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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 336 | Is Price Growth Over? 7 Signs Growth Is Slowing – Chat with Tim Lawless

Is the property market showing signs that growth is SLOWING?

Well, according to Tim Lawless, Head of Research at CoreLogic, it IS – and there are 7 tell-tale signs it’s happening!

That’s right. Joining us today is CoreLogic‘s executive research director for Australasia and indeed one of Australia’s leading property market commentators – and Tim’s noticed quite a few interesting trends in the data that reveal a SLOWDOWN on the strongest growth conditions we’ve seen since the 1980s!

So… is price growth over!?!

And what are the seven signs that suggest capital growth might be changing pace?

 

The 7 Signs…

    1. CoreLogic Home Value Index is already indicating __ __ __ __ __ __ __ __
    2. Lower __ __
    3. Rise in __ __
    4. A lift in __ __ __
    5. Negative __ __
    6. Less __
    7. High __ __ __

 

Free Stuff Mentioned

 

Here’s What We Cover…

  • 02:18 – Will legislation changes in Victoria affect Airbnb properties?
  • 04:15 – Full Summary of How To Win Friends & Influence People!
  • 07:01 – Meet Tim!
  • 08:04 – Was Tim surprised how much the market bounced back?
  • 09:42 – Why is the housing market so important for Australia’s economy?
  • 11:51 – Why do we generally see the government supporting property when there is a downturn?
  • 13:37 – The Multiplier Effect & The Wealth Effect
  • 14:43 – What’s the biggest barrier to the property market?
  • 15:04 – Does Treasury and Government look at the risks of LVRs and overall debt?
  • 15:36 – The 4 Key Metrics APRA Monitors Very Closely…
  • 16:15 – Will there be credit tightening coming soon?
  • 18:23 – What would this credit tightening look like?
  • 20:53 – The 7 signs the housing market is moving through peak growth…
  • 21:39 – What’s the catalyst that normally causes a slowdown?
  • 23:56Sign #1 – What’s the hedonic value measuring?
  • 26:47 – Which capital cities are showing this slowdown (and which ones AREN’T)!?!
  • 27:01 – Is this a DOWNWARD trajectory… or just a slowdown in growth?
  • 29:44 – Sign #2 – What’s happening with Auction Clearance Rates?
  • 32:17 – Sign #3 – What’s rising?
  • 34:08 – Sign #4 – What’s lifting that’s contributing to the slowing growth?
  • 35:50 – What’s happening with high rise developments?
  • 36:05 – Unit oversupply: What’s going on?
  • 36:40 – How many investors buy mid to high rise apartments?
  • 38:04 – When will inner city apartments bounce back?
  • 39:05 – If there’s not as many investors in the market, will APRA still need to intervene?
  • 40:20 – Why is the level of household debt so closely monitored?
  • 42:10 – Serviceability assessments…
  • 42:38 – Sign #5 – Negative Population Growth… let’s unpack it!
  • 43:17 – How have property prices grown WITHOUT population growth, anyway?
  • 46:39 – Sign #6 – When Fiscal Support gets taken out of the economy…
  • 49:05 – Why does the government offer grants for NEW properties, not existing?
  • 50:54 – Sign #7 – Where Housing Affordability Comes In…
  • 52:21 – How long does it take to save a deposit across the different states?
  • 56:48 – When was the last time we saw all markets rising like we have?
  • 58:04 – How is CoreLogic measuring the shift to regional markets?

 

And

  • 1:02:10 – Key Takeaways from the episode…

 

335 | The Four Types Of Wealth

Do you know the FOUR types of wealth?

Yep. Prosperity, or “wealth”, can be narrowed down to four specific categories – and in today’s episode we’re unpacking each one so you can see where YOUR definition of wealth really sits!

(And if the “type” you’re consciously or unconsciously chasing will actually get you to your ultimate goals and passive income targets!)

Key Message: Don’t let “1” and “2” rob you of “3” and “4”! 👊

Tune in now to learn about all four types of wealth and join us as we deliver the gold straight from the studio (you just might hear the Stig drop something in the background… ahhh, it’s great to be back!!!)

As mentioned in today’s episode…for this week only get 40% off our Start & Build online course!

Given current market conditions and the fact that there’s a serious chunk of FOMO (Fear of Missing Out) going on, we’ve decided to discount our premium online course “Start & Build” so folks can get access to the correct education and fundamentals of property investing so they DON’T make any rash decisions they’ll regret later! This course is now even more affordable to access with a significant 40% discount.

So, take advantage of the decade that’s coming, avoid FOMO, get educated on the proven process to build a property portfolio, and create the type of wealth you really want for yourself. 40% Discount, 365-Day Money Back Guarantee, and 9 Exclusive Bonuses ends THIS Monday (26/04/21) at 11:59pm AEST.

CLICK HERE to see what you get when you try Start & Build today!

 

Free Resources Mentioned

 

Here’s What We Cover…

334 | Bernard Salt: The BIG Shift In Australian Property!

If you listen to just one episode, please make it this one!

Folks, today we are chatting with one of our very own virtual mentors (of all time!)… BERNARD SALT!!

Yep. You’ve probably heard us talking about Bernard on the podcast before – indeed, he has formed a lot of our own views about where the demand for property is heading.

In a nutshell: if there is one person on earth who deeply understands the intricacies of Australians and what drives people 1) to this country and 2) to make specific property and lifestyle decisions, it is this man!

(And if you know these insights… you’ll begin to see where the property price increases are likely to occur, right?!)

It obviously goes without saying that over the decades we’ve absolutely read and reread (and dog-eared the pages) of Bernard’s highly-regarded book (just one of many) called “The Big Shift”.

Yep. Big Guest.

Bernard Salt is widely regarded as one of Australia’s leading social commentators. He draws on a range of data sets to interpret social change now and into the future. He argues that social and cultural change are powerful forces that are reshaping the way we live, the way we work and even how we form relationships. He was awarded Member of the Order of Australia (AM) in the 2017 Australia Day Honours and was a partner at KPMG until his retirement in June 2017, and still acts as special advisor to the firm. Between 2011 and 2019 he was an adjunct professor at Curtin University Business School.

Now Bernard is Managing Director of The Demographics Group, and writes weekly columns for The Australian that deal with social, generational and demographic matters.

Essentially… Bernard is the Go-To Guru on how statistics tell human stories and what the data suggests about key future trends!

Tune in now – ripper episode, folks! 🤸‍♂️

 

Free Stuff Mentioned

 

Here’s What We Cover…

  • What’s the #1 thing you need to know about understanding demographics data?
  • The future of Australia and how this should shape your decisions around buying property!
  • What’s the current culture telling us about the demand for certain properties?
  • The new COVID norm – What’s in store for us?
  • Will we go through The Roaring 20s again?
  • Bernard’s acronyms to describe specific clusters of people!
  • How did Bernard get into demographics, anyway?
  • How do statistics tell human stories?
  • How does Bernard decipher so much data?
  • What does the location of Red Rooster hint about people in that area?
  • Is the “escape to regional” short term?
  • What is Australia’s superpower?
  • The Fried Egg City…
  • The “Smashed Avocado” Debate!
  • The Empty Islander Syndrome: What is it and what does it say about Australia?
  • Why is the beach considered a “third Australian culture”?
  • Will people go back to working in an office?!
  • What’s the Millennial Movement that’s shifting property demand?
  • What are the key trends that shape the way we live?
  • The History of Australia: What does it say about our relationship with property?
  • How much has Australian culture been influenced by Mediterranean migrants?
  • Interesting character traits across the generations…

 

326 | How To Win In A HOT Property Market (Part 2) – The Step-By-Step Process!

Part 2 of “The Step-By-Step Process To Win In A HOT Property Market” is HERE…

… and today’s episode is all about two things:

  1. The SEARCH for the property…
  2. The DUE-DILLEGENCE around the search and the finance (lending) for that property!

Folks, as we mentioned last week in Part 1 of this 3-part mini-series… we are in a HOT property market – listings are TIGHT.

Properties are selling in the blink of an eye.

And pretty much every major and secondary market across the country is SMOKIN’…

… so if you’re a property buyer playing in “The Big Wave”, it’s vital you educate yourself so you stay in front of the curb (while NOT getting swept up in FOMO) – this way, you can ultimately enjoy the ride and, yep, the fruits of your smart efforts!

We’ll be unpacking quite a bit in this episode, and you’ll be getting plenty of tips on how to conduct your search to find an investment-grade property (incl. what WE personally and professionally do and look for!)… and let you in on “The Top 3 Deal Does” and “Top 3 Deal Breakers” in a HOT property market… as well as how to be due-diligent with your finances, ESPECIALLY in a market that is moving at a rapid pace.

Remember – stay informed, don’t do anything irrational right now… and ONLY IF you’re in a position to “push play”, move quickly but SMARTLY.

… What a ride we’re in!

 

P.S. – Part 1 was all about the backdrop of how we got to this HOT property market, how to get your PREP work done and figuring out your brief… this ep’s getting into the nitty gritty of the property and lending story!!

 

Free Stuff Mentioned

 

Here’s What We Cover…

  • The difference between On Market, Off Market and Advanced Listings!
  • The Investment Property Search Plan 🙂
  • How to conduct your asset selection
  • The Top 3 Deal Doers!
  • The Top 3 Deal Breakers!
  • What attributes do you need to look for in an investment property?
  • What “feeling” should the property evoke?
  • Why SHOULDN’T you be fearful of agents knowing your upper limit (in a hot market)?
  • Tips for dealing with real estate agents
  • How did we purchase a property when we were the 2nd highest price offer!?!
  • What research sites can you use – and what should you look for in each?
  • Questions to ask a Property Manager to help you with your search…
  • … Watch out for FOMO!
  • How to do your Due-Diligence with the property?
  • How to do your Due-Diligence with your finance?
  • What is happening in the lending space during a HOT property market?
  • How can you fast-track your home loan application?
  • Settlement mistakes in a HOT market
  • Red flags certain properties and when to walk away
  • The relationship between % LVR and the type of property to buy
  • How many properties are going to auction this weekend!?!

 

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