After last week’s much-anticipated talk with Jan Somers who is an example of someone who has made many successful choices when building her 40 plus year old portfolio, today’s episode features Bryce and Ben discussing seven of the most common ways many of us lose money when investing in property. With key advice and some examples of how and why the choices we make as property investors can have a negative impact on our portfolios, the guys make sure to warn us and help us understand why these ways can cost you money rather than make you more.
The first way to lose money in property is choosing the wrong location. As they have mentioned in countless episodes, location does 80% of the heavy lifting when purchasing property so making sure you have the right location is one of the key things to look for. It covers many areas such as amenities, human interest and practicality; so getting it right means a lot to your portfolio. To find out the rest of the points, make sure you tune in to this latest episode!
And don’t forget, we will be at the Melbourne Property Buyer Expo this weekend so if you are around, do come and say hi! 🙂
The other stuff mentioned in this episode are:
NASA’s video on the discovery of the 7 new planets: Watch here
Today we have another special vodcast episode; and joining Bryce and Ben on the couch is the President of the Real Estate Buyer’s Agents Association of Australia (REBAA), winner of The Buyer’s Agent of the Year award 2016 on Your Investment Property Magazine and Managing Director of Propertybuyer, Rich Harvey. As an established Buyer’s Agent, Property Investor, and expert in his field, today Bryce and Ben discuss the following areas with Rich:
How Rich established his career as a property investor and eventually a Buyer’s Agent
What motivated him to get his first step on the property ladder and what’s his first investment property looks like
Some mistakes and lessons learnt in his property journey
The benefits of having a Buyer’s Agent and how to find one that you can trust
Type of properties that he considers as investment grade and other types of property to stay away from
The current cycle of the Australian property market and his predictions for the market in 2017
Tips for finding the right resources to use when looking for investment properties
ps: We hope you enjoy watching this video and we would really like to hear what you think about it!
Today’s episode is special guest day and joining Bryce Holdaway and Ben Kingsley is Australia’s leading property analyst and CoreLogic’s Director of Research, Tim Lawless, who will discuss the future of each state in Australia. Following on from last week’s episode of President-Elect, Donald Trump and the uncertainty his win will have on the market; Bryce, Ben and Tim move on to discuss what the positives to follow are due to the presidential win, even though it’s is still early days.
So in today’s episode, the main areas these three will be talking about are:
Tim’s backstory and experience as a property analyst and how he got to where he is today
CoreLogic and research methodologies for the monthly reports
The uncertainty of Trump’s win and how this has affected the market and what potential effects are to follow
We hope you enjoy this latest post and look forward to hearing your thoughts on the matters brought up…even if it is a response to their thoughts on Kim Kardashian or Kanye West running for the next US election!
And here’s the reports mentioned in today’s podcast:
Have you heard about the myth that all property double in value every 7 – 10 years? If this is true, it is certainly an irresistible offer! But if it is true, why isn’t everybody investing in property? Unfortunately, based on the report recently released by Core Logic (download link below), this is simply not true. In fact, only three capital cities in Australia had doubled their median house prices in the last ten years and so, for today’s episode, Bryce and Ben will be doing a bit of myth busting.
They will also be answering a question from Stacey:
Hi Ben & Bryce,
I have a question about the suburb of Cranbourne in Melbourne…
I recently went to a property seminar in Melbourne and the presenter was telling us that Cranbourne will be a big growth area in the future, along with Pakenham, Officer and another suburb I cannot recall. Do you think this is true? Only because my partner has a house in Cranbourne he has invested in and is renting out at the moment, and we are not sure whether to hold onto it or not.
Many thanks guys and I am loving your podcasts.
Free resources mentioned in this podcast:
How many suburbs have seen median prices double over the past decade? By CoreLogic, October 2016 – Read here
FREE Tickets to the Sydney Property Buyer Expo (Coupon code: PBE16BRYHOL) – Get them here
Thank you for coming to our Facebook Live event on 13th of Sept! We received a lot of great questions that night but unfortunately, time ran out and we couldn’t answer all of your questions. We really do appreciate you taking some time away from your busy life to listen to us so that is why we are recording a bonus episode (or as Ben called it Bonusisode) today to answer all the remaining questions!
And for your convenience, here’s the list of questions that we answered in this episode along with the order they are in. 🙂
Assuming one has a portfolio of 5 investment properties and has entered the debt retirement phase, what does this actually look like? Is it a matter of spreading all excess cash flow evenly across the offset accounts against each loan until they are all cash flow positive or do you target the biggest loan and pay that out first (by matching the outstanding loan amount in the offset account) and move on to the next biggest loan? If these are all interest-only loans with the interest-only period ending for all 5 loans over the next 18-24 months how do you manage this, as it wouldn’t be affordable to any family budget for multiple loans to become principal and interest, so is it a case of constantly refinancing these loans and staggering the when they come out of their interest only period?
2 (Time: 03:17)
What are your thoughts about having a property portfolio with a mixture of properties, some with good rental income and some with good growth potential but negative net income?
3 (Time: 04:10)
Hey guys love the podcast, and the book. I have a financial question to ask. I currently have a principal place of interest (paying P&I for the next 3 years, and I can’t change that as I have just fixed it unfortunately), now for example and using round figures, say if I have a saving of $25k, with a current monthly surplus of only $500 would I be better off to use my savings to pay of any agent fees (e.g. buyers agent, financial planners etc.) and with what’s left over use that as part of the surplus for the next 3 years until I can release more funds from my principle place of interest, or use all the savings to put it towards the deposit for my first investment property, this is to achieve retiring with $2000 per week hope this makes sense. thank you for all the information you have provided us this far, really appreciate it. cheers Ash
4 (Time: 06:05)
Love the podcast and book! A massive fan! I have a question about inconsistent bank valuations. I purchased a two (2) bedroom unit in Rosanna in Melbourne last year in November for $275,000. I purchased this through a Buyers Agent (not you guys….SORRY!!!….but I followed the principals I have learned in the podcast) The settlement was Feb 29 2016 and I had the property re-valued a week later by several banks. I had a valuation for $480,000….$330,000….$400,000 and $295,000!!!! Is this common???
Thanks so much for your time tonight – great job! I am confused about the difference between capital growth and income (yield) returns? Is one more important than the other or should you look for a property that is high in both returns?
7 (Time: 10:27)
Hi guys, love the podcast and found the book really helpful. I’ve been using a great budgeting software for the last 10 years but I recall you mentioned something in one of your podcasts that you may have a software which can track budgeting. Is this available? (ps, will you be at the Property Buyer Expo in Sydney?)
8 (Time: 12:14)
Big thanks to Jake and co recently for their help!
Quick Q:, With investment properties, is it work getting a regular valuation say every 2 years to check available equity for next property or rely on market comparable?
9 (Time: 13:56)
Love ya work boys! I’m 25, if I could change one thing in the world we live in, my very long term goal is to introduce property investing as a school subject in years 11 and 12. I’ve been lucky enough to have family who invest but not all kids are. What are your thoughts?
10 (Time: 15:52)
I am a passionate and always ready to learn individual. I have recently developed a keen interest in property market. Where do I start if I want to make a career out of it?? What sort of options do I have and what courses are must before I even think about stepping my foot in the market?? Really appreciate all the info u guys give out for free. It’s GOLD.
11 (Time: 16:32)
I am thinking about engaging a Buyers Agent once my strategy plan is build, but how can I make sure that my BA is not getting me into something that favors him more than me. By that I mean how can I make sure that he is choosing the right property for me only and not looking just to sell one??
12 (Time: 18:11)
On a high income for next 2 years would you buy a more expensive eg 600k property or a 450k property
Johnny Rambo Azzopardi
13 (Time: 19:13)
Hello guys, do you think the Gold Coast will bring capital growth as the media and buyers agents would have you to believe in the mid to long term.
14 (Time: 20:53)
If I had access to equity to buy a ‘cheap’ investment property now should I buy one now or wait 12mths to when I have more equity to buy a more expensive Investment property?
15 (Time: 21:38)
Hi Ben and Bryce, I can’t get my head around how you can keep leveraging equity out to purchase more properties without running out of borrowing capacity, assuming that you are only purchasing only blue chip properties that don’t quickly become positively geared. Surely at some point the banks will stop lending to you, even if you have the equity. p.S. Hi Ivise 🙂
16 (Time: 24:14)
Hi, my question is based on a first home buyer, how much would you recommend is needed for a first investment property and would i be better buying when i reach this sum or saving for a bigger deposit and buying a bigger investment ? thanks!
17 (Time: 25:15)
Do you have any thoughts on investment in Port Adelaide, in Adelaide. Recent times has seen it to be a semi low social economic area, but there is enormous residential and commercial developments occurring there at the moment.
18 (Time: 27:21)
Gents what to do next? Own a townhouse as a ppor and will keep it as an investment going forward. Looking to buy a family home in 1-2 years. What to do? Save cash for this or buy an investment to leverage into the family ppor home?
19 (Time: 28:31)
Hey guys – made it through the first 35 podcasts – great stuff. Where would you buy in Melbourne right now if you’re trying to stay under the first owner grant limit (<$600k)?
20 (Time: 29:45)
i’m looking forward to the Facebook event.
I have another question for you (number 4)
Is there any chance you can discuss in depth the process of buying a property through SMSF. ie the associated costs, required structure and minimum LVR.
21 (Time: 31:00)
Hi Ben and Bryce
I understand that the process of building a portfolio involves repeatedly taking equity out of existing properties to purchase more properties. I’ve heard multiple stories of investors being able to repeat this process every 1-2 years.
What I can’t wrap my head around is how an investor can take equity out of their properties every 1-2 years without falling short of lenders’ serviceability requirements. Each time you take out equity, you are essentially taking out another loan, and the lender needs to know you have the income to service that loan. Unless you are buying only positive-geared properties (which most of us aren’t), surely at some point a lender would tell you that you’ve run out of income to service another equity release loan… I understand that part of the answer is that properties become positively geared over time, but that can take 5-10 years. Some of us would like to buy more than once every 5-10 years.
This is assuming all the loans in the portfolio are structured as interest-only loans with offset accounts, and that all spare cash is put into the offset accounts rather than paying off the loans. In the eyes of the lender, this means that all your loans are still at their maximum/initial balance. Theoretically a lender shouldn’t be willing to keep lending to someone who (on surface) never pays off their loans, and yet keeps taking out more loans…and yet that’s what is done by investors all the time!
What is the piece of the puzzle I’m missing? Ben and Bryce – how does it work? As you know I’m a big fan of the podcast, keep up the great work!