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464 | Using SMSFs to Avoid Getting Stuck on Your Next Property! – Q&A Day

By in Podcast, Property Investment, Q&A

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Many investors can’t seem to move beyond owning 2-properties due to limited borrowing power or equity, so why don’t more people turn to Self-Manager Super Funds (SMSFs) as an answer?  

Folks, this is just ONE of the enlightening questions from today’s enormous Q&A episode which has a bit of gold for every property investor, no matter what stage you are at on your property journey.  

From the ultimate pros and cons list of SMSFs to revealing the true long-term advantages of owner-occupier appeal – and why it matters over high yield – we’re exploring the winning strategies one can use to move up the property ladder.  

 We also explore the moral and ethical dilemma of property investing (are you evil if you become a property owner?!?) and do a first-time reveal of our newest series.  

Tune in now to hear all this – and how you can access this series for free – and learn how to maximise your returns today! 😊  

Questions We Answer…

Q1) Property Owners Are Evil from Boyd 

Hi Bryce and Ben.

I just want to let you know that I love the podcast. Find it very insightful and I listen to it all the time. My question today is around property investing and, more around the ethical/ moral side.

You hear a lot of the media, even friends and colleagues always scrutinise property investors as – they’re the evil people in the world trying to screw over all the people – which I can agree to an extent I would say.

My partner and I are very ethical and morally driven, we feel like and we are looking to invest next year and struggling to sort of decide whether we actually want to because of those reasons.

We feel we still will because a) we want a better lives and our future, but also b) we don’t think we’re going to be those type of people that will squeeze every bit of money out of everyone and a bunch of other reasons.

I was just more wondering how you would end that sort of question if someone said that to you because….. and if there’s any other. reasons why which would maybe help us in our journey and other people in a journey that are sort of up in the arms about it.

Thank you very much for your time.

 

Q2) Buying Property Through SMSF from Milind 

Hi, I don’t see any dedicated episode on SMSF or buying property through SMSF.

Most buyers get stuck at the second property because of inadequate equity or borrowing power and SMSF is buying property is is really one of the good options but I don’t see anything on that so can you please cover that in detail thank you.

 

Q3) Why Owner Occupier Appeal from Kate

Hey guys,

Love the podcast but am struggling to see why you would hunt down properties that have owner occupier appeal and good long term capital growth if you also advocate to hold properties for the long term and never sell. 🤷‍♀️

If you’re never selling them then why does that matter? Wouldn’t you want to find high yielding properties and enjoy cash flow now and in retirement?

Sorry if this is an ignorant question.

Thank you 🙏

 

Free Stuff Mentioned

Here’s some of the gold we cover… 

  • 0:00 – Using SMSFs to Avoid Getting Stuck on Your Next Property!  
  • 3:35 – We’ve got a brand-new series out?! (+ How you can get it for FREE!)  
  • 5:12 – Want to be on the couch?? Calling all 2023/24 Summer Series Guests  
  • 5:50 – Mindset Minute: The 3 Magic Principles of Mastery  
  • 8:58 – Q1) Property Owners Are Evil  
  • 10:32 – A perception shift around providing rental accommodation… 
  • 14:07 – Why your friends aren’t always right!  
  • 16:01 – The Fishing Analogy 🐟 
  • 18:15 – How do we benefit Australia economically and socially?  
  • 22:42 – Q2) Buying Property Through SMSF (Self-Managed Super Fund)  
  • 23:24 – A little disclaimer… 
  • 24:13 – How does SMSF work?  
  • 26:18 – The Pros of SMSF 
  • 28:07 – Beware of these Cons!    
  • 29:39 – Considerations BEFORE using a SMSF 
  • 33:57 – FOLKS, BE SURE TO GET THIS  
  • 36:50 – Why does the name of the contract matter?
  • 40:25 – Q3) Why Owner Occupier Appeal?  
  • 41:39 – It boils down to these 2 things… 
  • 46:06 – The true advantage of owner-occupier appeal 
  • 50:41 – Justify by emotion & logic! 

And… 

  • 57:39 – Lifehack: Why should you only eat to 80% capacity?  
  • 1:00:21 – WMPN: The BEST and WORST states to invest in and more findings from PIPA’s 2023 Sentiment Survey  

463 | Property Managers: Are They Worth It?! – Q&A Day

By in Podcast, Property Investment, Q&A

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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

  

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!  

432 | Another Tax Grab…What 62.5%?!?!

By in Podcast, Property Investment, Q&A

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It’s sad but true, we’re back with yet ANOTHER tax grab (It feels like just yesterday that we were waving goodbye to Queensland’s diabolical land tax…) and this time…

We’re talking about a tax that’s set to take 62.5% of your earnings!!! 🤯🏃

Folks, we’re covering everything you need to know about Windfall Gains Tax – what it is, where it came from (according to Ben 😉) and how much you can be expecting to pay. 

(Oh, did we mention you only have 30 DAYS to pay?!)  

Yep. Welcome back to our first Q&A session for 2023 where we’re tackling this shocking tax grab, along with a line-up of fantastic questions like… 

👉 Should I renovate and rent now or rent then renovate later?!

👉 Why buy Established over new housing?! (How much do you really benefit?)

👉 And if diversification is the key to growth, should one expand their investments beyond property?!  

 Another jam-packed episode that sees Ben more fired up than ever (and not just because he gets called Benjy 😉). Tune in now!  

 

P.S. For any of those folks who have been using our Moorr platform and gained value from it, we would appreciate it from the bottom of our hearts if you could leave us a 5-star review on Apple or Google Play! This helps us to reach and help more people take control of their money on their path to financial freedom.  

 

Questions We Answer

Question from Kristy on Rent and Renovate – Now or Later?  

Hello to The Property Couch and all listeners. 

My question relates to an investment property I have in Geelong. It’s a 1980’s property in original condition on a very large block and it’s planned to be a long term hold. 

I’m trying to examine two strategies. The first being just simply rent out and renovate it when it’s time to sell maybe in 20 years versus renovate now and rent it out.Where would we be in 20 years?  

With the first strategy, the property would be very rundown by then. With the second strategy the property would likely need another renovation. Of course, I’m trying to be smart with the numbers to see where we might end up. Which strategy would produce more capital growth? Any thoughts or suggestions with how I might evaluate this? Many thanks and can’t wait to hear back from you. 

 

Question from Wayne on New Housing vs Established 

G’day boys. 

Wayne here from Brisbane. I wanna ask a question here. I’m a little worried that the quality of the information or my voice might be tainted let me start off we go the pies. 

So I’ve been listening to your podcast for quite some time now. I’ve circled to most of the episodes. One of the questions I have is around the established properties versus obviously the house and land packages and so on. 

I get that there’s a whole issue with the supply and demand in newer states and all that sort of stuff. I guess where the confusion for me comes is generally the properties will experience growth because the phases and stages of new developments obviously the land gets more expensive I don’t think it ever gets cheaper so that would kind of dictate that you’re actually going to get some capital growth even in the early stages and if you buy it for long term, 20 or 30 years then obviously at some point these newer states are going to become the established estates as they open up more land etc. 

So obviously the savings that happen in terms of stamp duty being paid on new purchases if you’re only paying it on the land is significant savings there. The non-cash deductions on new properties obviously there’s significant rebates and sort of stuff there from a tax perspective. 

So just wondering why it’s kind of not the accepted way to go?  

I’m not disputing what you guys teach, obviously, you’ve been doing this a couple lot longer than I have but I just I just wonder if you can explain am I missing something? Or you know my reading it right and and just you know it’s one of the options that are available to us so anyway thanks for the info.

 

Question from Ned on Windfall Gains Tax 

G’day Bryce, G’day Ben.

Firstly, thanks so much for all the work you do with the property couch podcast as well as your book. I’ve really really enjoyed my time reading and listening so thanks for all the hard work that you do. It’s really valuable for all your community, no doubt.

My name is Ned, I’m 22 and I’m from Adelaide and I have a question about windfall gains tax particularly how that looks in Victorian Market. I think it could be of interest of payable who either hold currently assets in the rural sector or those looking to potentially invest in that market too so if you could explain what it is exactly, first of all and how it looks going in to the next few years.

I think a lot of people would be interested so thanks guys.I will be looking forward for your response.

 

Question from Cam on Property & Shares – Diversification 

Hi Bryce and Ben.

My name is Cam. Now I have a question for you. If diversification is really the key your growth then the key to your assets, then would you recommend considering other asset clauses such as shares or ETFs?

The reason being is obviously we all love diversification and we do not want to throw our eggs in to one basket. Obviously the great thing about property is that there is a lot of leverage that you can place in to one asset. You could control half a million dollar property in less than 20% even in some cases 5% down.

But if diversification is the key and you have the sizeable amount that you wanted to truly be diversified, with franking credits and dividends being paid, is shares and ETFs something that all people should consider? Or are shares and ETFs something that people should  consider in combination of couple of investment properties?

 

Free Stuff Mentioned… 

  • Happy 8th Birthday on The Property Couch! To celebrate we’re giving our awesome community 1-week FREE access to our Suburb Report for (Usually costs $39).
    Click here and enter the Coupon Code: TPCBIRTHDAY. Limit 5 per person.
    Note: To ensure you are not charged, please purchase a single Suburb Report x 5 times. If you add 5 Suburb Reports into one cart purchase, you will only receive a $39.00 discount. Hence purchase one report at a time please 🙂  This offer expires 9th March 2023.  
  • Learn how to make your WealthSPEED go faster! Check out Ben’s newest videos:  
  • Read the article from Ben’s “What’s Making Property News?” here >> 
  • Send us your questions!  (and if it appears on the podcast, we’ll send you a Start & Build course for FREE!) 
  • For our Moorr users, if you’ve gained value from our money management platform, we’d seriously appreciate it if you left us a 5-star review on Apple or Google Play! Help us to reach thousands of other hard-working Aussies on their property investing journey. 😊  
  • Episodes referenced:  Episode 418 | The Hidden Forces Driving Property Values 

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – Welcome back & send us your Qs!  
  • 4:32 – Free Resources: Make Your WealthSPEED Go Faster, Free Suburb Report & Moorr!  
  • 12:29 – Mindset Minute: If you feel you’re in control, you’re more likely to… 
  • 16:31 – Q1) Renovate now or later?  
  • 17:30 – What Kristy should be considering…  
  • 19:13 – Ben & Bryce’s rule of thumb for renovations! 
  • 21:25 – Our thought process behind this question (+ potential benefits)   
  • 25:54 – Q2) Buying New Housing vs Established 
  • 28:20 – Why land-to-asset ratio matters! 
  • 31:19 – It boils down to THIS thinking… 
  • 34:10 – Folks, it’s about that 1 or 2%!  
  • 38:00 – Spruikers will show you this 🤨 (& where risk lives)  
  • 41:20 – Q3) Windfall Gains Tax  
  • 42:13 – Everything you need to know about Windfall Gains Tax (An extra 62.5% tax?!?!?)  
  • 45:15 – …And here’s when the thresholds kick in! (It’s not great folks)  
  • 46:50 – Let’s dive into an example… 
  • 48:25 – Who ultimately pays?  
  • 50:55 – This has been our message since Day 1!  
  • 53:08 – The hidden impacts of this tax + how to circumnavigate it  
  • 55:14 – Q4) Property & Shares – Diversification 
  • 56:56 – The best investors say this…  
  • 59:31 – Weighing up the benefits vs costs with diversification  
  • 1:02:20 – Folks, we will NEVER say this…(& the checklist we do recommend!)  
  • 1:03:26 – How to diversify your portfolio beyond property!  

And… 

 

Get Moorr out of your money:
Log in or create your free account via the Moorr web platform, or download the app on Apple and Android and transform the way you view and track your wealth. 

 

415 | When Do Out-Of-Pocket Costs Become Too Much?

By in Podcast, Q&A

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One person doesn’t know if their properties are worth the out-of-pocket costs. 💸 

Another couple isn’t sure if they should strike when the market is hot….or if it’s best to wait. 

And another investor just wants to know, ‘Are we absolutely sure that Queensland’s Land Tax is off the table?!?’  

 

We’re back with another mega-exciting Q&A Day that speaks to the Psychology of Investing, especially in an environment with rising costs and interest rates. 😮  

From the common mindset blocks that investors face (like loss aversion and sunk cost) to how you can carve a path for yourself when you just don’t know what to do next…  

We’re unpacking why investing isn’t for everyone, the Quality of Living trade-offs, how and why you’d want to split your variable and fixed rates and tons more wisdom!  

Basically folks, this episode has a bit of gold (and anxious feelings) that we can all relate to.  

PLUS, Bryce and Ben unpack and explain CoreLogic’s recent release on the 2022-23 Federal Budget and what the RBA’s recent rate hike reflects about us as consumers.  

Another fantastic episode filled with your awesome questions, tune in now folks!  

 

 

P.S. And if you want help identifying the next step on your investing path, book a free, 100% no-obligation consultation with our award-winning team of Property Investment Advisors here.  

 

Questions We Answer

Question 1: Anonymous on Confirmation that QLD Land tax is off the table 

Hi Ben 

I’m a property investor contemplating my next purchase.  

I heard that due to lack of support QLD’s premier has had to back-track on her proposed new land tax which would see the subject tax calculated on one’s total Australian land holdings (where before was only based on holdings in QLD).  

Reason I am touching base is the QLD premier stated she would have to revoke the proposal and would have to be tabled and passed in parliament. Not understanding this process, I wondered if you might know whether the proposal has been formally revoked and/or if you can advise how or where I could direct this enquiry to obtain absolute proof this land tax is now off the table.  

LOL, there is no way I would want to proceed buying in QLD knowing the new land tax could send me broke.  I need to see it set in stone.  😂 Thanks for any help you can offer. 

 

Question 2: Travis on Out of pocket expenses to maintain to IP 

Hi gents hope you are well. 

My question and advice relates to out-of-pocket expenses for me to hold 2 investment properties, because at the moment after all costs and tax rebates I’m around 15-18k PA out of pocket. I own a ppr and have a vic & qld IP.  

My Moorr platform is up to date and has me in the surplus of 4K per month but only at the moment. 

My issue is I don’t see current benefits with the high out of pocket expenses which are only going to increase & a couple of costly expenses to address on each property with water issues one being a requirement to put in a pit drain to tackle storm water and the other a fixed awning to combat heavy rain over a balcony, 4K and 3.5k respectively. 

With all this expense and the impact on quality of life due to concerns of having to pay for the next big cost I wonder if it’s even worth it. 

I have spoken with my advisor and informs me it’s ok but I wonder if this is sustainable or do I sell out for a more comfortable quality of living. 

I appreciate that there is some sacrifices but 15-18k YOY with little prospect of that moving to a favorable portfolio holding I just don’t see. 

To add there will be continuous improvements to spend in the coming years just to keep up with the age of the properties and keep them fresh I don’t feel rental increases will help the catch up. 

Please share your advice and thoughts. 

 

Question 3: Rose on A question on paying investment loans 

Hi Ben and Bryce, 

This is Rose, I love the podcast and have really enjoyed the personal stories in your summer series. I’ve never heard of financial anorexia before, but I definitely have it. So I was wondering if you could give me some guidance. 

I bought a small investment property August 2021. I had a lucky guess that interest rates where going to go up sooner than the RBA was suggesting, and I fixed the whole loan at a lower rate than the bank offered for the variable. 

However, this means I don’t have an offset account and I’m only aloud to pay off extra up to a limited amount per year. 

This is an investment loan, and the property is positively geared. 

I’ve heard old adages about how you shouldn’t pay off investment loans because they’re tax deductible, but the saver in me wants to pay down the loan. 

So I’m asking you two as the experts, should I still pay off extra on my property investment loan now, while I have a low rate for a few years, or just keep paying back the minimum and invest the extra money elsewhere?
 

Question 4: K on Using equity – the now or never mentality 

Hey gents,

Thirty-something female listener here from Sydney, and big fan of all your work. You made lockdown liveable – thank you.

While I have met with one of your team already for a free consultation, I have to say I am finding taking the plunge my biggest challenge

My partner and I will be having a baby within a year, and have some modest “rainy day” savings in our offset – which took a few years to build. We purchased our home (PPR) in late 2020 and also have an investment property (unit) in Sydney purchased in 2018.

We now have a window of opportunity to use the equity in our home and investment property to buy our next investment and scale up.

I note in a recent Q&A episode you talked about borrowing capacity (for some) decreasing over time and becoming a tad harder, plus the mortgage environment will be generally more challenging with interest rates hikes etc.

I am not afraid of the macro changes going on in the world too much, but the ultimate question is: do we strike while the iron is hot, or wait?

The challenges ahead aren’t small (new human on the way, parental leave considerations, reduced income, rising interest rates etc)?

Please help.
K, Sydney.

 

Free Stuff Mentioned… 

  • Other Episodes Mentioned:  

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – This week we’re tackling… 
  • 1:21 – We’ve had a MASSIVE upgrade to our Lifestyle By Design platform!! Check it out here.  
  • 7:44 – Quick Recap: CoreLogic, the RBA rate hike & Hot Property Data 
  • 10:33 – Feeling uneasy? This is what you should do. 
  • 13:02 – Here’s how a previous TPC Guest is implementing our lessons…. 
  • 16:01 – Why you should chase your curiosity!  
  • 17:28 – Q1) Confirmation that QLD Land Tax is off the table 
  • 18:35 – The process behind amending legislation like this!  
  • 20:40 – Off-Ramping: Why you shouldn’t be concerned…. 
  • 24:03 – Q2) Out-of-pocket expenses to maintain an IP 
  • 26:00 – This a classic conundrum that investors face…  
  • 27:56 – The Psychology of Investing: Sum Cost, Loss Aversion & Comfortable Quality of Living 
  • 29:06 – Over the long term, THIS disappears… 
  • 30:25 – Here’s how Travis can face his anxiety 
  • 31:47 – THIS is why some people aren’t suited to be property investors
  • 33:28 – “You don’t believe it”  
  • 36:45 – Why investing is just like a bottle of wine… 
  • 39:16 – Q3) A question on paying investment loans 
  • 40:19 – What is Financial Anorexia?  
  • 41:20 – Some of the catches to consider…  
  • 42:49 – How to split your variable and fixed rates  
  • 44:18 – Ben’s Answer (In theory)  
  • 46:01 – What’s the benefit of going part-variable?  
  • 46:51 – Q4) Using equity – the now or never mentality  
  • 48:29 – Why you should focus on long-term horizons!  
  • 51:04 – How to find your pathway forward…(Psstt…if you’d like help with this, why not book a free, no-obligation consultation with one of our highly qualified Property Wealth Planning advisors here.)  
  • 54:30 – The 3 Golden Dials!  
  • 57:03 – How we make the “Invisible, Visible” 

And… 

  • 1:01:47 – Made a mistake on your iPhone calculator? Here’s how you can wipe your last move 
  • 1:02:58 – Why Re-grading Property Investment in Cairns is outrageous!  
  • 1:08:08 – Keep the Qs coming folks! Submit them on Speakpipe.  

 

413 | The Future of Price Growth in Australia

By in Podcast, Q&A

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Passing on interest rates to tenants. Updating property plans. The future of price growth and…  

Restructuring your mortgage (is Line of Credit still the best?!)   

Yep.  Folks, we’re back with another ultra-packed Q&A session that’s all about being smart with your money in an unpredictable market.   

 Here’s a teaser of what else we cover… 

  • How can landlords offset these extra costs from rising interest rates?!  
  • The #1 biggest indicator that it’s time to update your property plan 
  • Why housing prices WON’T stagnant and housing prices will STILL grow – even given today’s market!  
  • The Veblen Effect: What it is and why it’s important in today’s market cycle!  
  • Where most of Australia’s growth actually came from (aka. A short history lesson)  
  • The Role of Income Growth, Immigration and Inheritance  
  • What are Quasi Lines of Credit?! (are they a good idea??)  
  • The markets Ben is (and isn’t) worried about in this market cycle, plus  
  • Tons more gold!!  

It’s another massive episode folks, give it a listen to get the facts and cut through the noise! 

 

Questions We Answer…

Question 1: Janet on When should you update your plan? 

Hi Ben and Bryce, 

My husband and I are big fans of the podcast. 

We have learned so much listening to the both of you over the years. 

We’ve actually been to your team Empower Wealth in North Melbourne for financial planning and property investment advice and that was before our honeymoon. 

Now we have 1 child (14 months old) and 2 properties in, one principal place of residence and 1 investment. This was all factored in by your team as part of our lifestyle by design plan. 

There is a component to the plan which is to get our 3rd property in a few years time as investment towards our retirement plan. 

However, with the changing market, I’m starting to wonder if its time to bring things forward or we stick to the plan. 

So my question is once you’ve got a property investment and a retirement plan set up, how often would you recommend getting this revised and looked into? 

I would love to hear from you two and keep up the good work on the podcast. 

 

Question 2: Adam on Can you pass on interest rate rises to tenants quickly? 

Hi Boys, 

Love the show and thanks for all the tips and all the advice that you provide each week. 

My wife and I have 3 investment properties and given the market is a bit softening at the moment and there’s a lot of uncertainty out there, we think it’s really good time to try to buy again. So we can get a loan at the moment our broker confirmed to us that we can borrow at the moment. 

However, when I run our numbers on next year in  about 12 months time, our 3 properties that we do have at the moment are currently on the fix rate and we fix them at about 2% interest and all 3 come off their fix periods in about 12 months time. 

So if we did buy again now by fourth place, when the loan repayments we’ve got on the other 3 next year did it at fixed period, that’s more than $2000 a month extra in mortgage repayment will be up for so we’ll be in trouble if we borrow again right now so we’re a bit in a snag. 

I’m just curious in your thoughts, I think you’ve mentioned before in your show that the Australian economy, I think is about, $40B in residential loans that fixed at the moment with low interest rates  in the last few years and they’re all gonna be coming off fixed periods next year. 

So there’s gonna be a lot of people, lots of household all of a sudden have to find material amounts of money each month in extra loan repayments. For those who are investors like us, we can just wanna try to pass on a lot of these costs to our tenants and raise the rents that they are paying given there already is rental crisis across the country.  How do you see this playing out in the economy. 

If you have a lot of landlords all of a sudden wanting to put the rents up substantially because interest rates have blown up and loan repayments are higher, do you think we’ll be able to recover some this cost through increasing the rents at all?
 

Question 3: Michael on Interest Rates, Borrowing Capacities and long term impact on price growth 

Good day Ben and Bryce. 

Hope you’re both well. 

Ben, condolences on the loss to Sydney, mate.  I know that’s probably a tough one. 

My question to you both is regarding to the overall pricing of housing and I know it’s broad question but with regards to the correlation between interest rates and the impact it have on borrowing capacity. 

I know there’s been peaks and troughs over the last 30 years but I’ve seen over time you know a gradual decrease on the amounts that we pay on the interest rates therefore our borrowing capacity increased. 

My question to you is that now that we’ve reached the bottom point where we’re on our way up, do you foresee that having a long term impact on the increase in housing value? 

I know there’s other factors in play but as far as borrowing capacity goes, I can see that there is quite a strong link in interest rates and the borrowing capacity. 

Just curious to get your thoughts on that and what’s the impact it will have. 

Thanks. 

 

Question 4: Karen on Borrowing Strategy – what is the optimal review? 

Hi Bryce and Ben, 

My name is Karen and I have a question about refinancing a principle place of residence and investment properties. We currently have a loan of credits on our principle place of residence.  

We used this loan of credit to purchase 3 investment properties and these 3 investment properties are all with different lenders. With the current interest rate rises and some of these loans coming off fixed interest, we are now wanting to refinance some of those. 

Our mortgage broker, this is my question for you, our mortgage broker is suggesting because of our age which we are 51 and 52 respectively, we have high disposable income because our children are all over 18 and that we combine all of our loan in to one big facility with AMP and have it split in to various splits and so our home loan on PNI and then the various investment properties as interest only. 

I’m really concerned with this approach because it goes against everything that I’ve listened to in your podcast today and I’m would just be really interested to hear what you have to say on the next approach. 

So basically the splits for the investment properties would be interest only and our principle place of residence P&I and she’s saying that this is the only way forward for us to be able to refinance the whole lot. 

Ideally, I’d like to keep the line of credit. 

I like the flexibility of it and I’d like to keep the investment properties with loans separate to our home. 

Free Stuff Mentioned… 

 

Want to work with Bryce & Ben’s Award-Winning Team? 

 

Here’s some of the gold we cover… 

  • 0:00 – What we’ve got in store for you… 
  • 1:18 – Folks, this is how you can get a free Start & Build Course! 
  • 2:53 – Negative things happen. Negative mindsets make it…. 
  • 5:19 – Question 1: When should you update your plan? 
  • 6:56 – How you can tell it’s time to change!  
  • 7:38 – And this is WHY you’d want to bring it forward!  
  • 9:20 – 97% of the time this what you’ll be doing…  
  • 11:21 – THIS is where they sit on our “7 Grades of Financial Wellbeing” scale (Don’t know what this is? Take the quiz here!)  
  • 12:46 – Question 2: Can you pass on interest rate rises to tenants quickly?  
  • 14:42 – We haven’t seen this for the last 3 years… 
  • 15:44 – When are we going to see the 3 big tranches?! 
  • 16:15 – Rents will be going up…  
  • 18:34 – How Adam can offset costs!  
  • 20:41 – Legislation that property owners should consider!  
  • 22:47 – THIS is a good rule of thumb for measuring costs and profit… 
  • 25:38 – Want to future forecast your modelling? Try Moorr, our online money management platform and it’s forecasting feature: MoneySTRETCH.  
  • 27:48 – Question 3: Interest Rates, Borrowing Capacities and long-term impact on price growth 
  • 28:57 – Most of this growth has to do with Australia’s lowering cost of M___!  
  • 29:40 – Income growth, affordability & interest rates  
  • 31:36 – Ben’s predictions for wage and population growth! (THIS will always push growth)  
  • 32:38 -These are the markets Ben’s worried about… 
  • 32:55 – The Role of Inheritance and Immigration 
  • 34:51 – Recap: What were the “Roaring 20s”?  
  • 35:17 – Why housing values WON’T stagnant! 
  • 36:14 – This is why price growth will continue! 
  • 38:40 – If you haven’t check out THIS amazing chart (bottom of page 1) from CoreLogic… 
  • 39:17 – The Veblen Effect 
  • 41:40 – Question 4: Borrowing Strategy – what is the optimal review? 
  • 44:21 – Who is AMP?  
  • 45:19 – Why you don’t really need a line of credit… 
  • 46:08 – Some other great options!  
  • 47:06 – What Ben does with HIS line of credit!!  
  • 47:23 – Why there’s still opportunity for older aged Australians… 
  • 49:51 – What is a Quasi Lines of Credit?!  
  • 50:34 – If you want more on How to Beat the Banks, check out Ben’s newest educational series here.  
  • 51:17 – Leave us a Question on our Speak Pipe – it’s never been more important!  
  • And… 
  • 51:50 – Did you know, the body of the Apple phone is actually pretty cool. Here’s why… 
  • 54:12 – The Top #10 Most Successful Celebrity Investors 
  • 57:22 – Honourable mentions for the women… 

 

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