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302 | Back To The Future: Lessons From 50 Years At The Top Of His Game – Chat with Scott Keck

Want to hear from an Expert Witness who has been observing and analysing the property market for over FIFTY years? And what if they also happen to be a highly regarded industry professional who’s literally been valuing the price of property for more than five decades…?

… you’d probably get a bucket load of invaluable intel, right?

Well, let’s put it this way… the gold from today’s guest is well worth a king’s ransom! One of our favourite episodes yet – and you’re about to hear from someone who’s property knowledge is off the charts and who, let’s face it, we’ve been admiring from afar for years!

Welcome to the couch… Scott Keck!

Scott Keck is Chairman of Charter Keck Cramer, a leading Australian independent, strategic property consulting firm. Scott has more than 50 years property valuation experience within the Melbourne market, having begun with the firm in 1968, becoming a Director in 1978, Managing Director in 1984 and Chairman in 2010. He is considered one of the best and most high-profile valuer.

He is frequently engaged as a senior negotiator in complex commercial and statutory issues related to the property market and for advice in relation to large portfolio valuations for major statutory and private corporations.

And get this… in the last eight years alone he published over 500 articles on the property market!!

So, what can we ALL learn from someone who’s been in the market before we were even born???

 

Free Stuff

 

Here’s What We Cover…

(FYI: so much! This is practically a property masterclass 🙌)

  • So… what does someone who has over fifty years’ experience have to say about the property market??
  • Scott’s views on property as an investment
  • What’s changed over the decades? (Design styles, construction materials, floorplans, the use of space etc, the urban sprawl, density etc, etc)
  • What does this tell us about buyer demand?
  • Very Important Observations About Humans and Property Over 50+ Years!
  • What (if anything) has been consistent with the property market?
  • What’s the most interesting property Scott has ever had to value?
  • Post COVID-19, what does the residential property market look like?
  • What would prevent/impact this from happening?
  • Is it likely that people will want to continue living in capital cities moving forward?
  • Why will the “four pronged strategy” to get the economy moving again influence the price of property?
  • How on earth will population DOUBLE over the next 40-50 years?
  • And what will the property market look like to cater for this demand?
  • For investment purposes, how many bedrooms should a townhouse have?
  • Why do Off The Plan’s almost always outperform?
  • A deep dive into Off The Plan numbers: Why you’re in trouble before the house is even built!
  • What will the future of Melbourne look like? And will this now change with COVID-19?

 

“For every two people that come we need a new dwelling” – Scott Keck

 

 

 

 

 

301 | How to Lose Half a Million Dollars & The Secret to Lifestyle Design

Don’t want to lose half a million bucks? Well then, make sure you don’t do this… 

In today’s episode, we’re diving deep on The Secret To Lifestyle Design – that’s means What To Do & What NOT To Do when building out your Property Portfolio Plan. 

Like we always say… “Plan to become what you plan to become.” 

So, if you’re an aspiring or existing property investorwhat does it mean to plan your property portfolio? And why go to the lengths to plan out your future anyway?  

Well, with “the end in mind”, your goal is a heck of a lot clearer! 

But there’s something wildly more important than this 

 Listen now to get the secret to creating the life you want (“lifestyle design”)… and how to reverse-engineer your dream goal to suit your current lifestyle! 

 

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Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

The Questions 

Question from Angus: 

Would love some commentary about The Barefoot Investors email yesterday: 

 Hi ,“Get out now.” That’s the advice the CEO of NAB has given to homeowners who are struggling to make their repayments. 

Yes, in his quarterly trading update last week, NAB’s new-ish chief, Ross McEwan, warned: 

“There will be some circumstances where people are better off selling out early and taking some equity out of their homes, or keeping some equity, before it disappears.” 

While most of the media didn’t give his words much attention, there are two good reasons that you and I should: 

First, because in all the years I’ve been doing this column I’ve never heard a bank boss speak so candidly. 

Bank bosses are basically politicians: they get parachuted into the top job, stay there for five years, and rocket out with $40 million. Their main job is to stick to the script: “keep lending”. (And we’ve all witnessed how bad things go when bank bosses go off script, like getting into wealth management.) 

So why is NAB’s CEO sticking his neck out? 

Well, that brings me to my second point: he obviously doesn’t like what he sees on the horizon. 

And know this: McEwan isn’t peering into a cloudy crystal ball. Over the years NAB has invested billions into tracking its customers’ every financial move. In fact, all the banks have incredibly detailed customer analytics that tell them what people are doing — or not doing — with their money, in real time. 

Now, according to the banking regulator, APRA, roughly 1 in 10 mortgages in Australia are paused. 

Which gets me thinking … 

On one side, how long can the banks cop 10% of their customers not paying? 

On the other, when will customers who are really struggling finally bite the bullet? 

It’s a grim situation. 

My hunch is that the banks are betting that the overwhelming majority of their customers will get through this. Yet they also know a small number of their customers won’t, and so they (well at least Ross McEwan) are turning up the heat on them. 

My advice? 

Please don’t misquote me: I am not saying you should sell your home. 

What I am saying is don’t be a frog … if you were in hot water before COVID hit, don’t just sit there bubbling away. 

We’re still early on in this crisis, and you have more options than you think. And if you want someone independent (and free!) to walk beside you and carefully lay out your options, call the National Debt Helpline on 1800 007 007 and speak to a financial counsellor (like me) immediately. 

The last word goes to McEwan: 

“We’ve seen in other crises around the world, when people try to hold on they end up walking away with nothing.” 

Don’t say you haven’t been warned 

 

Question about Vendor Finance from Simon: 

 How do you set up Vendor Finance? What is the process? Do you need the full amount in cash or can you use funding from elsewhere, like a venture capitalist maybe, or even a bank under certain circumstances? Does a third-party company look after everything for a fee or is it more of a hands-on personal approach that is needed? How do you evaluate the risk vs reward with the process? What happens when the buyer refinances down the track? I’m thinking for some people in certain industries to get approval for borrowing will be very difficult for some time, this may open up opportunities within the vendor finance area? Some people may see this as praying on others misfortune while others, like me, may see it as offering a lifeline to those who need it. 

Could fragmentation of properties and vendor finance offer an attractive way in for less money for anyone struggling to get into property? Is this also a way you could offer Vendor finance if you only had for example 50% equity?? 

 

Question about What Property To Buy from Scott: 

To buy established or a new investment property, Bryce. I am in Sydney and considering buying in Melbourne as I feel the market there is way undervalued compared to Sydney, given the expected population numbers expected to surpass Sydney’s over the next few years. Thanks mate. 

 

Question about Our Biggest Investment Mistakes from Quy: 

Love your work gents! What are your biggest investment mistakes which had delayed you from reaching your passive income goals quicker. 

 

 

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Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

 

 

272 | Q & A: The Unspoken Truth About Growth Corridors & Picking The Right Property Investment Strategy

How many times have you heard something along these lines…?

“This suburb’s a growth corridor…”

“There’s heaps of development happening here… it’s the next growth corridor.”

“With all the new public transport networks, job opportunities and shops coming in, this place is absolutely a growth corridor… full of investment potential.”

With all this buzzword talk, it’s would appear that all us property investors need to do is hunt down the next “growth corridor”, invest in it before it really kicks off, and then sit pretty for the rest of our lives …

BUT. Folks, there is a massive problem with this! An unspoken truth about growth corridors that trips up a lot of investors out there. Sure, some “growth corridors” might indeed grow in value, but there is a huge misconception out there that we want to clear up today.

So, in our first Q&A of 2020, we’re diving deep on this unspoken truth and we’re also going to answer your questions about how to pick the right investment strategy… ‘cos guess what? While a whole lot of you folks know the fundamentals of property investing, you don’t necessarily know how to apply these to your own situation and goals!

 

Here’s a 30,000-foot view of what we’ll cover … 🚀

 

Resources Mentioned

 

The Questions

03:26 – Question from Jack on Bris vs Melb and differing opinions:

Hi there guys, first up I just want to stay that I’ve just tuned into your podcast and I’m absolutely loving it! I’m going to be buying a couple of your books too they seem to have a lot of great reviews and, yeah, I’m really excited to read them.

Fellas, I’m looking at starting my property investment journey in December 2020. Now, I’m following a couple of investors – one guy’s currently investing up in Brisbane. And this other guy I follow as well stays purely local, mainly Melbourne. He’s explained to me about the growth corridors – how they’re not really growth corridors – Packenham, Windenvale, Tarneit. I’ve gone and had a look and they don’t average as much as I thought they would. Nice places, but yeah. I can’t afford to invest in Melbourne itself and the different to the two is – the one up on Brisbane is getting people starting up around the $500 mark. And the other guy who invests only in Victoria says start out somewhere like Bendigo or Ballarat. He doesn’t think Geelong’s got good growth. Yeah, I’m hesitant to go to Bendigo and Ballarat as they are inland, but I’m hesitant that my judgement’s being clouded. I’ve always grown up in coastal places – always lived near the coast and love the coast. If you guys could give me your opinion that would be fantastic

 

13:18 – Question from Nick on Investing as an Expat:

Hi Bryce and Ben, my name is Nick. I’m calling all the way from Switzerland, although originally from the northern beaches in Sydney. My wife and I are both from the northern beaches, but we have been working here in Europe for the past 3 years and we are looking to buy our first property back in Australia. We’re keeping an open mind and looking all over the country – so not necessarily in Sydney.

We have a general question about what type of strategy we should be looking for being non-residents for tax purposes but Australian nationals, taking into account we can’t take advantage of first home owners grants, or negative gearing as we have no income back in Australia. Originally, we were considering purchasing an apartment with potentially 5-6% rental yield with the idea of having a high yielding property so one that can be potentially positively geared. What are your thoughts on this?

 

20:03 – Question from Nikii on upgrading PPOR now or later based on economic forecast:

Hi it’s currently June 27 2019, currently my husband and I purchased a 3 bed 2.5 bathroom 2 garage, 243sq townhouse, freehold in prime real estate in Hawthorne, Brisbane. We have been provided by market experts that we could get $830 – $850K  from the sale of our property. We’re currently wanting to upgrade to live in a better area. Would we be best with the economic forecast over the next couple of years to keep that property as an IP before upgrading to a property just in the very low millions.

 

26:03 – Question from Craig on selling a property at a loss or wait to recoup loses:

Good afternoon The Property Couch, my name’s Craig and I have a question. My partner and I currently own 3 investment properties between us. 2 of these properties are performing quite well, in terms of growth and low upkeep. The third investment property in Darwin was originally bought as a PPOR and is not performing well as an IP. The market is at the 32% downturn and is unlikely to recover any time soon. My question is… Should we continue selling the Darwin property at a loss and still walk away with about $30,000 to reinvest into a new or existing investment OR should we hang onto this investment long term with the intent of recuperating our losses, even though this property costs us about $8K a year? Thank you for your time.

 

31:40 – Question from Scott on what to do with money in the bank:

Hi guys, Scott* here, I’ve been on board following the podcast at April 2015 and have loved the journey. Almost five years in and I thought it was finally time to hit you guys up for some advice!

My wife Teresa* and I live in regional WA with our two kids aged 7 and 9. Both of us work full time for a state government department and we currently earn $270k gross per year combined. We own two properties in our hometown Perth. Our first home in Bibra Lake (shout out to Bryce!) which is valued at 430k with 350k owing. Our other property is a 1940s weatherboard cottage 5kms from the city with owner-occupier appeal, valued at 630k with 500k owing. So our total LVR is about 80%. Both loans are interest only and both properties have reliable tenants in them, paying $350 and $410 a week respectively.

We aren’t big spenders, and have no personal, car or HELP loans. Due to this, and the fact that our employer has heavily subsidised our rent whilst we’ve lived regionally, we’ve quietly amassed savings of $320k which currently sit in an offset account. We intend on staying in the bush for at least another 2 years before heading back to the big smoke, and in this we anticipate the $320k we have will grow by $75k each year in which we don’t do anything with it. However, I’m sensing there’s a huge opportunity cost here if we leave things any longer! Any advice as to what our next move should be would be very much appreciated. Keep up the stellar work.

 

39:30 – Question from David on Subdividing Parent’s Land:

Hey Ben and Bryce, Really been enjoying the podcast. I’ve got a bit of a unique question. At the moment I live with my parents and I am in my mid-20s, and I’m looking to subdivide a bit of their land as housing pricing are a bit too expensive for a single income. I was wondering if I classify for the First Home Buyers Grant if I build on their land and whether the actual certificate of title transfer needs to come onto my name, or can it remain in their name? Cheers, David.

 

Quote of the Episode

“An informed investor is a smart investor.”

 

Last Week’s Download:

Keen to find out how the state capitals recovered from their previous trough and the current outperformers? Looking for the data they chat of on the show? Just fill in the form below and we’ll send it to you right away.

Free resources: States Capitals Feb 2020

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271 | Property Outlook and Hotspots To Watch in 2020

Who wants to know what’s in store for the property market in 2020?

Think Hot Spots. Suburbs to watch. Capital city drive by. Property Predictions!!

Sure, we know all of this property outlook stuff is a bit “crystal-bally” folks… BUT we also have some cool data up our sleeves that’s backed in some serious research! So today we’re gonna give it a solid crack at letting you know what we think is going to happen this year!

And not only are we going to do a “fly around” of the entire country so we can paint a realistic picture for you, we’ve also pulled our Capital Growth King, Jeremy Sheppard, our from the lab to share the outperforming suburbs in each state and territory!!

For our folks who’ve been with us for a while, you’ll know who our mate Jeremy is… and for the folks that don’t — basically Jez is THE guy you want on your side if you want to find the best locations to buy in! He’s the Property Analyst, Research Director and Creator of DSR data, one of the many property research tools of Select Residential Property!

We’re not holding back on today’s episode either folks — you won’t JUST get the property hotspots, you’ll also get the insights into the specific properties we buy in each capital city. and why! Plus, of course, you’ll learn all of the states we’re currently buying in, the “up-and-comers” and the ones we avoid at all costs.

Let’s kick your year off with the CORRECT data-backed information!! (Also, you can get all of the numbers we refer to below. We don’t want your email or anything. You might just want it handy when we’re going through the numbers!)

 

Download All Of The Data We Refer To Here

Free Resources Mentioned:

 

Keen to find out how the state capitals recovered from their previous trough and the current outperformers? Looking for the data they chat of on the show? Just fill in the form below and we’ll send it to you right away.

Free resources: States Capitals Feb 2020

  • This field is for validation purposes and should be left unchanged.

 

Key Learnings

  • Typical value versus median values
  • Current value vs. peak and trough in EVERY state & territory
  • How many outperforming suburbs are in each state?
  • The suburbs to watch in Sydney
  • The suburbs to watch in Melbourne
  • The suburbs to watch in Brisbane
  • The suburbs to watch in Adelaide
  • The suburbs to watch in Canberra
  • The suburbs to watch in Perth
  • The suburbs to watch in Hobart
  • The suburbs to watch in Darwin
  • The types of properties we buy in Sydney
  • The types of properties we buy in Melbourne
  • The types of properties we buy in Brisbane
  • The types of properties we buy in Adelaide
  • The types of properties we would buy in Canberra if we were an owner-occupier
  • The types of properties we would aim for in Hobart
  • WHEN we’re thinking of buying in Perth
  • Affordability and Apartments as Investment Properties?
  • The Capital King’s Property Hot Spots and Hot Tips for you!!

 

 

 

 

269 | Gamifying The Race To Retirement: Granny Flats, A Garage Full of Cars, And An Ex-Seller of House & Land Packages – Chat with Athena Anca

Put your hand up if you want to fast-track to the day when you can choose whether to go to work or not? Okay. Hands down. Most folks — probably early morning on a Monday when the alarm goes off — have thought it’d be nice to have the option to roll back over… or simply get out of bed and have the whole day to do whatever you want, without worrying about where the money’s going to come from.

So that’s why today’s guest is gamifying the race to retirement — that is: she’s turning money management into a game… a fun competition where her and her partner are trying to beat how much surplus they can trap… and how fast they can race to retirement!

BUT, as all “real life” stories go, this one’s a bit more layered than that. In fact, it’s WAY more layered….

Because, for one thing, Athena Anca — the FINAL “everyday investor” who has put their knowledge into action and is tying up our 2019-2018 Summer Series — wasn’t always like this.

What’s most interesting is Athena actually used to SELL House & Land Packages! … And she and her partner Jason BOUGHT one as their first property!! Sure, now they’re investing in granny flats and planning for their dream home with a garage full of super cars, BUT…….

Guess what??? This actually is isn’t the first time Athena’s been on The Property Couch! If you circle back to mid-last year (Episode 236), Bryce actually read out an Instagram message from Athena….

 

Our first property decision was a setback in disguise. In 2016 we bought a house and land package based on first home buyer incentives that weren’t in line with our goals. Cue Bryce and Ben….
One episode at a time we learnt the difference between Investment Stock and Investment Grade, became my familiar with the lending landscape and finally channeled our discipline into managing money rather than it managing us. I only mind a little bit that our friends think we’re tight-arses! We became borderless investors and this year added our third property to our portfolio…”
– Athena on Instagram, Read out in Episode 236

 

Free Resources Mentioned:

 

Episode Breakdown

01:53 – The Money Backstory!
07:20 – How did Athena manage her money before she met Jason?
14:50 – The “tight-arse” money moments!
16:28Why invest in property?
16:58 – Gamifying the race to retirement…
18:28 – How had they set up their lending?
19:53 – Why didn’t they buy a house and land package again?
21:42 – Investing for Yield: Is a Granny Flat a Good Strategy?
23:10 – The “Super Car” story!
23:51 – What was it like selling House and Land Properties??
25:18 – The House and Land Sales Spiel…
30:21 – How much are the granny flats? How many beds, etc?
31:25 – … and the rent return for the granny flat?
32:37 Pros and Cons of Granny Flats
33:15 – The Plan
35:20 – Athena’s advice for YOU….
35:44The Mindset Tips: How to overcome analysis paralysis
40:52 – Are they still tracking ever single dollar with Money SMARTS?
41:11 – What do they do differently with their 7 day float?
41:38 – How far ahead are they on their money target?

 

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