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Episode 260 | Q&A: Picking The Right Investment Strategy and Beware: Proposed Changes to QLD Residential Tenancy Act

How do you know if you’re following the right investment strategy? Like… how long are you meant to wait until you buy the next property? And how much should you look at spending? OR what about all the variables in the mix — say, you or your partner is about to take maternity leave, or your overall aim is to leave a decent inheritance for the kids? And where do cashflow-positive properties fit in to all this? (And what even are they??)

We get it folks… there’s A LOT to consider when it comes to picking and following the right investment strategy!! Let alone adding on top of that trying to factor in future costs, changes to income, individual needs and capital gains on each property!

So, in this special Q&A on property investment strategies, we’re going to answer a handful of our listeners’ very own questions that dive into the common dilemmas and unique situations folks are facing!

Plus, given the recent news, we’re going to touch on the proposed changes to Queensland’s Residential Tenancy Act as well!! Learn more about the ‘Opening the Doors to Renting’ Reform here.

 

Oh, and not to mention we have a very, very special gift for you…

(which we hope will even the par on the “Black Friday” discounts happening all over the globe, which let’s be honest, aren’t exactly designed to make your money work HARDER for you!)

 

FREE BOOK!! (yes, it’s a physical copy!) – The Armchair Guide to Property Investing – How to retire on $2,000 a week

www.TheArmchairGuide.com.au

 

Yes, really. We’ve got a stack of books ready to go in the office — and until we run out, we’re GIVING THEM AWAY! Here’s our crazy deal…. We pay for the book. You pay for the shipping.

CLICK HERE to Get Your FREE COPY of The Armchair Guide to Property Investing (just pay shipping, and it’s all yours, provided we have enough left!)

 

The Black Friday Announcements:

 

 

Today’s Questions

Question from Brad

Hi guys, awesome podcast! Very informative. My wife and myself are in a bit of  a unique position, we currently have a house on the family farm we pay minimal rent for. We recently bought our first home, which we are living in due to the First Home Buyers scheme, and will turn into our investment in February; my question is how long until we buy our next property? How much should we look at spending? How do you set up the next investment, as in interest only or principle and interest?

 

Question from Stephen

Hi. Just in relation to The Property Couch Facebook Page I was just wondering what makes a cash flow property if you could explain. Thanks all. Totally addicted to the podcast.

 

Question from Scott

G’Day property gurus, LOVE your work. For the case that we are holding multiple investment grade properties, have a strong cash buffer, and they are cashflow positive but not enough to fully live off. Is a hold strategy and living off the capital growth a possible retirement strategy? Of course, it’s important that they are growing at a faster rate than our living expenses, but can this strategy work long term in retirement?

The big pro for me is that it maximises the value of the inheritance which we’ll leave the kids. What are the watch outs for this strategy? Keep up the great work, and Go Pies. Scott

 

Question from Sara

Hi Bryce and Ben, thank you for your fantastic informative podcast. I listen to it a few times a week and am learning so much. I am a 36 year old woman and have a question regarding buying an investment property now, or family home in 3-4 years. I have $115K saved for a deposit. I am currently on maternity leave with my first baby and will return to work 3 days per week from March 2020 earning around $66K pa total (not pro-rata). I anticipate that I’ll stay at 3-4 days per week ($66-88K pa total) until we hopefully fall pregnant with a second baby in 2021. All of this means I will have part-time and maternity leave income until around 2023 when I’ll likely return to full-time work (earning around $115K pa).

I have wanted to get into the property market for ages but wanted to wait until I met a partner so we could consolidate our savings and buy a family home (and this only happened in the last 2 years). As it turns out my partner works freelance and has not been able to make enough to save for a deposit, so the responsibility for that is with me at the moment. We obviously hope that his earning capacity will improve. At the moment he makes ends meet with around 30K pa.

We currently rent in the inner city but would like to buy a family home in a regional area with a commutable distance to the city, as it is more affordable (median house price $650K), and offers a better quality of life for our family. With my work commitments we don’t see ourselves moving out of the city until after we have baby number 2 (so in 2-3 years).

My question is this: given that we don’t plan to move out of the city for 2-3 years should we keep saving during that time and then buy our family home in the regional area, or should we consider buying a 2 bd unit in the area we currently live (at around $500K) initially to live in (to save on stamp duty) and then as an investment property? I feel anxious about waiting another 3 years to get into the market as prices will continue to increase (albeit at a slower pace in the regional area), and at 36 years of age I am already leaving it very late to start out.  Additionally, if we were to buy a unit in the city, would we be able to use that as equity in buying a family home in 3 years’ time? Or would that mean we couldn’t get another loan? I know that our borrowing power will not be strong with me only working part-time and my partner’s low income.

I know you can’t give specific financial advice, but I thought this must be a common dilemma with the restrictions of maternity leave income bumping up against the pressures and timing of getting a foot on the property ladder. Thanks in advance for any insights you can offer,  Sara

Ps. Are you able to let me know when/if you answer my question? I’d hate to miss it.

 

 

 

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

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?

 

 

 

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

“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

 

Episode 192 | How do you compare to other property investors PLUS the Tech Platform that Outperforms any “Money Hack”!

Before we get into unpacking the recently produced PIPA Sentiment Survey (download here)…. Let’s play a game, folks!

It’s kinda like Charades… except we don’t act out anything. Or sing. Or draw. Or dance. Actually, all we do is tell you the exact words… BUT we say these words slowly, so it’s still really exciting! Okay, ready?

First word: Money.

Second word: SMARTS.

Third word: Platform!!!!

 

Yep. It’s finally happened folks! THE PROPERTY COUCH HAS ITS OWN MONEY SMARTS PLATFORM — and it’s Live.

Yep. It’s THE Tech Platform.

Yep. It’ll outperform any “Money Hack” or Money Management System out there (at least that’s what we think!)

BUT you’ve got to listen to today’s episode to find out what we’re talking about. (Let’s be honest, you can just go directly here, but can you at least listen to a bit of today’s episode so we can tell you about it ourselves… we’ve been dying to tell you folks about this for AGES! (The Platform goes hand in glove with our book so that needed to be ready too, hence why we could only drop hints… up until now!)

 

Make YOUR Money Simple Again…

The Property Couch Money S.M.A.R.T.S Platform (Yep, it’s FREE)

or http://thepropertycouch.com.au/financialpeace

Enter a nickname and an email address… it’s that simple to start. We really don’t want to pinch your details folks. We’re just two guys on a crusade to make Australians smarter money managers. The rest is up to you.

EXCLUSIVE TPC LISTENER DISCOUNT

CLICK HERE to get 20% off Make Money Simple Again (Coupon code: TPC20)

 

Before we jump into what you’ll get out of today’s ep…

…. We’ve got ANOTHER WEBINAR COMING YOUR WAY!

If you missed the announcement in last week’s episode, we thought we’d saturate today’s show notes with all of the huge announcements most dear to our heart! So, here it is again folks…

FREE LIVE Masterclass: How to Build a Property Portfolio and Retire on $2K Per Week without having to renovate, re-develop or sacrifice your weekends!

When: Wednesday, 10th October, 2018

Time: 8:00pm AEDT (Melbourne time)

CLICK HERE to Register and/or Get Full Details

 

And finally one, before we get to the latest Property Investment Professionals of Australia (PIPA) Sentiment Survey…

Are you an investment savvy mortgage broker looking to work for a passionate team in Sydney?

If you are, we want to hear from you! Send in your resume and cover letter to info@thepropertycouch.com.au

 

Right, back to TODAY’S Hectic Episode: 

 

p.s. Here’s the link again to the 2018 Property Investor Sentiment Survey! >> Download here now.

p.p.s. And of course, the link to our Money S.M.A.R.T.S Platform!! >> Get Access Here.

p.p.p.s Haven’t got a copy of our new book yet? CLICK HERE and use this Coupon code: TPC20

 

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