Cash Flow Archives - Page 16 of 19

Bonusisode – A Boxing Day Chat Between The Property Couch and Smart Property Investment Show

By The Property Couch December 26, 2016 in Podcast

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SURPRISE! On this Boxing Day, we are having a joint podcast with Phil Tarrant from Smart Property Investment Show! Phil joined us back in Episode 52 talking about his journey as a property investor but in this Bonusisode (Bonus Episode), the focus will be on investing in property in 2017! Ben and Phil will be chatting about:

The health of the Australian Property Market in 2017
Understanding the different market cycles and how economic activities and infrastructure development may change the market’s trajection
How to filter out all the noise regarding property investing and look at hard facts when making an investment decision
The prospects and returns from investing in apartments and city fringe location
What are their thoughts on the lenders’ out-of-cycle rate rise
What are the criteria lenders are looking for in an ideal borrower
The importance of borderless investing and buying counter cyclical when building out your portfolio

If you like this podcast: “Bonusisode – A Boxing Day Chat Between The Property Couch and Smart Property Investment Show”, 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/.

095 | Q&A – Investing in a Financial Planner, Upgrading your PPOR, Loan Strategy to Build your Portfolio and more

By The Property Couch December 22, 2016 in Podcast

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As Christmas is a time for giving, we thought today’s special Christmas episode should be none other than a Q&A session! Topics covered today include debt-retirement and refinancing loans, how to go about upgrading your PPOR (Principle Place of Residence), whether it’s worth paying for a financial planner and more. (And click here for your free The Property Couch Christmas Pack!) Today’s questions are from the following listeners:

Chris on debt-retirement and refinancing loans: Hi there, was hoping you could ‘unpack’ the ‘reality of’ the following finance-related scenario for me. I understand there is an “accumulation phase” where the investor actively accumulates as many quality, appreciating assets as required/wanted before transitioning to a “debt-reduction” or debt-retirement phase in the property investment journey. I was hoping you could spend some time describing what this debt-retirement phase actually looks like, assuming the investor has between 3-5 investment properties all on interest-only terms.

Changing all of these to principal & interest at the same time would probably be too strenuous on the budget, so is it a case of paying off the largest investment loan on principal & interest terms while refinancing the remaining loans as interest-only for another 3-5 years and start knocking off the balance of the largest loan? Or is it a case of building up the offset account of each loan evenly so that you end up paying less interest across all of the loans until you are in a position to pay the loan back in full?

But in this scenario the banks will eventually put you on a principal & interest payment unless you refinance again to an interest only loan, so how do you juggle at least 5 investment loans potentially all coming off their interest-only terms within 12-18 months of each other, while you’re trying to retire the debt without blowing the family budget? ($150+ principal payment across 5 loans = $750 a week which would destroy most family budgets).

Is it a case of focusing on one property at a time until the rent covers the principal + interest payments, before moving onto the next property or is it a case of continually refinancing to interest-only loans and building up the offset accounts? Is it better to focus on the largest loan first or distribute funds evenly across all loans? How do you actually go about entering the ‘debt-retirement’ phase on a portfolio of 5 investment properties (assuming all currently interest-only repayments with separate offset accounts but the interest-only period is expiring for all 5 loans over the next couple of years). This does not take into account the PPOR but we can ignore that part of the equation for the above scenario.

Bill on upgrading PPOR: My question is…I have paid off PPOR (home loan account closed) and would like to upgrade PPOR. What advice/suggestions do you have regarding using ex-PPOR as investment or sell off ex-PPOR to pay down new PPOR debt and then buying an investment property?

Anonymous on investing in a Financial Planner: G’day, I have a question that I think a lot of listeners would relate to and something you guys have not covered thus far.Firstly about me. I am 32 and have recently developed a passion to enhance my knowledge of residential property investment. I am in the Army and have a young family on my income alone. I earn 106k per annum gross. I bought my PPR in 2012 in Sydney which is valued at circa $8800k currently. Since I started my learning, using you guys as my guides, I have done the following.
- Analysed our cash flows for a month to understand where our money is going.
- Gotten rid of all non-deductible debt i.e. credit cards, pers loans etc.
- Bought our first investment. A two Bedroom apartment near Penrith. It’s walking distance to the station and five minutes from the train station, Nepean hospital and UWS. I also rolled our car loans into the investment. The place is currently leased with a 4.2 % yield.
- Manage our money to allocate spendings for myself and my wife similar to your model you advise with regards to offset and spendings accounts.

I also have a broker and accountant and also use a buyer agent. So my question:
I recently sought advice from a financial planner. After an interview, he sent me a proposal and plan which also outlines his fees. His fees were $500 per month with monthly payments that would be ongoing for a period of a few years. If cash flow management is essential and using surplus cash flows to reinvest is a key step, then how is 500 per month going out enabling this? Isn’t this counter to one of your pillars of mastery? If I had a large income and a large portfolio, then this would be manageable. But I don’t. Are all financial planners this expensive? I can see the value of buyers agent’s fees but I can’t see the value in planners for myself.

Andrew on when would be the best time to invest in property: I’m 26, my wife is 25 (DINKS), we live in Brisbane and our combined income is $150k. We’ve almost finished paying off our wedding (ouch) but are now planning for the future and want to get ahead before kids come along. We don’t own a house (currently renting), however we’re strong savers and would be in a position to buy in approximately 12 months. The issue is, our plan is to move to Adelaide in 2018 to allow my wife to study Dental Hygiene (limited college options in Qld). Would we be best to buy a house/IP right before we move to SA and rentvest? (and drop to a single income of $100k), or wait until she graduates (2 year degree) and look to invest then? Neither of us want to sit still for 2 years, but we’re reluctant to buy right before dropping to a single income.

Julia on Buying a home: I have only recently discovered your podcast and it’s awesome. Thanks so much for sharing your knowledge. I know your advice is ‘location first’ – I’m torn between two properties. A run down 1970s one bed room unit in Neutral Bay (ground floor) vs 10 year old amazing one bed room unit in Marrickville (top floor). Both similar price with similar strata. Neutral bay property needs everything renovated but has structural limitations. Marrickville unit has an amazing balcony that has a green leafy view and makes you feel like you’re at a holiday resort. I know Neutral Bay is blue chip suburb but would you consider Marrickville as a suburb with a potential high growth over next 5 years? This is my first property and I’m planning to live there for next 2 years then potentially rent it out. Any advice?

If you like this Q&A episode (Investing in a Financial Planner, Upgrading your PPOR, Loan Strategy to Build your Portfolio 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/

Case Study for Single 30-something Investor (How to Build a Property Portfolio to Retire on $2,000 a week in Passive Income)

By The Property Couch December 14, 2016 in Uncategorized

Hi Couchers! The Case Study for Single 30-something Investor demonstration is finally here! We know some of you have been waiting for this one since our second Facebook Live back in September. Thank you for your patience and let’s not wait any longer, just fill in the form below and we’ll send you the link to start watching the Case Study Demonstration on How to Build a Property Portfolio to Retire on $2,000 a week in Passive Income for a Single 30-something!

088 | Q&A – Investing in Newly Developed Areas, Getting into the Property Market, Career as a Buyers Agent and more

By The Property Couch November 3, 2016 in Podcast, Q&A

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Last week’s podcast had been quite an interesting one! We strongly recommend you to listen to it twice to make sure you don’t miss out on Dr Andrew Wilson’s outlook on the Australian Property Market. This week, we are going back to Question and Answer episode and Bryce Holdaway and Ben Kingsley will be discussing:

Question on a career as a property professional from Hayden: To the Property Couch, I have a couple of career questions to ask but firstly I just wanted to share my investment story so far and why I think what you are doing is so important. If I had your advice earlier, my circumstances would be much different. I am currently 25 years old; I began my investment journey when I was 17. My father suggested using the money I had saved for a car to use it instead to buy a house. This was in 2008 when the Rudd government was handing out the huge first home owner grants, when I had my first meeting with a mortgage broker (not even knowing what a group certificate was) they were suggesting I buy an off the plan unit. So put signed up for one in Frankston, Victoria from a company thinking they were giving me good property advice. This purchase eventually fell through due to the bank evaluation not coming through at the correct price. Then I signed up for another off the plan unit in Langwarrin, and after two years they had not even begun construction because the council was saying there was endangered fish in the creek near by. So I pulled out of that one and tried to purchase one in Carrum Downs 6 months later and this one fell through because the bank wanted 20% of the loan. Friends and family were telling me to give up by this point because of how upset I was getting, but I stuck with it and purchased one in Langwarrin. This time, a 2 bed 1 bath unit. This then turned out to be a very poorly built unit and eventually I received an insurance claim of $20,000 to fix the poorly built unit. After 4 years, this property has not delivered any growth at all and doesn’t look to in the near future either. Then I purchased a 1 bed 1 study 1 bath unit in a high rise in Ipswich, Queensland and this property has a lift, pool, spa, sauna, underground car park and a concierge.Even though I have made nearly every mistake you could make and still haven’t made a cent off property, I’m still obsessed with it and read and listen to every book and podcast and attended any event I can. I want to work in the industry to try to prevent this from happening to someone else but I’m not too sure what exactly I want to do. I was wondering if you would share some in-depth insights into mortgage broking and being a buyers agent. As much detail as you could would be helpful such as their daily tasks;
(A) The pros and cons to each and how much they get paid?
(B) And your thoughts on mortgage broking franchises or are you better starting off on your own?

Question on new developments from Brad: I realise that you guys are biased towards investing in established homes, usually with a short disclaimer on how you may have invested in new developments at some stage in your lives. In the interest of a more balanced argument, I feel it would be beneficial to offer someone in the industry who focuses on investing in new developments the chance to put their views forward. Just as there are good and bad established homes the same rings true for new or off the plan developments.

Question on next step in property investing from Damien: Love the podcast, learning so much each episode, feels like I’m completing a degree for free so thank you so much.
I recently purchased my first property under market value (purchase price $420k, my banks value $540k) 3-bed townhouse on 452m2 in Kenmore, Brisbane. I had to use LMI ($18,000) due to only 5% deposit which basically brought my loan up to $420k. I want to continue to accumulate good properties. My financial decisions i.e lifestyle was poor in the past but over the last year I have turn that on its head. I have $20k in cash now and I’m wondering what would be your advice for my next move. I’m making sacrifices to get ahead. I live in the townhouse with 2 tenants getting 360 a week for cash flow. I have an interest in renovation also and I’m looking in the Ipswich area. Should I hold off or move again swiftly?
Thank you for your help.
Go the Lions 🙁

Question on cash flow from Ben: Hi guys, love the podcasts! I stumbled across one of your podcasts when I was searching for investor information and enjoyed it so much that I went back to the beginning and listened to every single one in the space of about 3 weeks! I’m 21 and working part time whilst also studying. I am planning and on track to have a 20% deposit on a 400k house saved up in the next 12 months. However, due to the nature of my work (personal trainer) my weekly pay can drastically vary (anywhere between $300 and $900 per week, with an average yearly earnings of around $25,000) and the fact that I will still be studying and unable to work full time to increase cash flow for the next few years, I visage that I would have next to no chance of being successful in getting a loan to match my deposit. I want to do whatever I can to get into the property market as soon as possible, but considering my circumstances and my end goal (early retirement on 100k+ per year) is there anything that I can do to get into the market sooner rather than later without substantially increasing my cash flow? Or should I just keep saving and wait it out until I have the cash flow to match my deposit?

Question on investing in newly developed areas or established suburbs from Stephen: Would you be better to build in an area with established housing nearing the end of its development life where you know the quality of the area. Or in a new development with no housing as yet but a big blueprint for long-term development? Would you get a bigger capital gain in the new area over time vs potentially small capital gain in established as the capital gain has already expired?

If you like this Q&A episode (Investing in Newly Developed Areas, Getting into the Property Market, Career as a Buyers Agent 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/

Facebook Live Bonus Episode – Q&A

By The Property Couch September 16, 2016 in Free Resources, Podcast, 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!

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