Episode 116 | Q&A – How does Guarantor Loan actually works, Fixing a Joint Venture, Investing in WA and more

It’s Question and Answer time!  Now, we answered a few questions in the last episode but realised that we wouldn’t be able to respond to all of your questions at this rate, so we will be doing a Facebook Live very soon. Stay tuned for that!

On another note, there’s an exciting announcement at the end of this episode so make sure you stick around. And here are the questions that we would be answering today:

 

  • Question on Guarantor Loan from Kate:

My partner and I earn a combined gross income of roughly $130,000 annually. We have a small amount of savings – about $5000 (remember we’re getting married). But really nowhere near the amount needed for a deposit on our first home. Listening to your episode about guarantors got me thinking. Is it possible to borrow the full amount for an invest-grade property in Newcastle? Do banks really loan 105% with interest only repayments so that we can continue putting money into an offset account? Or are we better to wait and rent and continue saving?

My parents have been lucky enough to own a home in Sydney that has enjoyed the crazy house price growth. Their home would be worth at least $1.5 million at the moment. How long would my parents need to be guarantors – would it be until we had saved 20% of the loan? Perhaps in our offset account? Or would it be until the full amount was paid down?

My dad is from the generation of debt is bad and avoids risks. If you thought this was a smart move, do you have any tips on how to explain the risk/benefits so that he can understand?

 

  • Question on “To Hold or Sell” from Warren: Hi ‘couchers’, thank you for your entertaining, informative, and thought-provoking podcasts. I’d like to know what your thoughts are on rescuing a situation where someone has an investment property they’ve had for 10 years that isn’t performing. Cut the losses and look to replace it, or hang onto it? (I bought this place at age 20 on apprentice wages, it was all I could afford) Thanks! (specifics: paid $195k, current market value $240k, current rent $270/wk)

 

  • Question on Property Investing in WA from Daniel:

My partner and I recently bought a duplex (2 bedrooms, 1 bathroom, 2 living rooms, 475 m2) in Spearwood for $400,000. We have $112,000 equity in the property and $73,000 cash in our offset. Our salaries are $50,000 p/a for my partner and $71,000 p/a for myself, and we do not plan to have children for another 5 years. There is an opportunity to buy the second duplex (also a 2 bedroom, 1 bathroom, with a small granny flat at the back) for $385,000. The site is zoned R40 on 950 m2 (we see a 4 property potential), 3 km from the new Port Coogee Marina, the North Coogee development estate and the potential South Fremantle Power Station development bringing 6,000 new high-density houses/apartments into the area. We are 300 m from the local shopping centre and 5 km from the satellite employment hub of Fremantle (Bryce’s old hood). It ticks all the lifestyle boxes bar being near a train station (it is currently challenging to access the freeway to the Perth CBD). My two part question is:

  1. I am currently weighing up the opportunity cost. What is your inference of Spearwood as a potential “wave rider” suburb piggy backing off the growth of the coastal development? Do you feel that it would have long-term, consistent capital growth or a short term upswing, followed by a flattening capital growth and thus be better to buy into a blue chip area?
  2. As a first time investor, would it be wise to buy the adjacent duplex and land bank the asset, then develop the land after we have acquired several more properties in our portfolio or focus on the subdivision straight off the bat?

 

  • Question on Joint Venture from Tristan:o

I am in a bit of a bind and require some help. I currently have 4 properties. PPOR, a house in country VIC (Nathalia) that my father rents, a house in Frankston (that’s had 10% growth in 5 months!) and the front house on a sub dived block in Seaford.

The last 2 properties were purchased with friends as tenants in common.

I wanted to try and get another property with just my wife and so (as my friend has changed his plans a bit) I spoke to a well-regarded mortgage broker and they told me that the banks have changed the rules and that now they take the full loan amounts of the split properties and only half the rent!?

This destroys my serviceability. I am now not sure what to do, my friend is moving interstate and will not be ready to buy again for 2 years. (which I think my turn into 5 years) and I am keen to keep purchasing.

Should I concentrate on paying down the debt on my PPOR (280k worth 750k) or look at selling one of the joint houses (to gain the serviceability)?

 

And here are Free Resources mentioned in today’s podcast:

 

 

If you like this Q&A episode (How does Guarantor Loan actually works, Fixing a Joint Venture, Investing in WA 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://www.thepropertycouch.com.au/topics/

Kids Savings Tracking Calculator

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ps: For those of you who have stumbled on to this post, please do check out Episode 116 where Bryce & Ben discuss about how Guarantor Loan actually works, Fixing a Joint Venture, Investing in WA and more.

 

 

Should you buy a property with someone else?

 

The question we often get asked is, “Should I buy a property with someone else?” It sounds like a good idea isn’t it? It is a high-value transaction, and it can seem a little bit daunting to do it on your own. So we’ve got to have a look at our options. As Bryce and Ben mentioned on Episode 116, here’s the video on property ownership. Enjoy!

 

Bryce Holdaway - Quote of the Day - The Property CouchBryce Holdaway – Partner, Property Advisor & Buyers Agent

As co-host of The Property Couch, Bryce Holdaway is also a partner at Empower Wealth and Co-Host of Relocation Relocation Australia and Location Location Location Australia on Foxtel’s Lifestyle Channel. A qualified Buyers Agent and Financial Planner, Bryce holds a Bachelor of Commerce (Accounting), Real Estate Agent License and Diploma in Financial Services (Financial Planning).

 

Episode 115 | What Does The 2017 Federal Budget Mean To The Property Market?

What a week! Apologies for the podcast’s downtown earlier this week and thank you to those of you who wrote in to us. We had a system update and things didn’t quite work out as we wanted them to be. That aside, the 2017 Federal Budget has been released just a couple of days ago. So let’s talk about that.

There were a few proposals relating to the affordability issue and a couple more that aims at the property investors pool. But overall, this was not an overly exciting budget. It was a conservative one. Nonetheless, what impact will if have on property owners and the Australian Property Market in general. Some of the issues that Bryce and Ben discussed in today’s episode are:

  • The proposed changes to depreciation deductions for plant and equipment
  • Capital Gains Tax exemption for foreign and temporary tax residents
  • Investors’ travel expenses claims
  • The implementation of First Home Super Saver Scheme and is it a good idea
  • The expanded audit on overseas investors

If you would like to understand more about the 2017 Federal Budget, please check out this link.

We’ve also answered a few questions from:

  • Joel on the First Home Super Saver Scheme: Hi property couch crew! Since the website is down ill throw my question for the next Q&A here. A good one of the younger generation first home buyers as well as parents. My question relates to the announcement of the first home buyers saving scheme announced in the budget, with the tax break through superannuation. Being someone who has been taught in uni and at home by my parents not to touch my super and add extra payments where possible, is this scheme of accessing it for a house deposit reasonable? I see the tax break being a great idea but opening the idea of people taking there super to buy a house they cant save for rings alarm bells for me. Do i have the correct understanding of it all? Would you recommend another way?
  • Leo on property valuation: Hi Ben & Bryce – (and the Stig!), I cannot thank you enough for the endless amount of value that you provide for your listeners. Your content is conversational and easy to understand even for a first-time investor like myself.
    I have a suggestion that may also benefit other listeners. I have recently purchased my first investment at 23 years old. It is an existing (3 bed, brick and tile) property and I am in the process of planning a cosmetic renovation. My question is – When refinancing against an existing asset, do all property valuers have a set agenda when valuing your property? Since all valuers will have a different opinion on price, is there a similar set of factors they look at? (i.e Condition of kitchen, bathroom, flooring etc) – going on from this, Is there ways you can make your property more appealing to a valuer in order to gain a higher valuation to leverage onto the next investment? Thanks alot guys – I appreciate your work!
  • Derek on bookkeeping for investors: Something that isn’t as widely discussed in the field of real estate is book keeping. You guys mention the need to spend 10 hours or so per year to review each property in a portfolio. Can you dive into greater detail as to what exactly this entails? What sort of information do we need to keep track of and is that done through spreadsheets or specific software?

 

If you like this episode (What Does The 2017 Federal Budget Mean To The Property Market?), 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://www.thepropertycouch.com.au/topics/

Episode 114 (Part 2) | How One Punch Turned Into A Property Empire – Chat with Brad Teal, Director of Brad Teal Real Estate

Following on from Part One, the second part with Brad Teal focused on Victoria’s new underquoting laws that came into effect on the 1st May 2017. For those new to the real estate industry, underquoting as defined by the Consumer Affairs of Victoria is: Underquoting can occur when a property is advertised at a price that is less than the estimated selling price, the seller’s asking price, or at a price already rejected by the seller. You can learn more about this new regulation here.

So for this part, the three of them discussed:

  • How was this new underquoting law introduced and the logic behind it
  • What changes will the new regulation impose on the real estate industry and will it be introduced to the other states
  • Traits of a good selling agent and the research that a vendor can conduct
  • The different demands on certain property type in different market
  • What does he think about the buy and hold strategy
  • What success mean to him

 

ps: And if you are interested in Ben’s “Did You Know” Facts, click here.

If you like this podcast: “How One Punch Turned Into A Property Empire – Chat with Brad Teal, Director of Brad Teal Real Estate”, 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://www.thepropertycouch.com.au/topics/

Episode 114 (Part 1) | How One Punch Turned Into A Property Empire – Chat with Brad Teal, Director of Brad Teal Real Estate

The last episode of our Elite Agent Series is with Brad Teal, Director and Founder of Brad Teal Real Estate! Born and raised in Melbourne’s north-west coupled with more than 40 years of experience in the real estate industry, Brad’s understanding of the real estate market, property trends in the area and local facilities and amenities is second to none. And how did he build up his property empire? It all started with a punch in the face! Find out more on today’s podcast.

For the first part of this episode, Bryce, Ben and Brad also chat about:

  • How Melbourne’s north-west has changed over the years and the gentrification that had happened
  • What are considered as investment grade assets and why he’s interested in ‘bullet-proof’ properties
  • Setting the right expectation on rental returns and tips to increase yield
  • Is there any investment potential in one bedroom apartments?
  • New vs old apartments and the impact of high-density development on the suburbs
  • Mistakes buyers make at auction
  • Transparency in the buying process
  • Understanding the auction system

 

If you like this podcast: “How One Punch Turned Into A Property Empire – Chat with Brad Teal, Director of Brad Teal Real Estate”, 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://www.thepropertycouch.com.au/topics/