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Episode 342 | From $250K to $2M Properties: How To Invest No Matter What Your Budget Is!

Have you ever wondered how to invest in property with YOUR specific budget?

Like, what if you DON’T have a big budget to spend…?

Or, on the contrary… what if your budget’s actually quite healthy – but you’re not sure if a $1 million – $2 Million property is really a premium investment (Should you buy two cheaper investment properties instead?)…

Folks, they’ll be something for you in this Q & A episode… ‘cos we’re covering A LOT of ground here – how to invest no matter what your budget, age or strategy is!

We’ve got everything from…

  • Investing at 21… and 60!
  • Buying $250K or $2M Properties
  • Getting the “Big Rock in the Jar” at every life stage
  • Selling an investment to buy a dream PPOR
  • Understanding The Donut Ring concept
  • Unpacking new ATO data that reveals current investment trends
  • Helping kids get on the ladder
  • Why Rentvesting is mathematically a better idea, BUT….

Let’s just say: you’re in for a solid treat.

Listen now and find out how to successfully invest at any stage of life or budget 🕺▶

 

 

Free Stuff Mentioned

 


The Questions We Answer…

 Question from Sharon on Buying Higher Priced Properties

Hi Guys, Thanks for having such a great podcast. I’ve recently got very addicted to it and I’m really enjoying it. I do have a question though around the value of properties that we should buy. I hear you talk a lot about your asset selection but I never heard you talk about higher priced properties, so like when you’re well over the $1 million mark. We live in Melbourne in the North, so we’re looking $1.5 to $2M for our next purchase and I’m wondering if you consider that a best investment or what you think about high priced properties ‘cos obviously that’s still just like a very average 3 bedroom house in the North. So I am just wondering if you don’t talk about it for any reason, or if there’s some reason you should avoid that price point.

 

Question from Steve on Selling An Investment Property for A PPOR Or Buy Cheaper

Hey Gents, absolutely love the podcasts and I’ve been a listener for many years now. I’m 30 years old with a fiancé and we have an investment property fully paid off worth about $600,000. We’re currently renting very cheaply in order to save for our principal place of residence, so we were originally looking around the Ringwood area to spend about $900,000, but due to such limited opportunities I feel, and really average properties that don’t have scope to expend, we are considering selling the investment property off and plunging pretty much all of our net worth into a property that will allow us to get us into something more like around the $1.2 or $1.3 Million mark. In saying that, we’ll still probably only need to take on a loan of about $600,000 between the two of us, which is quite achievable, however just wanting to sort of get some advice from you.

Do you think it’s worth trying to buy our dream home — something that we’re gonna be happy for a very long time — and selling off the other investment, or whether we should be holding onto the investment and obviously sacrificing our lifestyle for the short term and turn to getting into something a bit cheaper?

Really interested to hear your thoughts. I am very, very confused at the moment. Thanks guys.

 

Question from Julia on Sell or Hold An Architectural Apartment in Inner Sydney

Hi Fellas, I feel really strange talking to my computer asking a question but I love your show, really had a great time listening to it. So my situation is I am in my early 60s and I’ve been working on super and all that stuff and I own my own home, but I bought an investment property in the heart of the city of Sydney. It was actually in a designer’s building – it’s got about 51 apartments there. Anyway, COVID came and of course the tenancy situation really changed in the heart of Sydney.

So, I did have to reduce my rent from $650 for a one-bedder down to $520 a week so that was a massive drop for me, but really my question is about – over the last 5 years since I’ve owned the property it’s only gone up about $20,000 ‘cos I think I’ve paid at the top of the Market.

My question is, Should I cut my losses being in my early 60s or should I hang in there and hope for better days?

My original plan is to keep this property well into my 80s and I’m just feeling the jitters because the rent has dropped so much and the value just hasn’t increased over the last 5 years so any input would be appreciated.

 

Question from Gabby on Buying A $250,000 Property

Hi! My name is Gabby and I’m a 21-year-old from West Australia. I love your Podcast, but I feel as though I belong to a bucket that you haven’t talked about much. I’ve been boarding and renting my whole life, but wish to or have to move out of home eventually and hopefully soon especially with low interest rates. I want to buy an old unit with 2 bedrooms in a small block priced between $250,000 and $300,000 and then rent out a room to a friend.

It’ll be in the East Fremantle area hopefully, which is on the premium side of first home buyer suburbs, but it could be out of my grasp if I sit on it for too long. The problem is that I don’t actually have the money needed and my parents are happy to invest as long as it makes sense. I’m thinking that repayments could be roughly $260 a week and the room could be rented out for $120 at least a week. This basically makes almost cheaper than renting but me getting the lifestyle and the property at the end.

Do I get them to go Guarantor or use the complete trust we have with them instead taking on the loan as an investment, but me paying it off behind closed doors and essentially taking it over by the end.

 

 

Episode 341 | How To Pivot Your Investment Strategy When Affordability Changes

Folks, it’s no secret that property prices have seen a significant uptick – so what does this mean for your investment strategy if you can no longer afford to buy investment grade locations that are close to the city?

See, if you’ve read our book The Armchair Guide To Property Investing, or heard any of our earlier episodes, you might have heard us quote particular price points that now seem, well, a bit ridiculous.

You might’ve thought, “A $650,000 property in inner city Melbourne… what? They’re now over a mill, guys…?”

Or, “Where on earth can I buy a property for $450,000 in this market!?!”

 Or, “You said to aim for inner city properties with owner-occupier appeal, but now you’re talking about regional markets… what’s the deal?”

We hear you. And we get it.

That’s why today we’re doing a deep dive on how to pivot your investment strategy when affordability changes!

Make no mistake – the fundamentals DON’T change… but you need to be both smart AND realistic about the locations that are available to you, whatever your price point may be.

This is a Q&A episode you don’t want to miss – we tick off A LOT of key property investment questions that we’re confident will allow you to find success no matter what your price point is! Plus, we’ve got some new frameworks on how to navigate land tax, learn when it’s time to SELL (yep) and best practices to manage your money without dedicating your life to managing a spreadsheet….

Tune in now – and let us know what you think!

 

P.S. Yes, Ben is actually in his CAR when we’re recording this episode… find out why in the first five minutes 🤣

 

Free Stuff Mentioned

 

The Questions

Question From Valarie on Tips For Money Management

I bought a course and really love I’m also through the Make Money Simple Again book. I have one question: How do you apply the Money SMARTS system to a couple? At the moment we have separate accounts, something like 12 accounts between the 2 of us. How do you change that to fit into the system? Do you go with one family account and 2 debit cards account and 2 credit cards account or is there another configuration that you recommend? Many thanks in advance for your feedback Tips and Have a Great weekend. Thank you!

 

Question from Kiran on Land Tax and Different Entities

Good day Bryce, Ben, Stiggy and the team. My name is Kiran, I’m from Melbourne. I was listening to your podcast a week or two ago and you spoke about an active, investor Bruce in this episode who had land tax issues because he was investing in the same state. All investments are in the same state. I understand the active investor issues but from what I understand, all these investments were possibly in his personal name. What if Bruce was able to invest in different entities for examples companies or trusts? Each entity would then be completely separate and hence reset the amount of land tax he had to pay. Can you unpack the issues as to whether this is a worthwhile strategy and other differences with finance? I understand that commercial finance is required for companies which results in less favourable LVRs. Are there any further issues that someone looking to invest using companies or trusts to reduce their land tax bill may encounter?

 

Question From Mathew Monty on How To Buy Assets Closer In On Combined $100k Income

Hi Guys, I love the Podcasts. I just got a couple of questions regarding investment grade/investment stock – more for people like me that don’t earn that much money. Can you buy with an income of $100,000? So I’ve got a property that’s got good equity and we went out and we bought another property for investment, probably just investment stock in Truganina. So 20-something kilometres from the city, I know it’s not investment grade like you just talked about. However, I wonder how people on say $100,000 a year in combined income could afford to get into those inner-city areas? I don’t know if that’s possible. Given our situation that we’ve bought a new investment stock property, where do we go from here?

 

Question from Dimitra on The 6-Part Framework That Reveals It’s Time To SELL!

Hi guys, Love your podcast. I listen regularly on the drive to and from work, and recently purchased your audio book which has been super informative. You always share a lot of knowledge when it comes to finding and purchasing an investment, but would love more information on what to do if you’ve bought a lemon! Most of the things you tell us to avoid applies to my investment property. The apartment was purchased off the plan in an area where supply exceeds demand and the property price hasn’t increased since it was purchased back in 2017. And to make matters worse, since Covid and the bad publicity new apartments have been getting, the property has gone down in value. There are tenants in the property currently and I have to contribute an extra $50 per week towards the mortgage (principle and interest)

The positive is that the property is in Sydney, 12km from the CBD and a 10 minute walk to public transport. This purchase obviously happened before I discovered your podcast, but what should I do?

Should I hold the property in the hope that it will eventually increase in value, or is there no other option but to sell and cop a loss?

Any advice you can give would be much appreciated. Many thanks.

 

 

 

 

Episode 339 | “Man, Can Politicians Spend Money!!” – ft Property Q&A

Folks, as promised we’re diving deep on the 2021-22 Budget Review – what’s in it, what are the key takeaways for property investors, first home buyers and us Aussie taxpayers!!

In a one-liner summary… “Man, Can Politicians Spend Money!!”

Yep. And we’re unpacking quite a bit of it – such as…

  • The $15.2 billion infrastructure spend!
  • Free cashback (Tax Offset) & how much you’re likely gonna get back…
  • First Home Saver Scheme
  • Family Home Guarantee for Single Parents
  • New Home Guarantee
  • Superannuation Downsizer Scheme
  • The increase to the Child Care Subsidy
  • Public Housing support
  • The HomeBuilder extension
  • VIC State Budget & The consequences for property owners and property developers

Plus, to give a bit of contrast to the Budget News we’re also circling back on a few key evergreen property investment formulas and answering a couple of listener questions!!

Get ready – you’re in for a solid ep, folks!

 

Free Stuff Mentioned…

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The Questions…

Question from Al Knight Lewis – Investment Stock & Investment Grade – Is it still relevant?

“Good afternoon. I have just started listening to your podcasts and am finding them so

Interesting! Episode 8 talks about investment stock vs investment grade and I’m wondering if the info in this episode is still current and relevant 6 years later? I’m looking for our first investment in Brisbane.”

 

Question from Don Holloway – Are there any benefits from having $10k sitting in an offset?

“With interest rates so low atm is there any benefits from having $10k sitting in an offset?

My calculations (and confirmed by investment bankers n mortgage brokers) best to buy quality shares with your $10k than to month ball it into an offset account. Would love to hear your thoughts on this.

BTW, I’ve read your book Make Money Simple Again last year. Found it to be a parallel to Scott Pape barefoot investor

 

 

 

 

How To Pick The Right Investment Property: “Know Thy Quadrant…”

So, what makes for the RIGHT investment property… and how do you pick it?

Well, let’s be honest… most of us can’t tick all the boxes on our property wish-list. We’d like to, sure, but often this isn’t an accurate depiction of reality. We can’t all afford the best house in the best street in a blue-chip, capital-growth-centric location every time we invest in property! So, chances are you’ve had, or will have, a conversation about what you might have to compromise in the buying process.

… And this is where our “Buyer’s Decision Quadrant” comes in!

This is a framework that can help you with the asset selection process and help you make an informed decision so you are NOT compromising where it matters most. Because there is something that is absolutely non-negotiable.

So in today’s episode, we’re going to take a deep dive on the four areas — the “Quadrants”  — of our Buyer’s Decision Quadrant so you can sleep well knowing you’ve picked the right investment property with the money you have and the ambitions you seek!

Listen now to learn how to pick the right investment property by using our Buyer’s Decision Quadrant to weigh up the “wins” and “loses” of what you compromise on!

Don’t forget, get further insights and “play along at home” by picking up a FREE physical copy of our book here: http://www.thearmchairguide.com.au/

 

Here’s a bit of what we cover in today’s episode…

  • What is “The Buyers Decision Quadrant” and how can you use it to purchase your next investment property?
  • What is The One Thing you should NEVER compromise on?
  • Should you buy “Smaller, Closer In” OR “Bigger, Further Out?”
  • What can you compromise on if you have a smaller budget?
  • How to recognise which investment property will work for your own circumstances…
  • Is a property that “ticks all boxes” – AKA the perfect property – really a myth?
  • Is “Uglier” always better?
  • Land size considerations…
  • What should you quickly overlook?

 

Free Resources

  • Free Book – The Armchair Guide To Property Investing: How to Retire on $2,000 A Week (please just pay for postage – we’ll pay for the book and send it anywhere in Australia for you.)
  • The Property Couch PodcastThe Insider’s Guide to Property Finance and Money Management (This is Australia’s #1 Property Podcast with over 307+ episodes that features HEAPS of simple and actionable frameworks, countless interviews with the best minds in the Australian property and finance industry and a ridiculous number of free resources to help you at any stage of the property investment journey)

 

Episodes from The Property Couch to Further Support You…

 

 

The #1 Reason Why These Properties Soar In Value… While Others DON’T!

Not all properties are created equal. And there is a specific reason for this – what we like to call “The Psychology Behind The Price”. And this has EVERYTHING to do with human interest and human behaviour – something that can indeed be measured and, almost always, stays exactly the same… no matter who you are or where you live.

Here’s the deal… there are two “types” of properties – Investment Grade and Investment Stock. And most investors are often tricked into thinking – or falsely assume – that what they think is a good investment is going to turn out to be, well, a good investment. And this is NOT the case. In fact, it’s often the complete opposite.

This may come as a surprise to you… but the greatest investments – what we call “investment grade” properties – actually target the owner-occupier (that is, the home owner)… NOT the investor!

And in today’s episode we’re going to tell you exactly why this is and give you the science behind what makes for an Investment Grade property and how to recognise one using the golden rule that underpins the value of propertySupply and Demand!

Listen now to learn how to get a return on your investment property and keep it… simply by identifying high demand in the property market.

 

Remember…

Investment Grade = Great.

Investment Stock = No good.

 

Don’t forget, get further insights and “play along at home” by picking up a FREE physical copy of our book here: http://www.thearmchairguide.com.au/

 

Here’s a bit of what we cover in today’s episode…

  • What types of properties almost always outperform others?
  • What do we mean by “Supply and Demand” and how can property investors use this to get a return on investment?
  • Investment Grade vs Investment Stock
  • What is “Owner-Occupier Appeal”?
  • How To Identify REAL High Demand in The Property Market!
  • Critical Supply Considerations and How to Identify “Scarcity” in the market
  • The Three Biggies: Human Behaviour, Human Interest and Economic Activity
  • What Property Indicators should property investors assess?
  • Why does the Demographic of a property market have such an impact on property prices?
  • What areas will grow most in value?
  • What is gentrification?
  • Tips for Investing in Apartments

 

Free Resources

  • Free Book – The Armchair Guide To Property Investing: How to Retire on $2,000 A Week (please just pay for postage – we’ll pay for the book and send it anywhere in Australia for you.)
  • The Property Couch PodcastThe Insider’s Guide to Property Finance and Money Management (This is Australia’s #1 Property Podcast with over 307+ episodes that features HEAPS of simple and actionable frameworks, countless interviews with the best minds in the Australian property and finance industry and a ridiculous number of free resources to help you at any stage of the property investment journey)

 

 

Episodes from The Property Couch to Further Support You…

 

 

 

 

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