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Reminiscing with Richard: The founding principles of Wakelin

At Wakelin Property Advisory, we’re fortunate to have more than half a century of property investment experience, which forms the bedrock of our knowledge, expertise and client services.

This comes by way of Richard Wakelin, our founder, who has been a pioneering force across Australia’s property investment landscape over the decades.

We’ll be bringing you Richard’s insights as part of a number of upcoming podcasts sprinkled throughout the series .

In our first of these specials, Richard takes us through the founding principles that inspired him to establish Wakelin Property Advisory, and how they can be applied to your property investment decisions today.


Richard, what inspired you to start the business and how did it launch?

Before we started this business in 1995, I’d had 20 years experience in the management and disposal of property for clients. At that time there was no one specially representing investors from the buying perspective. I saw a great need and demand for a service like that, and as a result, we created a formula, which led to the inception of Wakelin Property Advisory.

Before that, the average investor looking to buy a property couldn’t really access expert and unbiased advice. As well as individual advice, we also wanted to educate the population more broadly about the opportunities and benefits in property investment. So at the core it was about the protection of buyers, but at the same time, about community education.

We would hold evening information seminars, and conduct onsite property tours, to bring the subject of property to life – providing real practical examples. We later published a book Streets Ahead: How to Make Money from Residential Property, which provides readers with in depth knowledge and advice. We helped to shape the reasons why you would invest in residential property in Melbourne.

There are five key principles surrounding property investment that we established from day one – capital growth, income, personal control, adding value, and tax advantages.

Capital growth is at the top of our list, as you know, Jarrod, because capital growth is the key to attaining financial independence through residential property investment.

The important point here is the amount of equity accumulated, not the number of properties you own, which is the key criterion for the astute property investor.


That’s an important note, because there’s a lot of people on social media boasting that they own 20 to 30 plus properties. But the key question would be, how much equity do they hold in those properties?

Yes, so true, the word equity is crucially important. The quicker you build and control, the sooner you can attain financial independence.

The next important principle is with regards to rental income. Income serves several purposes. It helps fund the borrowings needed to invest in property, and as time goes by, the income can be used to repay principal, helping to increase the owner’s equity. And later on, as more debt has retired and the rent increases, it can be used to supplement or even replace the income you have been deriving from work.

We quite often hear about yield focused assets versus capital growth. And we always stress to our clients that high yielding assets often work at cross purposes with high capital growth assets. A high income asset is typically more value focused on the improvements, as opposed to the land value, because that’s what a tenant will pay for. In effect, if you chase rental yield, it often comes at the expense of capital growth.

Add further to that, often the location and style of property is inappropriate from an investment perspective. I’m talking purely about investment here, not homeownership. But definitely one of the traps around selecting investment property is the lure of a high yield.

At the moment, we have an extremely buoyant rental market, with increasingly strong yields. Some people are going to come into this market looking for high yield. But in fact, they may be missing out on the essential component – building equity through capital growth.


Especially with the fast rising interest rates over the last six to 12 months. Many buyers want to counter that through rental yield, but they need to be careful they are not neglecting the capital growth component. As you’ve said, while yield is important, it’s still secondary.

The third principle of good property investment is personal control. Rather than putting your money in the hands of a fund manager, which gives you limited control, by investing in residential property, you maintain control over your asset. By way of example, you can live in it, rent it out, sell it at the time of your choosing, bequeath it to your heirs, and develop and improve it.


That leads us to the next principle of property investment – adding value.

Yes, adding value. When you buy a property and keep it for the long term, there are impactful improvements that add value. Interior enhancements and renovations can provide improved rental yield, but more importantly significantly bolster the value and capital growth of a property. These can be carried out economically within the existing shell of the home.


Finally Richard, take the listeners through the tax advantage side of property investment and how it should be approached.

People are surprised when we place tax advantages right at the bottom of the list, but it is very deliberate. That’s because so many poorly performing properties are marketed with tax advantages as their main selling point. And it’s usually with a persuasive sounding report from a financial advisor who has a vested interest in selling the development. Sadly, over the years, I’ve observed many investors, who have lost literally tens and hundreds of thousands of dollars due to biased advice that served the developments, not the buyers.

Tax attractions, such as gearing strategies, depreciation allowances, and stamp duty savings, sure, that may assist the financing of an investment in the early years. But let’s make the point very clearly that they’re never the primary reason to invest, because too often it masks the property’s low scarcity value, and propensity for capital growth. So, the big message here is that saving tax never makes you financially independent.

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