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154 | The Do’s and Don’ts: The Discoveries We’ve Learnt in Property Investing (PART 2)

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Alright, folks! It’s that time again… Podcast Day!

And today we’re bringing you PART 2 of our Summer Series on the Foundational Principles of Property Investing, featuring THE best bits of gold from our guests!

So if you’re interested in building a property portfolio in a tough market, learning the key elements of property investing or wouldn’t mind a handful of renovating tips to increase that capital growth……. then this episode’s got it all!

But before we jump in and tell you which FIVE GUESTS are featuring today, we thought we’d slap on a sticky note here that reads:

Remember: $5 is all you need to become a PICA Member!

At the end of the day, it’s important we come together and join forces in protecting our investments, livelihood and ability to determine our own future.

 

That said, let’s get on with today show!

Featuring in today’s episode include the following guests…

Answering these questions:

 

153 | The Do’s and Don’ts: The Discoveries We’ve Learnt in Property Investing (PART 1)

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Happy New Year, folks!!! We hope you celebrated this new beginning in style — and also gave yourself a pat on the back for the great things you made happen in 2017!!

Indeed, 2018 is now with us……. and we are SO excited to share this new chapter with you. We also have a few surprises up our sleeve this year, with more than a handful of epic guests lined up!!

** If you’re super keen on hearing from someone in particular, or about a topic you’ve been dying to learn about, simply head to our Contact Us page or feel free to drop us a line at [email protected]**

And remember: $5 is all you need to become a PICA Member!

 

But back to today’s episode…. The Summer Series (Part 1 of 2) on the Foundational Principles of Property Investing, featuring THE best bits of gold from our guests.

In plain English, please?

You’ll hear The Do’s and The Absolutely-Don’ts of Property Investing from the people who have been there, done that, and have an enviable property portfolio to prove it.

(In a nutshell: all of the gold, snipped and trimmed, to fit into 2 episodes).

 

Featuring in today’s episode include the following guests:

 

Filling in the gold mine includes:

  • The Five Golden Rules of Property Investment
  • What is Gentrification and what signs do you need to look for?
  • Why type of car (yep) can influence the future price of a market?
  • The Checklist to getting a great Property Manager
  • If you’re a first time investor, what things MUST you know?
  • What do you need to be aware of when getting advice?
  • What property type is most risky? Why?
  • What role does the media play?
  • How to determine if you need a building inspection for the particular property?
  • What can go wrong?
  • How can you build a portfolio through rentvesting?
  • Asset selection tips and why is location research crucial?

 

Resources mentioned in the podcast:

Get your Break Even Calculator here

Become a PICA Member here

See the infographics Ben was talking about here

 

 

 

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

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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!!

141 | Success Leaves Clues: How Do You Compare to Australia’s Most Sophisticated Investors?

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Alright folks, Episode 141 has landed! And today Ben is sliding on his “PIPA” Chairman top hat. Why?

Because PIPA’s Annual Investor Sentiment Survey is out! And the boys are going through these factual insights so you can see what the most successful investors are doing, thinking and learning, right now!!

 

So what’s PIPA?

If you’re a recent Coucher, you might not know that the Property Investment Professionals of Australia (PIPA) is the peak association for businesses that operate in the property investment space. In other words: PIPA makes sure that professionals in the industry are, well, professional.

PIPA has developed a Code of Conduct (read it here) that their members MUST operate under. It’s a framework that, ultimately, makes sure clients come first — and aren’t misled from unsuspecting property spruikers!

 

What can you expect to learn from Australia’s sophisticated investors?

  • Is now a good time to invest in residential property?
  • What type of property are the majority of investor’s buying?
  • What state capital currently offers the best investment prospects?
  • What is the exit strategy should you consider adopting?
  • Should you be worried about the banks raising their interest rates?
  • Where is the most appealing place to buy right now?
  • How long should you expect your property to be negatively geared for?
  • Should the “bubble” stop you from investing?
  • Is there a need for regulation?
  • Is it possible to become a sophisticated investor on your own?

 

And of course, if you are interested in the report, here are the links!

For Bryce’s cover story on the Money Magazine? Get a copy here or at a newsagent/supermarket near you.

Just joined the podcast, here’s the Money SMARTS Checklist that Bryce mentioned on the show! Download here.

 

 

 

Facebook Live Bonus Episode – Q&A on Property Hotspots Webinar

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It’s here folks! Sorry it took some time. We thought we’ll organise it a little bit before broadcasting it to the rest of our fellow couchers.

So here’s the recording of the Facebook Live last week! This session is mainly based on the Questions we’ve received from our webinar, Property Hotspots and How To Find Them. Enjoy!

 

 

And here’s the list of questions that we’ve answered on the night along with the time stamps (in minutes). Hope it helps!

 

04:17
From Louise		 Hey guys, LOVE your work! I’m curious why you look for very low stock on market rather than high stock on market.

If you were to go with buying when others a fearful and selling when others are greedy (Buffet strategy), then wouldn’t you try to purchase in a buyers market where stock on market is higher? Or am I interpreting the data wrong?
07:42
From Paul		 When listening to all the experts they talk about buying properties under the median price.

From memory LS talk about Market Price?
10:06
From Jenny		 Does the history on location score for the various measures only go back to 2016 Jan?
10:44
From Steve		 Hey guys, having a sneaky watch during work…shhhhh. Can you please advise what the \”Statistical Reliability\” index is tracking and how this is determined? Thanks
12:42
From Ben		 Some commentators mention a term called Established Capital Benchmark as an indicator of value of a property vs others in a certain area. Whilst this does not appear to be related to supply & demand, it may be of value to investors looking at a specific property in a suburb. Is ECB a legitimate indicator when looking at a particular suburb, and is there a place for it as a metric for investors?
16:39
From Ben		 Is there a way to track the Location Score for a suburb over time? So a report based on date range showing variation in LS over time?
18:54
From Mandie		 I’m keen to buy but not sure which is the best State to invest using my SMSF.
20:26
From Jaccob		 What websites am I best to monitor to find major infrastructure projects, in construction or proposed? Cheers
20:40
From Todd		 Do the high location scores (>80) match your professional opinions on where you would recommend to buy? For example, Risdon Vale looks to be a fringe suburb of Hobart?
26:2
From Nathaniel		 Firstly many thanks for the data and overview and also the pod cast and book I have consumed all material you guys have produced. I guess the difficult part for me personally is finding a place to start when your looking at so many suburbs! I started my research by listing all suburbs within a 25km radius of the city I was interested in. Then included if the suburb had a train line from there I listed the location score of each suburb and the median price of properties, to try to narrow my searches to a handful of suburbs. I maybe suffering from analysis, paralysis, as I\’m still to close out a purchase. Some feedback on location score I\’d love to be able to filter on some of the metrics ie if I want to know what suburbs in Brisbane have the best rental returns only, or best supply ratio etc. I think it will help with filtering or pinpointing suburbs a lot better. P.s not a question just feedback, keep up the great work.
27:55
From Adam		 On vacancy rates, rapid increases in vacancy (particularly units) makes sense from a supply perspective (new developments). What’s the driver for rapid decreases in vacancy rates (as per the Southbank example)?
30:18
From Aaron		 Is it possible that the creation of this big data analysis system could artificially change the market? As investors shift towards buying or not buying in a certain location based on this information – does that artificially change the locations supply and demand?
33:56
From Yuna		 If I am trying to get in the market for buy and sell strategy then do I still need to look at all of those indicators we have looked? Thank you so much. Love your podcast Ben and Bryce 🙂
35:37
From Anne		 I’ve been using LS since your launch & I think it\’s fantastic. I was wondering if the you plan to further define the criteria in future, such as the ability to report a location score to include the number of bedrooms, bathrooms etc.
38:01
From Felix		 If you pick a location with high location score – does that mean that the market is hot and you are potentially paying more as more buyers are interested in that market?

Once a property has been in a hot spot how does that effect the future growth. is the hot spot a temporary boost in appeal?
40:51
From Christopher		 I am a little confused, I subscribed to LocationScore after listening to all of the property couch podcasts and reading the Book. However, I am confused. All I have heard via The Property Couch is about more blue chip properties. Yet on location score so many of the Top 250 suburbs are far from being blue chip suburbs. Can you please why there is such a difference?
44:25
From Gayan		 Excellent webinar team. Just wondering if I should stop using the investment property magazine stats – or is this reliable data with maybe a few gaps if you are time poor and can\’t review each stat on interested suburbs? Keep up the great work.
46:12
From Karla		 Thank you so much for this webinar, it was a great learning tool! You touched on the fact that there are some differing stats on opposing websites, and I have found this to be true in my research too. Personally, do you take an average of those numbers, or are there certain sites you trust more for this information?
47:01
From Karla		 When you research a suburb that has some of these indicators missing (No results for vacancy rates etc) in their profiles, do you discount this suburbs? or how do you include them into your research?
47:56
From Karla		 Does LocationScore take into account, future town planning/development, and other lifestyle factors in the suburbs to give its suitability score?
48:16
From Neisha		 If a lot of these indicators are good by your estimates, doesn’t it mean that it is not necessarily a good time to buy into that market ie if stock on market is low, vendor discounting is low, OSI is high doesn’t it mean the market is quite hot and it may be prudent to wait?
48:47
From Chris		 Could a downward trending Vendor Discount metric mean that a selling agent is adjusting the asking price lower over time to reflect a downtrend in recent sale prices?
49:15
From Nicole		 Based on your examples, does location score include all States and Territories, as you only showed the East coast or areas down South and South WA
49:38
From Ashish		 Is the research similar to other prediction reports ?
50:41
From Fred		 Is there a real difference between fair market price and fair market value?
51:49
From Peter		 Can you see what the weekly sales rate of non auction property

 
52:50
From Kosta		 Crosssing Investment Loans is generally a no-no, would you consider it for cash-flow properties in order to save on LMI (particularly when capital growth is not on the cards)?

 
53:16
From Tom		 You have negative gearing, and foreign investment trying to off shore their monies against potential political change. The 101 fundamentals of economics and markets, say equity markets doesn’t apply to property in most cases. People generally feel safer with tangible assets.
53:44
From Aaron		 Hey guys, love the show. Would love to know your thoughts on investing in north west Melbourne at the moment (Sunbury, Diggers Rest, Gisborne area).

Prices appear to be growing quite fast and there is lots of new infrastructure however, there are a lot of brand new estates.
54:46
From Matt		 Hi guys, if you had the option of buying a small one bedroom unit in an area close to city, (Randwick) or a 3 bedroom home further away (Gosford) what would you pick for a first home buyer ?
55:28
From Cameron		 As technology increases and people have the opportunity to work from home. (I am a property valuer employed by an office in Brisbane though I work from home on the Sunny Coast), do you think there will be a shift to lifestyle locations and therefore values will take over the cities. eg the coastal areas within 2-3 hours of a city.
57:20
From Sean		 As Buyers Agents, for a relatively conservative investor (plus young) is their a rule of thumb where you would say ok LVR is now ..% and we are happy for them to go and buy the next one.

Keen on capital growth plays at this stage, rather than yield.
58:20
From Jassi		 Opinions of buying an IP and building a granny flat in the back to increase cash flow?
(getting rent from the home and granny flat)
58:51
From Martin		 Hi guys! you are awesome, thanks for your insights.

When targeting auctions, how do you ensure that the value the bank will give to the house is close to the price you could pay for it?
59:38
From  Kimberly		 Hi Guys! Thanks so much for all your great work. I look forward to your podcast every week! I purchased my first investment property 18 months ago and have had a really bad experience with my tenant.

What are your tips for getting past the bad mindset this can cause?

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