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Episode 069 | Q&A – Where is that sweet spot between Growth and Yield, investing in metro or regional and more

It’s Questions and Answers time! This week, Bryce and Ben looks at the questions below. Thanks again for submitting your questions!:

 

  • Question on Growth and Yield from Steve: Anyhow, a question for the podcast. Growth and yield are like a sea saw. As one goes up, the other goes down. Where I wonder is that sweet spot? Where both balance nicely and their feet dangle without touching the ground? For example, the best growth may be on Sydney Harbour with a view, but you may be negative $1,000 a week. So you go one suburb back, negative $800 a week. So you go one more back negative $600 a week. At some point you must hit a spot where you say, that’s the best growth I can afford. How do you decide that sweet spot? Is it different for all investors? Even if James Packer said to you, “Get me the best growth you can, income is not a problem” would there still be a point where you think, “Geez, even if we buy him a house on the harbour, the growth still won’t cover that massive shortfall over time.”Great show, keep it up. You are both a shining light in a dodgy, unregulated shark-filled industry. After all, my experience with people who talk very confidently but don’t know what they’re doing, (the enthusiastic amateur you effectively call them) I came up with my own saying, “Confidence does not equal competence“. Unfortunately, all you need is a little doubt in your own abilities and you default to the more confident person, who you may well know more than.
  • Question on Metro or Regional from James: I am looking to invest in my second property with my partner, we live in a rural area (Albury/Wodonga) and have around $100,000 in equity in our current owner occupied dwelling and good incomes with a maximum borrowing capacity of around $700-800k. Do you suggest trying to break into a Metro market (i.e. Melbourne) with a property in an investment grade suburb, which will in turn max out our borrowing capacity, or alternatively buy 1-2 properties in a major rural city?
  • Question on forecasting capital growth from Kayne: Just have one question in regards to forecasting Capital growth. I know you are conservative with your vacancy and interest rate assumptions (7.5% & 10% respectively) in your models. Are you also conservative in your CG assumptions (e.g if historical growth was ‘x’ would you round down a percent or 2 or keep it the same?) if you’ve covered this and I’ve missed it sorry for the double up, if not I look forward to your answer.
  • Question on active investing from Brian: Hi guys love the podcast immensely! If possible could you discuss views on being able to be an active investor to essentially create an income while still passively investing through leverage? Is this a possible scenario or what would someone need to look into to be able to do something similar…. I’m a tradesman so majority of the work I could do myself. Thanks very much!

 

Some of the resources mentioned in this podcast:

  • Report from CoreLogic : A profile of the Australian Investor – Who, Where and What? – Download here
  • Episode 37 | Understanding the Scarcity factor in Property Investment – Listen here
  • Case Demonstration: 4% Growth and 6% Yield vs. 6% Growth and 4% Yield – Watch here
  • Episode 51 | Will Labor’s proposed changes to Negative Gearing policy be good or bad for ordinary Australians? – Listen here

 

If you like this Q&A episode (Where is that sweet spot between Growth and Yield, investing in metro or regional and more), don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

Episode 59 | Rentvesting: What is it and who is it for?

Money Magazine - March 2016 Cover PicAs mentioned in previous podcast, Bryce Holdaway and Ben Kingsley will be talking about Rentvesting today! It’s not a common property investing strategy but it is gaining some momentum amongst Australian property investors. In fact, Ben was asked to write about this for the March 2016 Cover Story of Money Magazine. If you would like a copy of this article, just fill in the form below and we’ll send it to you right away.

In this episode, our hosts will be explaining what this strategy is all about. The concept is fairly simple but it is important to note that rentvesting is NOT for everyone. You need to look at your numbers and make sure that it works for your cash flow position. There a few other considerations that you’ll need to think about as well before jumping in such as how it’ll benefit your household’s circumstances and how comfortable are you with the concept of renting. Start listening to the podcast to find out more.

 

ps: They will also be giving an update on the Negative Gearing debate at the end of this podcast! 🙂

 

The resources mentioned in this post:

  • Ben’s interview with 2GB Radio – Listen more
  • Fill in the form below to start downloading Ben’s article on Rentvesting:

 

Money Magazine Download

 

If you like this podcast: “Rentvesting: What is it and who is it for?”, don’t forget to rate us at our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts.

Money Magazine Cover Story – Rent and Invest

Money Magazine - March 2016 Cover PicThank you for your interest in the Rentvesting Article!

Just fill in the form below to start downloading the article.

 

ps: For those of you who have stumbled on to this post, please do check out Episode 59 where Bryce & Ben discuss about this investment strategy in detail.

 

 

 

 

Case Demonstration: 4% Growth and 6% Yield vs. 6% Growth and 4% Yield

 

As promised in Episode 34, Ben will be demonstrating the impact a difference in strategy make to your portfolio. He’ll be using Empower Wealth’s Wealth Projection Modelling to highlight the difference in cash flow between a 4% Growth and 6% Yield vs. 6% Growth and 4% Yield. Watch the video to learn more.

Episode 033 | Q&A – Investing with Equity, First Home Buyers Tips, Buy-Reconstruct-Sell Strategy and Leasing to Relatives

It’s Q&A time! In this episode, Bryce Holdaway and Ben Kingsley will be addressing some topics on:

  • Finance related question from Kat : Would you please explain more about using equity? E.g. I heard from a broker that one needs to refinance the loan on the existing property (PPOR or investment) – does this mean the old property and the new one to be purchased are tied together? Some suggest using Line of Credit to get equity out. To assess the equity available, does one first need to pay for a valuation report on the existing property?
  • Leverage question from Naomi : I am considering selling my investment property in order to pay off the mortgage on my family home leaving me debt free and with the ability to then use all the money I currently pay on the family home mortgage for investment purposes with tax deductible debt. Is this a good strategy? Is there a better alternative you would recommend?
  • Episode 033 | Q&A - Investing with Equity, First Home Buyers Tips, Buy-Reconstruct-Sell Strategy and Leasing to RelativesInvesting strategy questions from Andy : Investing for demolition and reconstruction vs capital gain. Is it worth buying an older property close to the coast however a little further out from the city to sit on with the view to demolish with a larger land size or to invest in a more expensive smaller property which could be a little closer to the city.
  • Buying a Home question from Tom : I’d love to hear a podcast on your advice to first home buyers – whether that be best ways to save for the deposit, traps to avoid, or some type of plan for young home buyers – for example I’ve just start work as a property valuer in Melbourne for the last 5 months, and my girlfriend of a few years finishes studies later this year and we have the hopes of buying our first home together in 18 months or so.
  • Investing question from Andrew : Guys, just wondering what your thoughts are on buying an investment property that is potentially going to be tenanted by a relative? A relative has their lease ending in a few months, and i see this as an opportunity to buy an investment with a secured tenant (all through the proper rental channels i.e REIQ rental agreement). I think the opportunity definitely outweighs the risks. What’s your thoughts?

 

Other episodes mentioned in this podcast:

 

If you like this Q&A episode, don’t forget to rate us at our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

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