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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 76 | Building a property portfolio after the boom – Chat with Veronica Morgan

 

This time on our Special Guest Episode, we’ve got Veronica Morgan on the Couch! Most of you would have known her as the co-hosts of Location Location Location Australia on Foxtel Lifestyle Channel with Bryce but when they aren’t filming, Veronica is the Founder and Principal of Good Deeds Property Buyers. She is also the Vice President of the Real Estate Buyers Agents Association of Australia (REBAA) and an active property investor herself.

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

  • What does REBAA do and why did she join it?
  • Her transition from a selling agent to a buyers agent – why did she switch sides?
  • How is the regulation in Sydney differs from other states such as the gazumping law?
  • Her journey as a property investor – what motivated her to start investing?
  • How did the recent market boom in Sydney affect her role as a buyers agent
  • What are some of the principals and strategies when it comes to building a property portfolio after the boom
  • Her asset selection tips to finding an investment grade property
  • Some of the mistakes and lessons learn in her property investment journey

 

PS: We hope you enjoy watching the video and we would really like to hear what you think about it! If you like it, let us know and we will produce this more regularly. 🙂

 

If you like this podcast: “Building a property portfolio after the boom – Chat with Veronica Morgan”, 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 050 | Q&A – Credit card management, professional fees, LOC for negative cash flows, adding value via reno and interest only loans

Only a couple more weeks left to our Summer Series. This week, Bryce Holdaway and Ben Kingsley will be answering the questions below from our fellow listeners. Thanks again for submitting your questions!

  • Credit card management question from Peter on Facebook: Loved reading the book. Quick question, in your Money Smarts section (Chapter 3 of the book) you discuss using your credit card for fixed expenditure. Does that include groceries…assuming groceries doesn’t come under lifestyle? That seems to provide a variable – do you think that is still best? I want to adopt your setup but worry about using a credit card, considering we don’t have one currently. Thoughts?
  • Professional Fees questions from Andrew : Hey guys, thanks for all the valuable information so far. I have a question in regard to the fees and cost of the property portfolio and buyers agent services. I am a first time investor with limited funds for my purchase, and I am trying to get an idea whether or not I could
    • a) even afford the above services and
    • b) whether those funds would be better spent contributing to a larger deposit? Can buyers with smaller budgets (sub $400k) still maximise capital growth and rental yield using qualified property advisers and investment savvy buyers agents? Cheers.
  • Question on line of credit from Christian: Hi Ben, what are your thoughts on using equity and/or a line of credit to fund the negative cash flow on high growth properties?
    I know that some other high profile companies are advocates of this strategy. Your thoughts? Would love to hear your thoughts in podcast.
  • Value add question from Heath: Hi guys, love the show and I am currently up to the Buyer’s decision quadrant in the book and really enjoying it. My question to you is:
    I have a recently renovated investment property in Brisbane that is a 3x2x2. We have built in a 4th bedroom downstairs in the existing utility room (legal height, ventilation, windows and power supply etc.) Currently I am speaking to a few building certifiers and engineers etc. to assess whether or not I can get the 4th bedroom certified through council. It’s looking like the certification will cost me around 5k and the difference between the median for 3 & 4 bedrooms in the area is around 60K. Would you think moving forward with this would be feasible? And if so when issued the certificate through the Brisbane council is this something that I would submit to the valuator when they would be doing the inspection?
  • Repayment question from Joe: I actually just finished reading your book about 30 min ago and I have to say I really enjoyed it. In particular chapter 9 and 10 (investment strategies and the case studies). I found it very easy to follow and understand though I do admit I learn a lot of the terms and phrases from the podcasts. I do have a couple of questions though.
    • I noticed that in the case studies the loans were always interest only which is fine and I understand why it’s like that, but is it possible to have Interest only repayments over the course of the entire loan? Surely at some point the bank wants principal paid back.
    • This leads me to my second question, during your case studies do you factor in the fees of your service as this would have a noticeable  impact on the overall purchasing power of the buyer?

 

If you like this Q&A episode (Credit card management, professional fees, LOC for negative cash flows, adding value via renovation and interest only loans), don’t forget to rate us at 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/

Episode 48 | Different investment structures (family trust, company, partnership), CGT and other tax related topics – Chat with Frank Azzopardi

Our loyal listeners would have noticed by now that every single time a tax related question pops up on the podcast, Bryce and Ben will try and answer it in a general sense (sometimes, probably too general). So, this time on The Property Couch, we have invited Frank Azzopardi from YK Partners to help give a clearer definition when it comes to questions related to tax and property.

Sit tight and be prepared because this episode can be very technical. Some of the issues that they’ve touched on in this episode are:

  • Investing under trust ie: family trust – what it involves and the tax implications
  • Investing under a company structure – why people do it and areas to be cautious about
  • Partnership in property investing – what to expect, difference between partnership with family and friends and types of partnership
  • Capital gain tax (Capital Gains Tax) and the 6-year rule
  • Are buyers agent fees and stamp duty tax deductible

 

Now, please remember that this podcast is general information only and is intended to assist you in understanding the different investment structures and some tax regulations related to Australian property. It is by no means a full representation of all aspects of the property tax and listeners/viewers should not rely on the information provided in this podcast when making their investment decisions. The Property Couch and our guests strongly recommend that listeners/viewers first seek qualified and professional advice to assess their individual and unique circumstances before making any decisions. For more disclaimer, please click here.

If you like this podcast: “Different investment structures (family trust, company, partnership), Capital Gains Tax and other tax related topics”, don’t forget to rate us at 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/

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