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Episode 013 | Buy an investment property and continue renting or buy a home – Q&A Day!

Right off the bat folks, a big THANK YOU to our listeners for all the questions they’ve sent in!  

We’re excited to be answering a BUNCH of great questions in our FIRST EVER Q&A session!  

We’ll be walking you through the crucial conversations you should be having before making ANY decisions…  

And sharing the type of research and data you should be conducting to know the best option for you! 📈  

We’re also sharing our thoughts on the Government’s policies on negative and positive gearing (and explaining why removing negative gearing is a terrible idea!)    

Once again thank you to all our question submitters, we’re glad that this podcast has inspired you and we had tons of fun recording this one!   

Listen in now folks, plenty of gold to help you make the right decisions.  

P.s. In the future we are hoping to answer ALL of your questions, so please keep sending them in!  

 

The Questions…

Dan and Ryan:  

“Should we buy an investment property in a high growth location and keep renting, or move a bit further out and get something we can afford?” 

Leah:  

“Do you think the tax rules around negative gearing will change in the future, so as not to benefit those investing in multiple properties and how do you diversify your portfolio?” 

Mark:  

“How do you identify high disposable income suburbs and if you’re buying in a block of units, how do you work out if there are more owner-occupiers than renters in the building and area? Also, what do you think about dual living homes ie: granny flats?”

 

Free Stuff Mentioned:  

  • Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which shows you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away! 

    • Are you also interested to have a better understanding of your cashflow position via our FREE Money SMARTS Platform?
    • This field is for validation purposes and should be left unchanged.

 

Here’s some of the gold we cover…

  • 0:37 – Dan and Ryan’s Question  
  • 2:15 – What you need to analyse first!  
  • 4:00 – Why you SHOULD consider renting in a lifestyle location  
  • 5:25 – The conversation you need to have… 
  • 6:21 – Leah’s Question  
  • 7:07 – The fundamentals of gearing  
  • 8:35 – What we predict for the future of negative gearing policy… 
  • 9:10 – How the Government gets its revenue 
  • 9:42 – Our questions to the Government on positive gearing tax  
  • 10:35 – Why removing negative gearing doesn’t work!  
  • 12:50 – How do you diversify your portfolio?  
  • 15:03 – Mark’s Question  
  • 15:45 – Where and how you can find the income story!  
  • 17:00 – Why you should focus on small blocks  
  • 18:29 – ALL the data we use  
  • 20:00 – When is it best to have a granny flat?  
  • 21:23 – Some gold from Bryce!  

 

Episode 012 | Why Invest in Property?

It’s no surprise that Ben and Bryce are huge advocates of property investing but until now, they haven’t explained WHY they love it so much! 🏘︎  

Today we’re taking a walk down memory lane and discussing why and how Ben and Bryce first got into the residential property market and why they’ve continued to stay!   

From Ben’s early love of investing to Bryce’s captivation with Jan Somers’ back of napkin calculations, we’ll also hear about Ben’s “apprenticeship” years that’s made him the guru he is today!!  

PLUS we’ll be looking at the fundamentals you should know about investing (Including how property can be BOTH a liquid and non-liquid asset, we know it’s a bit of a head-scratcher… 

The Property Couch - Ep 12 - Why invest in property - CoreLogic Pain and Gain report

And applying those to Sydney and Melbourne markets today.  

We’re sayin’ that this time – the rising time will NOT lift all ships!  

In this podcast, Bryce and Ben also mention that based on CoreLogic’s “Pain and GainReport, properties held for shorter time periods are much more susceptible to loss. To read the full report, click the image to the right. 

Listen in now!  

 

Free Stuff Mentioned:  

  • Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which shows you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away! 

    • Are you also interested to have a better understanding of your cashflow position via our FREE Money SMARTS Platform?
    • This field is for validation purposes and should be left unchanged.
  • CoreLogics “Pain and Gain” report. For more information on CoreLogic visit RP Data CoreLogic

 

Here’s some of the gold we cover…

  • 0:30 – Ben’s been through the wars… 
  • 2:12 – Why Ben first got into property investing!   
  • 5:20 – Why Bryce first got into property investing! 
  • 6:55 – A bit of gold from Robert Kiyosaki  
  • 7:45 – What does property investing mean for YOU?  
  • 9:00 – Ben’s “apprenticeship” years  
  • 10:05 – Sydney and Melbourne folk – beware of the market now!  
  • 11:20 – Case Study: Manly (and what you should learn from it!)  
  • 14:41 – Why the rising tide will NOT lift all ships 
  • 15:30 – THIS is what you need to understand about property investing…. 
  • 16:15 – Different investing strategies!  
  • 16:58 – The independent umpire is…. 
  • 18:10 – Why property is both an illiquid AND liquid investment!  
  • 20:00 – We’re at 4.5k downloads – THANK YOU folks!  

 

Episode 011 | Property Spruikers

We’ve got four words when it comes to property spruikers folks:   

Run for the hills! 🏃🏃 

Today’s topic is something we’re extremely passionate about which is why we’re focusing an entire episode on it!!   

Too often we’ve heard of “sharks in suits” who have no proper training…  

Giving terrible financial advice that can cripple folks’ wealth and make that lifestyle dream, well, a dream.   

In fact – hearing about these people are why we started this podcast in the first place!   

To help you avoid falling into the same situation, today’s episode will define who Property Spruikers are, what they do and why they even exist!   

More importantly, though, we’re covering HOW you can avoid them!   

We’ll be providing you with industry intel so you can also identify the main tactics they use (As you’ll hear with some spruiker “educators”…)   

AND we’ll explain how property advisors will act when they really have your best interests at heart!   

Did you know that Australia’s peak industry body, the Property Investment Professionals of Australia (PIPA) can also help you verify your buyers’ agent if they’re a PIPA member?   

Yep, that’s right folks!   

There are plenty of good tactics that you can use to stay away from the sharks; to find out more just tune in to today’s episode.  

 

Free Stuff Mentioned:  

  • Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which shows you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away! 

    • Are you also interested to have a better understanding of your cashflow position via our FREE Money SMARTS Platform?
    • This field is for validation purposes and should be left unchanged.
  • Watch Ben’s commentary on the recent rate cuts here.
  • Looking for a Qualified Property Investment Advisor? Use the Search Function on PIPA Website here or get in touch with us!
  • Our parent company Empower Wealth is a PIPA Member and all our advisors are QPIAs. You can learn more about our free and no-obligation initial consultation here.

 

Here’s some of the gold we cover…

  • 1:20 – What we’re NOT against… 
  • 2:15 – The problem with Property Spruikers  
  • 4:18 – Our message to beginner investors!  
  • 4:47 – How to get objective property advice  
  • 5:59 – What a true property advisor will do 
  • 6:19 – So, what are Property Spruikers? 
  • 6:36 – The Property Spruiker’s “argument” (and why it doesn’t work!)  
  • 7:43 – A sad real-life example folks 🙁  
  • 8:33 – 1 way to tell you’re dealing with a Property Spruiker 
  • 9:10 – Why do Spruikers exist?  
  • 9:55 – #3 Spruiker tactics!  
  • 11:33 – Beware the “educational” spruikers!  
  • 12:15 – How to verify a legitimate property educator  
  • 13:30 – The miner vs the shovel seller analogy 
  • 14:14 – Spruikers will use rental ______  
  • 15:40 – “There’s no such thing as a free lunch!”  
  • 16:47 – You gotta ask THESE questions  
  • 18:00 – How the Property Investment Professionals of Australia (PIPA) can help you avoid spruikers  
  • 19:35 – What is two-tier marketing?  
  • 21:51 – How to avoid spruikers!  
  • 22:42 – Check out Ben’s commentary on the RBA cash rate!  

 

RBA May 2015 Cash Rate Cut

Today the Reserve Governor and the Board met and they’ve dropped interest rate once again to 2%. So following the February rate cut, they’ve followed it up with a May rate cut. Now, if you are wondering what factors have motivated the RBA to make this decision, check out Ben’s commentary on it.

 

 

 

Ben Kingsley - Quote of the Day - The property couchCommentary & Opinion of Ben Kingsley – CEO & Founder; Property Investment Analyst and Advisor and current Chair of PIPA Ben Kingsley is the Founding Director of Empower Wealth and Chair of Property Investment Professionals of Australia (PIPA). A qualified Property Investment Advisor (QPIA), Ben holds a Real Estate Agency License (QLD), a Diploma of Finance and Mortgage Broking Management, a Diploma of Business and has become one of Australia’s leading experts in property investing for wealth creation. 

 

(People watching/reading this should be reminded this is an opinion comment by Ben Kingsley, and should not be used when making decisions about financial matters without seeking further clarification and understanding of your own personal circumstances. This article is not advice you should rely upon. We recommend you to speak to a licensed professionals before taking any action with your financial affairs)

Episode 010 | Tax Depreciation (Case Study)

Here are the Case Studies mentioned in Episode 010 | Tax Depreciation of The Property Couch:

Tax Depreciation Case Study 1:

A $600,000 – $700,000 period home with a rental income of $22,880 per annum

An investor owns a period home purchased for between $600,000 and $700,000 with a rental income of $440 per week.
Expenses for their property such as interest, rates and management fees totaled to $40,950. A depreciation schedule from specialist Quantity Surveyors BMT Tax Depreciation found the investor would be entitled to claim $9,880 in depreciation in the first financial year. By claiming depreciation deductions, BMT was able to help the investor to turn their negative cash flow into a more positive one, reducing the costs involved in holding the property by $3,655.
The following scenario shows the investors cash flow with and without the depreciation claim:

Tax depreciation case study 1 - The Property Couch
This investor used property depreciation to reduce the costs of holding their property. Without depreciation, they were paying out $219 per week. By taking advantage of tax legislation and making a depreciation claim, the weekly cost of holding the property is reduced to $149.

 

 

Tax Depreciation Case Study 2:

A $400,000 – $500,000 older villa with a rental income of $21,060 per annum

An investor owns an older villa purchased for between $400,000 and $500,000 with a rental income of $405 per week.
Expenses for their property such as interest, rates and management fees totalled to $29,610. A depreciation schedule from specialist Quantity Surveyors BMT Tax Depreciation found the investor would be entitled to claim $7,930 in depreciation in the first financial year. By claiming depreciation deductions, BMT was able to help the investor turn their negative cash flow into a more positive one, reducing the costs involved in holding the property by $2,935.
The following scenario shows the investors cash flow with and without the depreciation claim:

Tax depreciation case study 2 - The Property Couch

This investor used property depreciation to reduce the costs of holding their property. Without depreciation, they were paying out $104 per week. By taking advantage of tax legislation and making a depreciation claim, the weekly cost of holding the property is reduced to $47.

 

Case studies provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation.

Episode 010 | Tax Depreciation

If you were to ask an investor if they wanted to save $149 per week on a property, we can guarantee you that no one would say no… 

BUT that’s exactly what too many folks are doing when they don’t use tax depreciation right! (Check out the case studies at the bottom if you don’t believe this number…)  

Today we’re excited to be discussing this topic with the help of our good friend and first-ever guest to the show: Bradley Beer!  

As the Managing Director of BMT Quality Surveyors, experts at tax depreciation, Brad explains exactly what tax depreciation is and how and when you can use it!   

Buying a property for its depreciation, however, should NEVER be your main reason for investing!  

Instead, we unpack the important depreciation factors you should be looking at… 

And explain why 1985 and 1987 were very important years when it comes to tax depreciation. 

We’ll also be explaining what quality surveyors do and hearing some true stories from Bryce and Ben!  

 So tune in now for the gold on tax depreciation! (Yes, we say tax depreciation way too much in the episode too 😉)  

 

Free Stuff Mentioned:  

  • Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which shows you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away! 

    • Are you also interested to have a better understanding of your cashflow position via our FREE Money SMARTS Platform?
    • This field is for validation purposes and should be left unchanged.
  • Brad’s case studies that he has prepared for the podcast can be accessed here! The first is a $600,000 – $700,000 period home with a rental income of $22,880 per annum and the second is a $400,000 – $500,000 older villa with a rental income of $21,060 per annum.
  • Interested in using BMT? Download the BMT Tax Depreciation Application Form here, or fill it out below:
  • This field is for validation purposes and should be left unchanged.

 

Here’s some of the gold we cover…

  • 0:50 – Meet Brad Beer!  
  • 1:26 – What’s the benefit of a tax depreciation schedule? 
  • 2:00 – How Bryce’s friend benefited from one!  
  • 2:45 – Did you know you can get cash back?  
  • 4:00 – What do Quantity Surveyors do?  
  • 4:38 – Ben’s Franking Credit analogy  
  • 6:07 – WHY you should use tax depreciation  
  • 7:30 – This is why education is important!  
  • 8:09 – Why is 1985 and 1987 important dates?!  
  • 9:54 – So when do you get depreciation in a period home!?  
  • 10:55 – The challenge with depreciation is…   
  • 11:40 – Improving YOUR net yield  
  • 12:40 – The process to determine your tax depreciation!  
  • 14:50 – Renovation and depreciation!  
  • 16:00 – The lump sum scrapping approach 
  • 17:49 – Why you shouldn’t do tax depreciation after renovations   
  • 18:20 – Learn from Ben’s story!  
  • 19:40 – WHY it’s worth it to use BMT  
  • 20:15 – Some gold tax depreciation case studies!  

 

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