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Episode 389 | Interest Rate Rise: What this means for YOU! – Chat with Evan Lucas

Right. Let’s get this out of the way first… 

Interest rate rises shouldn’t be scary!  

There might be some panic-inducing headlines floating around (Especially after the Reserve Bank of Australia’s announcement to raise interest rates for the first time in over a decade)  

But in reality, rising interest rates are not bad! 

To help us explain why this is true, we’ve got a NEW guest on The Property Couch… 

Meet Evan Lucas, Chief Market Strategist at InvestSmart! He is an accomplished financial markets professional who has been investing in and researching global markets for more than a decade!

Evan gained experience at several top-tier global institutions and has worked with the likes of ABN Amro, the Royal Bank of Scotland and RBSMorgans!!  

On top of debunking this idea, we’ll be uncovering… 

📈 Why the RBA has decided to lift interest rates now, 

📈 How inflation psychology actually works (plus how to flip your mindset around it!)  

📈 And of course, does this change mean you should go with a fixed or variable interest rate?!? 

(PLUS, the RBA and politics, predictions for the future, AND SO MUCH MORE!!!) 

Evan will also be sharing his money story growing up and explaining what the GREATEST ASSET you can buy with money is! 

So tune in now to cut through the noise and understand the who, what, and why behind rising interest rates!  

 

Free Stuff Mentioned… 

  

Here’s some of the gold we cover… 

  • 2:10 – Stay close to your Mortgage Brokers folks! 
  • 3:00 – Don’t get anxious…get understanding!!  
  • 4:22 – Welcome Evan Lucas!  
  • 5:30 – Evan’s journey to where he is today… 
  • 10:35 – The elephant paradigm! 🐘 
  • 15:02 – Money can buy you the greatest asset of all: T____.  
  • 26:08 – What does buying T___ look like in everyday life?  
  • 30:02 – Why is the property market so special?!?
  • 34:44 – Evan explains the reasoning behind the RBA’s cash rate hike (and what “The 3 Mandates” are!)  
  • 38:45 – How to flip your mindset folks!  
  • 45:51 – Why the rising interest rates shouldn’t be scary! (And it’s actually a…positive?!)  
  • 48:03 – How does inflation psychology work??  
  • 52:04 – How is the global economy and supply chain influencing Australia’s market?  
  • 55:15 – Breaking down Australia’s employment figures!  
  • 1:01:04 – Should folks choose fixed or variable interest rates??  
  • 1:04:51 – What we predict for the future!  
  • 1:09:39 – Will the RBA’s decision impact the Federal Government’s Election??  

And… 

  • 16:23 – Let’s recap: How to buy your time back and why rising interest rates are good!  
  • 1:20:49 – Never waste time re-opening tabs again (This one’s for you Google Chrome users!)  
  • 1:22:15 – Beware Scammers folks! Listen to this to understand how they work.  

 

Episode 381 | Should I Continue Investing After 40?

Do you know how to make your invisible finances….visible? Or what we mean by “the big rocks in the jar”?!  

It’s been a while since we’ve done a Q&A Day folks, and boy we’re covering a lot of ground! We’re answering the questions above, and more, including… 

Debunking the “too old to invest” mentality that many people fall into, WHY it doesn’t work… 

AND how it leads to unfortunate statics, like how

73% of all Aussie property investors stop at one property, and 91% stop at 2!

Folks, we need to change this statistic which is why we’re exploring what our question-asker (and you) can do to avoid self-limiting action.  

Bryce also lists some great examples of people who’ve only found success later in life; listen in if you need some inspiration.  

PLUS, how you can use Capital Gains Tax (CGT) to best benefit you!  

Yep. We’ve got 2 listeners interested in CGT in 2 VERY different ways… 

We’re explaining what CGT is, clarifying whether it affects borrowed money and asset appreciation AND if it’s possible to dodge THE 6-year rule!!! (Don’t know what that is? Tune in to find out 😉)  

We’re also hitting a huge pain point of Ben’s, related to why banks treat investors (over owner-occupiers) like second class citizens, and why it doesn’t make a lick of sense to us!  

PLUS we discuss the floods on Australia’s east coast and its impacts on the property market. Our thoughts go out to all the people affected by this disaster ❤️. 

Of course, since it’s a Q&A day there are tons more good stuff crammed in as well.  

All questions are listed below folks – so tune in and enjoy!  

p.s Remember to send us your tax questions BEFORE the season starts through the Speak Pipe widget found on The Property Couch website. (You’ll find it on the bottom right side!)  

p.s.s Did we also mention if we answer your question in the upcoming podcast, you’ll get a free Start & Build course? 😉  

 

Free Stuff Mentioned 

 

The Questions We Answer 

Anonymous on Regional Investing   

“Hi Ben and Bryce,

Love your show and have finally hooked hubby into listening too! Question – We are both 41 years old, have a young family, and work full time. We have a mortgage on our principal place of residence in Sydney and have used our equity to purchase 2 properties in regional NSW over the last 2 years (in the same town of 65000 people).

Given we are early 40s and are keen to continue investing in regional NSW (needs to be somewhere hubby can get to and run repairs as he is handy) are we getting too old to have over two investments? Thanks!”

Riley on Loan Security/Captial Gains Tax on Principle Place of Residence 

“G’day team, 

I’m a rent-vestor that’s looking to purchase a home for myself in the next 6-12 months. I have enough equity in my investment property that I could feasibly loan against in order to generate a deposit. 

My question relates to Capital Gains Tax. I understand that I can loan against equity to purchase another investment, however, am I able to loan against equity to purchase a home? 

Will there be any capital gain associated with using the loaned money to purchase a PPR as opposed to another investment property? 

 I’ve been led to believe this is the case but haven’t been able to substantiate the claim through my own research. Any thoughts?” 

Anonimous on Capital Gains Tax and the 6 Year Rule 

“Can you tell me more about the 6-year rule?  

I understand that if you rent out your primary residence for less than 6 years and move back into it then you don’t have to pay CGT when you sell.  

Let’s say I buy a new house and rent out my current primary residence, can I move back and forth every 5 years between the two properties to avoid CGT when I want to sell one of them? 

Sorry if you covered this in a past episode, I’m getting my way through the 400 or so episodes!”  

 Tomasz on Split Owner Occ loan to fund investment:   

“Hi Guys, 

Love the show, I wish I had found out about it from Day 1 as it would have lead me to follow the knowledge you have shared. Thanks in advance for answering this question. 

I have a $400K Owner Occ loan with $200k available for redraw. I am planning to use approximately $150k of the redraw funds to purchase an investment property. My bank allows me to easily split this $400k loan into $250k/$150k splits. Do I have to change the $150k loan to an “investment loan”? Or can it stay as an Owner Occ loan? 

I am confused as the interest for the $150K loan will be tax deductible but the security for this loan is still the house I live in. Further to this can you share any information relating to why Investment interests rates are higher than Owner Occ rates?”  

 

Here’s some of the gold we cover… 

  • 0:48 – A catch up on Ben and Bryce’s social life since last week… 
  • 3:32 – Rob (Aka. Buggerlugs the boy) and family of Frank, Tracy, Layla & Elke [Kenny] cheers for the great reviews.  
  • 12:17 – How this lesson from the meat-packing industry can apply to…property?! 
  • 15:50 – Anonymous’ Question 
  • 16:06 – How old is too old??  
  • 17:08 – Don’t fall for these negative mentalities (Be more like Julia Child, Stan Lee and these other greats!)  
  • 22:23 – How can you make the “Invisible, visible” and stop limiting your portfolio to 2 properties!  
  • 27:26 – What do we mean by “the big rocks in the jar”??  
  • 28: 35 – Riley’s Question  
  • 29:22 – What is Capital Gains Tax?  
  • 30:22 – Why ______ does NOT affect asset appreciation or capital gains!  
  • 31:10 – Purpose NOT security folks  
  • 32:10 – The rule of thumb for deductibles…  
  • 33:18 – How you can ask us (and returning podcast guest Julia Hartman) your questions BEFORE tax season!  
  • 34:46 – Anonimous’ Question 
  • 35:15 – Why can you only have 1 current primary residence?  
  • 36:54 – Tomasz’s Question  
  • 37:59 – Why do banks treat investors like second class citizens?!  
  • 42:00 – When should you change your loan?  
  • 44:22 – Why Ben was called “That mortgage broker” by a politician…  
  • 46:20 – Bryce’s house reno lifehack!  
  • 48:30 – How will the floods affect Australia’s property market?  
  • 52:15 – Our future predictions for supply and demand in flood-affected areas  
  • 54:00 – Will insurance premiums go up?  

 

Episode 361 | When Is It Too Late To Get Into Property?

Have you left it too late?

Has the market moved?

Are you too old to start?

With the media hyping on about how hot the property market is these days, we get that some of you might be feeling a little anxious (even frustrated!). Everywhere you go, you’d probably hear people saying, “The prices are crazy these days!”

And yes, they might be right.

So… If you’re worried that it might be a bit too late to start investing in property, then today’s episode is perfect for you.

And the best part is…

There are quite a few calculations today too!

Better get a pen and paper on standby or just reduce the playback speed on some parts 😉

Oh! Before we go ahead with the questions, just a bit of a teaser… Make sure you stay till the end cause Bryce and Ben will be sharing their early prediction on how this year’s property market will end and where will next year’s market go on the “What’s Making Property News” segment!

 

 

Free Stuff Mentioned

  • Summer Series is around the corner and we’d like to hear from you! If you’ve gone through (or even going through) a financial transformation journey, let us know. We’d love to listen to your story! Simply fill in the form below or go to  thepropertycouch.com.au/mystory
  • We are also looking for a talented copywriter/storyteller to join our team! If you’re interested, learn more here:  https://www.seek.com.au/job/54189273
  • (Podcast Series) The Armchair Guide to Property Investing! Listen on Apple or Listen on Spotify
  • (Free Book) The Armchair Guide to Property Investing – Get a copy here
  • Bonusisode with Julia Hartman! Tune in here.
  • Free Report: The Top 5 Tax Rules Every Property Investor Must Understand – Download here

 

 

The Questions We Answer

Question from Luke about Having a $700k Mortgage in Late 40s

My wife and I are at a crossroads.
We never thought owning a home was worth it until now…and I reckon we’ve missed the boat…
For years my wife and I deliberated over buying a home. We travelled for work in our 20’s so renting was easier while we were on the go… by the time we settled down to have kids one income made it almost impossible to save for a deposit.
Fast forward 15 years and we’re 46 with 2 teenage kids and still renting…
We have around $260k in super between us plus $80k in savings. We’re sick of seeing that $3k rent money disappear from our banks each month and we are scared of renting as we age further so is it worth having a $700k mortgage at our age? And if not, what is the best way for us to secure our future?

Recommended episodes for Luke

 

 

Question from John about Selling Shares to Put in an Offset Account

Hi Bryce and Ben.
Love the podcasts and I’ve been a keen listener for a couple of years now.
I’ve learnt a lot from you guys and have recently just bought my first investment property. I also have a small amount of shares invested in the market which I’ve made capital gains on.
My question is – is there any benefit, tax or otherwise, in selling my shares and putting the money in my offset account?
For example, can I reduce my capital gains tax on my shares by moving that asset into the offset account?
P.S GO GWS!

Recommended episodes for John

 

 

Question from Renee about When to Buy a PPOR?

Hey guys, I have recently found your podcast and am grateful for the wealth of knowledge you provide.
So firstly, thank you!
I have a potential podcast question. The penny has just dropped regarding what you said about obtaining negatively geared investment properties with an aim for capital growth early on, then leaning towards neutral and cash flow positive properties later on.
My question is, strategically when does buying a PPOR fit into that scheme? Should you invest, sell, buy PPOR then invest with the equity? Particularly in south Sydney where anything 3 bedroom is at least $1.5 million.
I thought some personal context might be helpful.
I’m 25 and have an apartment in south Sydney that I’m currently living in but could be an investment long term. I have a stable income about $115k that will go up to about $150k by the end of next year which is when I will hopefully buy an investment property.
Obviously holding on to both properties would be the goal but I’m struggling to see how I could buy a PPOR by 6 or 7 years time without having to sell both.
Thank you in advance!

Recommended episodes for Renee:

 

 

Question from Peter about Get a Loan with high interest vs. not buying?

Hi Bryce and Ben,
Love your podcasts. Want to ask quick question in regarding real estate investing.
I have reached my borrow capacity but can do low doc loans, would you think it better to get a loan with a bit higher interest than not buying property?

Recommended episodes for Peter:

 

 

6 Reasons Why The Property Market Did NOT Collapse During COVID-19! – Bonusisode with Nerida

Folks, wanna know the SIX reasons why Australia’s property market didn’t “plummet” during a global pandemic…. even when so many commentators suggested otherwise!?!👇

We’re checking in with Nerida Conisbee, Chief Economist at REA Group and she’s going to tell you exactly why… and the key risks we still have to keep an eye on as we move into 2021!

 

A Hint on The 6 Reasons… (see if you guess right 😉)

1️⃣ __ are being __ for now

2️⃣ Unemployment primarily impacting __

3️⃣ __ __ have slowed

4️⃣ Some __ __ are faring well

5️⃣ Less overall __

6️⃣ Record level of Govt stimulus, such as __

 

Tune in now to Get ALL 6 Reasons and the latest update on…

🔸 Biggest risks to undermine Australia’s economic recovery

🔸 China /Australia Relations – who’ll blink first?

🔸 When’s the MOST auctions happening!?

🔸 How did so many commentators get it WRONG?

🔸 Where are First Home Buyers going?

🔸 How second homes might drive the post-COVID housing boom

🔸 The star suburb performer in NSW this year in

🔸 Commercial property investment from UK and German funds

🔸 Australian luxury property defies the downturn and global trend

🔸 Property Market Predictions For 2021

 

 

 

Episode 313 | Investing Since 1967: How This Legend Outperformed The Marketplace By A Whopping 7.1%! – Chat with Jock Bing

Want to hear a property masterclass from one of the best of the best in the industry?! And what if we told you this guest has not only been investing since 1967… but also OUTPERFORMED the marketplace by a whopping 7.1% during this time?

That’s right… today’s guest is one of the LEGENDS in property investing – one of the first EVER Buyers Agents in the country, in fact – and all of the properties he’s purchased for his clients have been scrutinised over a 47-Year Review… and their growth performance EXCEEDED the entire marketplace!

So how did he do it?! And, crucially, where and what properties did he buy to get such a phenomenal return on investment?!

Introducing Jock Bing, Executive Director and CEO of Portfolio Property Management Services – a property investment, buyers advocacy and management firm that Jock founded back in 1967!! Yes, he is one of the trailblazers who invested in property WAAY before it was ever a “thing”… and guided others to do the same; getting them a ripper of a return in the process!

With over fifty years of in-the-trenches experiences, Jock has an enormous amount of wisdom to share… and we feel very fortunate to speak with someone who doesn’t just have longevity in the game, but is one the great pioneers and thought leaders in the property investment industry!

Fun Fact: Jock has actually been one of Ben’s personal mentors throughout his own investment journey… and we’ve been trying to convince Jock to come on to The Couch for some time 🤣… ‘cos the insights this man has is Nothing But Pure Gold.

Boy, oh boy, oh boy… strap yourselves in for a Property Investment Masterclass, folks… you’re about to have your mind blown!

Also – if you wanted to get more information on our Start & Build course, you can get the Limited-Time Discount on Start & Build here. (Discount ends on 22/11/20)

 

Stuff Mentioned…

 

Here’s What We Cover…

  • Who is Jock Bing?!
  • What was the property market like back in 1967?
  • How did he come up of the idea of investing in property?
  • Who lent money to property investors in the beginning?
  • How much were properties back then?
  • How did he get people to invest in property when it wasn’t really “a thing” yet?
  • What did this process look like?
  • Why did he NOT go for the new properties?
  • What suburbs were they buying in and why?!
  • The Why and How of attracting university students
  • What does Jock see happening to the future of the property marketv?
  • What does “investing in an apartment” really mean?
  • Why did Jock say NO to Spruikers?
  • The Sydney and Melbourne Market shift…
  • The rationale behind investing in existing properties…
  • What was the appeal of artisan/workers cottages?
  • How do you attract a higher quality tenant in a suburb that’s in the process of gentrification?
  • The FOUR Things You Need To Consider In An Investment Property
  • When did it pivot from 60 – 66% deposits with solicitors to 80% funding with banks and then using existing equity to get 105%?
  • How did the introduction Capital Gains Tax affect property investors?
  • Why did he take the long term approach to property investing?
  • How many properties was he purchasing for each client?
  • What would Jock do differently? Would he do anything differently?
  • The implications of investing in property on main roads and compromised areas…
  • … Did someone say “NSW reform to Stamp Duty”?!

 

 

 

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