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Episode 046 | Q&A – Things we would have done differently, Buying sight unseen, Tax and purpose of property, Investment grade in regional centres and Joint ventures

We are back on with the Questions and Answer time for 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!

  • Question from Alex: Aside from getting into property earlier or not selling… knowing what you know now, what 5 things would you both have done differently?
  • Buying sight unseen questions from Lewis : We are currently living overseas and want to want to move back to Australia in a number of years. Late 20s and want to start buying investment properties in 2016, we have two questions.
    1. Best advice for buying property without being able to walk through the property.
    2. Best area to buy in Australia if you don’t know where in Oz you want to move back too!
  • Question on tax implications on property from Chris : A question relating to turning an investment property into a PPR. My partner and I just completed construction of a home which was intended to be an investment property for 5-7 years after which time we were going to move in and make our family home. Situations have changed and we will be able to completely pay off and move into the new house within the next 12 months. Will there be any issues arising from all the tax deductions (ie interest during the build, deprecation etc) Since we will be changing the purpose of the house?
  • Investment grade for regional properties question from Lou: Loving the podcasts – succinct and very informative so thank you! I’m currently saving for my first investment property and I have a couple of questions. I am considering regional Victoria (as I grew up there) and was wondering how ‘Investment Grade‘ the properties are, particularly along the Vic/NSW border. Should I be looking here or become more ‘borderless’ in my approach? I am looking to purchase in 2016 however I’m concerned with the property cycle, should I hold off another year until the market drops or is it likely to only increase in the short/medium term? I understand you can only give general advice, but I would like to know what the generally suspected trends are.
  • Joint venture question from Christopher: I am a first time investor and am looking at buying an older federation era home. For a 3 bedroom home of this style you are looking at a purchase price of around the $550,000 mark. Due to an over inflation of new homes, I can see these are the only worthwhile investments for the future as they have generally around the 1000 sq m block at less than a km from the CBD and are rising in value at around 2-3% per year depending on what renovations are performed where they can be anywhere up to 10%.  To find these funds I am looking at doing a joint venture with a good mate of mine who is a builder, do the minor renovations without overcapitalising, hold it for maybe 5 years rented out for that period and then sell it for hopefully a decent capital gain.  Are joint ventures worth it and will this be a silly strategy for such an old house as depreciation will have been used up already and these older houses can be a pandora’s box once opened up and end up costing way over budget?

 

Free resources mentioned in this podcast:

 

If you like this Q&A episode, 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 040 | Q&A – Line of Credit, NRAS Program, Fixing a Broken Portfolio, Conducting a Due Diligence and Insurances

Introducing the first episode of our summer series! Let’s kick start with a Q&A episodes. If you have a property related question that you couldn’t solve or needs an opinion on, please do not hesitate to let us know here. In this episode, Bryce Holdaway and Ben Kingsley will be addressing some topics on:

  • Line of Credit (LOC) question from Brad : Firstly, love the podcast, but have to agree that the sports commentary should be left out. ( 😥 from TPC Hosts). I have a finance related question, specifically about the intricacies of Lines Of Credit. All the articles I can find say you should get a LOC, which I get, but none drill down deeper into the intricacies of using the LOC. I understand that you would use your LOC for investing costs, such as a deposit on new property, or the levies or rates for a property. My uncertainty is whether I am then able to claim the interest charged on the LOC for these expenses. To make things more complicated, what if you were to pay your investment loans off using this LOC. Surely you couldn’t then claim the interest on the LOC as well as the investment mortgage? That would be double-dipping, right? Please do a segment on your show (which I listen to religiously) that explains more how to use the LOC tax effectively and legally.
  • NRAS questions from Cesar : What is your view on the NRAS program? From everything I hear from you it is probably a no go, but would be nice to hear more as many spruikers are heavily promoting NRAS to investors.
  • Property Portfolio question from Sandy : Guys, love the podcast and wish I had listened to it a few years ago. My suggestion is to discuss the strategy to fix a “broken” portfolio ie a number of under performing properties (pretty much all the things you have explained to avoid) that were spruiked.
  • Due Diligence and Research from Daniel : You always hear from professionals in their podcasts that you need to do due diligence and do your research into finding a property. I’m a first time investor, but this question could be used for every investor. What resources do you need and what do you have to look for in conducting due diligence? I wouldn’t know where to begin. Could you please elaborate on who one can achieve this?
  • Property Insurance from Daniel : Advice on what’s the best type of insurance to have on your investment property?

 

Free resources mentioned in this podcast:

 

If you like this Q&A episode, 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 034 | Q&A – Investing in Commercial Property, Fixing your Loan, Using a BA and Estimated Growth & Returns for Property Plans

It’s another Q&A episode! We are loving these Q&A episodes. If you have a property related question that you couldn’t solve or needs an opinion on, please do not hesitate to let us know here. In this episode, Bryce Holdaway and Ben Kingsley will be addressing some topics on:

  • Using a Buyers Agent question from Tim : For a person that is looking to purchase an investment property where they’ve already educated themselves on property investment from Podcasts, read property investment books and attended seminars and they’ve done all their due diligence from getting the right loan structure, finding the right location with all the growth drivers, will there be any benefits to engage a Buyer’s Agent?
  • Fixed loan question from Jonathan : Due to interest rates have been low for a few years now and flexible loans are good, when is the best time to fix them? When the interest rate reaches a point eg, 6%-7? Do you refinance your home and do 50% fixed and 50% variable . What is the rule of thumb on this topic?
  • Investing in commercial property question from Hany : What are the discussions of the pros and cons of investing in commercial property?
  • Estimated Growth and Returns for Property Plans from Josh : My question is around Bryce’s publications and the extent yield and growth percentages are applied. Exploring these publications I have found that the sum of both the yield and the growth figures never exceed 12% to 13%. Is this a rule of thumb? If so, to what extent can you divide these figures up when building an investment plan? is this constrained by property value? What is considered average, exceptional and using a Buyers Agent, what can be expected?

 

Free resources mentioned in this podcast:

 

If you like this Q&A episode, 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 033 | Q&A – Investing with Equity, First Home Buyers Tips, Buy-Reconstruct-Sell Strategy and Leasing to Relatives

It’s Q&A time! In this episode, Bryce Holdaway and Ben Kingsley will be addressing some topics on:

  • Finance related question from Kat : Would you please explain more about using equity? E.g. I heard from a broker that one needs to refinance the loan on the existing property (PPOR or investment) – does this mean the old property and the new one to be purchased are tied together? Some suggest using Line of Credit to get equity out. To assess the equity available, does one first need to pay for a valuation report on the existing property?
  • Leverage question from Naomi : I am considering selling my investment property in order to pay off the mortgage on my family home leaving me debt free and with the ability to then use all the money I currently pay on the family home mortgage for investment purposes with tax deductible debt. Is this a good strategy? Is there a better alternative you would recommend?
  • Episode 033 | Q&A - Investing with Equity, First Home Buyers Tips, Buy-Reconstruct-Sell Strategy and Leasing to RelativesInvesting strategy questions from Andy : Investing for demolition and reconstruction vs capital gain. Is it worth buying an older property close to the coast however a little further out from the city to sit on with the view to demolish with a larger land size or to invest in a more expensive smaller property which could be a little closer to the city.
  • Buying a Home question from Tom : I’d love to hear a podcast on your advice to first home buyers – whether that be best ways to save for the deposit, traps to avoid, or some type of plan for young home buyers – for example I’ve just start work as a property valuer in Melbourne for the last 5 months, and my girlfriend of a few years finishes studies later this year and we have the hopes of buying our first home together in 18 months or so.
  • Investing question from Andrew : Guys, just wondering what your thoughts are on buying an investment property that is potentially going to be tenanted by a relative? A relative has their lease ending in a few months, and i see this as an opportunity to buy an investment with a secured tenant (all through the proper rental channels i.e REIQ rental agreement). I think the opportunity definitely outweighs the risks. What’s your thoughts?

 

Other episodes mentioned in this podcast:

 

If you like this Q&A episode, 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/

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