-law, he expanded the business and eventually sold it in 1983. He used the money to purchase Chadstone Shopping Center for $37 million. Since then, he has focused on real estate. Chadstone Shopping Centre in Melbourne is currently the largest in the southern hemisphere.

Hui Wing Mau,  $6.00 billion

Chairman, Shimao Property

Chinese-Australian billionaire and real estate developer Hui Wing Mau is the co-founder and chairman of Shimao Property Holdings. Shimao is a developer of luxury homes, hotels, and offices in mainland China. He currently controls two publicly- listed companies: Shimao Property Holdings and Shanghai Shimao.

Stan Perron, $3.9 billion

Co-founder and chairman, the Perron Group

Perron’s diverse property portfolio consists of shopping centres, office buildings and commercial properties across Australia. Even up to now, the self-made businessman still very active in managing his businesses. He also has a thriving automotive business with  a rare arrangement with Toyota of Japan. Perron is the oldest billionaire included on the list.

The Top 5 Industries In The Rich List

With the strong demand for Australian property, it remains to be the strongest asset class to create and secure for long-term wealth. Residential and commercial property owners get opportunities to earn from capital appreciation, rental income and more.

While property remains the top pick, other industries were also included on the Rich List. Property is followed by investment (21), resources (18), retail (18) and financial services (16). There were also professionals from agriculture, manufacturing, technology, media, healthcare, entertainment, travel, transport, telecommunications and education.

Development site walk through – Triplex, Geelong

Sasha gives us a brief tour of one of our client’s development sites in Geelong, Victoria. He also reveals some great info for those who are interested in getting into property development…

Morning guys, Sasha here from the A Team, hope you’re well, Saturday morning, excuse my gangster casual attire. It’s a bit cold here and it’s also quite windy here in Melbourne, so apologies if you can’t hear me very well, I’ll try and speak close to the microphone.

So I’m actually standing here at the front of a development, in Geelong, so, it’s a triplex development that is nearly complete, and I’ll give you a walkthrough of it now. So I’ll just switch to the front camera.

Right, awesome, okay. So this is the existing glowing that we have done renovations for as you can see. A nice garden here. Walking down the driveway, still a little bit of work to do here on the existing driveway. But, it’s a lower socio area, so the finishes don’t need to be as high end, obviously that would be more blue chip. So what the development is, is retaining the existing dwelling and then subdividing and building two double story townhouses at the rear.

Alright, so, as you can see the driveway got layered I think last week. They’re basic units but still decent enough, so, this is the carport, so we’re not doing garages, because it’s at the bottom end or low end of the seller here in Geelong, so carports for the left hand side, the existing, this is for this one here, and then we’ve got a carport here at the back.

So, still as you can see, maintained the landscaping and tidied it all up, it should be complete fairly soon. So they’re double story, I’ll show you through maybe a little bit later, to sort of see a little bit inside there. Not really.

So yeah, so walking through, out the back, little bit of a backyard or courtyard here, which will be closed off and turfed with some landscaping, similar for the other property, so you can kind of see. Over here, over the fence I should say, there’s a little bit of an inside shot.

Walking back down the driveway, you can see basically there’s the front house there, fully fenced off. So this development I purchased a while back now and just decided to, to finish it to be honest. And the outs getting finished, so it was a very low end purchase. I purchased the property originally for $180 K. And, look, it’s probably, the un-completion value now, with the two townhouses and keeping the existing dwelling is going to be somewhere between $750 to $800.

My total debt across this will be 560, so, you can see a little bit inside here. So total debt will be around 560, the profitability, I only actually put in about 75 or $80 K into this dwelling including the purchase and the DA cost. So, not bad, this is when I could get much better financing methods from the bank before they made all these changes. So I’m going to switch back to this camera.

So, not bad, a total profitability, I’d be saying, would be a minimum of $250 K. And that’s not a bad return based on an under $200 K purchase. The mart I was in a little bit ago from the market which, it could be as high as $300 K, but I’ll get the properties revalued obviously once we’re done. So, as I said, this is a triplex development, taking the existing building, two townhouses at the rear, and then, they all have individual titles. I’ll be just developing and holding these, because they’ll be positive cash flow probably by 200 bucks a week at least.

So, not a bad little entry point. We don’t generally do these ones for clients because they are low end and there’s Melbourne cancels stuff, that’s why we do them elsewhere. It takes too long. We can get the same amount of effort put in, we can create a higher return in other markets, in other areas.

But yeah, a good little walkthrough. Basic sort of development, and very decent profit in the end. So, guys, yeah, that’s a little Saturday before 8:00 AM, or we’re at an 8 AM walkthrough, meeting the builder on site to talk through what needs to be done next, and that gives you an idea of what these development projects are all about. So, any questions, reach out. If you want to do something similar, then, we’re the people to help you. Have an awesome weekend, and I’ll chat to you next week, we’re off video.