Georg Chmiel chats with Harcourts boss Mike Green on real estate investment secrets

Georg Chmiel chats with Harcourts co-owner Mike Green about secrets for real estate investing.

One of the most charming and gregarious people in the real estate industry calls himself an introvert. But what will really surprise you about Harcourts MD Mike Green is the job that he sought before becoming an agent and what he has to say about investing in apartments. 

Green is co-owner of international real estate network Harcourts – a New Zealand native who made the hop to Brisbane (for the weather) and has since conquered not only Australia but nine other countries as well. 

We will get into Green’s secrets for real estate investing, but first let’s look at how he climbed the business ladder. He got into real estate purely by accident.  

“I was looking through the newspaper for a job, having just left university” he says. “I applied for a job washing cars in a car yard, and the guy turned me down.” 

That rejection sent Green back to the employment classifieds (remember those?). Eventually, he talked his way into his first property job at 19 as a real estate sales consultant with no experience and only one year of university. He hasn’t looked back since.

Does he still pine for the missed opportunity to wash cars all day long? I didn’t ask him, but I imagine not.

“I went into a profession that I just clicked with,” he told me. “I love the freedom of it, the impact you can have on people’s lives. Eventually, my wife Irene and I opened our own Harcourts franchise. Now (Harcourts Chairman) Paul Wright, Irene and I are the owners of the Harcourts international franchisor.”

Green’s secrets to success in business are available to anyone. “The reality is,” he says, “if you hang around long enough, you end up at the top — as long as you don’t do anything stupid and don’t annoy people.”

I have managed hundreds of people in my career and, as simplistic as it sounds, this advice is actually quite profound.

DISRUPTON

Green runs a major international real estate agency network with more than 900 offices in 10 countries. Is he worried about losing it all to a tech giant like realestate.com.au, purplebricks.com or Google? 

Not a bit.

“The only thing we need to worry about is disrupting ourselves by not delivering value,” he told me. Selling a home “is such an emotional and traumatic experience. Our clients actually want an advisor to help them through the process. It’s very hard to disrupt when you have hundreds of thousands of people on the ground doing just that.”

But Green did admit that there are still risks. No real estate company has a monopoly. 

“If we don’t add value to clients we will disappear like so many other companies in other industries have.”  

COUPLES

For Green, one of the benefits of a career in real estate has been the opportunity to work alongside his wife Irene, who is herself extremely successful in the industry in her own right. 

“Irene and I have worked together for nearly 30 years,” he said, “and it certainly creates its own unique challenges. You never stop talking about the business. It’s a really dangerous place to be when your wife technically reports to you, which was the case for a very short period of time.” 

After all, we all know who the real boss is…

That said, Green encourages other couples to consider a property career, as long as you can “keep a sense of humor and understand that, while the business is important, the relationship is far more important.”

WHAT SHOULD FIRST BUYERS DO?

Now, let’s get to Green’s advice for first-time buyers who are in a tough position because of high prices. 

“Government is more attuned to first-home buyers now,” he says. “Study up on the available first-home buyer grants and other incentives available.”

You should choose a “good property that can be readily resold and has a wide market appeal. What they say about location is very true. If you buy in a good location you will always be fine in the long term.”

And watch out for interest rates, which are still at historic lows. “Reality says that will change,” advises Green. “You should say, ‘Hey if the rates go up two percent or three percent, will I be OK?’ 

“Also factor in starting a family. If you have to live on one income, how will that look?”

ADVICE FOR INVESTORS

Green advises property investors to play it safe, too. His preferred investment is a three-bedroom home on a little bit of land and with a garage.

“They are very easy to rent, and if you need to sell they sell easily. Some investors look for houses that have been split up for multiple revenue streams, but those are harder to sell. They only appeal to other investors. If you are under pressure and need to sell, chances are other investors will be, too.”

Green made a 38% profit on his first investment home after only two and a half years. It had cost him NZ$29,000. Today, the same home is worth as much as NZ$1.8 million. 

Now, about apartments. While Green lives in one for the care-free lifestyle it affords, he doesn’t recommend apartments as an investment.

“They don’t perform as well in terms of rental return or capital gain. I’d recommend you spend a bit more and buy a three-bedroom house.”

Green firmly believes property investors today can still leverage a small amount of capital into a large and successful portfolio that eventually lets them live off their earnings. His own sons and a number of their friends are following just this strategy.

“I think you can do it today,” he said. 

“You have got to be a bit careful because there is more money involved. But as rents and capital gains grow and the mortgage is paid down, you are building wealth. Property will never be cheaper than it is today!”

Georg Chmiel, the chairman of Juwai, a Chinese website for buyers of overseas property, was speaking to Mike Green in what will be a monthly insight into the leading minds of Australian property experts.

He has spoken with LJ Hooker agent Bill Malouf about the ins and out of the Sydney market and REINSW president Leanne Pilkington about women in real estate.

He most recently spoke with Melbourne property developer Larry Kestelman about developing your first property.