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Episode 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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Free report: State Capitals Outlook 2020

Keen to find out how the state capitals recovered from their previous trough and the current outperformers? You’re in the right spot! 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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Bryce and Ben have unpacked this report in detail in Episode 271 but it is quite hard to visualise it on audio. So we’ve created this report as well as the definition for the terms used.

We’ve also included the hot pockets that Jeremy Sheppard listed in the episode. Hot pockets are clusters of suburbs either neighbouring one another or in close proximity where demand exceeds supply in all of them. Heat in an “isolated” suburb (i.e. not in a cluster) may dissipate into its neighbours, diluting growth. But a cluster means buyers have fewer options. They can’t turn their attention to a cooler market unless they look much further afield. This makes clusters a good choice for investors to start their research.

 

 

 

 

 

Episode 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!!

 

 

 

 

Bonusisode with Nerida – What’s the MOST IN-DEMAND suburbs for upsizers?

Our first Monthly Economic Outlook with Nerida Conisbee, Chief Economist of realestate.com.au and we’ll be talking about some serious updates folks! There have been some major events this couple of months so make sure to tune in.

Here are some of the topics we touched on today…

✔ Will rates be cut this week?
✔ Most in-demand suburbs for upsizers
✔ Updates on BREXIT and the US/China Trade War
✔ How will the coronavirus outbreak impact Australia’s Economy
✔ Why are listings hard to predict?
✔ Update on the property market across Australia Make sure to tune for more!

 

p.s. And of course, if you’d like more, subscribe to our podcast every Thursday at 3pm on iTunes, Spotify or your favorite podcast app!

 

 

 

RBA April 2019 Announcement – Are you prepared for what’s to come?

Folks, we’ve got a very FULL week ahead of us!

Firstly, it’s the first Tuesday of the month which means the RBA Board has met and announced the official cash rate.

And tonight at 7:30 PM (AEDT) is Budget Night! We’ll be hearing from Treasurer Josh Frydenberg and many are expecting some cash splurge. As indicated by the recent economic data, we need some good old stimulus in the economy.

This is then followed by a reply by the Labor party on Thursday! Do they agree? Do they not? Not to mention the recent shocking news that the Labor party released regarding their proposed Negative Gearing policy.

All this and more in Ben’s RBA commentaries. PLUS he’ll walk you through the global and domestic economy and give you his cash rate predictions for 2019! Make sure to tune in folks! 🙂

 

 

 

 

DISCLAIMER: This podcast is general information only and is an opinion comment by Ben Kingsley. The information contained in this video is for Australian residents only. The information does not take into account the particular investment objectives or financial situation of any potential viewer. It does not constitute, and should not be relied on as, financial or investment advice or recommendations (expressed or implied) and it should not be used as an invitation to take up any investments or investment services. No investment decision or activity should be undertaken on the basis of this information without first seeking qualified and professional advice.

The Property Couch, its employees or contractors do not represent or guarantee that the information is accurate or free from errors or omissions and therefore provide no warranties or guarantees. The Property Couch disclaims any and all duty of care in relation to the information and liability for any reliance on investment decisions, claiming the use or guidance of this publication or information contained within it.

For more information, please visit: http://thepropertycouch.com.au

 

 

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