SURPRISE! On this Boxing Day, we are having a joint podcast with Phil Tarrant from Smart Property Investment Show! Phil joined us back in Episode 52 talking about his journey as a property investor but in this Bonusisode (Bonus Episode), the focus will be on investing in property in 2017! Ben and Phil will be chatting about:
- The health of the Australian Property Market in 2017
- Understanding the different market cycles and how economic activities and infrastructure development may change the market’s trajection
- How to filter out all the noise regarding property investing and look at hard facts when making an investment decision
- The prospects and returns from investing in apartments and city fringe location
- What are their thoughts on the lenders’ out-of-cycle rate rise
- What are the criteria lenders are looking for in an ideal borrower
- The importance of borderless investing and buying counter cyclical when building out your portfolio
If you like this podcast: “Bonusisode – A Boxing Day Chat Between The Property Couch and Smart Property Investment Show”, 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/.
As Christmas is a time for giving, we thought today’s special Christmas episode should be none other than a Q&A session! Topics covered today include debt-retirement and refinancing loans, how to go about upgrading your PPOR (Principle Place of Residence), whether it’s worth paying for a financial planner and more. (And click here for your free The Property Couch Christmas Pack!) Today’s questions are from the following listeners:
- Chris on debt-retirement and refinancing loans: Hi there, was hoping you could ‘unpack’ the ‘reality of’ the following finance-related scenario for me. I understand there is an “accumulation phase” where the investor actively accumulates as many quality, appreciating assets as required/wanted before transitioning to a “debt-reduction” or debt-retirement phase in the property investment journey. I was hoping you could spend some time describing what this debt-retirement phase actually looks like, assuming the investor has between 3-5 investment properties all on interest-only terms.
Changing all of these to principal & interest at the same time would probably be too strenuous on the budget, so is it a case of paying off the largest investment loan on principal & interest terms while refinancing the remaining loans as interest-only for another 3-5 years and start knocking off the balance of the largest loan? Or is it a case of building up the offset account of each loan evenly so that you end up paying less interest across all of the loans until you are in a position to pay the loan back in full?
But in this scenario the banks will eventually put you on a principal & interest payment unless you refinance again to an interest only loan, so how do you juggle at least 5 investment loans potentially all coming off their interest-only terms within 12-18 months of each other, while you’re trying to retire the debt without blowing the family budget? ($150+ principal payment across 5 loans = $750 a week which would destroy most family budgets).
Is it a case of focusing on one property at a time until the rent covers the principal + interest payments, before moving onto the next property or is it a case of continually refinancing to interest-only loans and building up the offset accounts? Is it better to focus on the largest loan first or distribute funds evenly across all loans? How do you actually go about entering the ‘debt-retirement’ phase on a portfolio of 5 investment properties (assuming all currently interest-only repayments with separate offset accounts but the interest-only period is expiring for all 5 loans over the next couple of years). This does not take into account the PPOR but we can ignore that part of the equation for the above scenario.
- Bill on upgrading PPOR: My question is…I have paid off PPOR (home loan account closed) and would like to upgrade PPOR. What advice/suggestions do you have regarding using ex-PPOR as investment or sell off ex-PPOR to pay down new PPOR debt and then buying an investment property?
- Anonymous on investing in a Financial Planner: G’day, I have a question that I think a lot of listeners would relate to and something you guys have not covered thus far.Firstly about me. I am 32 and have recently developed a passion to enhance my knowledge of residential property investment. I am in the Army and have a young family on my income alone. I earn 106k per annum gross. I bought my PPR in 2012 in Sydney which is valued at circa $8800k currently. Since I started my learning, using you guys as my guides, I have done the following.
- Analysed our cash flows for a month to understand where our money is going.
- Gotten rid of all non-deductible debt i.e. credit cards, pers loans etc.
- Bought our first investment. A two Bedroom apartment near Penrith. It’s walking distance to the station and five minutes from the train station, Nepean hospital and UWS. I also rolled our car loans into the investment. The place is currently leased with a 4.2 % yield.
- Manage our money to allocate spendings for myself and my wife similar to your model you advise with regards to offset and spendings accounts.
I also have a broker and accountant and also use a buyer agent. So my question:
I recently sought advice from a financial planner. After an interview, he sent me a proposal and plan which also outlines his fees. His fees were $500 per month with monthly payments that would be ongoing for a period of a few years. If cash flow management is essential and using surplus cash flows to reinvest is a key step, then how is 500 per month going out enabling this? Isn’t this counter to one of your pillars of mastery? If I had a large income and a large portfolio, then this would be manageable. But I don’t. Are all financial planners this expensive? I can see the value of buyers agent’s fees but I can’t see the value in planners for myself.
- Andrew on when would be the best time to invest in property: I’m 26, my wife is 25 (DINKS), we live in Brisbane and our combined income is $150k. We’ve almost finished paying off our wedding (ouch) but are now planning for the future and want to get ahead before kids come along. We don’t own a house (currently renting), however we’re strong savers and would be in a position to buy in approximately 12 months. The issue is, our plan is to move to Adelaide in 2018 to allow my wife to study Dental Hygiene (limited college options in Qld). Would we be best to buy a house/IP right before we move to SA and rentvest? (and drop to a single income of $100k), or wait until she graduates (2 year degree) and look to invest then? Neither of us want to sit still for 2 years, but we’re reluctant to buy right before dropping to a single income.
- Julia on Buying a home: I have only recently discovered your podcast and it’s awesome. Thanks so much for sharing your knowledge. I know your advice is ‘location first’ – I’m torn between two properties. A run down 1970s one bed room unit in Neutral Bay (ground floor) vs 10 year old amazing one bed room unit in Marrickville (top floor). Both similar price with similar strata. Neutral bay property needs everything renovated but has structural limitations. Marrickville unit has an amazing balcony that has a green leafy view and makes you feel like you’re at a holiday resort. I know Neutral Bay is blue chip suburb but would you consider Marrickville as a suburb with a potential high growth over next 5 years? This is my first property and I’m planning to live there for next 2 years then potentially rent it out. Any advice?
If you like this Q&A episode (Investing in a Financial Planner, Upgrading your PPOR, Loan Strategy to Build your 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/
Keeping to our Summer Series tradition, Bryce and Ben are joined by yet another special guest in today’s episode; Nerida Conisbee – The Chief Economist of The REA Group: now the biggest digital real estate company in the world! With more than 20 years property research experience throughout Asia Pacific, Nerida also appears every Saturday on SkyNews Real Estate program, is an adviser on property market conditions to major Government bodies and has held senior positions within commercial agencies and major consulting firm.
Leveraging on her experience and knowledge in the property industry, the three of them will be chatting about:
- How are the two capital cities, Sydney and Melbourne performed in 2016 particularly in the apartment market and what’s the outlook for 2017
- What’s the level of housing affordability for property buyers across Australia
- Investing habits between Sydney and Melbourne, and how these compare to major cities around the world and the drivers that are slowing down property listing in those two cities
- Potential changes to the lifestyle trends in Sydney where houses are less affordable for young home buyers and how this would affect Melbourne
- Research data and methodology in commercial real estate as compared to residential real estate
- Seeing the GDP drop and finding that balance between the property market being strong and weak; therefore, knowing when the best time to sell is
- The 2017 outlook for Perth, Brisbane, Hobart, Adelaide, Darwin and Canberra and which market to invest in for 2017
We hope you enjoyed this podcast and look forward to hearing your thoughts on the topics brought up! And here’s the site that Nerida mentioned in today’s podcast:
If you like this podcast: “Which Market to Invest in for 2017? – Chat with Nerida Conisbee”, 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/.
For today’s podcast, we have Stuart Wemyss, owner and Director of ProSolution Private Clients joining us to talk about his property investment journey and his investing philosophies. Coming from an Accounting and Finance background and with more than 19 years of experience in the investment services, Stuart is also a PIPA Member and has authored two books; Smart Borrower’s Handbook and The Property Puzzle.
So for today’s episode, the three of them will be talking about:
- When did he buy his first property and how did he start investing in property
- What are the lessons he learned when building his property portfolio
- Why does investing for the long-term matter and the mindset needed for this approach
- In his role as a mortgage broker and finance specialist, what are the common mistakes he has seen over the years
- What are his tips for listeners when they are choosing an investment advisor
- Two questions you need to know the answer for before prior to building an investment portfolio
- What he thinks about commission-based financial advice
[alert]Don’t forget to download the Property Investor Sentiment Survey 2016 Report! – Download here[/alert]
And if you are interested to learn more about Stuart’s books, here are some reference points:
- Smart Borrower’s Handbook | An Essential Guide for Property, Sharemarket and Superannuation Investors – Buy here
- The Property Puzzle | A Simple Guide for Property Investors on How to Develop a Safe Financial Plan – Buy here
If you like this podcast: “Does Investing for the long term actually matter? – Chat with Stuart Wemyss”, 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/
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.
||# of Unit Sales
||Average Annual unit sales past 5 years
||Total New Units next 12 mths
||Total New Units next 24 mths
* 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://www.thepropertycouch.com.au/topics/
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://www.thepropertycouch.com.au/topics/