The Property Couch

This week on The Property Couch Podcast, we are going through some of our listeners’ questions. But before that, Bryce and Ben will be discussing the 25 basis point cut passed on by the Reserve Bank of Australia early this week. How will this impact the Australian Economy, how much have the banks passed on and will there be any flow-on effect on the Australian household? Here are the questions for today’s podcast: * Question on planning for a reduction in income from Matt: How do you plan for a reduction in income when you are still a reasonable distance from retirement and would it be wiser to maintain current income for long term potential or is there a process that could be applied? * Question on bidding tactics at auction from Adam: I was hoping in your next Q&A perhaps Bryce might be able to address the topic of bidding tactics at auction. Most of the tips and strategies you read amongst the property press propaganda are ridiculous things like dress in a suit and pull up in a sports car out the front. In your experience is there any value in these sorts of image approaches? or concepts such as ‘knockout bids’ and bidding late, or are auctions pre-determined events going to whoever was always going to pay the most. I know you will say the gold standard is to employ a buyers agent but I’d be interested in your tips for someone keen to DIY.   Some of the resources mentioned in this podcast: * Episode 53 | The Money SMARTS System – Listen here * Auction Tips video series – Watch here   If you like this Q&A episode (RBA Rate Cut, Planning for Reduction in Income and Bidding Tactics at Auction), 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/

  It is Special Guest Day and we’ve got Damian Collins from Momentum Wealth with us on our very first Vodcast! Just a bit of a background on Damian, he is an established property investor, the founder and managing director of Momentum Wealth, a Perth-based property investment and buyers advocacy firm and is also on the board of PIPA which means he is very well qualified to talk about the art of investing in property and building a portfolio. So for today’s episode, the three of them will be talking about: * Damian’s experience as an investor and what motivated him to build his portfolio * The mistakes, lessons and investing tips he learned as an investor * How is the Perth’s property market doing and where is it on the cycle * Was there a sentiment shift considering the recent economic changes * How does he conduct his property research when it comes to asset selection * What are his principles and investment strategy when it comes to building a property portfolio in a tough market * Some of the horror stories that he has seen in his seat   PS: We hope you enjoy watching the video and we would really like to hear what you think about it! If you like it, let us know and we will produce this more regularly.

We’ve received a lot of great feedback regarding our Money SMARTS System and quite a number of our listeners have requested us to unpack a little bit more. So for today’s episode, we will be talking about some of the dumb things people do with their money! If you’ve listened to all our previous episodes in this podcast, by now you would have understood that good money management is crucial to building a successful property portfolio. But this is easier said than done. What we would like to highlight in this episode is small things leads to big things. A tiny expense here and there would eventually sum up to a significant amount if not monitored properly. So Bryce and Ben listed 12 bad habits that they’ve seen and here’s the top 5! * Having too many separate individual bank accounts * Not changing your lenders simply because you are too familiar with the facilities and online banking arrangement * Thinking credit card money is your money * Not paying yourself first * Not having an offset account Tune in to find out the rest!

Before you go on, let’s make this very clear: We have full respect for real estate agents out there. This episode is not about highlighting the differences between us and them. Instead, what we are focusing today is the full role of a real estate agent. As insiders of the industry, we noticed that a lot of buyers out there do not seem to realise that the real estate agent is not working for them. Real estate agents work on behalf of the vendor and hence, at the end of the day, the role of the agent is to sell the vendor’s property to the highest bidder so buyers should not be expecting the real estate agent to be offering them any discounted price. So today’s episode is about understanding the process the agents have to go through, the decisions they have to make and from there, suggest a few ways that buyers can implement to outsmart a real estate agent. Bryce and Ben will be sharing their tips on reading an agent’s body language, picking up the subtle messages, what does the property price guides actually mean and more! Tune in and let us know what you think!

Back to back Questions and Answers episode! We’ve had a great time yesterday on our Facebook Live and hence we thought we should answer some of our other listeners’ questions. This week, Bryce and Ben looks at the questions below. Thanks again for submitting your questions!:   * Question on entering the property market from Glenn: I have 2 daughters in their early 20’s. What advice can you give them on the best way to enter the property market? Thanks * Question on buying a property with another person from Stevie: I am interesting in the issues associated with buying property with another person. For example, I currently own two houses (bought years ago) with my brother as investments and I now want to buy another within to live in (as I can’t get a loan with just my salary and want to use the equity in the houses in lieu of deposit). This will then restrict my brother’s borrowing capacity to buy a property to live in if he wants to do so in a year or so, and we are at a bit of a (friendly) stalemate with what to do about it – buy another or not. * Question on Buying a property with another person from Michael: Hey guys – just wanted to say I’m loving the podcast. Found it about a week ago, have listened to hours of content in a short amount of time. Such a great resource. Has been good to hear that a lot of my ideas and research is being validated in what you’re saying, but has also given me some other things to think about. I’m about to buy my first property in partnership with my cousin, am making an offer today on a great find that’s too good to pass up. 15km north west of the Melbourne CBD. $150k under median price in the area. Quick sale needed as the vendor needs finance asap. Just wondering, what would be a bad figure in terms of rental yield and annual growth? And then I guess what would be the better figures to see? Thanks again for such a great learning tool. * Question on rentvesting from Samuel: I am very open to the idea of Rentvesting, however I am torn between Rentvesting or purchasing a Principle Place of Residence, of which I would live in for 12 months and then be rent out for 6 years (thus avoiding CGT), plus rent out the other room/s whilst living in the property. I would love to hear both your thoughts on this one given the current market conditions and also the Gold Coast Suns performance this year.   Some of the resources mentioned in this podcast: * Episode 54 | Entry into the property investment market, debt reduction and investing in house and land packages – Listen here * Episode 59 | Rentvesting: What is it and who is it for? – Listen here * Facebook Q&A Replay Video – Watch here   If you like this Q&A episode (Buying a property with another person, security guarantee and rentvesting in Gold Coast), 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/

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 Australi...

It has been some time since our last episode on investing and mindset framework so this time, Bryce and Ben will be unpacking the common complaints they hear from property investors. Here are the top 9! * Wrong asset * No buffer in place * Mentoring was actually salesmanship * Not maximising tax depreciation with Quantity Surveyor * Solo sport * Self property management (Check out Episode 31) * Poor cash flow management (Check out Episode 3) * Not starting early enough * Selling   Apart from that, they will also be sharing some insider information on ‘offers’ they’ve received from property spruikers out there, Labor’s debate on negative gearing and the changes on foreign buyer stamp duty. Also, if you are interested in the BMT Tax Depreciation Application Form mentioned in this podcast, just fill in the form below and we’ll send it to you right away:   Other resources mentioned in this episode: * Property manager checklist – Download here * Ben’s Money Magazine article – Read here   PS: We’ll also be holding a Live Q&A Event on Wednesday, 29th of June at 8:30 pm. Check out our Facebook page for more information!   If you like this episode (Common complaints we hear from property investors), 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/

We have a guest on the show today! Kieran Clair, Editor of Australian Property Investor Magazine joined Bryce and Ben to talk about his role in the media and publication industry specialising in property investing. Prior to journalism, Kieran was an experienced property valuer and has more than 20 years of experience valuing properties for owner occupiers and property investors. So for today’s show, the three of them will be discussing: * Kieran’s experience as an investor and what motivated him to build his portfolio * The mistakes, lessons and investing tips he learned as an investor * His role as the editor of API Magazine * How the property valuation industry has changed over the years * What’s the property valuation process like * The types of properties that tend to be valued at below market price * Factors and considerations that would affect a property’s value from a valuer’s point of view   Other links: * Herron Todd White’s Monthly – Find out more * Any feedback for API Magazine? Email them here: editor@apimagazine.com.au   PS: You may have noticed that the audio quality for today’s podcast is not as clear as it usually is. We experienced a few technical difficulties while recording and we do apologise for this hiccup.   If you like this podcast: “Property valuation process and the journey of a property investor – Chat with Kieran Clair”, don’t forget to rate us on 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://tpcaustralia.wpengine.com/topics/

Well, technically winter is already here. However, we will be talking about the Property Market in this episode and for all of you who are a fan of Game of Thrones, you’ve guessed it right. It’s not going to be a good news story. Now, you’ve heard us talking about the danger of high-density developments before but this time, we are hoping to solidify our message by sharing some numbers with you. It is not a secret that we’ve seen a whole lot more of high to medium density apartments coming into the market in the last 24 months and a lot more will be completing in the next 18 months. Below is the table that Bryce and Ben were talking about in the podcast.   Capital city # of Unit Sales Average Annual unit sales past 5 years Total New Units next 12 mths Total New Units next 24 mths Sydney 34,216 43,442 34,300 81,696 Melbourne 28,506 30,781 29,541 80,503 Brisbane 15,880 14,932 16,652 44,511 Adelaide 6,988 6,195 2,581 6,002 Perth 5,331 6,834 7,031 13,797 Hobart 1,026 1,005 201 442 Darwin 864 1,026 985 1,256 Canberra 3,384 3,929 811 2,922 Combined 96,195 108,144 92,102 231,129 * This data is an extract from CoreLogic’s article dated 16 May 2016 called ‘Record high unit construction increases settlement risk’. To read CoreLogic’s commentary, please click here. So how will this affect the Australian Property Market and its existing properties? Will there be a significant market correction and if so, should buyers stay off until this happens? Bryce and Ben will also be answering a question from Vlad: John Symond on 3AW predicted a 10-20% fall in property prices if Labour’s policy on negative gearing were to be implemented. Given the uncertainty, is it prudent to wait until after the election to make decisions about investing in property and to see, should labour win, what their sledgehammer will do to the market?   PS: We’ll also be holding a Live Q&A Event on Wednesday, 29th of June at 8:30 pm. Check out our Facebook page for more information! If you like this episode (Winter is coming and the air will be colder up high), 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/

Today’s episode starts with a recap on the AREC16 Conference (ps: Bryce refused to talk about AFL). Bryce and Ben also discussed about the possible impact of technology to the property market for example, what would happen if we don’t need to drive a car in the future anymore? Would car spots still be a considerations in asset selection? They then moved on to answering a couple of the listeners’ questions below. Thanks again for submitting your questions!:   * Asset selection question from James: Love the podcast! Just wondering if there’s a big difference between investing in a 2 bedroom house or a 3 bedroom house. Everyone is telling me ‘the more bedrooms the better’ however others have told me that for an investment it doesn’t matter. Thanks! * Next step question from Mat: My wife and I are on the move from Newcastle (Whitebridge) to Coffs Harbour on the NSW mid north coast. Our house in Whitebridge is our first home which we purchased in 2011 for 365k and is currectly valued at 490k. Ideally we would like to keep our house in Whitebridge as an investment property and look to buy in Coffs Harbour. The rental return will be $420 which comfortably covers the mortgage at interest only. I see the house as being a good investment grade property and ticks the boxes that you both talk about in the podcasts. What should we do? * Question on strata properties from Sarah: I’ve got a question about strata properties. We have two townhouses, one is in a smaller complex with 8 townhouses & the levies are reasonable, there is rarely any issues with maintenance etc. The other one (our first purchase!!) is in a complex with 30 townhouses/units, the units have lift access/underground parking & we’re paying about $985 a quarter in levies.We are constantly getting correspondence from the strata company with owners having maintenance issues, leaking toilets/tiles, graffiti removal, underground car park issues…. We’ve committed the property, it will give good growth & should be neutrally geared in the years to come (held for2yrs to date) so selling is out of the equation.Would love to hear your thoughts on strata, when is it a good idea, when is it a bad idea. Should I be religiously sending back votes for meetings etc? When I read the strata documents that require owners response, it’s all dutch to me, can you explain how to respond to things I can vote on & making sense of the minutes etc. Thanks guys, appreciate any advice you can give on strata. * Question on timing the market from Leighton: I’d love to hear Bryce and Ben’s thoughts on the property cycle and the part that it plays in investment decisions and how the cycle ties in with “timing the market”. It seems that different parts of the country operate in different phases of the cycle.   If you like this Q&A episode (How will technology impacts the property market, investing in strata properties and more), 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.

It has been quite some time since our last case study so this time on The Property Couch, Bryce and Ben will be discussing one the case studies that we’ve received from our fellow listeners! Here’s what Tom wrote to us:     After listening to Episode 56 where you discussed various other case studies I thought I might write in to see if you were interested in discussing our situation. I’ll try and keep it short! Basically, my partner Kirby (30yo) and I (32yo) are both teachers on a combined income of about $160k. 3 years ago we got the bug to do something with our money but weren’t exactly sure how. Our simple goal is to have choice whether to work or not. If we had no loans to service we imagine a passive income of $80-100k would be more than enough, and any more is a bonus! We had a PPOR property valued at a tad over 300k with a mortgage of ~200k, limited other expenses and a disciplined approach to spending. Property sounded like a great avenue so we went about increasing our knowledge. Unfortunately our naivety led us to a property investment ‘education’ group where although we have learn a lot we have made what we think are two poor investment decisions. We overpaid for both to fatten the developer’s margins. Our first was brought using the above equity in our PPOR and was a House and Land duplex in Dakabin, Qld for circa $500k. Although the yield is decent there were many costs that the property investment ‘education’ group failed to mention/understand that we have been left with, and there is little scarcity or owner occupier appeal to make growth a good prospect. We have always had tenants in both sides which has been great. We borrowed 90% on interest only terms. About 18 months ago we signed another contract, this time on a 4 bed H & L in Doolandella, 18kms out of Brisbane for circa $400k. After a long land settlement this was completed yesterday and will be advertised for rent tomorrow. Looking at about a 4.9% yield. Again, this is on an interest only loan at 90%. Deposit and costs were paid from our savings – I know, huge mistake! Right after we signed this contract we found your podcasts which have taught us that there are so many fundamental errors in our property selections, and if we had our time again would have purchased existing properties with scarcity and owner occupier appeal. We have just had our first child and Kirby is now off work. We have a ~$45k buffer in our PPOR offset and somehow are still managing to save, even though Kirby is off work, although receiving maternity leave payments. We use a credit card to pay for 95% of our spending, and repay at the end of every month to ensure no interest payments. So, we are still very keen to use property as our investment vehicle and have learned so much in the last year but are now stuck as to our next step. We doubt we would have enough equity to purchase again now and the fact Kirby is off work will severely hamper our serviceability. She will return to work at the start of 2017. Questions: * Do we sell both/one of our current properties? We’d like to keep if possible as I am a firm believer in buy and hold, although will they hamper us moving forward? * Where to from here? Any information from you would be extremely appreciated. I’m sure there are a number of people who have used ‘

It’s Q&A time again! This week on The Property Couch, Bryce Holdaway and Ben Kingsley will be answering the questions below from our fellow listeners. Thanks again for submitting your questions! * Next step to building a portfolio question from Derrick: I was listening to your “tips for FHO’s” episode where you advised a gentleman to think about getting a one bedder in a desirable suburb (like Bondi) as his first place. Coincidentally I pretty much did that 4.5 years ago…buying a 1 bedroom unit in Woollahra. So you could say that I am that guy four years later! The only difference is that my apartment wasn’t part of an investment strategy at the time, I just liked the apartment! I am at the stage now that I want to get into property investing but at the same time I’m conscious about finding my second place of residence for my wife and I in about three years…preferably living in a similar area. So I’m trying to tackle two thoughts at once: how do I invest in my long term future while figuring out how to afford my next home? What should someone like myself be thinking? Should I be looking to invest and build more equity for our second place? Should I sit on our current property and save, while looking to use my current place of residency as a future investment property? Or is there another route? Thanks for your advice and thanks again for the show! * Size of portfolio question from Jason: Started to listen to podcast recently and love it keep up the good work. I just wanted your guys opinion on the ability to build large portfolios now in this current lending environment. I have heard you guys mention that you only need 4 to 5 properties to have a passive income and live into retirement but what if you want to have larger portfolio say of 10 or 20 properties is this achievable for people on average incomes like previously? Or has the APRA changes stopped this from occurring in the future? * Question on leverage from James: I’m 27 and looking to make a good go at property investing. I have recently sold my first investment property and now have a lot of capital from the sale. My investment now is a new property being finished in 12 months . My question is after selling down the 1st investment property, am I better off paying for the new one in full (using the rental income to service another investment property afterwards), or should I purchase a few more properties while i have a large sum off money and spreading the cash around to gain more houses for a larger passive income later down the line. Bearing in mind my age and goals. Thanks guys! and keep up the great work. * IP or PPOR question from Karla: Hey guys. I love the podcast and the sign offs too Ben! My question is, if you are renting and have the ability to purchase a property. Is it better to buy an investment property or a principle place of residence (IP or PPOR) first? Which would set you up better for the next step? It feels like a bit of “chicken or the egg”. I’d love to know hour thoughts! Keep up the good work and I can’t wait for footy season to hear your commentary! * Case study question from Deanna:  I am 22 yrs old and am convinced of the benefits of property as along term wealth building strategy, for now I am trying to develop as much understanding as I can. My questions are as follows: * Do you recommend that the first property that someone buys is for PPOR or can it sometimes be an IP? For example this may be relevant for young people currently living in Sydney who are renting but would also looking to be a border-less investor.

What a week in the property industry! It started off with ABC’s Four Corners Monday night segment called Home Truths. This episode focused on housing affordability and negative gearing and they’ve interviewed a few parties for this segment. Following that, we have the Cash Rate announcement at 2:30 pm on Tuesday. As widely expected, the Reserve Bank of Australia has dropped the cash rate by 25 basis point to 1.75%. A few factors contributed to this decision but one of the main reason is the deflation recorded in the January – March 2016 CPI data. Although most economists have forecasted this movement, there aren’t many who talked about the changes that lenders would make. Would they pass on the full rate cut? What other changes would they implement following RBA’s decision? How will this affect the current mortgage holders? Finally, on Tuesday night, we’ve got the 2016 Budget announcement by Scott Morrison. With so many speculations surrounding the negative gearing policy, what would the Government propose? Hence, this week on The Property Couch podcast, Bryce Holdaway and Ben Kingsley will be talking about all these discussions and how will it affect The Great Australian Dream. Tune it to start listening now! Resources mentioned in this episode: * RBA May 2016 Cash rate announcement – Watch here * 2016 Budget Announcement – Read here * ABC Four Corner’s segment on housing affordability – Watch here * ATO’s Taxation statistics 2013–14 – Read here   If you like this podcast: “Does the Great Australian Dream still exist?”, 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.

Listeners of The Property Couch would probably know our view on property renovation. If it’s a small project such as a fresh paint, we are all over it but if you are looking at renovating for profit, we always ask our listeners to proceed with caution because a renovation project can be quite daunting for the inexperience. So this time, Bryce Holdaway and Ben Kingsley invite a close of friend of theirs and a fellow property expert especially when it comes to renovation, Jane Slack-Smith from Your Property Success to share some of her views and tips on property education and renovation! The three of them will be discussing about: * What are the different types of property education or seminar out there * How to ensure you are getting independent views from these seminars * What’s the right mindset when it comes to property renovation * Characteristics of a successful renovator * What considerations and risk that you need to look at prior to starting a renovation project * Property renovation tips for beginners   If you are interested in the 20 Essential Renovating for Profit Tips mentioned in this podcast, just fill in the form below and we’ll send it to you right away:   Other links: * If you would like to be notified when Jane’s course is available, feel free to drop us a line here: info@thepropertycouch.com.au If you like this podcast: “Finding the right property education and property renovation tips – Chat with Jane Slack-Smith”, 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://tpcaustralia.wpengine.com/topics/

It’s Episode 60 and we’ve got a special guest on the show today! Bryce and Ben have invited Chris Gray, host of  ‘Your Property Empire’, on Sky News Business Channel and CEO of Empire Property to talk about all things property. Apart from being a property expert, Chris also manages his own property portfolio and is currently a rentvestor. In fact, he has been rentvesting for quite some time. So, drawing from his experience, the three of them will be discussing about: * How did he built his property portfolio through rentvesting * The considerations that an investor will need to think about if they decide to adopt this investment strategy * The required mindset for rentvestors * The scenarios where rentvesting is worth implementing * What kind of expectation you would get from family and friends * How to look at the numbers and ensure your cash flow is taken care of They will also be discussing about the lessons learned along the way and what they think about the current Australian Property Market. If you are interested in the Capital Growth Break Even Calculator mentioned in this podcast, just fill in the form below and we’ll send it to you right away:   You can also download a copy of Ben’s Money Magazine article here: Download here If you like this podcast: “Building a portfolio through Rentvesting – Chat with Chris Gray”, 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://tpcaustralia.wpengine.com/topics/