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Property Divestment

(Cam Irvine)

What does that mean?

Property divestment just means finding things to do with someone's wealth, money, time and life other than having it all wrapped up in real estate and property.

Why would someone want to divest from property?

There could be thousands of reasons why, but it really depends on each individual and what they want out of life. We have some videos that cover this very topic, but the short answer is: it depends.

Do you think investing in property is a bad idea?

Maybe, but maybe not. It all comes down to what someone wants to accomplish by investing in property. If someone is comfortable with high risk, gearing, dealing with unstable cashflows, tenants, already owns property outright and is making comfortable rental income and likes an option that is more likely to lead to generational wealth, then it can be great. If someone is buying a residential investment property with current house prices in NZ today, then most likely doesn't make sense. Property is not always a good or bad idea, so we can't just say 'yes' or 'no' without understanding an investor's goals and values first.

But I thought property always went up?

Nope. Sorry to lay down some hard truths but it doesn't always go up. There are many examples of property being a terrible investment. In 1974, residential real estate in NZ lost 40% of it's value after accounting for inflation, and it took until the middle of 1995 to get back to where it was. That's TWENTY ONE YEARS!!! It's important that people understand that because if someone invests in real estate thinking there's no risk and then realises they were wrong, it might be too late. Education of property is important.

Property is lower risk than shares and has had better returns, so why are you writing this?

That's only partly true. Property has big risks, the problem with risk is, usually people don't know how much risk is involved until something bad happens. The returns of property in NZ have actually been lower than NZ's share markets, it's only by increasing risk through gearing that property has offered good returns, until, well, it stops (whenever that time comes).

Why Property Divestment?

It's really quite simple. Many New Zealanders have far too much reliance on real estate. This means people have most of their wealth tied up in ways that they believe is 'safe' when the evidence shows that that is not necessarily true. So many people know the saying 'don't put all your eggs in one basket', but when it comes to property investments, we seem to forget that property is bought in big 'basket's just because of the high prices. My background is understanding investments on a very deep, fundamental and researched level. This means I can help look through the clutter, noise, and hearsay to better understand how to invest wisely. Not with hunches, not with a tip from a brother-in-law, but through data, science, and research. I am in a unique position to help people make smarter money choices and I feel like I owe it to the world to put that to good use. I love doing it, I'm reasonably good at it, and I want my clients to benefit from it. I genuinely and truly feel it is my calling.

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