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Episode 291 | The Property Loophole: Recognising A Pipe Dream From The Real Deal

The Property “Loophole”… is it a myth?!

If you’re interested in investing in property, at some point or another you’re probably going to run into someone who tells you about some “secret loophole” – whether it be about property, tax, SMSFs… you name it – that you can use to, ahh, exploit the system.

Well, folks… let’s just call it out, shall we?

Because there’s a MASSIVE difference between a Pipe Dream and the Real Deal. And we can assure you, the price you’ll pay if you get the two wrong is no small fee!!

Here’s the deal… during the week we reached out to folks on our Facebook Page and asked them what questions they had on their mind right now… and we received some eye-opening comments that made us go…

“Whoa. Hang on a sec…”

And so, of course, this episode was born!

You can check out the exact questions further below, but here’s a quick scope on what we cover:

 

The Free Stuff

 

 

The Questions

Question about Buying Off The Plan from Angivin:
Guys we are very clear that you aren’t fans of buying Off The Plan, however can you please provide insight when this strategy has/could work please? 

 

Question about The Pipe Dream & Its Consequences from Kieren:
Is turning your super into a SMSF to borrow and build property a good idea? My mate at work got sold the pipe dream by his brother in law to do this. He tells me he is building dual key units and that it’s eventually going to net him $300,000 per year based on rental growth forecasts! I have told him this is not believable. Turns out his brother in law who convinced him to do this is getting $60k in kickbacks and is going to split it with him. He also tells me his interest rate is 5.7% because apparently no one lends to trusts cheaper than this? He also pays some bird $3k per year who will “sort any issues he has” on top of the property manager. And there is a snake “finance broker (as he referred to it)” in there somewhere who I reckon stitched him up on the interest rate. What happens when all this falls over and the money you put into your super each year doesn’t keep up with repayments? There is a $25k limit on how much super you can put in without big tax $$ so what then?

 

Question about How Much of A Buffer You Need from Toui
Hi TPC team, loving the Money SMARTS system! Question: when you talk about 3 to 6 months of living expenses, do you typically recommend that calculation on Essential spend? Or both Essential and Discretionary?

 

Question about The Pros & Cons Of Interest Only Versus Principle and Interest from Matthew
Hey guys! What is your opinion on the pros and cons of paying interest only vs principle? I am learning the ins and outs and have seen people succeed in either.

 

Question about The COVID-19 Recovery Across Specific States from Adam
Do you think any state will emerge from the covid storm quicker or better off than other states? And if so, will this translate in their property prices?

 

Question about Mortgage Payments On First Investment Property from Shannon
Suggestions on looking into P&I loan for first investment property if little difference in mortgage payment compared to interest only+ offset?

 

 

 

 

 

Episode 277 | Coronavirus & Property FAQ

There’s been a lot of questions coming in about the coronavirus and its implications to the property market, the finance sector and the economy at large — particularly in direct response to the higher levels of social distancing regulations we’re now seeing and its flowon effect to unemployment and how we transact property. 

Sotoday we’re answering a whole heap of Frequently Asked Questions (FAQs) about how COVID-19 affects you as a property investor, a home owner, a first home buyeror someone who’s in fortunate circumstances to take action on the opportunity. 

‘Cos, let’s be real folks… if youre dining out on the news cycleits a very scary place out there!! 

Again, we must repeat… our message of calm remains…. but we’re going to dig even deeper into what we’re starting to see as this pandemic unfolds. 

As well as answering a whole lot of your questions (all of them listed below), we’re ALSO going to give you some Frameworks and Tips to support you during this time so you’re prepared, have the RIGHT knowledge behind you and can navigate the “new world” we’re all now living through! 

We touch on it in today’s episode, but just in case you need a recap… folks are likely to fall into ONE of TWO categories during this time… 

  1. Take Action Club – This is a small percentage of folks who are ready to take action based on their individual circumstances (please seek professional advice before you do this) 
  1. Money Management” Club – The vast majority of folks will sit here and during this moment-in-time of uncertainty, should focus on the gaps in their money management 

  

Free Resources Mentioned 

Free resources: Isolate + Chill

Fill in the form below and we'll email you all the playlist links and bonus resources right away! 😉
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And here are the Questions!

Question about “Investor & Tenant Relief” from Greg: 
Any talk from the banks/government on providing relief to Investors on investment lending so as to enable them to provide relief to tenants who find themselves in financial trouble? For many owners they would have tenants they don’t want to lose and would like to assist (if required) but may not be in a position to do that themselves 

 

Question about “The Six-Month Freeze” from Jake 
Points to consider for the six-month freeze 🥶 on home loans?  Ie. how is the loan recalculated after six months? Will interest still be required to be paid during the freeze? And could this result in household having higher repayments on completion of the six-month freeze? Will it impacted your credit file? Cheers 🤙  

 

Question from about Property Prices Dropping from Nicole 
I just heard that Economists are predicting a 20% drop in house values. Would love your thoughts on this? If one is to take up the banks offer of 6months “off” from the mortgage — besides extending the loan time frame, how will it affect households and do you advise it in what circumstances? 

 
Question from about Waiting To Buy from James 
My partner and I are looking to buy in Queensland later this year. But are we better to wait until next year to buy?  

 
Question about “What the market will look like next year” from Jarrad 

What will the market look like next year? Would it be a good time to buy if I was planning to buy my first property? Could it be a good time to get a great priced asset? Thanks guys 

 

Question about Offset Account Protection from Matt 
Are offset accounts protected by the government up to 250k? Should I move funds above that to a different offset account, or should I use it to pay down principal on the loan? Would this then secure these funds in the hopefully unlikely event that a bank failed. Note that this is not a big 4 bank. 

 

Question About Accessing The 10k Out of Superannuation” from Daniel 
If we have money in an offset account, can the bank access it to reduce their exposure?
Also, not sure if you can answer, what are the new rules around accessing your super? If you’re a couple can you both access the $10k per FY? Is it means or asset tested? 

 

Question about Finding a Remote Property Investment Advisor from Aaron 
Was about to redo mortgage and borrow additional funds for deposit on 1st investment property (which we are not really sure on the process, have to talk to mortgage broker),but now that everything is closing down not sure what our next steps are. Can we find a property investment advisor completely remotely? Is it a good time for a newbie investor to try and get into the market, when our only knowledge comes from the podcast and your book? 

 

Question About What To Do If Tenants Can’t Make Rent from Rebecca 
I am a single Mum with no family support … I have two investment properties but if tenants asked for ‘free rent’ don’t they realise that the landlord might be in a similar situation to them??? That this doesn’t make sense for tenants to ask for a pause on rent when mortgage payments still need to be made. I realise that some banks have waived the repayments for 3-6 months but I am actually not with the BIG banks who are doing this (WOW – it is impressive that it IS the big banks who are offering this support – makes me wants to transfer to one of them!)… any thoughts? 

 

Question from Andrew 
 it would be great for you guys to canvass the current situation around landlords insurance and what policies will and will not cover in terms of loss of rent due to coronavirus circumstancesie .Actually getting Coronavirus and not being able to work vs being laid off because of economic difficulties. I can see this being a bit of a snake pit in terms of insurance policies and wordings associated with ‘pandemics’. 

 

Additional Helpful Resources on COVID-19

National Update: Click here

State Update:

 

One Final Word…

And please… Just a (not so gentle) reminder. Stay at home if you don’t need to go out. Download our Isolate + Chill Pack if you want to use this self-isolation time to learn new things!

Free resources: Isolate + Chill

Fill in the form below and we'll email you all the playlist links and bonus resources right away! 😉
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Bonusisode | The Changes to Broker Regulation that will Impact Investors

We’ve got Phil Tarrant from Smart Property Investment Podcast and Alex Whitlock, the Mortgage Business Director at Momentum Media for today’s Bonusisode folks!

What are we chatting about?

Well, it’s all about the future of the mortgage broking industry following the Banking Royal Commission’s Final Report and how will it impact the consumers moving forward.

It’s not very often that we have a trade-specific podcast, but as this will have a significant impact when it gets rolled out, we thought it’s crucial to increase the awareness on it.

Here are some of the links that we spoke about…

 

p.s. If you like this episode, make sure to check out Episode 218 | The Warning Signs of an Economy in Trouble as well!

 

Episode 198 | Nine Ways to Navigate the Credit Crunch

Folks, if you’re playing the long-term game in property investing, you’ve got to know how to navigate the credit crunch!

And what do we mean by this??

… You MUST build financial muscle in order to succeed at the game of lending! Because folks you can NOT save your way to a passive income. You just can’t.

What you need is access to credit and an ability to optimise this credit so that it works in your absolute best interest.

But of course, there’s an elephant in the room here, isn’t there??

The lending landscape has changed, folks! This can be seen from APRA’s lending restrictions all the way to the banks feeling the pressure following the Royal Commission — both of which are just the tip of the iceberg property investors are now facing when it comes to accessing finance.

So. Here we are at the messy middle…… how can YOU cut through these challenges and still get the lending results you need??

Well, we’ve got 9 Tips up our sleeve to help you do just this folks!!!

 

Before we kick off the key learnings, here’s a couple of reminders from today’s episode…

1. Have you got a copy of Make Money Simple Again yet?

Grab a copy with 20% Discount here! Just use this coupon code: TPC20

Not ready to buy the book yet? No worries! Just download the Free Chapter here and check it out. 😉

 

2. Looking for the Facebook Group? Click here to join!

 

 

 

Episode 178 | Q & A : Is that 4th Bedroom Such a Good Idea? APRA’s Affect on Credit Cards & What’s The Secret to a Career in Property Investment?

If you’ve got a question about investing in property, then it’s in your best interests to listen to this episode!

Why? Because it’s our favourite day, folks… Q & A Day! And, not only is today just a couple of days away from the end of Financial Year, but also we’ve got some new, timely SpeakPipe Questions to answer! Which means … 1. It’s probably a bit too late to get your Depreciation Schedule into your accountant, BUT 2. You’re in for a high-powered learning session!

This Q & A is great for folks who…

  • Want to know how APRA’s regulations have impacted your ability to get a loan AND a credit card?
  • Are you seriously interested in getting a career in property investing and want to how to land a job?
  • Aren’t sure what tenants are REALLY looking for in your area, but want to maximise your returns?
  • Thinking about renovating tips, but don’t know if you should add a bedroom or where to put the toilet?
  • Wondering if it’s a good idea to live in your property BEFORE you rent it out?

 

So if this sounds like you, you better strap your headphones in!

 

But, as routine has it, before we tell you EXACTLY what the questions are that’ll give you all this invaluable information, we’ve got some housekeeping to get out of the way, like…

Our Melbourne LIVE Podcast has SOLD OUT!!!

We even did a dance about it! WATCH OUR FLOSS DANCE!

Yep, it’s true, folks! But if you’re lucky, another local listener might have something come up on the night, so you COULD land their ticket. CLICK HERE if you’re keen to join the waitlist, or find out more details.

 

We’re hiring!!!

Our company is currently looking for new members, so if you’re qualified, passionate and prepared to do what it takes to help other people, we’re looking for:

Interested? Send in your Resume and Cover Letter to info@thepropertycouch.com.au

 

We want your Money Hacks

If you’ve got a great Savings Tip or a way to make your dollar go that extra mile, we want to know about it! Let us know here.
If you have implemented the Money Smarts System where do you feel most vulnerable? Let us know here.
If you want to be a Case Study and you’d like to know how Money SMARTS can help you, let you know. Let us know here.

Remember to leave us your SpeakPipe Questions.

 

Question about Ideal Rooms and Features of Investment Properties from Joel:

Hey Bryce, Ben and Stiggy. My name’s Joel, from Adelaide. The question I’d like to ask is what kind of rooms and features do Australia’s want in the rental market at the moment? The property I’m looking at the moment is a 3BDR, open living area & a large home entertainment, or cinema, room. Now, looking at the plans, I’d probably convert that room to a bedroom, add some wardrobes, because it’s quite large, but I don’t know what other Australians would want. So I’d live there for a couple of years before renting it out, but I don’t know what Australian’s would prefer another bedroom, or that extra room for activities and stuff like that? Any input would be great, thanks!

Have a Similar Question? These Episodes will also help:

 

Question about Bank Assessment of Loans from Matt:

Hey guys, Matt from Canberra … via sunny London here! First up I can tell you our architecture and Land Tax in Canberra is just to make sure not too many of you and the other Capitals turn off the Hume Highway and discover Australia’s best kept secret. So thanks very much for helping to keep our secret safe there! My question is about the banks and them having to assess us against increasingly restrictive assessment criteria. But do they have to do that when they are looking at non-mortgage lending criteria? The Money SMARTS System works best with a nice, big credit limit with maximum interest free days and there’s sometimes great deals on car loans that are cheaper than the interest savings on our offsets this is often still with APRA regulated providers. But do they only assess you against the lending criteria for the lowest common denominator, essentially, when you’re applying for a mortgage vs non mortgage finance? Do they have to assess you for the same criteria with their other products? Thanks so much guys for everything you do!

Have a Similar Question These Episodes will also help:

 

Question about getting into a career as a Buyers Agent and Property Investment Advisor from Francis:

I know that this topic has been touched on in the past but I would love to hear Ben and Bryce give a few pointers to people (like myself) wanting to make a career in property investment, Buyers Agents and financial planning. In my case, I have done the REIQ (QLD) registration course but wondering if I need to complete the full license? Also, if I want to help people buy property in every state and territory in Australia, do I need to go and complete that course for each and every state / territory to become registered, or does the buyers agency take on that responsibility? Other than the QPIA course, are there any other ways to learn the industry while still working, so that people can transition into their new career relatively seamlessly? I just thought I would send this to support my recorded message and give a little more context to the question. Thanks again for everything you are doing!

Have a Similar Question These will also help:

 

P.S. Have you cut a full lap of The Property Couch yet? If not, and you’re too strapped for time, just make sure you MUST WATCH the first 20 episodes. Because they are FOUNDATIONAL episodes.

CLICK HERE to listen to our very first Episode

 

 

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