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Episode 084 | Why you Shouldn’t Invest in Property?

Yes, we know it can sound a bit contradictory. This is a property podcast with two of Australia’s top property experts and we even did an episode on why invest in property! So why would we talk about not investing in property?

Well, the fact is, investing in property is not the perfect type of investment for everyone. There are certain times in an investor’s journey where it is simply a bad time to start investing. There are also times when investors need to first reflect on their mindset before they start. Property investing is a high-value investment, and you’ve heard us repeatedly saying that it is for the long-term. It’s like following a recipe. If you don’t have all the essential ingredients in place, it’s best if you don’t cook the dish. So if you don’t have everything in line, it may be better for you to stay away from it for the time being.

So in today’s episode, Bryce and Ben will be sharing a few reasons on why you shouldn’t invest in property. The first is when you decide to invest purely for tax purposes.

 

Free resources mentioned in this podcast:

  • CoreLogic Pain and Gain report – Read here
  • Money SMART Report – 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: “Why you Shouldn’t Invest in Property?”, 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/

The Game of Property Investing

Learn to Play the Game of Property Investing Like a Pro!

We’re excited to be releasing this new educational video to further help you invest like a Professional.

In this video we set out to prove that not every property is created equal when it comes to investment and it’s our job to help you learn what makes for smarter investing!. We will highlight the factors and variables that expert property investors consider when selecting the right location and then the right property in this location. This research approach takes into consideration:
– Supply & Demand Variable
– Human Interest and Human Behaviour Influences
– The Practicality Test
– And more……

So what are you waiting for? Go ahead and register below and we’ll see you on the other side to teach you more about investing like a Pro!

 

Get Access to The Game of Property Investing Here!

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And if you have yet to subscribe to the podcast, you can subscribe here: Subscribe on iTunes | Subscribe on Android

 


Transcript:

Bryce: Hey there folks! I’m Bryce Holdaway, he’s Ben Kingsley and we are the hosts of The Property Couch which is the Insider’s Guide to Property Investing and today we want to show you how we helped people build portfolios for a passive income but it’s not just about investing on its own, there is so much to unpack Ben.

Ben: There is. It’s a game and there is a science to this game so what we’ve decided to do is we are going to show you how we play the Game of Property Investing. So you can see some cards behind us. We are going to talk to those cards and we are going to give you a bit of sneak peek in terms of how we play the Game of Property Investing aren’t we Bryce?

Bryce: We certainly are because we’ve got the view that searching is not researching. When it comes to residential real estate, there are no two properties that are the same. I always think that it’s like a fingerprint Ben, that even though there are subtle similarities they are always different. So just because you’ve lived in a property or just because you rent a property doesn’t necessary mean that you understand property. And we are going to make it a thing of the past Ben because once you’ve finished watching this video, hopefully, all of you would better understand a few things. Supply and demand and what else Ben?

Ben: Supply and demand, the practicality test, the human interest and human behaviour drivers, getting into the buyers’ psychology. We want to 10x your property investment results and we are going to show you how to do that. So why don’t we go back here?

Bryce: Alright.

Ben: So let’s take a quick look. Why do we do this Bryce? Why do we invest in property?

Bryce: Well ultimately it’s not to just impress our friends with how many properties we have. It’s to provide a passive income so that we can get two things back, our time and our experiences and that is what it’s all about.

Ben: It is. So we are talking about trying to create passive income. We are also trying to make sure that through research and through understanding the psychology of the buyer you can get an outperform result with your property investing. So, a little teaser here Bryce haven’t we? We just want to talk through this and then on the other side of this video we are going to unpack that in a greater capacity so that you can really get to see how two experts go about selecting the best location and the best property in those locations.

Bryce: That is very true Ben. So the number one point that we want to get through right here right now is very simple. The market is generally made up of owner occupiers and investors but the important thing for investors to understand is we want to be targeting properties that cater to this market here of the owner occupiers, not the investor market because quite simply, it is a numbers game. 70% of the market for any capital cities or any built up areas are generally made up of owner occupiers and roughly 30% is made up of investors. So it actually just makes sense to chase this sector of the market than this one Ben.

Ben: That’s right and all those people who listen to our podcast understand this because we take the time to educate you about the science that is property investing and this is no difference. When we get into the psychology, the human interest and human behaviour, we actually get to the next layer which is the practical reason why we invest and why they buy what they buy because they buy with their heart Bryce don’t they? They don’t buy with their head. So naturally they are the ones that are pushing the value higher. On the other side of this video, you would be able to see exactly how we go about doing this. Let’s give them a little teaser Bryce. Who are some of the players and what are some of the variables that we look at?

Bryce: For most people, the property is going to be driven by three variables. Economic activity, where am I going to earn my income. Human interest which is largely the things that people want to do on the weekend or the things that drive them to be in the suburb and human behaviour, are they time poor? Do they need to be close to the city, all those sorts of things? So economic activity, human interest and human behaviour.

Ben: That’s right and it also comes down to supply and demand. So there is a classic case of supply. If it’s in abundance, then technically prices won’t grow but if it is scarce, if there is some scarcity around what these people are looking to buy, ultimately you can find these nuggets of gold and get the best location and buy the best asset. That sort of links into this sort of concept. When we got these audiences, Bryce, if you want to jump out there, you can see basically, we’ve got different types of people looking to buy and connect. And they are trying to make decisions on the types of properties that they buy, the floor plans, the locations and the lifestyles drivers attached to that. So you can understand that there is lots of moving parts and on the other side, as I said before on this video, we are going to unpack it. We are going to see exactly how we put the Game of Property Investing together.

Bryce: So the question to you folks is this. Do you want to understand the Game of Property Investing? Because if you do, click on the link underneath here and we are going to take you to the next one. We are going to show you how all of this works, how it all comes together and if you can satisfy the practicality test, as Ben said before, chances are you will 10x your property investment results.

 

 

 

Episode 73 | Building a property portfolio in a tough market – Chat with Damian Collins

 

It is Special Guest Day and we’ve got Damian Collins from Momentum Wealth with us on our very first Vodcast!

Just a bit of a background on Damian, he is an established property investor, the founder and managing director of Momentum Wealth, a Perth-based property investment and buyers advocacy firm and is also on the board of PIPA which means he is very well qualified to talk about the art of investing in property and building a portfolio.

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

  • Damian’s experience as an investor and what motivated him to build his portfolio
  • The mistakes, lessons and investing tips he learned as an investor
  • How is the Perth’s property market doing and where is it on the cycle
  • Was there a sentiment shift considering the recent economic changes
  • How does he conduct his property research when it comes to asset selection
  • What are his principles and investment strategy when it comes to building a property portfolio in a tough market
  • Some of the horror stories that he has seen in his seat

 

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 in a tough market – Chat with Damian Collins”, 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/

Live Questions and Answer Chat on Property Investing – June 2016

The Property Couch podcast is all about helping others avoid making bad property investment mistakes and sharing the insiders guide to property investing. That is why on the 29th of June 2016, Bryce and Ben decides to hold a Live Questions and Answers Chat on Property Investing so that we can interact directly with our fellow listeners. Thank you to all of you who have joined in and if you would like to watch a replay of this, here’s a recording on Youtube:

List of questions Answered:

  1. Will Sederino: My question is about claiming depreciation on an existing property that has been renovated. We are about to purchase a property (using Empower Wealth’s Buyer Agents) that has recently been renovated by the previous owner and wonder whether we can claim depreciation on this renovation even though it was not us that completed it. My gut feel is that we would be able to? Is this correct?
  2. Mitch Scholard: G’day fellas, wondering your thoughts on which capital city will see the best capital growth over the next 5 years.
  3. Luke Stirton: Does development and renovation provide the secret to accelerated gains in today’s increasingly harder market to get ahead?
  4. Angela Cerasi: Hi guys, I am new to property investing and am currently in my research phase. Have listened to all your podcasts and enjoyed them immensely! I have 2 questions. (1) If a potential investment property is to have owner occupier appeal, then won’t you be competing with owner/occupiers when it comes to buying? From what I understand this means you could be competing with emotional buyers who could push the price up. I don’t think renovating is for me, so I would be buying a place that would be pretty much ready to be lived in by tenants. I of course want to find an area which is gentrifying, but wouldn’t owner/occupiers who are looking for a great buy also be looking for this too? (2) If a buyers agent takes a fixed fee, how much time would they generally dedicate to finding your property? Do you come to them with the city/suburb in mind or do they come to you with those details based on your personal situation? Do they keep looking for you until a property is successfully purchased? I appreciate that all buyer’s agents would differ but maybe you can give me an idea of how it works?”
  5. Maria Li: Can you do a PAYG withholding variation the first year that you own investment property (based on projected cash flows) or do you have to wait a year so that you can base future withholding variations on the previous year?
  6. Leisa Caines: Hi Bryce & Ben, love the podcast & your book. Hear you talk about finding an investment savvy mortgage broker but where do you find one? I’m in North west area in Sydney
  7. Brad McCreadie: Would you buy now or wait to see what happens to apartment prices in Briz. Looking at a 2 bedroom as owner occupy initially but then to use as investment.
  8. Karl Frank: Hi Guys. What will be the impact to the housing market if Labour win the next election and implement their changes to the Capital Gains Tax as it relates to investment properties?
  9. Mark Rogal: If Labour win the election, negative gearing and CGT changes won’t kick in until mid-2017. In your opinion, what is the most likely scenario for prices of established homes between now and July 2017? Thanks for the great insights! Cheers!
  10. George Kallinikos: I was wondering what is a suitable time frame is to wait it out during a period of experiencing little to no growth. I have owned a one bedroom apartment in a Melbourne blue chip location of Hawthorn since 2008 and it has barely kept up with inflation. This has left me disillusioned during a period where Melbourne overall has seen incredible growth. I understand exit / repurchase costs but also realise that the opportunity cost of this investment has been quite high. What are your thoughts?
  11. Bradden Mitchell: GDay Bryce & Ben. Does an investment grade property have to be over $500K ?
  12. Jack Killalea: If there is a significant price correction in the CBD apartment market over the next 2-3 years, will these apartments become potentially good investments or because they lack scarcity they will always be fundamentally not investment grade?
  13. Geoff Smith: Hey guys just a quick question, how does it work with using parents equity from their homes. How does the loan get structured or would it be used as a line of credit against there property?
  14. Graeme Ash: Hello Couchers, Great Show 🙂 Quick question – with banks only lending 60% for loans, do you think it is better to go for the biggest, blue chip, investment grade, growth asset you can afford using all your super or go for a cheaper property so your 40% does wipe you out and you can start saving for property 2.
  15. Felix Tjandrawibawa: What’s the best way to estimate capital growth for a suburb? Are you guys looking at historical growth (if so – how long do you guys look for?)?
  16. Rachel Hubbard: Hey guys. I’m now in a position to buy my next investment property. However my financial goal is to pay off my ppor in the next 5-10 years. Given that property investment is a long term strategy, do you suggest buying another investment property in an attempt to gain equity and sell in 5-10 years to pay off my ppor? Or given the high costs involved in buying/selling, should I look to invest in other ways to achieve this goal?
  17. Alex Hill: Are all house and land packages dud investments? In 2013 I bought land in North Lakes QLD and built a lowest house. I spent about $50K over median price for the area, trying to maintain some owner-occupier resale appeal. It’s currently cash flow neutral but I’m concerned there will never be any growth, and I’ll now struggle to accumulate a deposit for a second investment property. What are your thoughts?
  18. Amy Hambin: When building an investment property is yield calculated on land and construction costs or the first valuation on completion?
  19. Daniel Stocks: Hi guys, do you often come across clients who’s properties come in at less than purchase price when applying for finance?
  20. Sam Hockey: Hey guys, am I better off looking at an investment property towards the upper end of my lending capacity ($800k) to get into the better areas of Brisbane or looking further out for something around $400k to setup my next investment property purchase sooner? Love the podcast I’ve just finished it for the 2nd time around!!
  21. Richard Bristoe: Hi Bryce and Ben, I just want to ask what are your thoughts on Brexit, and how it will affect the Australian property market in the short and long term?
  22. Mitch Scholard: Would love your thoughts on the Sunshine Coast, I feel like it has great owner occupier appeal but not sure it has the income to keep property prices increasing.
  23. Daniel Stocks: If looking for properties interstate in unfamiliar areas, what advice can you give for narrowing down investment grade suburbs?
  24. Tammy Nguyen: What are your thoughts on the Logan area in Brisbane?
  25. Sam Hockey: How much does a Buyers Agent cost?
  26. Gaz Slater: How long do you wait for a city that’s nearing the bottom of its cycle before buying. Eg Perth.

 

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