The Property Couch | The Insider's Guide to Property Investing

What an interesting weekend! We always knew that the negative gearing debate was one that would never fade away but last weekend on 13th of February 2016, Opposition Leader Bill Shorten used his speech to the NSW ALP conference to unveil some possible changes to negative gearing should Labor win the next election. Needless to say, this opens up a lot of conversations and debates surrounding what this policy would involve, what data the decision is based on, the policies’ framework and its implications. In his speech, Bill Shorten mentioned that if Labor wins the next election, from July 2017 onward, negative gearing will only be available on newly constructed homes. This is to improve the efficiency and fairness of the Australian Taxation system and he reiterated that the changes will not affect existing negatively geared properties. Furthermore, this policy will also reduce the subsidy on CGT from 50% to 25%. You can read the rest of his speech here. As property investment advisors, property analysts and professionals who are actively involved in the industry, Bryce and Ben are both aware that any negative gearing changes would have a ripple effect on the Australian property market as well as the general economy. Decisions that are made without considering all the impacts on the market would mean history repeating itself again such as the brief change in negative gearing in 1985. Hence, in this podcast they analyse Labor’s proposed changes and explain the good and bad aspects of those changes.   It is important to note that Bryce and Ben’s comments and opinions in today’s podcast are their own and not the position of the Property Investment Professionals of Australia (PIPA). If you like this podcast: “Will Labor’s proposed changes to Negative Gearing policy be good or bad for ordinary Australians?”, 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 here: http://www.thepropertycouch.com.au/topics/

Only a couple more weeks left to our Summer Series. This week, Bryce Holdaway and Ben Kingsley will be answering the questions below from our fellow listeners. Thanks again for submitting your questions! * Credit card management question from Peter on Facebook: Loved reading the book. Quick question, in your Money Smarts section (Chapter 3 of the book) you discuss using your credit card for fixed expenditure. Does that include groceries…assuming groceries doesn’t come under lifestyle? That seems to provide a variable – do you think that is still best? I want to adopt your setup but worry about using a credit card, considering we don’t have one currently. Thoughts? * Professional Fees questions from Andrew : Hey guys, thanks for all the valuable information so far. I have a question in regard to the fees and cost of the property portfolio and buyers agent services. I am a first time investor with limited funds for my purchase, and I am trying to get an idea whether or not I could * a) even afford the above services and * b) whether those funds would be better spent contributing to a larger deposit? Can buyers with smaller budgets (sub $400k) still maximise capital growth and rental yield using qualified property advisers and investment savvy buyers agents? Cheers. * Question on line of credit from Christian: Hi Ben, what are your thoughts on using equity and/or a line of credit to fund the negative cash flow on high growth properties? I know that some other high profile companies are advocates of this strategy. Your thoughts? Would love to hear your thoughts in podcast. * Value add question from Heath: Hi guys, love the show and I am currently up to the Buyer’s decision quadrant in the book and really enjoying it. My question to you is: I have a recently renovated investment property in Brisbane that is a 3x2x2. We have built in a 4th bedroom downstairs in the existing utility room (legal height, ventilation, windows and power supply etc.) Currently I am speaking to a few building certifiers and engineers etc. to assess whether or not I can get the 4th bedroom certified through council. It’s looking like the certification will cost me around 5k and the difference between the median for 3 & 4 bedrooms in the area is around 60K. Would you think moving forward with this would be feasible? And if so when issued the certificate through the Brisbane council is this something that I would submit to the valuator when they would be doing the inspection? * Repayment question from Joe: I actually just finished reading your book about 30 min ago and I have to say I really enjoyed it. In particular chapter 9 and 10 (investment strategies and the case studies). I found it very easy to follow and understand though I do admit I learn a lot of the terms and phrases from the podcasts. I do have a couple of questions though. * I noticed that in the case studies the loans were always interest only which is fine and I understand why it’s like that, but is it possible to have Interest only repayments over the course of the entire loan? Surely at some point the bank wants principal paid back. * This leads me to my second question, during your case studies do you factor in the fees of your service as this would have a noticeable  impact ...

The Governor and Reserve Bank has decided to keep interest on hold at 2% in the cash rate announcement this month. But will there be another out-of-cycle rate rise by the lenders? We’ve seen it last year where interest rates on residential loans were raised but what are the chances that it’ll happen again this year? Bryce and Ben talks about this in today’s episode. They will also be talking about the recent hype in media commentaries regarding the Australian Property Market. Not to forget our promise for the Summer Series, these are the Q&As for today’s podcast: * Loan question from Ben on Facebook: Read a book that outlined the kitty loan system. I was wondering what Ben and Bryce’s opinion on using this system was and whether it truly works or not. The book indicated to let the amount accrue over a period of time, but I’m not sure what bank and what type of loan allows you to do this? * Expat investment question from Glenn: I am an Aussie expat living in Dubai and looking to invest back home. I have been told to look at property investments that provide a loss for tax purposes so I can benefit when I return. Any information on how I can invest or what would benefit me from overseas would be interesting to hear about. Is the tax benefits the most important issue for me or should I just be looking for growth that will then outweigh any taxes I have to pay. I hope that makes sense. I have enjoyed your podcasts thus far and have now purchased your book. RBA has kept the interest rates on hold this month but what are the chances for an out-of-cycle rate rise from the lenders?   If you like this podcast: “Possibility of an out-of-cycle rate rise and media commentaries on the Property Market”, 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 here: http://www.thepropertycouch.com.au/topics/

Our loyal listeners would have noticed by now that every single time a tax related question pops up on the podcast, Bryce and Ben will try and answer it in a general sense (sometimes, probably too general). So, this time on The Property Couch, we have invited Frank Azzopardi from YK Partners to help give a clearer definition when it comes to questions related to tax and property. Sit tight and be prepared because this episode can be very technical. Some of the issues that they’ve touched on in this episode are: * Investing under trust ie: family trust – what it involves and the tax implications * Investing under a company structure – why people do it and areas to be cautious about * Partnership in property investing – what to expect, difference between partnership with family and friends and types of partnership * Capital gain tax (Capital Gains Tax) and the 6-year rule * Are buyers agent fees and stamp duty tax deductible   Now, please remember that this podcast is general information only and is intended to assist you in understanding the different investment structures and some tax regulations related to Australian property. It is by no means a full representation of all aspects of the property tax and listeners/viewers should not rely on the information provided in this podcast when making their investment decisions. The Property Couch and our guests strongly recommend that listeners/viewers first seek qualified and professional advice to assess their individual and unique circumstances before making any decisions. For more disclaimer, please click here. If you like this podcast: “Different investment structures (family trust, company, partnership), Capital Gains Tax and other tax related topics”, 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 here: http://www.thepropertycouch.com.au/topics/

Peter Koulizos is back on The Property Couch podcast! The last time Peter joined our podcast, Bryce and Ben couldn’t stop discussing about his thesis on Gentrification. This time, with his thesis almost at its completion stage we are more than keen to invite him over and discuss in detail the findings his thesis has uncovered. On top of that, as a bonus, they will also be revealing their 2016 Property Outlook for the Australian Market. With the dropping auction clearance rates in Sydney and Melbourne market, the increasing high density apartments in the Gold Coast area and the up and coming investment spots in Brisbane, this segment is a must-hear for all those who are serious about property investing. Some of the issues that they’ve touched on in this episode are: * Which part of the cycle is each state currently in * Things to look for when selecting an investment grade suburb and property * Type of properties to stay away from * Development or changes affecting the economic activities in each state   Resources mentioned in this podcast: * Peter’s Book: Top Australian Suburbs: A Guide for Investors and Homebuyers – Click here * Peter’s Book: Property vs Shares: Discover your knockout investment strategy – Click here * The Property Couch’s Book: The Armchair Guide to Property Investing – Click here * If you are interested in joining Peter’s course, please email him at: Peter.Koulizos@tafesa.edu.au   If you like this podcast: “2016 Property Outlook and Findings on Gentrification”, 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 here: http://www.thepropertycouch.com.au/topics/

We are back on with the Questions and Answer time for our Summer Series. This week, Bryce Holdaway and Ben Kingsley will be answering the questions below from our fellow listeners. Thanks again for submitting your questions! * Question from Alex: Aside from getting into property earlier or not selling… knowing what you know now, what 5 things would you both have done differently? * Buying sight unseen questions from Lewis : We are currently living overseas and want to want to move back to Australia in a number of years. Late 20s and want to start buying investment properties in 2016, we have two questions. 1. Best advice for buying property without being able to walk through the property. 2. Best area to buy in Australia if you don’t know where in Oz you want to move back too! * Question on tax implications on property from Chris : A question relating to turning an investment property into a PPR. My partner and I just completed construction of a home which was intended to be an investment property for 5-7 years after which time we were going to move in and make our family home. Situations have changed and we will be able to completely pay off and move into the new house within the next 12 months. Will there be any issues arising from all the tax deductions (ie interest during the build, deprecation etc) Since we will be changing the purpose of the house? * Investment grade for regional properties question from Lou: Loving the podcasts – succinct and very informative so thank you! I’m currently saving for my first investment property and I have a couple of questions. I am considering regional Victoria (as I grew up there) and was wondering how ‘Investment Grade‘ the properties are, particularly along the Vic/NSW border. Should I be looking here or become more ‘borderless’ in my approach? I am looking to purchase in 2016 however I’m concerned with the property cycle, should I hold off another year until the market drops or is it likely to only increase in the short/medium term? I understand you can only give general advice, but I would like to know what the generally suspected trends are. * Joint venture question from Christopher: I am a first time investor and am looking at buying an older federation era home. For a 3 bedroom home of this style you are looking at a purchase price of around the $550,000 mark. Due to an over inflation of new homes, I can see these are the only worthwhile investments for the future as they have generally around the 1000 sq m block at less than a km from the CBD and are rising in value at around 2-3% per year depending on what renovations are performed where they can be anywhere up to 10%.  To find these funds I am looking at doing a joint venture with a good mate of mine who is a builder, do the minor renovations without overcapitalising, hold it for maybe 5 years rented out for that period and then sell it for hopefully a decent capital gain.  Are joint ventures worth it and will this be a silly strategy for such an old house as depreciation will have been used up already and these older houses can be a pandora’s box once opened up and end up costing way over budget?   Free resources mentioned in this podcast: * Episode 29: Common mistakes when investing in property   If you like this Q&A episode, don’t forget to rate us at our iTunes channel (The Property Couch Podcast

Welcome to The Property Couch’s first episode in 2016! Joining us on the podcast today is Paul Baker from Independent Property Inspectors Melbourne. As mentioned in Episode 22 and Bryce’s video on “When to conduct a building and pest inspection“, pre-purchase building inspections are non-negotiable for us. We cannot emphasize it enough the consequences of buying a property only to discover later on that a lot more money has to put in to ensure its livability. Not only will this impact the investor’s cash flow but it will also affect any property plans that has been put in place. Leveraging from Paul’s background as a building inspector and also a builder, Bryce and Ben will chatting about: * Why is a pre-purchase building inspection so important * What are the obvious tell-tale signs for water damages, footing and stumping issues * How much should a buyer expect to spend on an inspection * When should an inspection be conducted * Best way to decipher a building report * and a few horror stories from IPI’s Book of Horror!   Here are the pictures promised in the podcast!               Click here to download the PDF for these horror stories.   And here’s the HSBC video that Ben mentioned:     If you like this podcast: “Why should you conduct a Pre-Purchase Building Inspection and what could go wrong? – Chat with Paul Baker”, 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 here: http://www.thepropertycouch.com.au/topics/

For the last episode of 2015 and as promised for our Summer Series, we will be going through quite a few questions! Bryce Holdaway and Ben Kingsley will be answering the questions  below from our fellow listeners. It’s going to a full on one so sit tight!

Merry Christmas! It’s the first Christmas on The Property Couch and Bryce and Ben is definitely in a festive mood. In this podcast they will be sharing some of their stories on mortgage brokers and what role do they play in building a property portfolio. We’ve spoken about this before in Episode 17 where we talked about the concept of a Personal Banker. In this episode, we’ll list out the criteria to look for when you are thinking about including a mortgage broker into your property team. Yes, it does need to be an investment savvy broker but what else? Bryce and Ben will also be discussing about why loan structure and a sound finance strategy is crucial. We will also be answering this question from Andrew: Hi guys, loving the podcast. You’ve talked in past episodes about what to look out for when choosing to engage a property manager for your investment property. Could you discuss how you would go about selecting a mortgage broker? I have utilised the services of mortgage brokers in the past and have found that many of them are purely transactional and only use the big 4 lenders.     If you like this 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://www.thepropertycouch.com.au/topics/

Our next guest on The Property Couch is Steve Waters from Right Property Group! Steve comes from a Buyers Agent background and his company is part of the Property Investment Professionals of Australia (PIPA) association. With a combined experience of more than 30 years in the property industry, this trio will be chatting about: * What triggered Steve to start his investment journey and the biggest mistake he had ever made in his own portfolio * The philosophies and strategies in property investment – Capital growth vs cash flow * Their thoughts on new developments – the good, the bad and the ugly * What do they look for in asset selection * Where do they see the most pain in a market correction * Why do you need professional advice when investing in property and where to look for them   If you like this podcast: “Investment Strategy, New Developments and Professional Advice – Chat with Steve Waters”, 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 here: http://www.thepropertycouch.com.au/topics/

This week on The Property Couch, Bryce and Ben discuss about the moving parts of a cash flow management strategy. As compared to Episode 3 (Four Pillars of Mastery – Cash Flow Management) where we talked about the flow of money, this podcast is mainly about the Money and Wealth Accumulation Model. It includes the variables and assumptions to consider when modelling sophisticated wealth outcomes. As this topic can be fairly detailed, we strongly recommend our listeners to have the diagram open while listening to the podcast. We will also be answering this question from Bradden: You often refer to paying down debt during your talks as a means of creating passive income. Is there a strategy of paying down debt on your rental properties? Is it just as simple as paying P&I? Do you only start paying down debt once you have finished your accumulation phase? Does this only happen when you start to sell one of your properties? I’m interested in hearing your thoughts on paying down debt. PS: Ben’s not a bad bloke for a Collingwood supporter.   This topic is also discussed in Part Three (Section 10) of our book: The Armchair Guide to Property Investing. For those who have the book, you can also refer to page 219 for additional reference. And here’s the video mentioned in the podcast:     Free resources mentioned in this podcast: * Money & Wealth Accumulation Model Fact Sheet – Download here * Part Three (Section 10) of the Book – Order a copy here   If you like this 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://www.thepropertycouch.com.au/topics/

Introducing the first episode of our summer series! Let’s kick start with a Q&A episodes. If you have a property related question that you couldn’t solve or needs an opinion on, please do not hesitate to let us know here. In this episode, Bryce Holdaway and Ben Kingsley will be addressing some topics on: * Line of Credit (LOC) question from Brad : Firstly, love the podcast, but have to agree that the sports commentary should be left out. (

As mentioned before, getting the right strategy and perfecting the art of asset selection is crucial to any property investors. But what happens once the contract is signed? This time on The Property Couch, Bryce Holdaway and Ben Kingsley talks about the post-purchase process when buying an investment property. Bryce started off the podcast with an analogy. Imagine you on board a plane and it’s about to depart. When a plane takes off, from the moment it leaves the tarmac to the point it levels out at 30,000 feet, that’s when it uses most of its fuel. That’s the same with property investors. They use most of their mental fuel when they are going to buy the property but once the deal is done, most often forget that they still have the rest of the journey to complete.   Looking to donate to Ben’s Movember? – Click here   Free resources mentioned in this podcast: Property manager checklist – Download here   If you like this 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://www.thepropertycouch.com.au/topics/

In their daily role as a Buyers Agent and Property Investment Advisor, Bryce and Ben often conduct comparable analysis on properties that they are going to buy. This is a crucial part of their due diligence because it demonstrates the suitability of the property for the client’s property plan and also sets a starting point for their negotiation process. So in this episode of The Property Couch, they will be sharing the process that they go through when conducting a property price research. Our hosts will also be sharing their “text-book” floor plan, understanding under quoting in a sales campaign and ways to decipher a more reliable price range using the auction clearance rates as a guideline. Listen to the podcast to find out more!   If you like this 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://www.thepropertycouch.com.au/topics/

Scarcity. It is one of the three filters in our asset selection criteria and you’ve probably heard Bryce and Ben talking about it numerous times in previous podcasts. In this current market condition, it is more important than ever to ensure you nailed the scarcity factor right. But how do you determine if a property is scarce or not? In this episode, our hosts will be breaking the scarcity factor into two parts and will be sharing their very own “Scarcity Scale”. As mentioned previously, location usually does the heavy-lifting on the performance of an asset so, Bryce and Ben will be starting with area/location (right side of the scale) and then move on to the property type.   PS: If you would like to check out Ben’s Movember Pledge, click here.   If you like this 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://www.thepropertycouch.com.au/topics/