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Episode 083 | Do you think like a sophisticated Property Investor?

If you are new to property investment, don’t you want to know what the sophisticated property investors are doing? Why would you want to reinvent the wheels? It will certainly save you more time and money if you understand the norms and fundamentals from those who have already experienced the journey. So this time on The Property Couch podcast, our hosts will be discussing the practices of a sophisticated property investor.

Their discussion will be based on the recently released PIPA Annual Investor Sentiment Survey. It’s the only sentiment survey for property investors in Australia and has a unique sample of Australia’s property investment community. Distributed via PIPA’s extensive investor networks, it provides a rich insight into the views of Australia’s investors.

Some of the key findings discussed in this episode are:

  • What do investors feel about the long-term merits of real estate?
  • Does negative gearing really matter?
  • What kind of dwellings are the sophisticated property investor going for?
  • How much attention are they giving to the property market cycle?
  • Where do they get their advice from?

Tune in to start listening!

 

Free resources mentioned in this podcast:

  • 2016 Annual Investor Sentiment Survey – Download here
  • Webinar with Bryce Holdaway and Jane Slack-Smith on Renovating an Ugly Duckling – Register here
  • FREE Tickets to the Sydney Property Buyer Expo (Coupon code: PBE16BRYHOL) – Get them here

 

If you like this podcast: “Do you think like a sophisticated Property Investor?”, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

 

Episode 082 | Q&A – Great tenants vs higher rents, Investing in property overseas, Managing leverage and more

It has been 3 weeks since our last Question and Answers episode, so it’s about time for another one! Thank you again for sending in your questions.

For today’s podcast, we will be answering these questions:

  • Question on tenants vs rents from Mark: Is it better to keep a great tenant on a lower rental, than push for a great rental return and gamble with the quality of new tenants (and subsequent vacancy in between.)
  • Question on exit strategy from Tom: Hi, I would like to hear more about exit strategies when time is not on my side. I have just turned 50, with my youngest child in yr 12 and eldest living in eastern states. My principal place of residence (PPOR) is paid off (value $1.1M) and I have 2 investment properties with a combined value of $1m. But an investment loan of $1.2m. The reason for the negative Equity is that I have been capitalising. The investment interest whilst I directed all rental income into paying off my PPOR. So now I need to know what is next. My goal is to retire or work reduced hours in and on a corporate role by age 55. I am presently in a well-paid job paying about $220k and have about $270k in super, which I am contributing up to the max.$35k pa. I can’t get my headspace around what to do next. any suggestions would be appreciated.
  • Question on investing in property overseas from Sean: Would be great to hear your thoughts about investing in property overseas as part of a portfolio, particularly NZ. There’s some “wave rider” type activity gaining momentum around Auckland, which has become a heated market it seems.
  • Question on career in property investing:Hi Ben & Bryce, Firstly I would like to say you guys are doing an awesome job with the podcast. Have been listening from the start and as a born and bread Victorian now living in NSW I love the footy talk!!!!I would also like to congratulate you on your book “The Armchair Guide to Property Investing“. I will be handing it out to numerous friends and family as I believe it is gold when starting out and not knowing which direction to go.So some background on my situation. I started educating myself 2 years ago with every property podcasts/book I could find and now believe I have the foundations for property investing going forward with the right team around me (coach, broker, accountant, solicitor & acquisitions team).We moved to the Hunter Valley to set ourselves up to give us more “choices” in the future. I am currently on a high income of $140k as a coal miner but to be honest, my heart isn’t in it anymore and I don’t enjoy my work (except the pay each fortnight).The reason for reaching out to you guys is because we currently have a 3 year plan (possibly shorter) to move back to the Geelong area to be closer to our family and also closer to Melbourne because we live and breathe AFL. By then we plan to have 2-3 good capital growth properties in our portfolio in major cities utilising the high income (currently in process of acquiring property in Brisbane as I write this email).By the end of 2016 my goal is to complete a Diploma of Finance and Mortgage Broking Management because I believe that everything revolves around finance in creating wealth through property. I am also working towards 1-2 weeks work experience with my property acquisitions team to see how everything operates on the ground.

    My question to you guys is what else would you recommend I do over the next few years in preparation to help transition into the property investing line of work (educating others to create wealth or something down that path).

     

  • Question on paying down debt or invest from Ian: Good afternoon gents, thank you for sharing your wisdom. I’m 40/67 episodes so far and still loving the insight. A question for your podcast: Getting rid of debt 1st vs investing 1st: As a health practitioner with approximately 5K of discretionary income/month would you recommend chipping away at approximately $35K of bad debt mixed between high and low interest accounts and then seeking professional aid such as yours to become a 1st time rentvestor or seek out assistance and attempt to send that bad debit into some sort of mortgage? Love your work and your banter.
  • Question on Property Investment Advisor or Buyers Agent first from Paul: Hey Guys, Love the podcasts and your book. Great help for us newbs. I have just started my journey into the world of property investing. After listening to you guys plus reading your book I have taken my first step and started meeting with mortgage brokers to get an understanding of where I stand financially. One of the brokers I meet with was from your team at Empower Wealth. He was great and very professional. My question to you guys is once I have my finances ready to go do I need to be looking to meet with a property adviser or a buyers agent next? Your advice on this would be great. Keep up the great work!

 

If you like this Q&A episode (Good tenants vs higher rents, Investing in property overseas, Managing leverage and more), don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

Facebook Live Bonus Episode – Q&A

Thank you for coming to our Facebook Live event on 13th of Sept! We received a lot of great questions that night but unfortunately, time ran out and we couldn’t answer all of your questions. We really do appreciate you taking some time away from your busy life to listen to us so that is why we are recording a bonus episode (or as Ben called it Bonusisode) today to answer all the remaining questions!

 

And for your convenience, here’s the list of questions that we answered in this episode along with the order they are in. 🙂

 

ps: if you aren’t sure what we are talking about, check out our Facebook page! If you don’t have the book, you can get a copy here.

 

 

 

From Order Message
Chris Topher 1 (Time: 01:00) Assuming one has a portfolio of 5 investment properties and has entered the debt retirement phase, what does this actually look like? Is it a matter of spreading all excess cash flow evenly across the offset accounts against each loan until they are all cash flow positive or do you target the biggest loan and pay that out first (by matching the outstanding loan amount in the offset account) and move on to the next biggest loan? If these are all interest-only loans with the interest-only period ending for all 5 loans over the next 18-24 months how do you manage this, as it wouldn’t be affordable to any family budget for multiple loans to become principal and interest, so is it a case of constantly refinancing these loans and staggering the when they come out of their interest only period?
Adeline Teo 2 (Time: 03:17) What are your thoughts about having a property portfolio with a mixture of properties, some with good rental income and some with good growth potential but negative net income?
Ashish Isaac 3 (Time: 04:10) Hey guys love the podcast, and the book. I have a financial question to ask. I currently have a principal place of interest (paying P&I for the next 3 years, and I can’t change that as I have just fixed it unfortunately), now for example and using round figures, say if I have a saving of $25k, with a current monthly surplus of only $500 would I be better off to use my savings to pay of any agent fees (e.g. buyers agent, financial planners etc.) and with what’s left over use that as part of the surplus for the next 3 years until I can release more funds from my principle place of interest, or use all the savings to put it towards the deposit for my first investment property, this is to achieve retiring with $2000 per week hope this makes sense. thank you for all the information you have provided us this far, really appreciate it. cheers Ash
David-Anthony Gunter 4 (Time: 06:05) Love the podcast and book! A massive fan! I have a question about inconsistent bank valuations. I purchased a two (2) bedroom unit in Rosanna in Melbourne last year in November for $275,000. I purchased this through a Buyers Agent (not you guys….SORRY!!!….but I followed the principals I have learned in the podcast) The settlement was Feb 29 2016 and I had the property re-valued a week later by several banks. I had a valuation for $480,000….$330,000….$400,000 and $295,000!!!! Is this common???
Ryan Price 5 (Time: 08:27) Hi Guys.. 26 years old and Looking at purchasing my first property. Is it better to buy a 1st home (owner/occupy) or would it be better to buy an investment property first and continue renting (minimal rent as it’s the family home so handy for saving)
Samantha Rackley 6 (Time: 08:53) Thanks so much for your time tonight – great job! I am confused about the difference between capital growth and income (yield) returns? Is one more important than the other or should you look for a property that is high in both returns?
Evon Fung 7 (Time: 10:27) Hi guys, love the podcast and found the book really helpful. I’ve been using a great budgeting software for the last 10 years but I recall you mentioned something in one of your podcasts that you may have a software which can track budgeting. Is this available? (ps, will you be at the Property Buyer Expo in Sydney?)
Graeme Ash 8 (Time: 12:14) Big thanks to Jake and co recently for their help!
Quick Q:, With investment properties, is it work getting a regular valuation say every 2 years to check available equity for next property or rely on market comparable?
Jack Cole 9 (Time: 13:56) Love ya work boys! I’m 25, if I could change one thing in the world we live in, my very long term goal is to introduce property investing as a school subject in years 11 and 12. I’ve been lucky enough to have family who invest but not all kids are. What are your thoughts?
Jag Randhawa 10 (Time: 15:52) I am a passionate and always ready to learn individual. I have recently developed a keen interest in property market. Where do I start if I want to make a career out of it?? What sort of options do I have and what courses are must before I even think about stepping my foot in the market?? Really appreciate all the info u guys give out for free. It’s GOLD.
Jag Randhawa 11 (Time: 16:32) I am thinking about engaging a Buyers Agent once my strategy plan is build, but how can I make sure that my BA is not getting me into something that favors him more than me. By that I mean how can I make sure that he is choosing the right property for me only and not looking just to sell one??
Jaye Kershler 12 (Time: 18:11) On a high income for next 2 years would you buy a more expensive eg 600k property or a 450k property
Johnny Rambo Azzopardi 13 (Time: 19:13) Hello guys, do you think the Gold Coast will bring capital growth as the media and buyers agents would have you to believe in the mid to long term.
Leisa Caines 14 (Time: 20:53) If I had access to equity to buy a ‘cheap’ investment property now should I buy one now or wait 12mths to when I have more equity to buy a more expensive Investment property?
Maria Austin 15 (Time: 21:38) Hi Ben and Bryce, I can’t get my head around how you can keep leveraging equity out to purchase more properties without running out of borrowing capacity, assuming that you are only purchasing only blue chip properties that don’t quickly become positively geared. Surely at some point the banks will stop lending to you, even if you have the equity. p.S. Hi Ivise 🙂
Matt Bray 16 (Time: 24:14) Hi, my question is based on a first home buyer, how much would you recommend is needed for a first investment property and would i be better buying when i reach this sum or saving for a bigger deposit and buying a bigger investment ? thanks!
Micky Marafioti 17 (Time: 25:15) Do you have any thoughts on investment in Port Adelaide, in Adelaide. Recent times has seen it to be a semi low social economic area, but there is enormous residential and commercial developments occurring there at the moment.
Nat Bowden 18 (Time: 27:21) Gents what to do next? Own a townhouse as a ppor and will keep it as an investment going forward. Looking to buy a family home in 1-2 years. What to do? Save cash for this or buy an investment to leverage into the family ppor home?
Robert Thomas 19 (Time: 28:31) Hey guys – made it through the first 35 podcasts – great stuff. Where would you buy in Melbourne right now if you’re trying to stay under the first owner grant limit (<$600k)?
Chris 20 (Time: 29:45) Hi guys.
i’m looking forward to the Facebook event.
I have another question for you (number 4)
Is there any chance you can discuss in depth the process of buying a property through SMSF. ie the associated costs, required structure and minimum LVR.
Thanks
Chris
Maria Li 21 (Time: 31:00) Hi Ben and Bryce
I understand that the process of building a portfolio involves repeatedly taking equity out of existing properties to purchase more properties. I’ve heard multiple stories of investors being able to repeat this process every 1-2 years.
What I can’t wrap my head around is how an investor can take equity out of their properties every 1-2 years without falling short of lenders’ serviceability requirements.  Each time you take out equity, you are essentially taking out another loan, and the lender needs to know you have the income to service that loan. Unless you are buying only positive-geared properties (which most of us aren’t), surely at some point a lender would tell you that you’ve run out of income to service another equity release loan… I understand that part of the answer is that properties become positively geared over time, but that can take 5-10 years. Some of us would like to buy more than once every 5-10 years.
This is assuming all the loans in the portfolio are structured as interest-only loans with offset accounts, and that all spare cash is put into the offset accounts rather than paying off the loans. In the eyes of the lender, this means that all your loans are still at their maximum/initial balance. Theoretically a lender shouldn’t be willing to keep lending to someone who (on surface) never pays off their loans, and yet keeps taking out more loans…and yet that’s what is done by investors all the time!
What is the piece of the puzzle I’m missing?  Ben and Bryce – how does it work? As you know I’m a big fan of the podcast, keep up the great work!

 

Episode 81 | Does investing for the long term actually matter? – Chat with Stuart Wemyss

For today’s podcast, we have Stuart Wemyss, owner and Director of ProSolution Private Clients joining us to talk about his property investment journey and his investing philosophies. Coming from an Accounting and Finance background and with more than 19 years of experience in the investment services, Stuart is also a PIPA Member and has authored two books; Smart Borrower’s Handbook and The Property Puzzle.

So for today’s episode, the three of them will be talking about:

  • When did he buy his first property and how did he start investing in property
  • What are the lessons he learned when building his property portfolio
  • Why does investing for the long-term matter and the mindset needed for this approach
  • In his role as a mortgage broker and finance specialist, what are the common mistakes he has seen over the years
  • What are his tips for listeners when they are choosing an investment advisor
  • Two questions you need to know the answer for before prior to building an investment portfolio
  • What he thinks about commission-based financial advice

 

[alert]Don’t forget to download the Property Investor Sentiment Survey 2016 Report! – Download here[/alert]

 

And if you are interested to learn more about Stuart’s books, here are some reference points:

  • Smart Borrower’s Handbook | An Essential Guide for Property, Sharemarket and Superannuation Investors – Buy here
  • The Property Puzzle | A Simple Guide for Property Investors on How to Develop a Safe Financial Plan – Buy here

 

 

If you like this podcast: “Does Investing for the long term actually matter? – Chat with Stuart Wemyss”, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

Episode 080 | The Four ‘D’ words that equal a motivated seller!

One of the negotiation tips mentioned in previous episodes is to understand the vendor’s motivation to sell. Once you understood that, you would have a better idea on what to negotiate on and increase your chances of securing that property. But as always, this is easier said than done because how would you know if the real estate agent is clouding the truth? Hence why you need to make sure you are asking the right questions, in the right way and is capable of assessing the agent’s reaction to your questions.

 

In some cases, some vendors are extra motivated to sell and you can take advantage of this to help you boost your chances. So in today’s episode, Bryce and Ben will be discussing the four ‘D’ words that would indicate a very motivated seller. They will also be sharing some of the questions you need to ask to spot these situations, answers from real estate agents that you should look out for and negotiation tricks that you can use if the vendor’s motivation fall into these 4 categories. Start listening to find out more.

 

If you like this podcast: “The Four ‘D’ words that equal a motivated seller!”, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

 

Episode 079 | Q&A – Underquoting, New Developments Next Door, Fixing an Overly Negatively Geared Portfolio and more

It’s the first day of Spring and a perfect time for a Question and Answer episode! Bryce and Ben started off with some of their auction stories on underquoting and a general market update.The property market had been rather cold this winter but with that over, what will we be expecting these coming months?

 

Here are the questions for today’s podcast:

  • Question on new developments next door from Jesse: My question is regarding to the current development boom that has exploded all over Melbourne as it relates to my property in bayside Melbourne. My wife and I bought a town house in Cheltenham about 8 years ago. It is on a reasonably busy road that goes from Nepean Highway down to the beach in Sandringham. We have been diligently paying it off as quickly as we can in order to give ourselves some freedom (we are both freelance) and now we are looking to buy our first investment property. This week the house next to us and the next seven houses along have all got ‘For Sale’ signs up in front. Our understanding after a brief chat with the next door neighbours is that they have all been approached by a developer who wants to build a large mid level apartment block right next to our house. Our concern is what impact this will have on our property value. We are now planning to move out and ‘rent-vest‘ as we don’t want to stay there through this construction phase.
    Our main concerns are:
    (A) How this will impact the value of our property when it comes to us getting a loan for an investment property.
    (B) The impact this will have on our ability to rent out our townhouse if this new development goes ahead. In light of this are we better off trying to sell now and cut our losses or stick with it as a rental.
  • Question on cash flow from Sonia: Hi Bryce and Ben, I am a big property fan and have been listening to every single episode of the property couch. I have a few investment properties in the Sydney inner city suburbs. Besides that I also have a decent amount of savings in cash. I just quit my job to study interior design, hoping to set up my own business later on. I am a typical rich in assets and poor in cash flow example. Just wondering what is your investment advice for people like me. Thank you. Sonia
  • Question on property portfolio fromKhai:
    • Q1) Is it better to pay off the mortgage or keep buying Investment properties?
    • Q2) I have forecasted passive income of $60,000 (as a couple) in next 10 years (assuming 5% annual price rise and if I sell down my 6 properties to fully own 3 including PPOR). How do you increase this to 100,000? Keep buying 3-5 more properties in next 5 years.
    • Q3) How do I fix a severely negative cash flow portfolio (minus $25k annually for 6 properties)? Options I have in mind are: building a granny flat, refinancing to lower interest rates, raising rents, converting car space in townhouse to LUG (costs probably $10,000 per townhouse but increase rents $1k per year), converting car space in townhouse to LUG (costs probably $10,000 per townhouse but increase rents $1k per year)
  • Question on develop or buy from Adam: I own a positively geared corner property in North Sunshine in Victoria, I am ready to take the next step in building my portfolio, does it make better sense to develop my existing property into three town houses, or to go and buy another investment property keeping in mind that property price growth will most likely exceed building costs ?

 

If you like this Q&A episode (Underquoting, New Developments Next Door, Fixing an Overly Negatively Geared Portfolio and more), don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

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