GFC Archives - The Property Couch

199 | Q & A – Future Proofing your Portfolio in a Changing Market

By The Property Couch November 22, 2018 in Podcast, Q&A

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Folks, with State Election around the corner and the Federal Election less than a year away, it’s time to future-proof your portfolio.

The market has changed and will continue to change. We’ve also got some challenges in the Macro landscape as well — lending regulations, potential changes to negative gearing and interest rate rises, just to name a few.

So you might be asking yourself, “How is it still possible to build a property portfolio and earn $2K per week in passive income with all of this other stuff happening?”

And you’ve got a good point. There IS a reason to be concerned, but this does NOT mean you have to abandon ship altogether. Far from it.

So in today’s episode — before our Surprise Superstar Guest joins us next week for our 200^TH EPISODE!! — we’re going to answer some of your questions about how to do exactly this.

This is just a few of the things we’re discussing:

The right time to buy in a changing market
How should one approach 2019?
Picking the bottom of the market (and if this is actually possible!)
Strategies to increase your cash flow
The house price drop
Releasing equity
Starting with ZERO equity
The future of the property market

Before we get to the questions, Ben is coming to all of you who are based in Perth! As the Chair of PICA of course. Details below:

When: 6:30 pm – 9:00 pm AWST, Tuesday, 4 December 2018
Where: Queens Building, Lecture Room, Level 1, 97 William Street, Perth, WA
Cost: FREE!

Link to secure your ticket: Reserve your Seat here

And if you’re after the video that Bryce mentions in today’s show to Know Your Number… Watch it below or click here to watch it now.

Finally, the questions we’re answering today…

Question from Mirella:

When talking about earning $2,000 per week in passive income is this measured before or after outgoings; eg. rates, land tax, etc.?

Question from James:

Trying to build a portfolio whilst the future of interest rates and a change in government and a change to negative gearing could potentially impact the market. How should one approach 2019?

Question about market sentiment/right time to buy from Kirthika:

Thanks for this session guys! Quick Q… there’s a lot of media activity discussing the impending drop in property prices over the next few years. As a result, my husband and I are worried about investing now? in the event we could buy for cheaper in a year! What are your thoughts?

Question about increasing cash flow and paying off debt from Nipper:

I feel confident with how to select investment grade properties. But I’m not so sure on how to hold them then get to the cashflow stage. Do you propose changing loans to P&I or selling down some properties to then pay off the debt of others, or something else?

Question about having no equity from Dan:

You mention using equity. If you don’t yet have access to equity… do you have any tips to get started?

Question about realising equity for cash flow purposes from Kosta

Do you ever recommend using some equity release to pay the monthly repayments to improve cash-flow?

196 | Q & A – Negative Gearing Changes – Should I Still Invest in Property?

By The Property Couch November 1, 2018 in Podcast, Q&A

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“Labor risks $12bn housing hit over ending negative gearing” — if you’re like us folks… this headline has us all concerned!!

And the concern didn’t stop at the headline.

As we read on, the full news article, published by The Australian on the weekend, highlighted that the $32 billion plan to end negative gearing would — quote — lead to a fall in new housing construction of up to 42,000 dwellings over five years and 32,000 fewer jobs across the country, according to independent modelling — end quote.

Yep… that’s a drop in a whole lot of new housing construction (ie. supply) AND just a-bit-more-than-a-few losses (up to 32,000) in jobs!!

Folks… this is crazy stuff.

And those stats aren’t the only ones coming out of recent independent research digging into the numbers of what’s likely to happen if negative gearing’s ditched.

So, today we’re looking at a few of the worst-case scenarios from two different reports (the links to both of these are further down in the show notes) and unpacking — with both a short term and long term view — how this change to negative gearing might affect the property market and those investing in it.

But negative gearing changes — and the possible consequences on housing prices and for first home buyers — isn’t the only question we’re answering today! We’ve got plenty of gold on how to time your exist strategy, retiring debt and the right asset to invest in!

Oh, and if you’d like the Geospatial Heat Notes — the heat map that shows the Compounding Annual Growth in Median Value for Houses from 1974 till the end of 2017 that is sourced from the Valuer General data — you can get them here.

Back to today’s Q’s…

Question about Negative Gearing Changes from Shadi:
Hey Bryce and Ben. Thank you for all the information and for all the podcasts you provide. Apologies in advance if this question has been answered in previous episodes. I’ve been binging myself since episode 1 a few months ago, and am not quite up to date yet. I just have a question specifically about the abolishment of negative gearing and the impact it will have on first time investors. I’ve been looking to invest since listening to your podcast, and am interested to hear how this will affect my first purchase — whether or not it will just be a short term problem that effects cash flow or if it will have a long term effect, especially when entering the market.

Question about Your Exit Strategy from Anne-Marie:
Hi guys, this is Anne-Marie in Victoria. I’m 56 and my husband is 51. I started listening to you many years ago after we had our 7 properties. Our last property was 3 years ago. There all on fixed term interest only, which makes no offset available to them. And we’ve paid off our home, which is worth 1.1 million (1 of the 7 properties). It takes us $13,000 a year to hold all the properties, we just put our tax in, which is amazing. So property has done really well for us, and the mortgage we have on all of them is about 2.5 million, with domain value being low sitting at $3.9 mill, and high $5.2 with middle there all about 4.6 million. I want to start going into doing less hours at work — I’d like to retire on a passive income in maybe 4 years’ time. How do you transition to get the passive income we’ll need for retirement without too much of a tax liability? I paid about $10K in tax this year and I really don’t want to be paying a lot of tax while I’m getting to this point. Can you give me any pointers? And I can’t have an offset account as I said. I’d like some advice on this.

Question about the Right Asset for a First Home Buyer from Carrie:
I have a question about the best type of asset you should invest in. I’m looking to buy my first property, which I’ll live in initially. I have a budget of $750K. I’ve been looking at 70s and 80s free standing villa units in small blocks of 12 – 6 in Melbourne’s east. This puts me in middle ring suburbs around 20km from the city, with a land size of 350sqm. It’s a good balance between decent landmass without being out in the sticks. Alternatively, I could by a 2bdrm apt in an older, low density block — the type with only 2 or 3 stories closer to the CBD. Are either of these good investments? And which of the two is better? Or is there anything else I should look into. Love your work guys, keep bringing out those podcasts! Thank you

The Articles Ben mentions:

The Australian Article — Labor risks $12bn housing hit over ending negative gearing

Housing Industry Association (HIA) — Media Release

190 | Q & A – Addressing Media Alarmists, Investing in Your 50s and The Truth About Lenders Mortgage Insurance…

By The Property Couch September 20, 2018 in Podcast, Q&A

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If you’ve heard the latest media reports, folks, you might have reason to believe the property market is all bricks and slaughter… but is that really the case?

Today on the Couch, we’re addressing media alarmists — the recent noise shouting out alarm that they’ll be a total housing crash in Australia! So… is there any truth to the gloom and doom?

PLUS, we’re deep-diving into investing later in life and what this really looks like for people in their fifties, including the ramifications of investing in property can have on pension allowances.

And, of course, Lenders Mortgage Insurance… let’s run the basics, and work out when too much is WAY too much!

Before we kick off the Qs… guess what??

If you want the 30% discount on our new book Make Money Simple Again you need to join our waitlist BEFORE 11:59PM TOMORROW (Friday 21^st September 2018)

Yes, this is a limited-time only discount, folks!

>> CLICK HERE to Get 30% Discount of our New Book

And before we jump into the questions, here are some recommendations from Stiggy to help you go through this episode:

Winter is here! If you’re worried about the recent media attention on the market, go back to Episode 66 (Winter is coming and the air will be colder up high) to find out what properties we think would be affected first. And of course, while you’re on the trip down memory lane, don’t miss out Ep 37 on all thing Scarcity.

Do you want the recording from on the VIC Residential Tenancies Act Amendments? PICA will be sending out the slides AND the replay to their members next week. Not a member yet? Click here to join.

(Spoiler Alert) And finally… Here’s the link to the Granny Flat that we’ve chat about on today’s show. Make sure you consult a qualified and experienced Financial Planner before making any investment decisions folks! 🙂

Alrightey, let’s get to today’s questions!

Question about Investing in Your 50s from Darren

Me and my wife made a mistake late in life. We bought a house and sold it back in 2000, so we’re not first home buyers. We’re 50, looking forward to getting on the property train and have a good income of about $180K per year. We have about 4.5K in disposable income that we can put into property. Given everything I’ve heard from you guys, how could a couple, now 50, with that available cash, make their way through to give themselves a passive income by mid-60s, earning $80 – $100K per year in passive income. We were thinking of buying a house for around $450K, perhaps on the north side of Brisbane, around Petrie and Kallangura area, and we could smash out as much as we could in a year and a half, build up some equity and buy then move onto the 2nd house with a maybe a bit of renovation between. So my question is: how do people of our age group get onto the property ladder and make this happen for ourselves?

Question from Steph the “Serial Coucher”

We’re looking at purchase a home from my father in law over a period of time. Essentially, he is an asset rich, cash poor retiree who is living fortnight-to-fortnight on the pension. Yes, it’s certainly an emotional driver, but the asset does stack up. So my question is: how does something like this work? Can you acquire traditional financing, or is it a specialty class of financing? And what specialist should we look to engage? I want to get as much info as possible before even bringing up the subject with him. Thanks guys!

Question about Lenders Mortgage Insurance from Alasdair

I’m looking to increase my portfolio from 2 Investment Properties (IP) to 3IPs, and possibly a 4th. I’m sitting at around about 90% when I get my loans. I read somewhere that around the $1million mark it gets difficult. And I’ve heard that the global portfolio is impossible to get it over $2.5 mil. Can you speak to that idea?

144 | The American Property Market: Tax Liens, Tax Deeds, Texas and Investing in Opportunity – Chat with Jeff Goins

By The Property Couch November 2, 2017 in Podcast

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We’ve spent the week in America, folks — so we thought we’d better bring you back a bit of gold!

Sitting by a pool in Dellas (yep), we scored some local intel on the American Property Market —like what’s making Texas a HOT place for investing — with today’s guest, Jeff Goins.

So who’s Jeff? A full-time investor of “Tax Deeds” in Texas which includes house “flipping”, he has a builder’s license and a sponge of property knowledge. What’s most eye-opening though, is his local insight into how Americans invest in residential property, including their lending rules and regulations, and their penalties for (and opportunities in) unpaid property taxes, which is VASTLY different from the way us Aussies do it!

Oh, and a couple of Texan “translations” before we start:

“Inventory” = Supply and Demand
“Rehab” = Renovate

So, what are we discussing?

What’s the appeal of investing in the American market; particularly Texas?
The US Government involvement in their lending and how it triggered the global financial crisis (GFC)?
Aftermaths of the GFC and how they recover their confidence in the real estate market?
The differences in Australia’s and America’s lending regulation
What are the interest rates like?
How to research investment grade locations
Understanding the geo-economic difference between both countries and how will it impact investors’ decisions
Why do they have such a volatile property market?
Why is the average property price in America SO much cheaper?
Are there offset accounts and are they able to leverage off equity?
What happens if you don’t pay tax on your property?
What does “Tax Liens” and Tax Deeds” mean?
How can investors benefit from Tax Liens and Tax Deeds?
Is there such a thing as residential property advice in America?
Where are the auctions held in Texas? (!)

ALSO, we’re doing Movember this month! We’ve been supporting this cause for years but this time, we plan to expand the awareness on men’s health and help the support the cause to our community. Our target is $5,000. Now, our show is free but if you think we are doing a good job, please donate here.

Every dollar counts! (Bucket loads of good karma awaits you.)

Here’s the link again: https://moteam.co/the-property-couch

Finally, the questions we’re answering today…

Folks… this is crazy stuff.

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