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Episode 162 | Q&A – Second-tier Lenders, Brisbane’s units market and the order in Investment Assumptions (PLUS a special appearance from Jeremy Sheppard)

We have a couple of treats in store for you today, folks!!

Not only is it Q & A Day — we know: it seems like forever since we had one, and we love ‘em!! — we’ve also created A BRAND NEW SEGMENT, which is kicking off on the Couch TODAY.

Yep. Think property markets. Think sneak peak. Think data!

Actually, speaking of data, joining us for a portion of today’s episode (hint, hint) is Jeremy Sheppard! He’s our other third of LocationScore.com.au and the pioneer of the DSR Formula, which collects, analyses and researches the level of supply and demand across every market and 15,000 suburbs in Australia!

(You would have heard his insights back on Episode 125 | Everything You Need to Know about Picking the Next Hotspot — Chat with Jeremy Sheppard or on our last Facebook Live!)

 

…. What will be covered from today’s questions?

  • Should you invest in a Brisbane unit?
  • What are the pros and cons of second-tier lenders?
  • Are the assumptions about property investing making you confused?

Alright folks, before we kick off the questions, you’ll notice soon that all of them are voice recorded messages! Yep, we’re officially prioritising all of our questions that come in through our SpeakPipe widget! So leave us a quick, 60 second voicemail here!

 

Question about Investment Assumptions from Matthew:

“I’m wondering if you guys can take a moment and reflect on the investment assumptions in property, particularly on stuff like, “Hey, you should always buy in this order for capital gains: you should by a free standing house, and then a townhouse or a free standing house and a duplex and a townhouse and an apartment”… all of these investment based assumptions, which are general rules of investing in property. It’d be good to examine when they’re true and when they’re not true with different cases. I look forward to your answer. Cheers guys!”

 

Question about Investing in Brisbane Units from Pia:

“I’m a 31 year-old single woman from Brisbane with a budget of $360,000. My question is about the Brisbane unit market.
My priority is investment and I’m open when it comes to the location or type of property I purchase, but ideally I’d like to buy a place I can live in for the short to medium term, and a Brisbane unit is the best fit in that regard. I’ve been looking a 2br, 1 – 2 bathroom units in a 3 – 10km radius of the city in older boutique blocks. I’ve heard all of the warnings about the oversupply of apartments in the Brisbane market at the moment, but I’m wondering if this is the time when “Others are fearful and I should be greedy”? Where do you think we are in the market cycle? Are Brisbane units about to go up in value or are we still looking at another couple of years of downward or flat growth?

 

Question about Second-tier Lenders from James:

“My question is there have been a lot of media articles and posts around lenders outside of the big four banks, or second-tier lenders…. What are the Pros and Cons of using these lenders?”

 

 

And our chat with Jeremy Sheppard?

  • Why there’s not much data in January?
  • Recapping what is Online Search Interest and should investors be worry about the impact the season would have on the property market?
  • What’s the BIG NEWS on Perth??
  • Auction Clearance Rates and who are the outperformers and underperformers in this cycle?
  • How’s the month to month trend for each of the state?
  • What does Adelaide and Gold Coast’s property market trend have in common?
  • How about Days on Market data for February 2018?

 

P.S. Leave us a Voicemail Message here.

P.P.S. Want to find the best locations to invest in? REGISTER FOR A FREE WEBINAR here!

 

 

Episode 156 | Tim Lawless – Property Outlook 2018 with CoreLogic’s Director of Research

We promised you a market outlook last week….. so, folks, we had to deliver!

Yep! This week on the Couch, we’ve wrangled in Tim Lawless, CoreLogic‘s executive research director for Australasia, who heads up the Data Research and Analytics team, analysing and interpreting real estate, demographic and economic trends across the country! He’s one of Australia’s leading property market commentators, so…..

In a nutshell: Tim knows his stuff.

For our newer listeners, Tim no stranger of the Couch. Back in Episode 90, he joined us to chat about the impact of Donald Trump on the Australian Property Market. So what’s in store this year for each state and capital in Australia?

Tune in…… you’re about to find out!!

 

Before we jump in and tell you the property outlook 2018, Bryce wants to remind you to send in your Android Life Hack (please and thank you) so we can even the playfield with the iPhone users! Just email it in to info@thepropertycouch.com.au!

 

Okay, so today’s big questions are:

  • What’s in store for the Australian property market?
  • Is there going to be a significant shock?
  • What’s up with the economy? (Think, “Will your wage increase?” and interest rates!)

 

Now, let’s drill it down to Capital Cities:

*** Scroll down for the city you’re most interested in ***

Melbourne

Sydney

  • What are the tips and trends happening in Sydney?
  • How much has the market fallen and how much more will it fall?
  • What areas are holding their value?
  • Which quartile is coming down the most?
  • Will Sydney bust now that it’s peaked?
  • Are first home buyers entering the market?
  • What is the median value for houses and units?
  • How will the lending restrictions affect the market?
  • Are yields increasing?

Brisbane

Perth

  • Is there growth happening in Perth?
  • Are the investment stock levels reducing?
  • How many new listings are there?
  • Is it on our radar?
  • Where are the vacancy rates highest?
  • What signs should you look for?

Hobart

  • Is it a sustainable market?
  • What sort of investor should you be in the Hobart market?
  • What are the investment trends?
  • How much of the market is investment driven?
  • Who is buying in Hobart?
  • Will there be investment opportunities coming up?

Adelaide


Canberra

Darwin

  • Is Darwin showing signs of turning around?
  • What’s happening with the yields?
  • Are buyer numbers increasing?
  • How many new listings are there? How do they compare to Melbourne & Sydney?

 

p.s. Looking for the CoreLogic January 2018 Chart Pack? Download it here!

 

 

Episode 155 | Think you know your A.B.C.D — How to Action The Four Pillars of Mastery in 2018!

It’s the day in our week we most look forward to… Happy Podcast Day, folks!

And, you betcha: this episode is ESSENTIAL!

Why?

If you’re a regular listener of the show (legend), you know that we go on and on about making sure you head back to our earliest episodes (pre-studio & pre-“professional podcast hosts”), because the information we shared in our glory days is vital. It’s foundational. It’s absolutely the name-of-the-game in property investing!

That’s why today we’re revisiting The Four Pillars of Mastery….. the ABCD of Property Investing. Because now, more than ever, they are going to determine the success of your property portfolio.

What are they again? (Click the link for their full episode).

ABCD. Memorise them. Make sure you’re intimate with every detail and action them in 2018.

 

Before we explain how you can achieve all this, we want to let you know that if you missed our Throwback Thursday this morning — either you haven’t checked your inbox yet or are yet to register for our free stuff — we gave you Dr Danika Wright’s slides, Controlling the housing asset bubble: Affordability, financial stability and regulation, which she presented at the Affordability Conference  late last year. So, if you’re interested in The Housing Bubble Debate or Supply and Demand, we suggest you check it out. You can access it here.

(And, remember: $5 is all you need to become a PICA Member!)

 

Right, what’s the deal with today’s episode?

  • What’s the latest with the negative gearing debate?
  • How can Ben’s latest acronym — SACI — influence your cash flow?
  • What is “open banking”, and how can changes in technology influence your cash flow?
  • What is the biggest risk with your cash flow?
  • What are the four categories of cost?
  • Conversational Commerce: Watch this space!
  • Is equity enough to land you a loan?
  • How do you get around the APRA lending changes?
  • Why do you need to have a borrowing strategy?
  • Looking towards the future, are there consequences of going P & I?
  • We’ll say it again: investment stock vs investment grade
  • What are fundamentals of asset selection?
  • What does defence protect?
  • What do you need to know about insurance that’s REALLY important?

 

Resources mentioned:

 

 

Episode 126 | Q & A-ccounting with Frank Azzopardi—Tax Deduction, Capital Gains Tax, Land Tax and Aussie Expats

Alright folks! It’s Q & “Accounting” time! Yep, on the couch today we’re talking all things tax! Here to help us wade through the grey area is Frank Azzopardi from our friends (and accountants) at YK Partners. If the name sounds familiar, it’s because Frank joined us back at Episode 48!

So, we’ve received a couch-load of questions about tax lately, and quite the few of you have these questions because you’ve “temporarily departed” overseas—you’re Aussie Expats working in another country, but investing in properties back here. And as you know, this can be quite the pickle for tax purposes!

(The rest of you simply want to know what you can and can’t claim. Fair enough.)

Trying not to number-crunch the neurotransmitters in your brain, here are what B1 & B2 + Frank discuss:

  • Is there a tax-free threshold when you live overseas?
  • What is a Double Tax Agreement and what does it mean for you?
  • How does foreign tax credit work?
  • How do you offset tax loses?
  • Tax Talking, What’s the difference between a PPOR and an IP?
  • Can you claim tax on Lenders Mortgage Insurance (LMI)?
  • What really constitutes “Repair” or “Capital Improvement”?
  • Can you negatively gear a property as an expat?
  • What is the “6 Year Rule” of Capital Gains Tax?
  • Can you avoid Capital Gains Tax?
  • What’s the risk of loan in two people’s names (joint ventures)?
  • What’s the tax cut for your kids when they inherit your property?

 

Some of the helpful resources mentioned today are:

 

And… The questions discussed are:

 

From Andrea

“First of all I am loving the podcasts. I listen to them over and over. Secondly, as an Australian expat, living overseas long term but preferring to invest my money back home in Australia, are you able to do a podcast directed at Aussie expats wanting to invest back home but are not sure how to go about it? If you could talk about it or bring someone in? If you could talk about things Aussie expats need to be aware of ie—the different rules that apply regarding capital gains; tax depreciation; tax credits; services expats can employ to assist with the fact we can’t make a trip every week to attend viewings and sign papers. Having bought 4 places in the last few years, I have not completed my PIPA education yet—I am nervous about giving too much advice. Thanks and keep up the good work. I’ll be ready to buy again soon so will likely be in touch for assistance in this.”

 

From Salim:

“Hi Guys. I listen your podcast regularly and leaning a lot!! I have a question and have been searching for the answer for a while; but no luck so far (asked same questions to few accountants but all of them have different opinions)! I bought an investment property last year in Melbourne in July 2016 (that time I was living and working in Sydney) but very soon, I am moving to Melbourne and am living in my investment property as principal residence.
1. I paid around $7500 as LMI. Can I claim this for tax deduction?
2. Can I offset the interest in my Tax?
Any help would be greatly appreciated!! Look forward for your resonance. Thanks.”

 

From Nick:

“Hi guys! Really enjoy the podcast—you have both helped reshape my approach to property investment and I’m currently in the process of developing an investment strategy that suits the specific circumstances of my partner and I, rather than rushing into the often-scary Sydney market.
We’re a couple currently renting in Sydney with a combined income of over $220,000/year, around $80,000 sitting in the bank, no kids at the moment (but probably will within the next 2 years); and we’d like to get our foot in the door of the property market. One challenge we face is a high likelihood of moving overseas for work within the next 5 years. If we buy as owner/occupiers we’ll be looking at 2 bedroom apartments in the medium-priced suburbs of Sydney – right at the limit of our purchasing means. Should we move overseas for work, my understanding is that we won’t be able to negatively gear the property (since our income tax will be overseas). It does appear that some other countries have negative-gearing policies, although it’s not clear whether losses incurred from overseas investments are eligible and the rules differ from country to country. My feeling is that stretching to buy an apartment in Sydney for ourselves now could force us to sell early if we move overseas and the repayments are strongly outweighing the rental income—not a situation we want to be in.
If we instead look at rent-vesting and aim for a cheaper investment property in a growth location somewhere outside of Sydney, with a path to getting it positively geared in the short-term, this seems like a lower risk strategy that still gets us a start on our journey to a property portfolio. I’m hoping the principles you talk about have sunk in a bit and I’d love to hear if you think I’m on the right track.
I think our situation is quite common for a lot of young professionals. What tips can you give from both a tax and property selection point of view to the many Australians working overseas or planning to work overseas, who still want to invest in the Australian property market and start building a passive income for their futures?

 

From James:

“Hi Ben & Bryce. With the strategy of accumulating 3–5 good capital growth properties and potentially selling 1–2 in the long term future upon retirement, would we not be best to (if possible) move into each property for minimum of 12 months to avoid capital gains tax when the properties are sold? Thanks for such a valuable podcast I always listen to each episode a couple of times a week. Regard, James

 

From Simon:

“Boys. Love the book and am now an avid listener to your podcast each week. I have a land tax question for your next Q&A session that no one can seem to give me a clear cut answer.
My wife and I have a PPOR (Newcastle), as well as one current investment property also in Newcastle. Recently we have just purchased an apartment off the plan which is not due to be completed until late 2018 at the earliest.
Currently all three properties are in both our names—50/50 share.
My question is regarding NSW land tax which the 2017 threshold is approximately $549k. (Lets just say $550k for ease of rounding off)
Does this mean that as a couple we have a combined threshold of $1.1 million or despite having two people owning these properties do we still have to come under the $550k to avoid land tax as a couple?
If the latter is the case, what is the best way to minimise our exposure to paying land tax if we wanted to continue to purchase investment properties in NSW? Should our next purchases be in separate names?
Thanks for your help. Simon.”

 

If you like this podcast: “Q & A-ccounting with Frank Azzopardi—Tax Deduction, Capital Gains Tax, Land Tax and Aussie Expats”, 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: New Topics

Episode 124 | Q&A – 20 minutes Saved 20 Years of Regret, Investing in Airbnb, Property Spruikers, Buying Cash Flow Only and the Cost of Commission

Alright folks, it’s that time again … you ask, the boys answer!

After receiving a tabletop full of new topics, we’ve taken our que this week behind an anonymously-sent testimonial. Turns out an earlier podcast Why You Shouldn’t Invest in Property saved our listener from being “sold a lemon by a spruiker”! Yep. Unfortunately guys, the property spruikers are still out there, so Bryce & Ben will be answering similar questions on the red flags to look out for, like:

  • How to sniff out the so called “educators” and get your trust back
  • What your next move should be to fix bad property advice
  • How 20 minutes stopped 20 years of regret
  • What the consequences are with ‘fee for service’ and ‘working for commission’
  • Why the right asset selection can flip the spruikers on their heads
  • What the finance in the first two stages of property investing are
  • Why negative gearing is really only a moment in time
  • How long and how many properties do you need in the accumulation phase
  • What ‘buying only for cash flow’ is, and its risks and rewards
  • Investing in regional area and factors to consider
  • How to spot the difference between a genuine property educator vs a spruiker

and (SUPER TOPICAL)

  • Airbnb Investment: Is it worth considering them?

This is a goodie, especially for those who don’t want to feel the sting of bad investing!

(For those who want to know the website Ben talks about, it’s PIPA.)

 

The questions we’ve handpicked are from:

 

Listener Anonymous (as continued from their nightmare situation, which the boys will read out):

… We have about $200,000 of available equity, but we are now not sure what our borrowing power is as our previous broker was also linked to the spruikers and we don’t trust what they’ve told us. In your opinion, what should our next move be? Ideally we’d like to invest in Melbourne or Sydney but are not sure if it’s the right time to get into these markets.

 

Andy:

Can you guys talk about the finance in the first two stages of property investing? How do we go about understanding the numbers eg loans, consolidation and what is involved how everything works with the finance and loans, what to do with the loans from accumulation stages to consideration stages and onwards?

 

Jonathan:

Hi guys. I’ve recently started listening to your podcast and think it’s great. I’ve recently attended a seminar with ‘XYZ’ company, ‘XYZ’ Education they call themselves. Just wanted to know if you had heard anything about them? I understand there are many of these ‘mentors’ out there—those that are ‘fee for service’ and those that work off commission. These guys are the later. Any thoughts, comments would be greatly appreciated. Thanks in advance.

 

Kate:

What do you think about the idea of buying for cash flow only? I live in Adelaide and there are many areas within 60 – 90mins of Adelaide where you can buy quality character properties for less than $250,000. If only earning an average income, and planning to buy and hold for 15 – 20 years, do you think a larger portfolio of properties like this may be less risky than one or two closer to the CBD, which will have substantial holding costs?

 

Eddie Airbnb:

Hi. I am an avid listener to your podcasts and I started listening to them since 2015, but I have stopped for a year. I have recently bought another investment unit and have started listening to them again. I am currently at episode 51 and it is great because I can listen to them nonstop without having to wait for the next one to arrive in my podcast. Great work, I really enjoy your shows.
I have a question regarding Airbnb. I know it is not aligned with your property investing strategy and overall investing mantra. But recently, it has taken the property market by storm and there are many investors who are doing this to become positive cash flow. It is sort of the elephant in the room and there is a lot of talk about it out there, whether it is in high-rise holiday resort, or brick and mortar family homes. People are doing it. I have recently bought an apartment (yes: high rise, high density, tourist destination, lifts and caretaker) and so far I am cash flow positive, after netting all costs including cleaning, rates and body corporate. I only manage the bookings of the apartment and outsource everything to a cleaner who doubles up as my meet-and-greet host. I also have insurances to cover those times when needed, and I do everything above board.
I would like your views on how your look at Airbnb investment as part of an investment strategy—if it is something that you are interested at discussing.
Thanks.
If you like this Q&A episode (A Transitioning Market, Money, Habits, Tax Deductions and What It’s Really Costing You), 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://thepropertycouch.com.au/topics/

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