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520 | Should You Take Property Advice from a Financial Planner?

By in Podcast, Property Investment, Q&A

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Folks, Episode 520 is not just another massive Q&A Day on the couch, but today’s episode has us responding to the rawest feedback we’ve EVER received. 🤯 

Plus, you’ve heard our about property investing journeys. But what about today’s true story from Trevor, who backs up everything we said about failing to retire on $2K per week?!  

You’ll have to tune in to find out how he gets out of this sticky situation. 

In this episode, you’ll hear:

  • Why TPC listener Gabriel opposes calling property investors “small business owners” 📈 
  • Capital Gains Tax: Has the AFR proven us wrong? 🤔 
  • Should you take property advice from a financial planner? 🏡 
  • How do birthdays and curing blindness overlap? Tune in at 19:45 to find out. 👁️  

It’s a ripper episode folks. Give it a listen now!  

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  • Get on Bus #1 (Listen to 50:45 for some background 😉)!
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Questions We Answer

Q1) Feedback on Episode 515 – Negative Gearing from Gabriel  

Hello, 

Firstly thanks so much for all the work you are doing for giving an alternative to some of the media rhetoric on this topic.  Can I offer a couple of points as constructive feedback after listening to the episode.  

While it provided a lot of good points to consider, I think there is an opportunity to rethink a couple.  

Firstly on the history of capital gains tax, while you said that it replaced existing arrangements, you failed to mention the important point that it is more generous that its predecessor and that there is scope for scaling it back. The AFR in their Fin podcast mentioned that CGT was worth $25B a year vs $2B for negative gearing. It was meant to encourage investment in businesses and instead turbo charged property.  

Secondly I find you calling property investors small business owners irritating, and if this is a sentiment shared by many others I wonder if it could be detrimental to the cause of changing the public opinion of ‘greedy investors’.  

While I own an investment property myself, I would never introduce myself as a ‘small business owner’ based on that. I own an asset that serves a great social purpose of housing Australians, but this is not a business where I create something new out of time, creativity and resources.  

The asset is already there, built by an actual business. It’s managed by another business – a property management agency and it’s maintained by other businesses like tradies.  

I don’t have an ABN and don’t need one. If I owned shares which ultimately give capital to listed businesses so they can invest and grow the economy, would I call myself a small business owner? 

Love your work (still!) 

Regards,
Gabriel 

 

Q2) Role of financial advisor in property investing from Helal 

Hi, I hope you are doing well.  

I have a question about the role of a financial advisor and the services that you provide. From what I understood from listening to the podcast is that the financial advisor cannot advise you to go looking, or advice about properties, is that correct?  

If not, what should we do? Do we go through a financial advisor first and then decide whether we want to go into property with them going with the financial advisor’s plan? 

 

Q3) How to fail to build from Trevor  

Hey Ben & Bryce, 

Just wanted to reach out and say Ep. 480. Guys! This is phe . nom . enal ! I can relate to some if not all of the “how to fail to build” points you raised here.

My true story goes a little something like this. I bought my first house and land package as a PPR just before the GFC hit and after living in it for a year, rented it out because I went off traveling the world in my mid 20s for the next 8/9 years.  

After the real estate agency secured what I thought was a good tenant, I gave them the flick and managed the property privately. Thought it was a great idea to save a few dollars on fees right. Those same tenants moved out 5 years later and I had to replace all the carpets, repaint the walls and replace some fans the kids had swung off of. Needless to say, the bond certainly didn’t cover this.  

I kept the bond and offered the tenants to pay the rest of the bill. Obviously, I heard crickets from them so had to pay the rest out of my own pocket. I had landlords insurance but this is a worst case insurance for me and I never use it to claim small things. It’s just for the “what if the house burns down”.  

You’d think I’d learn right? Wrong.  

I went and got another tenant, funny enough it was the family next door and they were moving out of that house because it was up for sale. I saw an opportunity to save on management fees again and 2 weeks’ rent the real estate would have charged for finding a new tenant. The new family moved in under a private agreement. Sweet as right? 

Nope. After trying to manage this house from a yacht somewhere in the Bahamas (which I worked on by the way, not owned) I found out while doing my own tax return one year that they had underpaid me rent. I had to send them emails and show them spreadsheets from afar of how much they were behind and it was more than 5 grand.  

I thought enough was enough and got a property manager to help sort them out and they did pay me what I was owed and all was fine. But do you know what the kicker is, well it’s not keeping up with what the rental market is doing. I.e. rents around my house had gone up and considerably, but because I was managing this house myself from afar I didn’t have the finger on the pulse.  

After all of this learning, let me tell you fellas… I have now learnt! I maintained a property manager for this house from then on. That lesson had taught me about property management and its importance. What it didn’t teach was having the right strategy in place, and so I sold that house at roughly the 10 year mark (insert palm in face emoji). 

I can wholeheartedly say that the net of the money I saved in management fees over the years was surely a net negative and as you can see to top it off I sold the property and paid commission to do so.  

I can’t bring myself to check the growth of that suburb and what the house would be worth now or even to check what its rental yield would be. For context I sold it in 2022. 

Final point I’ll make on this and for people who may hear this, I wish I got accredited professional help because my future self would have thanked me for it. My wife and I have now got that help through Empower Wealth and we are on a path of retribution.  

I am a dedicated listener to your podcast.  

Keep up the great work!
You guys are my Joe Rogan!
Cheers Trev. 

 

Timestamps  

  • 0:00 – Should You Take Property Advice from a Financial Planner?     
  • 1:29 – Footy banter and Trump’s win  
  • 5:39 – Australia’s FIRST property AI is now LIVE 
  • 9:35 – MoneySMARTS 2.0: Release webinar!  
  • 11:33 – Empower Wealth is hiring a Chief Operating Officer  
  • 14:39 – A heartwarming moment at the Tina Turner concert! Ruva, here’s a shoutout to you 😊  
  • 17:48 – Mindset Minute: “Life is not for complaining about pain and sorrows; it’s about prioritising…”  
  • 19:45 – Bryce’s 50th: Give the gift of sight! 
  • 26:56 – Block Auctions: A reminder it’s not based on real property principles!   
  • 29:51 – Q1) Negative gearing feedback & would I call myself a small business owner 
  • 32:10 – The history of capital gains tax  
  • 34:04 – What makes a small business?  
  • 37:29 – The #1 overarching reason why the property investor narrative needs to change 
  • 39:45 – Framing businesses: Vintage cars and social good 🚗 
  • 43:19 – Negative gearing for… planes?!  
  • 45:05 – Q2) Should you take property advice from a financial planner?    
  • 46:13 – Residential properties aren’t a licensed product!  
  • 50:45 – Bryce’s minibus analogy: Traditional financial planners vs. Investment-savvy financial planners 
  • 54:33 – Why do QUALIFIED property investor advisors (QPIA) matter?  
  • 58:43 – Reach out to us if you want to get on Bus #1!  
  • 1:00:42 – Q3) How to fail to retire on $2K per week  
  • 1:04:58 – Avoid touching the pot!  

And… 

 

359 | Locked Down & Locked Out: Buying Property In A Shutdown State! – Chat with Leah Calnan

By in Podcast, Real Estate Agent

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Is property sliding under the pressure of continual lockdowns?!

Folks, it’s no surprise that Victoria’s extended lockdowns (and indeed lockdowns happening right across the country) are having unintended consequences to property buyers, sellers AND renters.

With Melbourne spending more days in lockdown than ANYWHERE else in the world, it begs the question: How can you buy property in a Shutdown State?!

Here to unpack all this, as well as the Winners & Losers of legislation changes, is returning guest Leah Calnan, President of Real Estate Institute of Victoria (REIV). Leah has served as REIV President since October 2019 and during this time has seen SIGNIFICANT disruptions and changes to the Victorian property market and Tenancy Act. She has over 24 years’ experience in property management, is the sole Director of Metro Property Management and, of course, is considered one of the industry’s most dedicated, accomplished and senior Property Management practitioners in the country.

Leah is about to give you a behind the scenes look at the stark reality of a property market Locked Down & Locked Out, including the tangible impact this has on property investors, in conjunction with the “VCAT Mess” that’s currently unfolding here in Victoria.

So, is it all doom and gloom? Is it simply Too Much For Too Long for Victorian investors? Is “The Great VIC Exit” fast-approaching?!

Listen now to learn How To Buy Property in a Shutdown State & stay informed of the impact current lockdowns are having on the broader property market.

 

Free Stuff Mentioned

 

Here’s What We Cover…

  • 02:13 – FYI: The dark spot on Ben’s forehead…
  • 04:46 – What do you think about this Mindset Minute?!
  • 06:50 – Meet Leah.
  • 07:32 – The Controversial Question we just had to ask!
  • 10:09 – Leah’s first property & money management story…
  • 16:08 – Money Advice for teenagers!
  • 17:14 – Some of the ‘highlights’ as REIV President…
  • 19:15 – Winners & Losers: Legislation Changes!
  • 20:01 – Will these Unintended Consequences further drive investors out of Vic?
  • 21:43 – Which legislation would Leah most like to repeal?!
  • 23:33 – The VCAT MESS!!
  • 26:16 – Have landlords cracked down on the type of tenant they get?
  • 27:42 – Has the legislation change lead to longer first term tenancies?
  • 29:00 – Locked Down & Locked Out!
  • 31:13 – One of the biggest challenges with Victorian lockdowns…
  • 34:09 – What HAS opened up again for buyers?
  • 38:32 – How agents keep potential buyers safe…
  • 40:16 – Can you inspect properties in regional Vic if you live in Melbourne?
  • 42:12 – Is there a “Super Saturday” coming between now and Christmas?
  • 45:53 – The Best Property Management Tips!
  • 48:30 – Why You Should NOT Self-Manage Your Property!
  • 53:28 – How to measure your wealth!
  • 55:25 – What’s Making Property News!?!
  • 55:38 The Scalpel Has Landed: Macroprudential Change Is HERE!

 

 

332 | New Laws To Sting Landlords! – Chat with Hayley Mitchell

By in Podcast

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Rental Reform is here. And with this comes quite the ‘sting’ for landlords. So we want to make sure our community – in particular those who already own an investment property and also folks who are considering an investment property now or in future – know what to do to prepare for these new laws.

Here’s the deal…

As of March 29th 2021, there have been 132 rental rule changes here in Victoria. And while these laws have NOT (and perhaps won’t) make their way into other states and territories across the county, we recommend all our listeners to tune in to this episode.

Yes… these are Big Changes. And with them come consequences… BOTH to landlords AND tenants. Both Great and Not-So-Great…

At the end of the day… this is Brand New Policy and with that comes new learning and course-correcting along the way. With our advocacy work through PICA, we will continue to advocate for property investors and make sure our collective voice is heard. So, please know that what we are talking about today might not always be the case… and, for the record… we are fully on board with the safety precautions in place for our investment properties. What we struggle with is policy that is short-sighted and regulated down to the 5% of people who are doing the wrong thing.

Here to help us unpack this New Legislation is Hayley Mitchell, Director of Geelong Property Managers and Director and Trainer of Mitchell PT, which provides training and consulting in the property management industry. She is a fully licensed Real Estate Agent and has worked in property management since 1999… and she knows her stuff when it comes to legislation change & how to best prepare landlords for New Policy!

 

Yep. We spoke with Hayley WAY back in Episode 249 when these proposed changes were on the horizon… but now that they are HERE, what do us property investors need to know???

And, most critically, Are these Rental Rules as “Fair” as they appear to be?

Listen now to find out – VERY important episode folks!

 

A Key Message to those who have invested or are looking to invest in Victoria…

Yes – we’re not super happy about all of these new laws, either! But please remember the fundamentals and what attracts people to this State (and hence increases the demand for property!) – we are playing The Long Game here. What might “sting” a bit now needs to be put into context of a 20/30/40-year decision. So, Keep Calm, do your numbers and reach out to your property manager on the best way to navigate these changes.

 

Free Stuff Mentioned

 

What’s Covered In The Episode….

  • 02:05 – Start & Build Winners!
  • 03:57 – How to get LocationScore for less!
  • 05:12 – April Fools Pranks!
  • 06:32 – How to spur people on to success
  • 09:05 – Meet Hayley…
  • 10:05 – What was life like as a property manager during COVID-19?
  • 12:34 – They DONT have a copy of the written legislation yet!?!
  • 14:43 – What are the most significant changes?
  • 15:26 – Who is going pay for these changes?
  • 16:16 – What is going to happen to rents as a result?
  • 17:40 – What will happen tenants after lower-priced rents??
  • 19:02 – What changes “snuck” through?
  • 20:30 – New Rental Minimum Standards
  • 21:15 – What are the new ventilation requirements?
  • 25:25 – Unintended consequences of the new electrical standards
  • 27:09 – You have to PAY for the codes to access the minimum standards!
  • 28:26 – Our new name as landlords…
  • 29:00 – How will it change you way you buy property?
  • 30:29 – Will there be a pivot where the vendor needs to make sure these standards are met (as opposed to the buyer)
  • 33:47 – New disclosure requirements
  • 35:11 – What happens to properties that are rented after 29th March?
  • 36:38 – What’s going to happen to the line at VCAT!?!
  • 38:56 – New Urgent Repairs
  • 41:15 – Pest “Infestations”
  • 42:47 – Ben’s story about the tenant and the “ants”
  • 44:15 – Compensation for Sales Inspections
  • 48:36 – Painting!
  • 49:55 – When the website and the legislation don’t match up…
  • 51:51 – The 120 day Rule (Ouch!)
  • 56:50 – Hayley’s Two Worst Changes!
  • 57:17 – What will these changes mean for the industry?
  • 58:35 – The Five Strike Policy!

And…

  • 1:01:11 – Message for landlords
  • 1:07:29 – “Not Happy Jan!!”
  • 1:08:13 – Our Key Message for our Victorian Landlords
  • 1:13:15 – Ben’s Lifestyle Design Update!
  • 1:13:37 – Auction results from the weekend

 

 

299 | Sell Everything And Run? Brand New Update From Leah Calnan, President of REIV

By in Podcast

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If you listened to last week’s episode, you’ll know already that there’s been significant changes happening on the grounds in the real estate industry… particularly here in Victoria with Stage 4 and Stage 3 Restrictions now seriously impacting what we CAN and CAN’T do when it comes to property transactions and inspections across the state…

And since then, we’ve heard from the Commonwealth Bank CEO Matt Comyn on the current health of one of the Big Four and the damage faced to our banking system as they act as “shock absorbers” during the COVID-19 crisis…

.. so the question now is… Is It Time To Sell Everything And Run? And for us living in VIC, Should we flog everything and move to Queensland?!

In today’s eye-opening Q & A, we’re unpacking ALL this, plus – as promised – we have a Brand New Update from Leah Calnan, President of the Real Estate Institute of Victoria (REIV) with further insights into what buyers, sellers, renters, real estate agents & property managers are legally allowed to do in COVID-19 Victoria.

Leah will also be covering what services can still go ahead with up and coming settlements and end of leases… and smart ways to safeguard purchases and sales over the next five weeks.

So. What are we in for?

 

Free Stuff

 

The Questions

Question on Finance from Matt Feeley

If I buy an investment property with equity release and create two loan splits (let’s say 100k equity secured against PPR and 400k home loan). If I sell the PPR in the future to upgrade the family home, what happens to the 100k loan that is secured to the PPR? What are the options? Thanks a lot guys!!

 

Question on Selling Right Now from Cameron Hall

Not really a question, but thought I’d share our experience selling our home recently. Went on market two days after Melbourne went into stage 3, but despite individual inspections and the associated hassle, there was huge interest (25+ groups), and it sold in 5 days, for what we wanted, and a street record     . In a pandemic. No shortage of demand (at least in our area) from what we’ve seen. Hope this helps anyone worried about selling

 

Question from Maximus Decimus Meridias

This is a buy, rent and sell question and although specifically about the Perth market, I think it is valid for all of Australia. The media reported last night that the Perth median sell price has slipped below Adelaide and is 2nd from the bottom with Darwin sitting below Perth. However, the rental vacancy rate is

$200 less than last month and about half of what it was this time last year! I believe I heard you say in a podcast a few weeks ago that potential sellers are holding onto their properties because they know prices are real low. But has distressed selling pushed the median price down? Or are the media looking at stats at a certain point in time which reflects a bad run of  lower cost properties being sold in distress or otherwise? All these stats don’t match up with what I’m hearing about rental vacancy rates in other parts of Australia either.

And finally, we are looking at rentvesting, yet is it better to look at buying in Perth right now, rather than rentvesting or does that depend on the suburb?

 

Question from Hugh Gates

Hi guys, currently building a granny flat on the back of my PPOR at the moment which will be leased. My question is will my serviceability for a future  investment loan be increased if I lease the main residence also? The flip side is that the repayments on the house are lower than the equivalent I would pay in rent ie. Repayments $330 a week, rental $450ish. However the rental income I would generate on the house would be equivalent to that of the rent I would be paying. (Balanced out I guess)

Love the show boys and Stiggy, have listened to the lot and have read one of  your books keen to read the next! Thank you for your time and commitment to bettering others futures be it financial or otherwise!

Edit: sorry NSW based not Vic!

 

Question from Tee Dee

With stimulus being used to prop everything up, is it fair to say that we can expect to see an initial deflation in the market (10-20%), followed by a severe inflationary period as the mass amount of new money finds its way to the bottom of the pyramid when everything opens back up via rents and prices? If we keep our current monetary system the only way to repay this debt is through mass inflation. That tells me to hold my assets,  switch to interest only (despite low interest rates), and pay off my debt using tomorrow’s, devalued dollar. Is this a naive way of thinking? Thanks guys

 

Question from Jamie Attard

I’m hearing a lot of hype of a tree change from our major cities. Is there data out there to back this up and what regional areas are benefiting from this if any?

 

Question from Heath Ian Sullivan

Thoughts on Queensland being bombarded with melbournites trying to  escape from the city?

 

Question from Sonja Mallia

What to do if we have over 200k in offset, and the banks can now use our money if in financial ruins and not pay it back?

 

One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

 

 

298 | Property In A State of Disaster – Chat with Leah Calnan, President of REIV and Nerida Conisbee, Chief Economist at REA Group

By in Podcast

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“Property in a state of disaster.” Yep. You heard it here first, folks…

And there’s no doubt we’re literally making property news with this timely “double header” episode featuring two of the brightest minds in Australian real estate… (and no, this breaking news is not “hot off the press” either… we actually interviewed one of today’s guests BEFORE the press even got to them!! 😲)

Here’s the deal…

With Stage 4 restrictions now here in Metropolitan Melbourne and Stage 3 restrictions all across Victoria… the property market HAS been impacted as a result.

So, not only are we getting the update from the National Representative of Victoria, Leah Calnan, President of Real Estate Institute of Victoria about what we CAN and CAN’T do when it comes to property here in VIC, you’re also going to learn how (and if it’s even possible!) to transact property with these harsh restrictions now in place… and what the next six weeks is potentially going to look like for buyers, sellers, and renters.

PLUS, for our folks NOT located in or looking to buy in Victoria right now… our longstanding friend and indeed one of Australia’s best property and economic experts Nerida Conisbee, Chief Economist at REA Group, also joins us for a deep dive on what’s currently happening in the individual segments of the Australian property market including…

It’s a BIG ep… but we promise there are plenty of new updates and quality gold in here that we simply couldn’t NOT share with you! (Let’s just say there’s A LOT happening!!!)

 

Free Stuff

 

Here’s A Glimpse Into What We Cover…

  • Pandemic Brings New Rules For The Victorian Property Market… And They’re Not Great
  • How can you transact real estate in Victoria?
  • What are the unintended consequences of these harsh restrictions?
  • What does Real Estate Institute of Victoria (REIV) think about all this?!
  • How many known cases of COVID-19 have come from the real estate industry?
  • Can you still get a new tenant in with these new laws?
  • What about cleaning? Building and Pest Inspections? Pre and Post Settlement?
  • How is Nerida navigating the outlook of the property market when things are uncertain and constantly changing?
  • The September Cliff versus The September Slope
  • Where are we seeing distressed markets?
  • How many distressed sales are we seeing?
  • What’s likely to occur if the pandemic continues into 2021?
  • What is the Pilot Program and why has it now been derailed?
  • Are investors buying right now?
  • What’s happening to premium property?
  • What are we seeing in the CBD and how will this continue to play out?
  • What on earth is “Revenge Spending” and how will this play a role in getting us through COVID-19?
  • Are predictions of 20 – 30% drops in the property market still relevant?
  • Around The Grounds in The Australian Property Market

 

One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your MoneySMARTS platform here and update the numbers.

Want to learn more about MoneySMARTS? Claim your free copy of our best-selling book Make Money Simple Again which explains it all in detail!

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