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Welcome To Your Lifestyle Design: Your Passive Income Starts Here!

By in The Armchair Guide to Property Investing

Have you ever thought about how you can create a passive income through property investing?

Further to that… have you ever thought about the lifestyle you could design for yourself if you had $2,000 per week coming in… WITHOUT having to go to work for it?!

If that was the case, you could literally spend your time doing whatever it is you want – maybe it’s travel, maybe it’s philanthropy, maybe it’s each and everything in between!

Well, welcome to The Armchair Guide to Property Investing podcast…!

This show is for aspiring and existing property investors who want to learn how to build a multimillion-dollar property portfolio that creates $2,000 a week in passive income! Learn from Bryce Holdaway and Ben Kingsley, two of Australia’s leading property investment experts, the co-authors of the #1 bestselling book, The Armchair Guide to Property Investing and co-hosts of Australia’s #1 Property Podcast, The Property Couch – The Insider’s Guide to Property Finance and Money Management.

This show’s come together in a rather unique way (which Bryce is quickly going to tell you about now)… and, yep, it features the content, the “behind the scenes” summary and all of the best bits of our bestselling book – The Armchair Guide to Property investing: How to Retire on $2,000 a week. And, no, we don’t read it out word for word as that’s not as fun! 😉

If you want a FREE Physical Copy of The Armchair Guide, head to www.thearmchairguide.com.au for more details!

Enjoy the show… and, more importantly, enjoy your Lifestyle By Design!!

 

 

 

199 | Q & A – Future Proofing your Portfolio in a Changing Market

By in Podcast, Q&A

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Folks, with State Election around the corner and the Federal Election less than a year away, it’s time to future-proof your portfolio.

The market has changed and will continue to change. We’ve also got some challenges in the Macro landscape as well — lending regulations, potential changes to negative gearing and interest rate rises, just to name a few.

So you might be asking yourself, “How is it still possible to build a property portfolio and earn $2K per week in passive income with all of this other stuff happening?”

And you’ve got a good point. There IS a reason to be concerned, but this does NOT mean you have to abandon ship altogether. Far from it.

So in today’s episode — before our Surprise Superstar Guest joins us next week for our 200TH EPISODE!! — we’re going to answer some of your questions about how to do exactly this.

 

This is just a few of the things we’re discussing:

 

Before we get to the questions, Ben is coming to all of you who are based in Perth! As the Chair of PICA of course. Details below:

When: 6:30 pm – 9:00 pm AWST, Tuesday, 4 December 2018
Where: Queens Building, Lecture Room, Level 1, 97 William Street, Perth, WA
Cost: FREE!

Link to secure your ticket: Reserve your Seat here

 

And if you’re after the video that Bryce mentions in today’s show to Know Your Number… Watch it below or click here to watch it now.


 

Finally, the questions we’re answering today…

Question from Mirella:

When talking about earning $2,000 per week in passive income is this measured before or after outgoings; eg. rates, land tax, etc.?

 

Question from James:

Trying to build a portfolio whilst the future of interest rates and a change in government and a change to negative gearing could potentially impact the market. How should one approach 2019?

 

Question about market sentiment/right time to buy from Kirthika:

Thanks for this session guys! Quick Q… there’s a lot of media activity discussing the impending drop in property prices over the next few years. As a result, my husband and I are worried about investing now? in the event we could buy for cheaper in a year! What are your thoughts?

 

Question about increasing cash flow and paying off debt from Nipper:

I feel confident with how to select investment grade properties. But I’m not so sure on how to hold them then get to the cashflow stage. Do you propose changing loans to P&I or selling down some properties to then pay off the debt of others, or something else?

 

Question about having no equity from Dan:

You mention using equity. If you don’t yet have access to equity… do you have any tips to get started?

 

Question about realising equity for cash flow purposes from Kosta

Do you ever recommend using some equity release to pay the monthly repayments to improve cash-flow?

 

 

 

196 | Q & A – Negative Gearing Changes – Should I Still Invest in Property?

By in Podcast, Q&A

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“Labor risks $12bn housing hit over ending negative gearing” — if you’re like us folks… this headline has us all concerned!!

And the concern didn’t stop at the headline.

As we read on, the full news article, published by The Australian on the weekend, highlighted that the $32 billion plan to end negative gearing would — quote — lead to a fall in new housing construction of up to 42,000 dwellings over five years and 32,000 fewer jobs across the country, according to independent modelling — end quote.

Yep… that’s a drop in a whole lot of new housing construction (ie. supply) AND just a-bit-more-than-a-few losses (up to 32,000) in jobs!!

Folks… this is crazy stuff.

And those stats aren’t the only ones coming out of recent independent research digging into the numbers of what’s likely to happen if negative gearing’s ditched.

So, today we’re looking at a few of the worst-case scenarios from two different reports (the links to both of these are further down in the show notes) and unpacking — with both a short term and long term view — how this change to negative gearing might affect the property market and those investing in it.

But negative gearing changes — and the possible consequences on housing prices and for first home buyers — isn’t the only question we’re answering today! We’ve got plenty of gold on how to time your exist strategy, retiring debt and the right asset to invest in!

 

Oh, and if you’d like the Geospatial Heat Notes — the heat map that shows the Compounding Annual Growth in Median Value for Houses from 1974 till the end of 2017 that is sourced from the Valuer General data —  you can get them here.

 

Back to today’s Q’s…

Question about Negative Gearing Changes from Shadi:
Hey Bryce and Ben. Thank you for all the information and for all the podcasts you provide. Apologies in advance if this question has been answered in previous episodes. I’ve been binging myself since episode 1 a few months ago, and am not quite up to date yet. I just have a question specifically about the abolishment of negative gearing and the impact it will have on first time investors. I’ve been looking to invest since listening to your podcast, and am interested to hear how this will affect my first purchase — whether or not it will just be a short term problem that effects cash flow or if it will have a long term effect, especially when entering the market.

 

Question about Your Exit Strategy from Anne-Marie:
Hi guys, this is Anne-Marie in Victoria. I’m 56 and my husband is 51. I started listening to you many years ago after we had our 7 properties. Our last property was 3 years ago. There all on fixed term interest only, which makes no offset available to them. And we’ve paid off our home, which is worth 1.1 million (1 of the 7 properties). It takes us $13,000 a year to hold all the properties, we just put our tax in, which is amazing. So property has done really well for us, and the mortgage we have on all of them is about 2.5 million, with domain value being low sitting at $3.9 mill, and high $5.2 with middle there all about 4.6 million. I want to start going into doing less hours at work — I’d like to retire on a passive income in maybe 4 years’ time. How do you transition to get the passive income we’ll need for retirement without too much of a tax liability? I paid about $10K in tax this year and I really don’t want to be paying a lot of tax while I’m getting to this point. Can you give me any pointers? And I can’t have an offset account as I said. I’d like some advice on this.

 

Question about the Right Asset for a First Home Buyer from Carrie:
I have a question about the best type of asset you should invest in. I’m looking to buy my first property, which I’ll live in initially. I have a budget of $750K. I’ve been looking at 70s and 80s free standing villa units in small blocks of 12 – 6 in Melbourne’s east. This puts me in middle ring suburbs around 20km from the city, with a land size of 350sqm. It’s a good balance between decent landmass without being out in the sticks. Alternatively, I could by a 2bdrm apt in an older, low density block — the type with only 2 or 3 stories closer to the CBD. Are either of these good investments? And which of the two is better? Or is there anything else I should look into. Love your work guys, keep bringing out those podcasts! Thank you

 

 

The Articles Ben mentions:

The Australian Article — Labor risks $12bn housing hit over ending negative gearing

Housing Industry Association (HIA) — Media Release

 

147 | Q&A – What’s Your Exit Strategy? Are You Retiring or Have You Bought a “Dud”?

By in Podcast, Q&A

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It’s Q & A day BUT first things first … thank you!!

We have officially nailed our Movember target of $5,000!!!

And we’ve been busy parcelling The Armchair Guide to Property Investing for those of you who donated $25 or more (yep, for those who haven’t donated yet, you can still get a free book if you do this)!

PLUS, as Ben promised, he will be doing a Free Webinar on Working Out Your Retirement Gap … so stay tuned!!

In the first few minutes of today’s show, we also make an announcement on what happens if we hit our next target. (It has to do with Stiggy!!!)

 

But back to today’s Q & A on EXIT STRATEGIES, here’s what you’re in for:

 

The Q’s are as follows, folks:

 

Question from Lou:

Hi guys … long time listener (you take the edge off Sydney commuting, so thank you)!

My husband and I currently have six properties in NSW (nothing in Sydney metro … yet) valued at $2.3 million and LVR at 64% and gross yield of 8.2%.

We are both 40(ish) with two kids under 5. Our aim is to retire early with a $100K income. Reading your book and watching the videos and listening to the podcasts, I am wondering if retirement income is always based on rental income alone, or do you ever recommend borrowing off the equity as part of an early retirement strategy (with major buffers of course!). We’ve been very wrapped up in the acquisition phase that it’s hard to see where the end is especially when rents seem to creep up so slowly … I would love your thoughts on ‘living off the equity’ as part of a strategy.

 

Question from Chris:

Hi, I just started listening to your podcast. Can I get some advice from you guys regarding this case?

Mid of 2016, I paid 40k down payment (10%) for an off-the-plan 1 bed room apartment in Melbourne CBD (close to Melbourne Central.) The settlement is in 2018.

After getting some education from several property investment resources including your podcast (which I should have done first), I realised that I had probably made a rookie mistake. The purpose of this investment was tax deduction (another rookie mistake, I know).

Now, I still have some cash (around $200K) in my home loan offset account (saving and equity from a remortgage). If I want to start building a long-term portfolio (I’m 37, 2 young kids), what shall be my next step? Do you suggest I sell off-the-plan apartment before settlement? I have a very bad feeling about that off-the-plan apartment before settlement? I have a very bad feeling about that investment …

Look forward to your advice!

 

Question from Sonya

I’ve started listening to you guys (and yes, I tune out to the football banter) and yes, I have bought your book. My question is: What determines whether or not an investment property is a ‘dud’, and should you get out of it as soon as these signs start to appear? We bought an investment property in Thornbury, Melbourne. The area has had great growth in the last five years, average above 8%. Our property is a 2 bedroom townhouse, circa 1970s. It has grown about 4% pa and rent has not increased in the 5 years we’ve had it. Rental yield is about 4%. I believe the location is the problem as it is not a walk to the main hipster drag. We have cash flow to purchase another property, but could have more if we sell this ‘dud’. And we have a capital gains loss from a piece of land we sold a while ago, which we can use to offset any capital gain we may make if we sell the ‘dud’. Does this have signs of a property ‘dud’? Do we hold out and wait, or do we exit now, use the capital loss to our benefit and buy another property?

 

Question from Christian:

  1. I would love to listen to an episode dedicated to exit strategy and retirement.

These types of strategies, how to exit, how much income to expect in retirement etc.

  1. Are the days of large property portfolios over?? Given the current APRA restrictions and banks extremely conservative assessment rates, many investors with 3 – 4 properties are finding it difficult to borrow more for further purchases. Banks are assessing existing borrowings and P&I loans with rates at 7.5%. Rental income at 80% and negative gearing not taken into account. For an investor with 2 ­­– 3 properties or more, that kills your servicing to borrow more. Yes, it’s a first world problem, but we need to build a decent asset base to get the passive income stream down the track!

Thoughts??

Love your work!!

142 | Q&A – Can you achieve a passive income in 3 years? Are you too old?

By in Podcast, Q&A

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Alright folks, let’s get down to the “nitty gritty” … how long will it take you to achieve a passive income?

What about the limits of your age? Are you too old? Are you too young? Do you have an outstanding HECS debt to pay off?

In today’s Q&A, we will be discussing all of these and plenty of other tricky questions too.

Oh, AND we have two GUEST LISTENERS featuring on our podcast — don’t forget: you can feature on The Couch too if you leave us a voicemail message!

A handful of dot points for you:

  • Is an apartment in the CBD a bad idea?
  • When will it be too old to begin investing in property?
  • Should you pay off your HECS debt before you buy your first property?
  • If you start right now, can you achieve a $1,000 passive income in 3 years?
  • Which is better in the long term: a free standing house or a unit in a better location?

 

See you this Saturday at the Sydney Property Buyer Expo! Haven’t got your tickets yet, click here to purchase your tickets and save $50 by using this discount code: PROPERTYCOUCH

 

And here are the questions from today’s show:

SpeakPipe Question from Michelle:

First of all, first of all thank you for the podcast. I love every single episode of it — so keep up the good work!
My question today is: I have a property in Melbourne CBD, which is an apartment in a high rise building. After listening to your podcast, I understand that this is a really bad purchase … should I sell it to fund the next purchase? And my second question is: should I buy in blue-chip areas in Melbourne where the average price is $750,000 or should I start looking further down — Regional Victoria or interstate, where the price is down to $400,000 – $500,000 and aim for better growth?

Thank you!

(You might also like: Episode 007 | Studio or One Bedroom Apartment as an Investment Property)

 

Question from Anonymous:

Hi Ivise & team,
The boys take their work far too seriously and they need to pay a bit more for their advertising campaign — see attached, (the photo is next the Batman Avenue flyover near Punt Rd).
Team: I’m a 55-year-old, married with 2 independent dependents in the house, our house is worth $1.1 mill, we owe $420K, we have some super, less than $100K each, good income of $160K between us, no other real debts; is it toooo late for us to start property investing?
My thought is: if we did start, it’s better than not starting at all — it may not give us great passive income by the time I retire (65), but it’ll be better than our current plan, which is … as soon as I work out what it is, I’ll tell you.

Thanks, Anonymous.

 

SpeakPipe Question from Mathew:

Hi Ben and Bryce,

Hey guys, I hope you’re well. I’m a long time listener and I have a bit of a dilemma with asset selection.

I’m in a situation where I’m preapproved to buy an asset — and I have two areas I’m looking at. In one area, I can only afford a 1 bedroom unit, and in the second area I can basically afford a 3 bedroom, detached house on land.

My question would be: Weighing up all the pros and cons of each, I’m not sure which would be the better investment for the long term. Any help you can give me would be awesome.

Thanks guys!

 

Question from Cate:

Hi Bryce and Ben,

Just love listening to your podcasts. My friend put me onto your podcasts 3 months ago and I’m already up to Episode 70!

Question: I’m a first home buyer looking to buy in the inner suburbs of Melbourne, older style flat, 2 bedrooms, 1 bathroom (not more than 20 units in the apartment block!). Average price from my research is $550K. I have a mortgage broker friend who has advised if I pay off my HECS debt roughly $10K, it means my borrowing power would be $480K with a $110K deposit or $430K borrowing power without paying off my HECS. Would you recommend paying off HECS and sacrifice some of my deposit to free up additional cash flow from my income and enable greater borrowing for this property and other investment properties down the track? (Note: I’ll be moving into the property and renting out the second room).

Look forward to your response.

Cate.

 

Question from Carina:

Hi all,

I’ve been following your blogs for quite some time now and have also read your book. I am a 29 Year old German living in Brisbane and I’m working in the corporate world that doesn’t give me any freedom. My goal is to create $2000 passive income a week and to be able to see my family in Germany more often and follow my real passions. I’ve been going to open houses and looking at every sold property online in and around Brisbane to educate myself and to understand the property market.

I don’t have a property yet, but am looking at buying from November/December onwards. I have $50,000 deposit at the moment. Can I please have your honest opinion if you think that I can achieve $1000 passive income through rent within the next 3 years? I obviously have to invest in more than just 1 property, but I also don’t want to waste my time.

 

 

 

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