Episode 079 | Q&A – Underquoting, New Developments Next Door, Fixing an Overly Negatively Geared Portfolio and more

It’s the first day of Spring and a perfect time for a Question and Answer episode! Bryce and Ben started off with some of their auction stories on underquoting and a general market update.The property market had been rather cold this winter but with that over, what will we be expecting these coming months?

 

Here are the questions for today’s podcast:

  • Question on new developments next door from Jesse: My question is regarding to the current development boom that has exploded all over Melbourne as it relates to my property in bayside Melbourne. My wife and I bought a town house in Cheltenham about 8 years ago. It is on a reasonably busy road that goes from Nepean Highway down to the beach in Sandringham. We have been diligently paying it off as quickly as we can in order to give ourselves some freedom (we are both freelance) and now we are looking to buy our first investment property. This week the house next to us and the next seven houses along have all got ‘For Sale’ signs up in front. Our understanding after a brief chat with the next door neighbours is that they have all been approached by a developer who wants to build a large mid level apartment block right next to our house. Our concern is what impact this will have on our property value. We are now planning to move out and ‘rent-vest‘ as we don’t want to stay there through this construction phase.
    Our main concerns are:
    (A) How this will impact the value of our property when it comes to us getting a loan for an investment property.
    (B) The impact this will have on our ability to rent out our townhouse if this new development goes ahead. In light of this are we better off trying to sell now and cut our losses or stick with it as a rental.
  • Question on cash flow from Sonia: Hi Bryce and Ben, I am a big property fan and have been listening to every single episode of the property couch. I have a few investment properties in the Sydney inner city suburbs. Besides that I also have a decent amount of savings in cash. I just quit my job to study interior design, hoping to set up my own business later on. I am a typical rich in assets and poor in cash flow example. Just wondering what is your investment advice for people like me. Thank you. Sonia
  • Question on property portfolio fromKhai:
    • Q1) Is it better to pay off the mortgage or keep buying Investment properties?
    • Q2) I have forecasted passive income of $60,000 (as a couple) in next 10 years (assuming 5% annual price rise and if I sell down my 6 properties to fully own 3 including PPOR). How do you increase this to 100,000? Keep buying 3-5 more properties in next 5 years.
    • Q3) How do I fix a severely negative cash flow portfolio (minus $25k annually for 6 properties)? Options I have in mind are: building a granny flat, refinancing to lower interest rates, raising rents, converting car space in townhouse to LUG (costs probably $10,000 per townhouse but increase rents $1k per year), converting car space in townhouse to LUG (costs probably $10,000 per townhouse but increase rents $1k per year)
  • Question on develop or buy from Adam: I own a positively geared corner property in North Sunshine in Victoria, I am ready to take the next step in building my portfolio, does it make better sense to develop my existing property into three town houses, or to go and buy another investment property keeping in mind that property price growth will most likely exceed building costs ?

 

If you like this Q&A episode (Underquoting, New Developments Next Door, Fixing an Overly Negatively Geared Portfolio 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/