With today’s property and economic conditions in mind, we’re back with a Q&A Day that’s focused on how to maximise your savings. 

Tune in to hear:  

Are property managers really worth it?!  

We’re giving you the unfiltered pros and cons of managing tenants, insurance, taxes and more (Basically we’re unpacking exactly what goes on behind the scenes!)  

If you renovate your Principal Place of Residence (PPOR) can it be considered tax-deductible when you turn it into an investment property?!   

Why is it important to separate household and business incomes? Plus, the newest features coming out on Moorr and managing finances at the start of a new relationship, and… 

How accurate is the narrative around property owners today?! 

Another massive episode that picked our brains (and the brains of our friends at BMT Tax Experts 😉) tune in now to discover our answers! 

 

Questions We Answer…

Q1) Saving $$ through getting rid of the property manager from Sean 

Firstly, thank you Bryce and Ben for your advice and your podcast.

Based on that we bought our first investment property just over a year ago which was great. But obviously it went from being very positively geared to rapidly. going to negatively geared very much so.

I know recently you’ve said to hold property at all costs and also mention taking on a second job etcetera.

Would you consider removing the property manager as part of this is as this would save us $50 a week and potentially bring it around to. being cash flow neutral?

Bear in mind that we live a literal stones throw away from our investment property and I have some friends who are electricians etc.

I’m just interested on your thoughts and whether that would be. considered almost like taking on a second job.

Thanks.

 

Q2) Investment Deductions when moving to PPR from Edward 

Hi, we currently live in a property.

We are looking at getting an investment property and maybe moving out of our current primary residency and turning that into an investment property.

We are doing some works on it at the moment and new floors new kitchen, maybe new bathrooms.

Is there a way to get them as a investment deduction when they transfer to an investment property?

How can I leverage that?

 

Q3) Moorr – money management with business AND partner

Hey guys, thank you for the books.

Make money simple again. Completely went through it and it makes complete sense. I just got a question for you, I’m in Moorr and I’m doing all my expenses, income and all that kind of stuff.

The income that I derive is from my business, so I use my individual taxes returns – average the two trust distributions, and that’s what I’ve done for my income.

However, with the debts, I’ve got a few debts in the business.

I was just wondering whether or not I need to put that that credit card debt in the Moorr portal and then how to separate the expenses because obviously I’ve got business expenses and what not and what to add and what not to add a little query.

The other question was my partner and I do our banking separately we derive our income separately but then we put a joint budget to cover you know groceries, car expenses and any expenses as a joint expense.

I’m just trying to figure out whether to just do a separate portion from there and just kind of figure it out that way or just really get her involved and bring her on to the Moorr portal and really nut down and try to do it together.

Any advice would be amazing. Thank you.

 

Q4) Property Investors as Small Business Owners 

Hi Bryce (and Ben),

I have been loving the winter series and listening with interest to the some of the conversations (your show and others) that all landlords are “rich heartless bastards (excuse the language) who are just taking advantage of the rental crisis” and wanted to add our own recent experience to try and provide some balance.

We have a property in the NE of Adelaide that has come up for a lease renewal and we were presented with two options/recommendations from our property manager to consider.

Option 1

In line with what has been unprecedented rental increases (well at least in the 20 years I have been investing) in the area, apply what they called a “modest” increase of $30 per week to the current rent.

Option 2

Not renew with this tenant and place the property on the market, with no changes to the property other than an outgoing clean, at current market rental rates which would see us attain somewhere between $130-$150pw increase.

Now to put into perspective Option 1, a $30 pw increase, would be the biggest increase we have ever applied to this property in the 18 years we have owned it.

Historically we have only ever applied increases of $5-$15 pw even when reletting to the market (and across the Covid we applied $0 for no other reason than it felt the right thing to do) so to apply a $30 increase would have been huge, let alone attain $100+!

So what did we do I hear you ask? For us it was a no brainer, we have a great tenant who has been in the property for over 7 years, treats it as her own (she is a single, middle aged lady who initially had her daughters at the home with her, but now is there alone) and who we know would struggle to find an equivalent rental in this market if we did not renew so it was an easy decision for us to offer a renewal of $20 pw (still large in our eyes but we felt fair) which she signed up to within a couple of hours.

We did this despite seeing, since October 2019, our interest costs on this property go up 116% ($11,200pa) whilst only passing along a 4% ($780pa) rental increase to our tenant over that same period.

Yes, we could have tried to recoup more from our existing tenant or not renewing and grabbing one of the many people we know would be queuing up to secure a property like ours however the combination of it just not passing the “sleep tax test” (as one of your guests so well put recently) as the right thing to do and knowing this is a long term play where we have built up our buffers (in part thanks to your teachings) over the years that allow us to ride out this period, do the right thing by our tenant, and still be on our path to being self funded retirees in the next 5-10 years.

Anyway, sorry this has become such a long email but I felt the need to share and confirm what you have been saying over the last few months – not all property owners are bastards, many of us genuinely play the balancing game of trying to set ourselves up to be comfortable (not outrageously rich) in retirement without being a financial burden on society.

We are also very aware that at the end of the day there is a person/family calling our property home that needs to be treated respectfully as well.

I hope it helps in what you are doing [and if you want to share it in any way that assists I am happy for you to do that if you could just keep us reasonably anonymous with anything you might make public].

Thanks, keep up the good work and of course “Go Crows!”

 

Free Stuff Mentioned

• Q2) Read the report from BMT, Tax Depreciation Experts here >>  
• Q3) Want to add a secondary user to your Moorr account? Find out how to here >>  
• Q4) Discover the surprising results from PIPA’s Annual Property Investor Sentiment Survey 2023! 
• Calling all potential Summer Series guests for 2023/24 (Especially the ladies!). Share your story, get a free Start & Build course and positively impact our community. Reach out to us here >>  
• Have your question read on our next Q&A Day! Ask us here >>  

  

Timestamps

• 0:00 – Property Managers: Are They Worth It?!
• 6:24 – Calling all Summer Series guests! ☀️ 
• 8:01 – A little teaser about a NEW course coming out… 
• 8:56 – Mindset Minute – The 2 master skills for an extraordinary life 😊
• 12:40 – Q1) Saving $$ through getting rid of the property manager 
• 15:05 – The 3 Buckets 🪣 
• 15:53 – What risks do you run with tenants?  
• 21:10 – The Basics vs. The Rest  
• 23:14 – Limited Growth: It’s human nature! 🌱 
• 24:33 – Insurance, Tax & Fools Gold?!  
• 27:55 – In summary, our answer is…  
• 29:03 – Q2) Investment Deductions when moving to PPR 
• 29:49 – THIS is considered second hand 😮  
• 31:50 – What we’d recommend! (Read the report from BMT here!)  
• 33:38 – Q3) Moorr: Money management with business AND partner 
• 35:39 – Household vs. business incomes: Why does it matter?!  
• 38:29 – A lot of people don’t realise Moorr has THIS capability!  
• 41:23 – Transparency & finances in early relationships  
• 43:03 – ANOTHER SNEAK PEEK!!! 😉  
• 46:24 – Q4) Property Investors as Small Business Owners 
• 50:34 – The Real vs. Fake narrative being sold… 
• 52:10 – Findings from PIPA’s 2023 Sentiment Survey  

And… 

• 56:08 – Lifehack: Save videos to watch later!  
• 58:38 – What’s Making Property News: Ben was at the Victorian Inquiry!