The Property Couch

As 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!

In recent weeks, a few lenders have begin to tighten their terms and conditions on apartments in certain suburbs across Australia. Needless to say, some commentators are putting a blanket statement on the future of apartments and claims that they are looking rather bleak at the moment. However, how much impact will these changes have on apartments value and if so, will it affect all types of apartments? Listeners that have followed this podcast since its inception would know about Bryce and Ben’s view on apartments. Whether it is a brand new one bedroom apartment in the city centre or an attractive off the plan deal, our hosts still prefer established apartments in great locations. As property investment advisor and buyer’s agents, they have advised hundreds of clients to invest in apartments so, are they worried about this lending restriction? Are they expecting a massive drop in apartments value and where are they seeing this happening? Listen to this podcast to find out more.   The article mentioned in this post: * Apartment lender AMP blacklists more than 140 suburbs – Read more   If you like this podcast: “Will apartments value drop by 50%?”, 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/

The whole idea for this podcast is to help others become successful property investors (or perhaps avoid them becoming unsuccessful property investors). But Bryce and Ben know that the more successful you become, the more likely you are to be criticised. Unfortunately, it is far easier for people to share their thoughts on what you are doing wrong and when something does turn up a little haywire, you would get the usual , “I told you so”. Now, this is probably very different from the usual topics that we talk about in this podcast but Bryce and Ben have both gone through this journey. In fact, they are still facing these situations occasionally. So in this podcast, they are sharing some of their experiences and also some positive mental attitude tips that helped them along the way. To have a successful property portfolio, you’ll need to make sure you are ready for it and it’s not always about being financially ready. It’s also about having a strong mental attitude. In addition, they will also be sharing what they think are the traits of successful people as opposed to the unsuccessful ones.   Some of the motivational speakers mentioned in the podcast: * Zig Ziglar – more * Tim Ferris – more * Tom Panos & John McGrath – more * Trevor Hendy – more   If you like this podcast: “Investment savvy mortgage broker and why interest rate is not king?”, 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 Q&A time! 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! * Exiting a contract question from Alex: Hi, Just looking for some advice as the more I listen to the podcast (and read your book), the more I think my first IP buy could be better. I’m currently on a defacto visa so can’t buy anything but new properties which led me to an off the plan development in Brisbane. While its marketed very well and made out to be a great buy, it goes against all you talk about- high rise, buying through a unqualified salesman, no room to improve, rental guarantee, and high strata. At the time it looked good but the more I understand what makes a good investment, the more I think I could do with the $40k deposit I put down. My question is, is there any way out of the contract that won’t cost me? It’s not due to be built for another 2 years so wondering if I could ask the developer to renege on the contract without penalty or even onsell it for cost price. I’ve started putting away some cash every week just in case it comes in undervalue but would rather not be in the position of ‘hoping’ this doesn’t happen. Would appreciate any advice to help! * Crowdfunding questions from Carol: I have heard people talking about “crowdfunding” being the next property investment strategy. What is “crowdfunding” and how will it work? * Ownership questions from Rob: What property ownership structure should investors use when buying an investment property? Individual, trust, company etc. Is there a need to balance tax advantages with long term asset protection on this issue? * Global events question from Cookie: I have an economy/finance related question and would like to hear your discussion on it. As we step into 2017, the market has been flooded with negative sentiment news. Lots of countries are under the water as oil and other commodity price plummet. China economy slowdown and share and currency tumbled. In the middle-east you have ISIS terrorist and European country have migration crisis. The central federal government around the world response to the crisis with more and more quantitative easing money printing. I feel like 2008 all over again and this time the crisis is on a global scale.The question I want to raise here is what will happen to the property market and banking policies if the crisis come in the near future? Few friend of mine thinking that the property price will go down like during the great depression. Am I best to wait until the crisis come and then purchase undervalued asset? But if there is a crisis and bank run, will interest rate raise to double digit and banks tighten the lending? What happen to my home loan if there is a bank fail? European central bank is doing negative interest rate already, will Australia heading to this direction one day? How should I position myself now so to be prepare for the day to come? * Case study question from Chris: Brief Bio – 33 yrs old. married with one child, live in Sydney, workfull time. have three properties. two in Townsville (both rented) building one in Melbourne currently. Currently renting in Sydney as units where we want to live sell for $800 k to $1 million. However we can rent and invest. We put all our money into our offset and pay out the credit card at the end of statement period. We also have a full functioningPAYG withholding variation in place....

The last time we did a podcast on finding a mortgage broker was in Episode 43. We’ve received a lot of feedback after that episode on what kind of questions the borrower should ask to determine if the broker they are speaking to is investment savvy and if there are any websites that sort of serve as a directory. So this time around, our hosts will be sharing a framework to help you understand the difference between a banker and an investment savvy mortgage broker. They will also be focusing on the differences between lenders and things to look out for between the lenders. Lastly, they’ll discuss the all time question on, “Why is interest rate NOT king?”.   Free resources: – Watch Ben on The Today Show here – Money Magazine’s March 2016 Cover Story – Money SMARTS System – Listen here   If you like this podcast: “Investment savvy mortgage broker and why interest rate is not king?”, 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 Q&A time! 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! * Entry into the property investment market question from Aaron: Hi guys! could you possibly talk about entry into the property investment market? Specifically how much money you need? I have some money sitting in a term deposit but I have heard that you need more like $40,000 before you can even look at starting out. If that’s true, then I need to keep saving. But I keep thinking to myself “what if its better to start investing that money into cheaper property so that you can start investing sooner rather than later”. How much money should people have before starting? * Debt reduction questions from Marty: I have just finished the new book and found the content informative and practical. I do however find myself grasping for answers about debt pay down in the practical section. How does the graph move to a zero debt position on IOnly loans? I would like some more detail on this area as it’s probably the missing link for me in the whole process. In case study three a couple with surplus annual income of 36k Pays 1,000,000 in principle in 10 years with IO loans. The property selections are not high yielding so I’d expect the cash flow to be only just positive even at year 15. Am I missing something? * Debt reduction questions from Mitch: Hey guys. Love your podcasts and your book. Just a quick question about paying down debt to start receiving passive income. In your book you say to set up all loans to interest only, if I want to retire off passive income at the age of 40 how do I pay down debt without selling any properties and without access to my superannuation? * House and land packages question from Rob: Hi Guys, love the podcast – I’m an avid listener and after finding you, went back to Ep 1 and went through them all. I’m just about to place an order on the book… Fundamental Question: Is a house and land package always a bad investment, or are there situations it can work as an investment property?   If you like this Q&A episode (Entry into the property investment market, debt reduction and investing in house and land packages), 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/

By now, our listeners should understand the importance of good money management habits. It is the core of building a successful property investment portfolio and has been reiterated multiples times throughout this podcast. Since episode 3, as part of the Four Pillars of Mastery, Bryce and Ben have talked in various occasions about Cash Flow Management and the flow of money in your household. This includes where money comes from, types of spending and types of investments for your surplus. In episode 41, they talked about the moving parts of cash flow management otherwise known as the money and accumulation model. This model looks at variables and assumptions to consider when you’re modelling sophisticated money and wealth outcomes. On page 58 of the Armchair Guide to Property Investing, they introduced the money SMARTS system. It’s a money management system and the name stands for Surplus, Mindset, Application, Resources, Timelines and Strategy. The book provided an overall summary of each section and also some tips on how you can set up this account structure yourself. But we’ve received some feedback that our readers would like us to explain this little bit more so that is exactly what Bryce and Ben have done in this podcast. As an extension of the money SMARTS system, we are also sharing a “cheat sheet” on which account to use for different types of expenses. Just fill in your details below and we’ll send you the link to download it.       If you like this podcast: “The Money SMARTS System”, 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 our One Year Anniversary!!

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://tpcaustralia.wpengine.com/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 on the o...

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://tpcaustralia.wpengine.com/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://tpcaustralia.wpengine.com/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://tpcaustralia.wpengine.com/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://tpcaustralia.wpengine.com/topics/