Wealth Coffee Chats

How 3 years can turn into 1 million dollar loss!

Hey, good morning. Good morning everybody, Jason here. Tuning in for another "a Coffee and a Chat." Marvelous Monday back at it, hopefully everyone had a good weekend, got some stuff done, a little bit of stuff around the house myself and hang out with the fam, which was always nice, hopefully you guys did too. Well again jumping on, just quick intro, Jason Witten is my name. For those joining for the first time or watching the replay, I've been property investing for . I have 20 years and coaching property investors across Australia and New Zealand over 18 now. So along the way, learn a few things, and each morning I jump on a quick five or 10 minute chat. Good morning my love. With the crew, with the tribe, just to share some wisdom, experiences, ideas, opinions, information about the property world. You know, lots of things fly at as all as property investors, you know, left, right and center, so sometimes it's just good to sort of check in and see where everyone's at. So, that's what "A Coffee and a Chat" is all about. So, thanks for joining me gang on this marvelous Monday. So, listen, you know, I chucked a little headline in here, "How Three Years Can Turn Into a Million Dollar Loss." And I chat with people all the time. I meet want to be property investors or property investors who've started there investing. Morning Johnny, Morning Chris. Ah, new investor, welcome buddy, thank you. Meet property investors who started their journey or are thinking about their journey, and obviously sometimes getting going, sometimes doing something that you've never done before, sometimes buying a piece of real estate is a very big deal, often some of the biggest things that people do in their lives. They say the most stressful things in their lives is something like public speaking and buying a house. But the idea that as a property investor, if you've got the resources, if you've got the capacity, if you've got the ability to invest, why do you wait? And I see this all the time. The opportunity costs... Morning trainer. Oh, is it not too good today? Now let me have a look. Hopefully the streaming's okay. Maybe the old wireless is a bit dodgy, let me quickly see. Yeah, it's on full wireless. Hopefully it comes good trainer. But yeah, listen, you know, I meet people all the time who've got the resources, who've got the capacity, there's nothing really stopping to invest in property or buy their properties, they've decided they wanna buy some properties, and they just take forever to do that, to take that action, to buy their properties, to buy the next one and the next one. They say, listen, what I'll do... Here's a few mistakes that I see property investors do. Oh, you know what? Just to begin with, I'll buy a cheap one. I'll buy a buyer cheap one and see how it goes. What a terrible idea. Buying the cheap piece of rubbish to see how it goes will end up in a terrible outcome. I see that all the time. So, I see that buy cheap one and we'll see how it goes. You know what? I'll buy one and then I'll wait a fair while, I'll wait three, five years before I buy my next one. And the other one is I'll buy one, I'll pay that one off and then I'll buy the next one. All right, and all of those are stupid ideas as far as I'm concerned, I've seen the opportunity cost be huge, been massive for property investors. And I've done some mathematics calculations, you can chuck it in a spreadsheet yourself. You can put in whatever calculation you wanna put in there, but you wait one year to buy a property, and in 15 years time, let's say that property grows at 6% with some tax deductions and some cash flow, you will miss out on the opportunity cost of waiting one year in 15 years will be just over $400,000. Wait, one year when you could have anyway, when you could've bought the property. Right now, if you can buy that extra investment, you've got the resources, you've got the capacity, What are you waiting for? Like the world ain't gonna get any cheaper in Australia for real estate, let me tell you it ain't. So many people wait around the GFC, I'll wait until it plummets 50%, you've got rocks in your head, mate, it's not gonna happen. Australia doesn't work like that you guys okay, never has never will. Our real estate system is not like Europe and not like America, and stop listening to those idiots like Harry Dent, who say it's going to be like that. Like, listen, only this month in Byron Bay, record house price set in Byron Bay, record house price in Byron Bay, Sydney record price paid for a house in Sydney at auction. This last week or the week before record price paid for a piece of land in a suburb in Brisbane. All right, the prices aren't gonna drop 50%, what are you waiting for? Okay, what's going to happen, and we've said this for a while, is prices are going to go up in certain places, and you're gonna pay more 30, 40, 50K more to be in Brisbane, to be in Canberra and other places like that, if you want to invest in those places. So, why wait? You wait one year it's 400 grand in 15 years time, the compounding effect. You might two years, all right, it's between 650 and $700,000, the compounding effect in 15 years time. You wait three years, it's a million dollar cost to you. Million dollars of value in 15 years time, because you waited three years, because I'll see how it goes. No, don't. The point is, and I've talked about this a few times gang, your acquisition phase, acquisition buying the properties that you want, you should crack on with it, just get on with it. There's no reason to wait around, there's no reason to I'm gonna certainly negotiate, and drive a good deal and find the right one, and diversify and get a good spot. And you know, but I'd mix it up with houses and townhouses and apartments, if you wanna diversified portfolio, those exactly, absolutely excellent stuff, excellent stuff. And I see this all the time too, I see people take on projects. Oh, you know, I'll make a hundred grand profit in a project. And I've seen this so many times with splitters, like subdivisions. Subdivision people go, oh, I'm gonna take on a project. And you know, inevitably it takes three years, I don't know if anyone is listening in here, you know, you think it's gonna take six months, it takes 24 months. It takes a long time to do a project when it comes to real estate. You've got three years, you made a hundred grand, maybe you didn't make that much, because you thought it was going to take 18. It delayed or ate into your interest or your profits, and in three years time you make 60 grand, and what was the point? Someone else bought a property, got a discount or a cashback straight up front of 30, 50 grand. It grew 5% for a couple of years and they've made more money than you, and they didn't have to do anything, didn't have to take any risk. Not that I'm against subdivisions or anything like that, I just wanna get across this morning with our chat, there is no time to waste, because for us as property investors, the point is to get our buying, our acquisition done as fast as possible in a safe manner, because we wanna get onto the bit, the lifestyle bit. We wanna get onto the income bit as quick as possible. So, if you've got the resources, you've done your numbers, you've got your strategy with your coach, you're feeling safe, you know where you're going, then there's no reason to faff around, it's a good time to crack on and go for a deal. All right, that's the way I see it gang. So, hopefully that makes sense, maybe even a little bit of a rant this morning with the all "Coffee and a Chat" as we're going along. But yeah, listen, don't wait around, and if you're feeling unsure, if the reason you're feeling unsure is like, oh, I don't wanna make a mistake, I get it a hundred percent, then get yourself a coach, like get someone who can help you make those decisions. Another set of eyeballs, another brain, another idea across it, because then you feel a little bit more confident to make those decisions. Don't give over all the power, we've talked about this before your six experts, your six star team on your team. Get a coach, just check my rationale, check my strategy here, am I going in the right direction? Do you see anything with the numbers and the challenges? No you looking good. Go for it, let's make this happen and away you go. But anyway guys, that's it for me for a Monday quick "Coffee and a Chat," a little bit of a shorter one today, but hopefully that makes sense. And you guys have an awesome Monday and have a good rest of your week. If you wanna join me tomorrow, same time, around about the same time, about eight o'clock each day, quick "Coffee and a Chat" and away you go, kick the morning off well, that's pretty good. A couple of questions coming in as you go. Hi, Jason, you wanna speak with me direct? Richard, if you wanna connect with me or one of my coaching team, you can track us down on our Facebook pages and send us a message. That's the easiest way to just flick us a direct message. Same as you Trent, love to catch up with you sometime if you want, that's all good clearly. And understand your strategy is good, because Marie, if you've got the money and you know your strategy, and you've got an extra buffers put in place, there's no reason not to buy three in one month if you can, like there's none. I've done it before, our clients have done it before, you know, buying three properties in three months, getting it done. Buy the properties, get them done okay. So, it's a good question. How long should I wait? And maybe your nervousness is you're waiting, because you don't know your numbers very well. You don't know your strategy very well. You don't know your buffer very well. And Marie, if that's the case, then you need someone to help you get that sorted, tighten that up, and then you'll feel confident. You know you've got the numbers, you know you've got the money, the budget, the equity, the cashflow, the servicing to do the deals, so good question and away you go. Sarah said, "Do I have any thoughts on region of Victoria?" Hey, Sarah, thanks for a good question. I'm always a fan of having your money in better location Sarah, and, you know, depending on what regional you're asking, if it's like Bendigo, Ballarat or depending on if you're asking on like Cobham, you know, or somewhere smaller, the smaller towns it's a big fat no for me, like don't do it. Don't do it, it carries no longterm economic power, the Cobras of the world, even though they're nice little towns. Nothing wrong with living there and having a home in that town, if that's where you're at, so it's a big fat no for those. Now Bendigo and Ballarat it's okay, but you can for an extra 50 grand, maybe a hundred grand, which by the way is only $10,000 more in deposit, you can be balling in Melbourne, Sarah, depending on your capacity to borrow. So for me Sarah, it wouldn't be my first choice for an investment, it's fine for your home, but it certainly wouldn't be a choice for investment. I would invest my money in strong economic, long-term economic locations that are powerful, like major cities and most budgets can get there, most budgets can get there. But if your borrowing power is a little bit limited, sometimes you just have to work with what you got. So, hopefully that makes sense Sarah. Again, it's a great question, one that sort of is good to answer from an overall strategy point of view, with your buying and servicing, your borrowing power done, your long-term strategy and yeah, go Melbourne buddy. Hey listen, Melbourne's awesome. Melbourne still one of the cheapest cities in Australia to invest in, so have a good crack at Melbourne. Be careful how you buy right now, because you don't wanna end up in some short-term rental stress, that's what you gotta be careful of at the moment. It's not normal, it's completely abnormal. It's not gonna stay forever, it's probably going to wash out after six to nine months, but just be careful of how you're getting there Sarah. Just give us a shout out if you need some help, buddy. Yeah Heidi, Adelaide doesn't get a mention often. Listen, Adelaide's, you know you can buy the same price property in Brisbane as you can in Adelaide, and Brisbane is a stronger city, Heidi. We've got a heap of clients in Adelaide, nothing wrong with owning your own home there. May be one investment there maybe, 'cause you know it is a strong little town. It's got some strong little capital growth, but it's economic power, Heidi longterm is really limited. It's a limited city and it's fabulous place, I love it, we used to visit all the time when we could fly around, great wine, great food, great people, great little compact city, but I certainly believe that you should be spreading your money into better locations longterm, it's called the migration of your money, and I might talk about that tomorrow actually, that's a good one. Good shout out. All right gang, well, thanks for the questions. Awesome, to have you guys chucking some out there. If anyone's still listening, chuck some more questions over the fence, I'll have a look at the chat later on today and maybe answer them tomorrow. Hopefully that answers a few of your questions. Thanks for chucking them out there, and I'm gonna coff off and get my day started. All right, hopefully that was a useful gang. Take care, be safe and catch you tomorrow, around about the same time, eight o'clock, for another "Coffee and a Chat." All right, bye, bye gang.
 

Cash on cash return, return of cash.....how do I measure success

Hello. Good morning everyone. Welcome to another coffee and a chat. There we go there, how's that? Hi, good morning. Jason Whitton here for another coffee and a chat. Welcome, do the quick intros while the Facebook Live is warming up. As I said, Jason Whitton is my name. Each morning jump on quick Facebook Live around about eight o'clock with the gang, the crew and we talk about property investing, all things around the world of property, market places, etc. Been investing 20 years myself, coaching property investors across Australia and New Zealand over 18. So I'll share a bit of experience, ideas, strategies, tactics, about property investing and making sure we go the distance in this gig. Because it is a marathon, not a sprint. So for those who are joining us for the first time, welcome. For those who are coming back. Good morning, Margaret. Good morning, everyone. Who's jumped on this morning for a quick Facebook Live. There's Christopher. Yeah, the borders are open again you beauty Morning evade. Yeah, it's good to see the ability for everyone to travel and get their spirits back. It's great to see the world of people's ability to get out and about and take care of themselves. Re-energize which is awesome and travel at least into state for the moment, I did see that some international flights are going to resume on this December the seventh in Melbourne. So I'll be interested to see what happens there. So morning, Alan. So great to see everyone jumping on. Listen, today I wanted to talk about the idea of how do you measure? Cause there's a number of ways that investors measure their success in a real estate world or in any investment. They call it yield, call it growth, call it cash on cash return, call it return of cash, which way do you measure the investment ? To say oh well, am I on track? What am I doing? How are we progressing? Am I succeeding? Am I not? So it's an interesting question. Because the answer is, it depends. It's, there's never one direct answer. But let me talk you through a few things today. A few things that I always sort of say to people to keep an eye on. When we talk about yield. Okay, so that the return, the value of that property or stock is producing in a rental income. Now, rental income and yield. That's a very simple, easy calculation to do. You do the annual rent divide it by the value and you end up with a percentage. Now, as property investors were aiming at 5% or more of the rental yield from at a purchase. And worst case scenario, maybe 4 1/2% maybe for a property in a better location. Okay, so 4 1/2% to 5% minimum and upward from their rental yield, which means the return based on the value of the purchase price is that percentage. Now, as the property grows in value, let's say you purchased it for 500,000. And now it grows to 700,000. What is your yield then? And this is an interesting conversation. Good morning, Alison. Is my property keeping up? Is the rent keeping up dollar for dollar? Is it producing the income? And the statistics show over a 10 to 12 year period in Australia. Property prices in strong areas often go up between 50 and 100%. And that's over a sort of a 12 to 15 year period, the latest two cycles have been and the rents don't keep up with doubling they go up 50% are buy and large. So you can expect the rental yield to decouple detached from the value of the property as it travels along. Okay, that's very normal. That's to be expected. Because the values especially in residential property, are not linked to the or the rents are not linked to the values in commercial or retail property or industrial property. The values and the rents or the income that you can generate from that property are intrinsically linked. So if you can put the rents up means often the value will go up on your property in residential, industrial, commercial, that sort of thing. So not residential, sorry, retail. Now residential property, you buy a property for 500, it goes to 700. Now your rent might be 650 and so on and it starts to drop away. Is that a bad thing? The answer is no. How I measure this is my return on my cash or the return of my cash. Let me. Good morning Ingrid. Got me to sort of explain this one as we go. So return on capital, return on cash. Some people like to do that, well, if I put $100,000 in to my property, I put $100,000 in. So let's do this. It's easy to do it on a whiteboard. But maybe I'll do that next time. If I bought a $500,000 property, and it's renting for $25,000. That's a 5% return. That's a 5% income. Now, that's not my total return. Because if I added in my capital growth, and I added in my tax deductions, cause I like to add in those tax deductions, a lot of people say oh, you don't have them, it's like this rubbish. It's real cash flow. And for us is probably this is we're not selling them. So you can add it in to your return as far as I'm concerned. So that's my total return, you can add up your yield, you can add up your growth, and you can add up your tax back, your tax cash flow back, and you can keep them separate, but your total return might be 5% yield 3% growth and 1% back, okay. Returning your cash, it's the job done. You did right, Allison. So for me, as we go forward, the most important conversation for me as a property investor, is if I put $100,000 into that property, how fast does that property return my cash? Okay. So if I put five $100,000 into a $500,000 property, and let's say, four years later it's gone up $100,000 dollars. I can release the equity, I can take that 100,000 dollars back out, and I can put it back where I got it from. Often it's from our homes. So you take the 100,000 dollars out, you plunk it in back in your own home. And now you have a property that owes us zero. There is no money in that property whatsoever. It has done its job, it's returned all of its capital. It's returned it back to you as the investor. And now that is stand-alone, zero funding from anywhere else. And from that point onwards, that property is now what I term giving you an infinity return. Because you've got no money in the deal. There's no money in the deal. So your return is at endless. So there's nothing that you have to put in and especially if that property is cashflow positive, and the rates have gone up and so on, then you're all you're making great headway. Okay. So the way I like to look at it is how fast does the property return my cash? And once it's done that, then I'm very happy with the property. Now if it takes forever to return my cash? That is when sometimes I might maybe this is a bit of a dog this one, and maybe I can move it on. Okay. And I've had to do that a few times in my portfolio just because I've bought some rubbish properties, and all of us every now and then end up with a property. Sometimes without the right due diligence, sometimes we bought it and something didn't go right, whatever. And sometimes, we just need to move on from those. But our aim, especially in mentoring is not to end up with rubbish properties is to end up with good ones right from the start because we do more work at the front rather than having to clean it up at the back. But I was a bit mad at the front. So but that was many years ago. So listen, that's how I like to measure my returns. And as we go, one thing that of a lot of financial planners like to do, they like to quote returns, like they say, what's my yield on on my investment? Okay and I'll go, Oh, well, my yield on my investment was 12% okay or 15% way better than property. And it's actually not accurate. It's actually not true what they're saying, because it's not a yield. And the yield is an income generated from owning and holding an asset. Okay, that's the yield. That's the way I define it. You own a property its yield is what it produces in income when you continue to own it. Now, a lot of financial planners a lot of people in the share market like to quote, high-yield based on the activity of selling shares, not just the dividends. The sale of the shares and so oh my yield, my yield was 12%. Okay. Now that is not an investment process that is a trading process that is buying and selling. Okay. And we've talked about this before. Buy own forever. That is investing, as far as I'm concerned when it comes to real estate. If you are going to trade, buy and sell, perfectly fine. Don't call it investing, passive income investing, it is trading investment. It is a business when you buy and sell stock, that is a business that is not passively investing. Okay, again. Anyway, that's my little soapbox moment this morning, I thought it'd be a good chat to have about measuring and understanding how I'm succeeding. And listen, maybe your property doesn't return all the capital immediately. Maybe it returns 20%, maybe it turns 50% of it. And that's good too. As long as when you're measuring the success of the deal. If you've got 100% of your capital back and that property takes a little bit of time to get going, then who cares? It doesn't owe you anything. Okay. And that's the way I like to measure how I'm doing. And like Ingrid said, it's always a long term vision, which is spot on Ingrid. So, yep. Let's do this thing. And I like that Alison. The only thing that you tried to stir from the shop sell it for more than you paid. I love that stuff gang. It is it absolutely awesome. Some side hustles I've done that with my kids. We've got side hustles going on selling fidget spinners and two meter iPhone cables and all sorts of stuff. It's lots of fun. And these days, it's easier than ever to make a little bit of cash on the side and have a bit of fun while you're doing it. Anyway, hope you're all awesome. And well, Terrific Tuesday it is. Have a great day. Hey listen, jump on and have a listen to my most recent podcast from John Wood. One of my all time heroes, he's an absolute legend. I love him. And yeah, it's a good one. Well I enjoyed it anyway hope you guys do. The Well faculty, John Wood Founder of Room to Read charity, which is so cool. And I love that guy. And yeah, give us a thumbs up and leave us a comment if you like it. Give us a rating on iTunes it helps us scale up the charts a bit so, all good, all right gang. That's it. I'm done and dusted coffee in a chat over and out. See you tomorrow at eight o'clock for another coffee and chat Adios. Take care gang. Bye bye.
 

More cashflow from furnished properties is it worth it

Hopefully the audio is coming through. Good morning team, good morning gang. See how we're going here. While all your all Facebook Live is warming up. Did a quick intro, morning everybody. Jason Whitton here. Morning Allison, this one's for you today. Yes, Happy Friyay, Friyay indeed. Love a good Friday. It's a fun day. Hang out with the kids tonight. It's pizza night tonight at my house. Pizza and a movie night. Hey, quick intro is Jason Whitton's my name for those who are joining, morning Megan, for the first time, welcome along. Those coming back, welcome back. Been property investing 20 years, coaching property investors across Australia and New Zealand. I have the right team. Actually, it was interesting. Just pull some figures the other day about how many property deals we've helped people do. In our system, it shows that we've helped people purchase 10,137 properties over 18 years. I'll say that again. 10,137 properties over 18 years. Pretty bloody cool. Pretty bloody cool. So yeah, that's pretty sweet. I love that. So anyway, again, good morning. Morning Philippa, morning Nicole, Alex. Great to see all you guys here. So today I was going to do a little bit of coffee and a chat about furniture. Allison asked yesterday is it worth putting furniture in a property, and positives and negatives to that? So let's talk it through, furniture packs. Listen, I'm a big fan of furniture packages because for me in the past they have been, I have been able to rent my properties for another, it's often between 15 and 30% more, depending on the time length that you rent those properties for. Let me sort of explain better. So a good furniture package, not a rubbish furniture package, is pretty, pretty important. You need to make sure you speak to your property manager if you're going to put a furniture pack in any property. And they number one, the property manager needs to be experienced in letting furnished properties. And number two, you need to ask that property manager, what would you furnish? All right, don't go over the top. Don't under furnish, don't over furnish. Have a chat to a property manager about the furniture that you need to put in there. And often, it's the big pieces of furniture that you need to put in there. Fridges, dryers, washing machines, microwaves, beds, et cetera, et cetera because there is a little bit of a trend with the sort of the 20s to 30-somethings of they like to be very mobile, and they like to try out lots of different places and areas for living. So their lifestyle, they like to try them out. And so if they only have to come with some suitcases, like they're moving into a university dorm, and they're sharing with friends, making that easier, is actually quite rewarding for you as a property investor. So the answer is yes, I love furniture packs. I love furniture packs in the right location, in the right property. Now for me, I've found the right location and the right property have been properties close to the CBD, properties close to where multiple people will want to share that apartment together, two or three people together sharing a property because those people they don't take usually move around with lots of furniture in tow. The location of that property that has been very successful in furnishing. I've got some fantastic properties in Brisbane and Melbourne furnished, renting off their chops. But they're close to the city. They appeal to young mobile, white collar workers let's say, or students who are studying or a combination or whatever it is. Very good, I love them. It's fantastic. And like I said, anywhere between 15 to 30% increase in your income. And another advantage of a furniture pack is that you get to write off the value of the furniture literally within two years, like depreciation is massive. It's fantastic, and I love it. I've even in the past, don't tell anyone this, statute of limitations has passed, I think. Even in the past I have gotten furniture off the side of the road, I don't know does anyone live in Sydney? And their throw out days? The throw out days are amazing in Sydney. I used to drive around, I used to live in a suburb called Wahroonga in Sydney, and Wahroonga is a very flat place. And I used to drive around Wahroonga in my old car. And I used to pick up furniture that was amazing that people were throwing out from their mansions, and I would grab the furniture. My wife was so embarrassed. She was like so embarrassed, she'd hide in the car. She wouldn't come driving with me. And I grabbed the furniture, and then I would go and put it in my investment properties and I'd depreciate it. So I'd get free furniture then I'd get tax deductions. How's that? Crazy. So gang, listen. Throw out days are so good. I take my kids dumpster diving and throw out days still to this day and just teach them about recycling. We actually built, our family, just built a whole, we've got a little farm down south, 100 acres. And we built our whole little cabin down there out of fully recycled scavenged materials. And it was awesome. It reminded me of my childhood days when I used to live in a small town, there was no hardware store, no nothing. And you used to have to, the only way you can have stuff to fix things that broke was to go to the rubbish dump. This is a true story, this is not bullshit. We had to go to the rubbish dump and find old stuff, and get the old stuff, and either cut it apart or re-weld it together, or old thrown out stuff from other people, we would grab, and then we would fix broken things because we didn't have a hardware store. The closest hardware store was two hours away. And we only went to town once every fortnight. So there you go. Anyway, I think I've gone off track. This was meant to be about furniture. So I'm a big fan of furnishing properties in the right location. Big fan. Let's talk about the downside of furnishing. The downside of furnishing is this, number one, yeah exactly, Nicole, with the bikes. The downside of furnishing is this, number one. It's going to cost you cash money from somewhere. You can't include it in the price of the property. You can't borrow it. You can take it out of your equity, out of your home, or something you redraw, but it's probably going to cost you between 15 and $25,000 to furnish something very nicely. So don't skimp on it. So it is going to cost you money and you can't borrow that money technically, as part of the purchase price of the property. Number two, it does take, I wouldn't call it a specialist specialist, but it does take an experienced property manager to let that type of property. So not every property manager is capable of letting a furnished property. It's just not their skillset or not their experience. So make sure you get the right agent who understands, who they're letting those properties to, and how to get them let. That's important because often if you make it difficult for an agent, your property won't rent, or you won't get the highest income for it. And you're like, why, what happened? Because one of the agent around the corner, et cetera, et cetera. So there you go. And number three, probably the one that is kind of the downside, which is annoying, what happens when you can't furnish it, and then you want to turn it back to long term unfurnished rental? Well, you've either got to sell the furniture or you got to store it somewhere. And then you kind of, then it's kind of counterproductive. You go and store it somewhere for 15, 20, 50 bucks a month and now it starts to eat into your cashflow. So there's some upside. I love the upside. I don't have any issues with storage if I need to because I can just chuck it at my farm, but a lot of people don't have that choice. We're storing stuff for a furnished property. Absolutely, Allison, chat to the Aria team about letting a furnished apartment. Now often, a three to six month letting cycle for a furnished apartment gives you that optimal high cashflow. So six month kind of gives people the chance to get in and get out. So but you've got to make sure that that works for you as a property owner. So I sort of try and aim between the six and 12 month. I had a long term tenant up in one of my Brisbane ones. It was a doctor, they were on to the hospital and it was a nice one bedder furnished apartment, they loved it. And they just did it a full 12 month lease fully furnished, which was awesome. So you never know. They can be a little bit lumpy for letting, so they can be vacant for a little bit longer. So just to understand that, gang, as we go. Yeah, Brahman, I reckon. I reckon you'd be in for a good improvement in your rent in the Windsor, for sure. So reach out to the Richardson ranch team in Brizzy, and talk to them about it, Brahman, because it's close to the hospital, that's like the biggest hospital in Brisbane. And professionals, nurses, doctors, all sorts of even, yeah even people staying at the hospital, et cetera, et cetera, with people who are sick, they need somewhere to stay as well sometimes. So and I'm not talking about Airbnb gang, I'm not talking about short term Airbnb letting, I'm talking about regular residential letting, but with furniture. Because I think that is kind of the sweet spot for those who don't like the sort of the up and down risk of something like Airbnb, and the high intensity of really short term letting, like two or three days at a time. So by and large, I'm a big fan of it, but don't underestimate the downside. It can be a bit annoying, be prepared for that as you go, and have a good chat to your property manager whether it's going to be right for you. So I think that made sense this morning, hope it did, gang. A good conversation. Carolyn, I would say Bellbird Park is too far out. It is a bit far away. Yeah and listen, Matt brings up a really good point there, he put a fridge, a washer, and a dryer in. Now sometimes it's not like the whole house, sometimes it's just a couple of bits. You bring up an excellent point, Matt. I used to do just put in a washing machine and a microwave oven, microwave, and charge an extra 10 bucks. So there you go, gang, and you get good depreciation. So great chat this morning. This is the nuance. Imagine earning an extra 20, $30 a week for your property. You get the depreciation 100% deductible all the way back, the whole thing, 100% deductible within two years. And away you go, yes. Roman, that is one of those little extra excellent ways of using your property for self-use, as well as getting some income going on then. Sam and I used to do that on one of our properties up in Brisbane. But then the body corporate said we couldn't do short term letting anymore, as in like three nights and four nights at a time. But yeah, that's a good one, absolutely, you can do that for sure. There you go. Anyway, gang, hopefully that makes sense. For all of those of you who are in mentoring, reach out to your coaches and have a bit of a chat about just talking through the strategy, making sure you do the numbers, and get it right. If you're not in mentoring, if you don't have a coach, well, you need one. And that's what we do. So if you need some coaching, you need some support, you need some help, then reach out. Send me a direct message here if you want. I'm happy to help you, happy to have a chat about what it might take to get some coaching, and really take your investing to the next level. A bit of a shout out, gang, for tonight, wine and wisdom is on tonight. We've renamed it, wealth, wine, and wisdom, just so you guys know we've added an extra w, rounded it out a bit. So join us again tonight, myself and Andy Fenton talking all things property and all things, stock market, the two behemoths collide, and we're debriefing the week. We meet every Friday, four o'clock Queensland time, five o'clock everywhere else. And I don't know about SA and WA, but you guys can work it out. Join us for wine and wisdom. We debrief the whole week, the marketplaces, and make sure we're all keeping an eye on things, and have a good chat and a bit of a yam. So all good, gang. That's it from me, coffee and a chat, done and dusted. Have an awesome weekend. And join me again on Monday next week for another coffee and a chat roundabout eight o'clock. All right, gang, hope you're all well. Have an awesome one. Join me tonight, four o'clock, five o'clock, wine and wisdom if you're there. All right, adios, bye.
 

Compared to what

Well, good morning, everybody. Welcome to another coffee and a chat. Jason here. Wandering up to the office this morning, so thought I'd quickly do the intros as I... Oh, look at this, I've got, I've got a couple of ducks in my pool. How cool is that? Anyway, what a wonderful morning. Morning, everybody. Morning Allen. Good to see you. Hey, welcome along to another coffee and a chat. I thought we'd just do a little bit of an outside chat today as we go along. I'm free-handing this. I'm free-handing my phone this morning, so we'll see how we're going. But hopefully everyone's well. Hopefully you can hear me. Morning, Belinda. Everything's doing okay, but hey listen, welcome along those who jumped on right now for the live. If you're joining for the first time, Jason Whitton's my name. Property investing 20 years. Coaching property investors across Australia and New Zealand for over 18 years. And each morning we get together, have a little coffee and a chat around about eight o'clock just quickly talk about the world of investing. The world in general, really sometimes, about keeping the momentum going as a property investor because this gig that we call property investing is a marathon, not a sprint. It's about going the distance as a property investor and making it happen. So this morning, I thought I'd talk about the concept compared to what. And I get this question all the time, "Do you think this is a good property? Ah, do you think I should buy this house? Do you think I should buy this land? Do you think I should buy this apartment? Do you think I should buy this... Is this property any good?" And that question in itself is impossible to answer because you're not giving me a compared to what. A compared to what and what do you want it to do. As a property investor, we're always analyzing and considering the things that we're purchasing. Why am I buying this one? Well, you should be anyway, if you're not. But a really good question to have on the tip of your mind, on the tip of your tongue, every time you're analyzing a property: compared to what? Compared to the average property, compared to another property in another city, compared to, compared to, compared to. And it gives you the opportunity to analyze and rationalize when you make decisions. Now, some of these questions I find all the time are things like this, okay? Oh, I got asked this one the other day. "Do think Bendigo in Victoria is a good place to invest? I can buy myself a nice brand new house out there for $489,000." And I'm like, "Well, compared to what? Compared to where?" And then we did a bit of analysis. We did an analysis, so compared to what? What are you getting out of that property? Well, you're getting a sub $500,000 brand new house, fine. The location, eh, it's regional. It's not necessarily strong. I don't think that I'd put my money there. And then you say, "Well, what are the rents? And what's the future growth possibilities? And what is the infrastructure possibilities of that location?" And then you compare it to, for example, I'll give it in a comparison that I used, compared to you can buy the same property, the same size, the same price, the same construction of that house, you can buy that in Brisbane, in part of Brisbane. So, Bendigo is a city of 150,000 people, Brisbane's a city of 1.6 million people. Ah, okay. Compared to what? It's a really powerful question, gang, compared to what? So, you'd buy a property in Bendigo or you buy a property in Brisbane? And the comparison, 150,000 people, 1.6 million people. All right, well, now I'm listening. Infrastructure. The Brisbane City has over $6 billion worth of infrastructure projects planned and underway. So, massive amounts of infrastructure. Job growth and property growth. Income growth in that city, absolutely golden. Plenty of opportunity for incomes and values to increase in somewhere like Brisbane. And the population will blow up and explode and be amazing, compared to Bendigo where when are they going to spend $6 billion in Bendigo? They're not, it's not going to happen. Sure it might be a nice regional town. It might be a great place to live personally, however, compared to, compared to what? Compared to Brisbane, nah, wouldn't do it. Let's do another compared to. Let's say compared to Melbourne or compared to Sydney. And then I said, "Well, you're going to Bendigo 'cause you want a house, well, let's compare this, let's compare the same price, $480,000. I can get you a one bedroom apartment five kilometers from the CBD in Melbourne. Let's compare that for the future." Melbourne is the most lived in city in any state, 75% of the population of Victoria live in Melbourne, which is pretty cool. Incomes other than the Corona issues just recently the strongest economy in Australia. And it will be the strongest economy in Australia again. On track to be the largest population, largest city in Australia. And the biggest infrastructure projects ever in Australia's history being launched and were launched prior to COVID in Melbourne. So, compared to what? Compared to a one bedroom apartment. For proximity and location, absolutely worlds apart. Now, this is where a lot of people get challenged. "Oh, a one bedroom apartment, doesn't go up in value." And that's true in comparison to houses, they don't grow as much, but the rents grow significantly in one bedroom apartments. They can be furnished and you can really get a far higher rental deal out of them. Now, I'm not telling you to buy a one bedroom apartment. What I'm saying today in the coffee conversation, the coffee and a chat, is you've got to ask yourself this, compared to what? What is the outcome? What is the thing that I'm trying to get? Because capital growth, the obsession with capital growth, gang, I've said this numerous times, the obsession with capital growth is a vanity metric, it's vain, it makes you feel good. You don't bloody use it, all right? You can't use capital growth to live off. You can't take it out and pay the bills. And if you do, you're stupid, right? 'Cause that's not the point. You don't use your capital growth to live off. You use that capital growth to recycle your equity, to buy another deposit. All right, that's what you do. And the moment that property has given you back your money, if you put $80,000 into property and it grows enough in value to give you that $80,000 back, gang, once it's given you back your capital, you now have an infinity return. Let me say that again. An infinity return on that property, because the amount of money that you have in that property is zero, zero, zip, . None, nothing. It's fully 100% totally self-funded. And I don't care what property you own at that point, whether it's a one bedroom apartment or a four-bedroom house, who bloody cares? The property is completely self-sustainable. It has returned its capital to you, and now you own a property for nothing. And into the future, it will grow in value, you can use tax deductions, you can get income from it, okay? Concentrating on capital growth is vanity, and it will actually ruin your experience as a property investor. Now, it is important, don't get me wrong. Don't get me wrong, you want your properties to grow in value. You want your properties to give you your deposit back. But if you measure your success as a property investor by the capital growth of your portfolio you will be 99% of the time solely disappointed because capital growth is not a linear process. And some days it's good and some days it's not. Every single property in the whole entire of Australia has gone up in value at some point and gone down in value at some point. They have, right? Growth is not like it goes up and never goes back down. And if you ever bloody jump on Onthehouse or RP Data or whatever, and you try and check your property values like you check the stock market, it's bloody insane. So, a really good question as a property investor, gang, is compared to what? Compared to what and what am I trying to achieve, okay? At the end of the day, in my world it's about momentum and acquisition as fast as possible, okay? If you can purchase your properties in five to seven years, rather than seven to 10, then get on with it, crack on. And that, that for you as a property investor it's about momentum. There you go, that's the way Alison, that is exactly right. The property has given you back your capital. It's done its job. Now, stop treating it unfairly. Once the property has given you the capital back, then leave it alone and let it run. And if it doesn't give you your capital back, it's probably a piece of shit, ditch it, move on, all right? Like sometimes, listen I've bought some rubbish properties, and sometimes you just got to take that one on the chin and move on. These days, ... And to be honest, I did that when I was chasing things like cashflow was the only important thing and all that sort of stuff and it led me down some fool's gold paths. These days, I believe our coaching and our property acquisition and strategies are so robust in comparison to 15 years ago. So anyway, gang. So gang, hopefully that made sense this morning. Compared to what? And it's never been easier to compare across different markets, but the fundamentals are always true. Where is the strength of jobs? Where is the strength of incomes? Where is the strengths of infrastructure and future growth of that location? Because I certainly wouldn't encourage anyone to buy a substandard location that longterm is going to be quite weak, because really at the end of the day, we're going to live off our rents. Our rents are the things that we're going to live off and the cities are going to have more ability to produce higher rents and more consistent rent than other locations, okay? That's just the way it's going to be. That's just the way it's going to be. And ultimately, if you do want your properties to have some pretty consistent growth, then the right locations in the cities are going to be far more powerful than regional locations. And there's a few caveats like the Byrons and the Noosas and those sort of extensions of the cities, they're the cities' holiday locations, but they're a bit volatile as well. Probably overpriced to be honest. But yeah, let's stick with the straighty-180 stuff and build a good property portfolio. Anyway, gang, there it is, compared to what? Good question to ask. Hopefully, everyone is awesome and having a great day. Already off to a cracking start. Always start the day with a nice coffee and a chat, and I really enjoy having a yarn to you guys. So, great to have everyone on. If there's something you guys want to ask or you've got a question, chuck it in the chat and I'll have a bit of a look later on and I can maybe talk about that tomorrow with another coffee and a chat. Have an awesome day, enjoy the rest of it. The start of it, the best of it, whatever it might be and join me tomorrow for another coffee and a chat. Hey, listen, my podcast, my interview with Trevor Hendy dropped yesterday, which is pretty cool. So, crack onto that one, track it down. Give us a rating and a star and a whatever. So, love you guys to do that. And Sam, my business partner, Sam Saggers, the best property investor in the country. He is an absolute genius. His podcast drops on Wednesday, which is tomorrow. So track that one down, which is awesome as well, gang. So, both on iTunes. His is called The Urban Property Investor. Mine's called The Wealth Faculty. Love it if you give it a listen, give it a rating, give it a thumbs up, give it a comment, whatever it might be on the iTunes. All right, gang, have an awesome day. I'm off, I'm done and dusted, coffee and a chat done. You guys be awesome and join me tomorrow for another coffee and a chat. Adios.
 

Let’s talk taxes

Good morning everybody. Morning, morning. Jason here. Dropping by for another Coffee and a Chat while everything's warming up. I'll do the quick intros, hopefully everyone as well. So, Jason Witten's my name? Good morning for those who are joining for the first time. Welcome for those who are coming back. Welcome back. Always a few smiley, faces or comments on there from the regulars, so welcome gang. Just a quick one for the like, for those who are joining the first time. Being a property investor a 20 years, coaching property investors over 18 across Australia and New Zealand. Done a few property deals in my time. And each morning get together, with the crew. Morning Belinda. And share a few, ideas a few bits of wisdom, a few opinions, a few rants every now and then to keep this, dream alive. Property investing is a marathon, not a sprint, and you need to go the distance you need to, you know, stay the course, keep the pace as we go along. So morning, Justin, Morning, Shaquille everyone there. Great to see everyone jumping on. So listen, you know, one of the classic things or classic inefficiencies challenges, things we need to manage and understand as a property investor are property taxes. Taxes, taxes, taxes, taxes. It's one of the most taxed, pieces of asset classes in Australia, which is I think pretty terrible to be honest. But at the end of the day, we can't change that. It's the politicians and the States that make these decisions, classic conversation going on right now about the idea of stamp duty. I don't know if everyone remembers this. When GST came in, GST was to come in and then stamp duty was to phase out, it was to be gone. It's a hideous tax. Most of the world has, doesn't have stamp duty on, people's homes. It's disgusting as far as I'm concerned. And you know, the, government's kept it around. It really annoys me, but just, because it annoys me doesn't mean that you know, that I, just go and cry in the corner. We got to work this stuff out as property investors and we need to understand how to minimize tax, taxes and how to maximize our returns. Because you know, at the end of the day you've got to money and everyone else bloody wants it. The banks want it, the governments want it. You know, every other institution and, thing out there is looking for your cash and your job is to manage it well and put it in places where it's going to replicate and, you know support you in the future. So let's just talk about property taxes at this point in time, ones as a, property investor we are exposed to and ones we can manage, okay. Ones we can manage. So number one, the first tax money, Alison the first tax we're exposed to as property investors that we can manage is stamp duty. Okay? Stamp duty with your, property purchase adds a cost on top of the purchase of the property. Sometimes pretty significant. And I'll chuck it out there, gang. What's the number one way you can, have a 50% less stamp duty on a property purchase. How do you get 50% less stamp duty pay 50% less stamp duty on a property purchase right now I'm going to leave that one hanging out there. So someone might know the answer. So put it in the chat. So stamp duty is calculated it's a state-based tax and you go to different States, it's calculated whether you're an investor or an owner occupier. And, the reality is, you pay it to the States. There's a couple of people put the answer in there. Judy, you were almost there by new, but Shaquille nailed it. You buy a land and house package because you only pay stamp duty on the land. Ladies and gentlemen, listen up, you only pay stamp duty on the land. If you were to buy a $600,000 property in Queensland today, you would pay $25,000 on an existing property, existing property. Okay? However, if you went and bought a piece of land and built a brand new house on it to the tune of $600,000, you would only pay about $12,000 for the stamp duty ta-da? interesting stuff all right? And, as we go as property investors we need to be smart about keeping the money in our pockets keeping the money in our portfolio, not wasting it because somebody said, "I'll buy, an existing property cause that's the best way to do it." Rubbish. Right? Be smart, analyze why, is that the best way to do it? Because the people who are telling you that don't know how to do it any other way, right? So for me, gang, you have to be smart. We, aren't, you know, running around with a gazillion dollars of cash in our pocket we have to make every dollar count and one wastage, one inefficiency right up the front, first thing we do when we buy a property is stamp duty. Okay? Stamp duty. It's, a issue. We have to manage that expense and there are clever ways to do it. So we need to understand that one. Okay? It doesn't mean you buy every single house or property as a house and land. But what I'm saying is, if you are managing that sort of stuff then keep an eye on that as you go. And there you go Shaquille there's another way, I was going to ask that but you got right in there. How do you pay no, stamp duty out of your own pocket? Well, we at PRA use our, coaching bulk buying power and we make vendors pay the stamp duty. We make the seller pay the stamp duty. Yeah mate we'll buy that, but you pay the stamp. It's not our problem, it should be your problem. So, you know Shaquille got one of those deals, which is awesome. All right? So there you go again, you can, negotiate in and around that stuff, which is awesome, all right. Stamp duty, let's move on to the next one a few taxes that we're exposed to land tax as a property owner, land tax they're trying to sort of Jimmy the old bloody, you know stamp duty and then have every owner in the country paying land tax. I think it's a wrought but I won't get into that one today. But land taxes as investors, you've got to be aware of it. It might not show up now, but it will show up later. And that's why we diversify into different States, land taxes, a state-based tax it's an entity based tax and it's an owner based tax, all right? So, you know, diversify your locations which is actually good for your wealth and your security and also good for tax minimization, land tax minimization, gang okay? As we go, forward. Buy properties in different States? Absolutely, Judy, I'm a big fan gang, I'm a big fan, at least having three, three different state locations for your portfolio three, you don't have to go mad and buy one in every state, but at least three. And everyone listening in should, at least have either a Melbourne or a Sydney in their portfolio. You don't have to have both, but at least one of those behemoth cities our biggest cities. You've got to have a piece of one of them. Okay? You, will regret it if you don't in 20 years time, if you've got... if you can get both awesome, wonderful love it. But you know, Sydney is probably a little bit more expensive. Melbourne is still quite good buying in comparison these days. You've heard me talk about that before, Canberra? Absolutely love Canberra, Nicole, and yeah, there you go. If you're asking a question? Canberra stamp duty is taxed at October in the first year. The politicians look after themselves, don't they? There you go. All right you know, so, good understanding, of the inefficiencies taxes and, how you can manage your way through that, very nicely, basically at the end of the day gang if you're smart and you know more things than the regular Joe you end up with more properties in your pocket more cash in your pocket, than giving it away. Don't waste your money, right? Don't waste your money. The best money you will ever spend is on some education and understanding about the things you're going to invest in that best money. That's going to save you heaps, and then, you know applying that information obviously at the right time, is the, implementation concept. So we've got, stamp duty, we've got land tax. We need to manage and minimize those gang. You know, how do we do that? A few suggestions. And I'm sure there's many more, when you sit down with your coaches, they'll, be able to talk you through it. Now, a couple of taxes on the other, end of this stuff, capital gains tax. How do we minimize capital gains tax? How do we never ever, ever, ever pay capital gains tax gang? Let me hear you say it. You'd never sell ever crikey. Everyone carries on about capital gains tax. Well, don't sell is not the point. The point is not to sell your frigging properties. The point is to buy them and keep them. However, if you are going to sell anything, you got it Judy you nailed it. If you are going to sell something and that's part of your strategy, because you are buying or selling whatever. Then there's ways to minimize that obviously, owning a property for more than 12 months minimizes your land tax or your capital gains tax in your personal name. Don't buy properties in company names. If you're going to own them for a long time if you're going to buy and sell in a short period, it might work. I'm not going to get into that today cause not many of us are into that sort of developing process, but there's a couple of places you can have capital gains tax free properties. If you ever sell. Excuse me. One, your own home. If you do, do a pre PR upgrade capital gains tax free on your own home and your, properties that you own in super capital gains tax is a lot less inside of super in what's called accumulation phase and when in retirement phase capital gains tax is zero. And matter of fact, income tax is zero as well. So zero income tax is pretty nice. So minimizing our taxes last but not least is our own personal taxes. So we had those property taxes right there but our personal tax, how can we minimize that? And you guys should all know this one, it's depreciation our tax deductions we can claim being a property investor. Matter of fact, you can claim depreciation anywhere as a business owner, as a property investor an investor in any asset, it doesn't have to be property. So don't get all worried about, you know a couple of dipshit reporters saying, Oh, you know property is no good and you know negative gearing and stuff like that. Don't listen to that rubbish. Okay? Because the ability to offset a depreciation loss yep dead right Judy is available in every asset class in every nook and cranny of our economy gang. So, you know, take advantage of it. It's very useful. So get your tax deductions because you get depreciation, which, is not losing money, it's not negative cashflow, it is depreciation on, you know I don't know I'm sitting on this chair. It costs a 100 bucks to buy and in a year's time, it's worth 50 bucks but I still have the chair, I still get to sit on it. But I'll technically lost $50 of value, I can claim $50 against my tax taxable income and I get a tax deduction Awesome all right? So there you go. Stamp duty was the, sort of catalyst for today's conversation. How do you minimize it? There's a few, ideas there, but again, with taxes you've got to manage those across the spectrum. And it's kind of like a little choose your own adventure or choose a smart adventure as a property investor to make sure you minimize those taxes. Keep more money in your pocket and, go the distance in this gig called property investing. Anyway, gang, that's about it from me today. Hey, listen, my, recent podcast with a lady called Heather Gardner just dropped out yesterday, go and track that one down. She's an inspirational lady, she's very, she's very awesome. And a country lady, she and her partner ran a $200 million business and, she had, seven kids. You name it, she's an inspirational lady So go on and have a listen to that podcast she operates in the school of tough love. She's, inspirational, so go and check that one out if you haven't already. And I think that's about it. Yeah Coffee and a Chat done and dusted, go check out my podcast. Sam's podcast is landing on Wednesday he's going amazingly. His stuff has just gone from strength to strength So check it out and, yeah, that's about it gang. Hopefully you're all well, join me tomorrow for another Coffee and a Chat and, have an awesome rest of your day. And if anyone who hasn't been to one of our trainings our Property Investor Nights, I'm going to run one because one of our coaches can't make it on Thursday. I'm going to run one on Thursday for people in Darwin. Doesn't matter where you are in Australia or if you're listening in, and if you've never heard from us before this might be the first time you'd dropping in track us down on, track us down on our Facebook page or our website. And you can come and dial into the Darwin Property Investor Night it's a webinar, So you can dial in from anywhere if you're up for it. All right, gang. Hopefully, hopefully you're all well, and that's it for me done and dusted Coffee and a Chat over you guys have an awesome day and see you tomorrow around about the same time, bye bye.

Is off the plan safe

Hi, good morning everyone, dialing in for a "Coffee and a Chat." Just getting up to my office, show you guys a bit of a tour if you want while I'm getting myself ready for our "Coffee and a Chat" this morning. I don't know, I don't know if you can see in the background there, that's my office. I live in my office about 100 meters from the house which is pretty cool, which is always awesome. Nice to have a bit of room. Hi, so thanks for joining us. If you guys jumping on now, which is cool. Before we get going, always do the intros for those who are joining me for the first time, joining us for the first time. Jason Whitton is my name been property investing, over 20 years and a coaching property investors across Australia and New Zealand with my business partner Sam and my partner and business partner Shay. For 18 years at Positive Real Estate. So, hey listen, good question from yesterday in the chat, someone said, "Hey, listen Jason, is this off the plan thing, safe?" Is off the plan safe? So I thought, I'd talk about that today. I thought I'd have a bit of a chat and say, you know answer that question. 'Cause it's a good question, is off the plan safe? I like off the plan as a strategy personally, it's worked extremely well for me over the years and... Morning, Heidi, morning Raj , Dane's there, Alison morning, I do walk to work Alison. Yep, I get my fitness every time I need something, I'm gonna walk back to the house, which is cool. But I live on a nice spot, live on an acre. I've been working from home for 15 years, which has been cool. So for me, working from home is pretty good. But listen, good question from yesterday, someone asked is off the plan safe? Now off the plan is absolutely perfectly safe. No, no safer, nor more dangerous than any other acquisition strategy. And let me talk you through the strategies that we talk about and we coach too as property investors at Positive and the strategies we've used ourselves. So there's six strategies or types of deals you can do when it comes to buying some residential real estate. Number one, an easy type of strategy for an acquisition strategy is a discount or rebate strategy. So it's pretty straightforward, the property is on the market for 500, you buy it for 450. That's a way you can, as the purchaser acquire the property in a way that can help you create equity, create cash, get a discount, improve your rents and so on. So discount or rebate, we love that one positive. We've done literally thousands of those types of deals over the years, discount love it. The next one a lot of people talk about is a renovation type deal. So buy a property, house, apartment, townhouse, don't care, add some value right? Renovate it, fix it up, small renovation, large renovation. If the renovation is large I would say it's getting towards a development. And I wouldn't call that, something simple. You know if you're adding bedrooms, you're knocking down half the house that's a small development. So we've got discount, rebate, we've got renovation. The next two are ways to add value. And I've done a fair few of these myself over the years. And it's almost like a progression of value adding or ways to do a deal in property investing like sort of one to six here. One is called the strata, okay, so you either buy an existing property. And this is often where there's existing apartments or townhouses all in one title, you know, two, three, four, I've done a strata titling very successfully. Over the years, my largest strata was 15 apartments. I bought 15 apartments in Sydney, I renovated and strated them, they were all on one title so the gentleman who actually owned them or selling them built them himself actually 20 years before. And I purchased them all in one title. I renovated, I strated, chop them up and then onsell them for a very nice profit. So that strata titling. Subdivision is another way to add some value. So subdividing, you know, a big piece of land. It, complies with council measurements and you can chop it up. I've done a fair few of those, and they're really good too. I quite like them, these deals like strata and subdivision require a significant amount, more capital and they require the council to be involved heavily in your deal. And I wouldn't call them beginner deals. I wouldn't call them you know, easy deals, but they are profitable if you buy the right one and you understand how to do it. But I would... If you're within your first three to four properties in your investment portfolio these types of deals are not for you, okay. That's my position anyway, you need a nice solid bind hold wealth based first. Morning Diane. And then you can get onto more interesting deals. The next type of deal is off the plan, okay. And I'll leave off the plan to last. The next type of add value way to do a deal is a full-blown development from scratch. And you buy a piece of land and you can develop it into apartments, townhouses, or even a large subdivision. I do a couple of those a year. They cost way more money and they've got way more risk. And certainly not for the faint hearted. I'll tell you guys a few stories about that maybe in the coming weeks, I'll chuck a couple of stories in my morning, coffee chats about a few of those disasters that I've experienced in my life. Learn some lessons, very good quality, high value lessons, high cost lessons. But the question was is off the plan safe? And the answer is absolutely, what's not safe often are people. Let me just put it that way, all right. The deal is fine, but let me talk through off the plan, the positives and the negatives, okay. Off the plan, if anyone listening in doesn't really understand what it means, it is purchasing a property and 95% of the off the plan purchasing comes from apartments or townhouses where you put a deposit down today, a 10% deposit, you agree on a price today. You have a set of plans and some drawings and some photos. And the developer says "I'm gonna build something like that." And you're like "Good, I like the spot, I like the drawings and the design that you've done, here's my deposit. When you finish it Mr. Developer, Mrs. Developer, I'll pay the rest." Okay so off the plan, I like off the plan because of those things. Now the upside is, for 10% let's say $60,000 as a deposit you can control awesome, amazing pieces of real estate. And there's no more to pay for, let's say two years or three years off the plan. Your piece of real estate can be in a location. Let's say right now, I've got a piece of off the plan property coming up, that our investors will be taking a look at in Brisbane . It's coming up very soon, we're launching it to our, all of our members, all of our mentoring members very soon. And I'll talk you through it, like why I think that deal will be absolutely bomber right? So it's very close to the CBD, two and a half kilometers from the CBD. It's perched up on a cliff, It looks at the city with views, never to be built out. It looks down that way to the river, It looks down that way to the river in Brisbane. Absolutely spot on location and spot on suburb. The developer, so the location is good. The developer is extremely safe, the developer has one development of the year, building of the year, the design of the year, six out of the seven years in the last seven years in Queensland, okay. And then has gone on to win other awards nationally as well. So big tick boom, the developer.. Morning Simone, The developer is fully funded and has some significant resources to complete the deal and does not need secondary or third level finance or funding from untrusted finance and funding sources, okay. So you know, how do we check in on is an off the plan safe? That type of off the plan is awesome, I would expect that my deposit will work hard in the off the plan process. If I put my deposit down $60,000 for two years my deposit and the value of that property will either stay at the same price or potentially go up, okay. I think that mine will go up. I did one in Melbourne just recently in Collingwood. It's settled late last year. And the value went up, you know, $40,000 in the timeframe. And another one I did in Canberra, they both went up in value in the after plan, after plan timeframe. Okay, I put my deposit down and the values in the area rose in the meantime. How can off the plan be unsafe? Okay, well here's how often plan can be unsafe but really it's not the off the plan that's unsafe. It's you as the person that are unsafe to do the deal. Okay, so let me say what that means. Number one, you buy an off the plan property and you choose a poor one or something happens in the market place and it goes down 10% in value. Or the valuer, valuing the property, doesn't want to value it at what you paid for it, or you agreed to pay for it. You've either paid too much, or the value is a wanka. It's probably nine out of ten, the value is being a wanka. Sometimes you'll just pay too much because you didn't know, you didn't get any help, you didn't get any assistance and so on, okay. So you arrive at the time, you have to settle that property for an off the plan and you think, oh I've already put my 10% in, I've got a 90% loan, I'm fine. Hang on now the value it says it's worth 50 grand less and you have to put another $50,000 into the deal to settle it and you don't have the 50,000. So that's what can happen with off the plan. You can arrive when you think you need to settle it and you can't because the lending and the valuation doesn't agree with what you thought it was going to be. So that's where it can be a problem or an issue but what you make... What you gotta make sure you do is make sure you understand who the developers are. You check out their previous projects, you make sure they're fully funded, they're gonna deliver the project on time, et cetera, et cetera, okay. So that can be an external evaluation issue for you. The other one, you lose your job, something happens in your life. Two years is a fairly long time, you might lose your job. You might separate from a partner and let's say, you know, you both agreed you were gonna buy it together, 'cause that's how you could afford it. And then you're now single, your life circumstances change. So that's how often plan can be a little bit dodgy into the future. If your life circumstances are uncertain, okay so you have to be certain that you know, pretty well from where you are today. It's either going to be the same or improve by the time you get to the off the plan settlement. Which is, important, so that's for you. The other one is the quality of the developer. It's called the render to reality, okay. Now it happens in every, every state of Australia. There are good quality developers, we call them brand developers. They have a brand, they have a reputation in the market, which is important to them. And then there are developers that have no brand, no name. You don't even know who the person is building that property. You've never met them, you can't find them in LinkedIn. You can't... They don't have a company, there's no website. That is a no brand developer. And hear me when I say this you guys, there is no, there is zero reason ever to purchase from a no brand developer off the plan, okay. That is when you will get in trouble. That is when that person has nothing, nothing, nothing to lose by delaying, by not paying, by not delivering on what they said was in the brochure because the prices went up, et cetera. And that is where the danger is, It is when you think off the plan that one's 50 grand cheaper. Why would I buy the one that Jason's talking about? When this one over the roads, 50 grand cheaper. Oh my God, It looks exactly the same in the brochure. And that's when you get caught because most people shop on price and not on value, on true value. Price is irrelevant, If it doesn't deliver when it comes down to it, okay. So just make sure you understand what that means. That's why I believe if you ever want to do off the plan, off the plan in a group like we do, we call it co-op buying. We are a co-op and we purchase in bulk in a group 5 or 10 or 15 or 20 from a developer as a group of people that developer must behave, there's 20 of us. And if they don't deliver we will band together and give them a hard time. You by yourself, isolated alone, and that developer doesn't deliver you have got nothing to stand on unfortunately. So can can off the plan be unsafe? Absolutely, 100% It can. It's certainly not for people who don't understand real estate. That's why like buying a property today and... Like seeing a property today and buying it tomorrow is quite simple in comparison to off the plan. But off the plan can be super powerful, massively powerful. I love it, as a strategy, It is certainly a key strategy in good quality real estate around Australia, okay. Ashton just said here about rescinding contracts. Yup, and which is good so Ashton once you're in a contract that off the plan contract, and you've gone unconditional so you as the buyer, you cannot rescind the contract. You can't choose, "Listen, I don't want to do it anymore gang, thanks but no thanks." You're contractually bound to settle a property like you have to do it and you know irrelevant of your circumstances. You can apply, you know, on compassionate grounds let's say something went... Didn't go to plan, you know, you had some circumstances in your life. And I do know a number of really nice quality, good people developers who have let people out of contracts from time to time for genuine issues. But 99% of the time, it's like, well hang on. You know, you said you could pay for it two years ago. I trusted you, I went ahead and build this property. Now I've incurred all the costs, you need to settle it. So you can't get out, if you just change your mind Ashton. That's not how off the plan works. So you have to be certain, to go the distance guys. On the flip side, which is a little bit annoying which is kind of hypocritical when you think about it. But you know, the developer is in the driver's seat not you, they can via a mechanism in an off the plan contract called the sunset clause. The sunset clause rescind the contract, if it goes on too long. So the developer can rescind the contract. Yep, there you go I've seen you asked it there and depending on how the contract's written Ashton you could cancel it or the developer could cancel it, so check in on that one mate, as you go. Certainly once the sunset clause is passed kind of the gloves are off, which is fair enough. You know, maybe something goes wrong, maybe COVID hits you know, in Melbourne it's gonna cost more for that developer to build that property now. And they kind of like... It's gotta make a loss, so they can't go ahead and build it. So there are genuine issues in that process as you go. Melinda asks, what about off the plane in Melbourne gentrifying areas right now? Absolutely Melinda, and we love this. At positive and Sam my business partner has written books about it. He talks about it at universities, the gentrifying areas. And we use the off the plan strategy in the gentrifying areas, right now we all know, we all know that Melbourne is having a bit of a tough time when it comes to COVID right now but it's not gonna be that way forever. And, you know, Melbourne will come strong. It's an amazing city, It's a beautiful amazing place to live. It's got huge amounts going for economically beautiful city. So, you know, if you're concerned about buying a property physical property today in Melbourne, then off the plan is a fantastic strategy. I'm doing off the plan in Melbourne right now. And my property is going to land in 2023, fantastic, right Right in the middle of when you know, the peak level of property shortage, the peak level of everyone back at work and jobs, the peak level of migration going to start and come in the peak level of vacancy rates being low. So I'm using off the plan as a bit of an opportunity to put my foot on a spot, being in control of a piece of real estate to land it at a time where I believe there will be little to no challenges or issues in the rental market. So, but if there is, you have to be prepared for getting that wrong and you have to be prepared to own that property for the long term into the future. And I am, and you know, Melinda, if you're thinking about that now 2022 is gonna be very good. I think it's perfect, but just make sure you grab a little, bit of extra maybe cash, buffer another five or 10 grand up your sleeve, just in case there's a little bit of wobbles, but you know, if the property's good and you're happy to own it for 15 or 20 years then the short-term stuff is just short term off. Off the plan is good, It's a good strategy. If it suits where you are, suits your financial, suits your emotional capacity and your mental capacity as a property investor. But certainly you've gotta check in those no brand, no name, nobody developers, silliest thing you could ever do, just because it's cheap. Cheap does not mean value when it comes to off the plan you guys. If you wanna get a deal, if you wanna get a good price deal, wait till it's complete. Wait till the whole thing's built and at Positive we do that all the time, our crew do it all the time. The last 5 or the last 10 the developer hasn't been able to sell off the plan, well we go in and bash them up and get a big discount. So wait till it's completely finalized. You can get a valuation today, you can get a discount today and you can settle a property tomorrow. And sometimes, sometimes those no name, no brand developers actually deliver a pretty good property. They built it so you can see it, they've built it so you can investigate it. And if they delivered on what they said they were going to do then perfectly fine. But I wouldn't put my money in the off the plan hope and pray strategy for the no brand, no name developer ever, ever that would be madness. Anyway, that was a good chat today gang. That's a good question, thanks for asking that one. I can't remember who asked it but I'll give them a shout out in the chat. So if you guys got any questions, chuck it in the chat, guys always happy to answer, have a conversation about these things, as we go the morning coffee and a chat, I quite enjoy sharing these experiences and ideas with you guys. So thanks for joining me a few online today which is awesome, but that's it for me, gang "Coffee and a Chat" and done and dusted. If, anyone wants to find out about our mentoring or our co-op group buying, or buying off the plan and you need some help or some assistance with that, give us a shout out. Track us down in our web page, track us down in our Facebook events. We do training events every week, or hit me up with a chat or a message. We can have a bit of a yard. Alison, we've got some amazing deals in Canberra. 7% yield, 360 K, they're pretty good actually. Only Canberra is our little winter, but give us a shout out, if you need some help you guys Alison, I can help you with that one buddy depending on where you wanna buy that's for sure, but hope you guys are good. Have an awesome day, it's Friyay. Tonight, Andy Fenton and myself are doing "Wine and Wisdom." We're gonna debrief the week, the whole week. What's in the news, the budget. It's a big one, it's an amazing one. We're gonna that tonight at 5:00 PM New South Wales time, 4:00 PM Queensland time. I think that's what we're doing anyway, as you go. So join us for that this morning gang, as you go... Ashton there you go, mate, yep the developer got a discount 5% off good work mate. My only thing Ashton with those sorts of things is be careful, if that developer is a no name, no brand, unidentified developer. You know even if you've got the discount, you know, maybe they've under priced it but mate just check in on it. Just letting you know what you've gotta check in mate, but a 5% discount awesome mate good job. That's more money in your pocket and that's the way to roll. So, all right gang if you're gonna join us tonight, join us at 4:00 PM Queensland time, 5:00 PM New South Wales and Victoria time. And for the other States I can never bloody remember. Alright guys, have a good one. Friyay, bye bye.
 

Tax free Wealth.....PPR upgrade strategy

Hi, good morning everyone. Morning! Morning! A little bit colder here in Queensland today. Bit rainy overnight. Hopefully everyone is well while we on the internet and people are jumping on the live, we'll just quickly do that intros. Good morning Jason Whitton is my name. Each morning around about eight o'clock, jump on the old Facebook and do a bit of a Facebook law coffee and a chat. Good morning Alison you're always. Oh, I see great to have you on the lot again and just talk about little tidbits of information, inspiration whatever it might be for asset property investors. As we go on this journey, it's a marathon not a sprint. We've gotta go the distance but we've gotta be smart and we've gotta be focused and understand you know, what the outcome is. But today a bit of a shout out from someone yesterday asked about the principal place of residence, the PPR Upgrade Strategy and it's an excellent strategy. One we should keep in mind as we move through this journey, we call property investing, creating wealth as property investors. It's one of the cornerstones, the pieces of foundational wealth that you need to make sure you get right in this activity we call property investing, property ownership. Now your principal place of residence buy large, the debt on that is a bad debt. Okay? And so we've talked about this before and in other videos making sure that when we have a our own home principal place of residence, we target to reduce the bad debt and make sure that that happens at the right sequence. It's usually after acquisition is done because our resources are all of our spare capital needs to be put towards deposits. But for the most part, most people if they have a debt reduction strategy can pay off their own home principal place of residence within 10 to 15 years if you do it right, if you follow the strategy, follow the process, understand where your money is isn't and use it well. You can reduce your debt on your home significantly and fast. Okay? So the Principal Place of Residence Strategy Upgrade is a strategy that you use for tax-free wealth. Your own home is a tax-free asset. It's one of the only assets that you can own that if you buy and sell that asset, you don't pay any tax to the government, any capital gains tax to the government. Obviously when you own it you know you pay some rights and I technically that's a tax you pay some stamp duty when you buy a new one technically after tax but a sale tax, a gain of wealth, you don't pay any tax on the gain of wealth on your own home. So part of the strategy when you create a strategy over a 15, 20, 30 year plan, let's say we think a little bit longer in Australia. It depends on how fast you can pay your home off. Gang it is smart to go in two directions with your principal place of residence for upgrade. Number one, the first part of an upgrade Principal Place of Residence Strategy is the you purchase a property in a good location now let's say it's maybe an up and coming location. You lived there for 10 years. You reduce the debt and now you have a home that has got low debt or no debt on your principal place of residence, around you that a suburb has risen in value. You know it's gone significantly well. We've got one of our coaches in Melbourne. She did just that, you know 12, 13 years ago she bought a property in a pretty interesting location. It was good. It was a good location but it wasn't like the best best, you know in 10, 12 years later, it's an amazing location because the city has just put the pressure in that the capital growth around her and instead of selling her property and moving on, she has chosen to do a significant renovation on the principal place of residence because the house was old but the location and the land was excellent. And she maximized it's what's called the highest and best use, add value renovation to that property. So we've got two choices. First part of this is your principal place of residence it's capital gains tax-free. Your debt reduces significantly or pay it off completely. You get to this point, we go right. We've still got you know, we've still got the capacity to borrow. We've still got 10 or 15 years of working left in our life. What shall we do? Shall we significantly upgrade the property wing cause it is in a good location and now the house is not the highest and best use of the land we're living on or you know what? This area that we're in, that we could afford 10 or 15 years ago is a nice area but it's certainly not a premium area and it's time for us to sell our home and go buy in a premium area. So let me just try and put some numbers in this. Let's say you purchase a house, you know 10 years ago for $400,000. Now that house now is worth $800,000 let's say and you've paid off the debt. Okay 10 years later, you take that $800,000. You sell the property and you can go purchase. Let's say a property for 1.2, 1.4. You know, don't have too significant a debt, a debt you can pay off in 10 to 15 years maximum. Now you jump in location, you jump in property quality, you jump in maybe lifestyle value, a suburb a much better location. Now in the next 10 or 15 years time that property going up in value because you've shifted into a better location, goes from 1.4 to $3 million. Now the one you, if you stayed in the 800,001 and let's say it doubled in value, it's only $1.6 million. So you know the capital gain value over the long term principal place of residence, capital gains tax-free. Grow your principal place of residence value because it is the one of the only places you will ever get a tax-free capital gains sale in your personal name. It's the only place. You can have capital gains tax free sale if you own a property in super and you can have a capital gains tax-free sale if you're structured in business and your own a workshop or an office or something, and you qualify. So if you ever want to know about that stuff, let me know. It's a little bit more interesting but that's the idea. So you know guys part of your long-term strategy if you're looking to maximize your wealth should be the principal place of residence tax-free strategy, okay. There's another part of that principal place of tax-free strategy which is some people move in and buy and own principal place of residence, live there for a year, live there for one year, get all the grants and whatever, move out and rent it out for five. You can rent that property out for six years, live in another property, a rental property not have another principal place of residence and you've still got six years to sell that property capital gains tax free. So that's seven years of growth on that property. You could trade a property like that every six or seven years. So there's a few strategies around the principal place of residence, your own home that make a lot of sense using it as a wealth base to grow your capital and shift your wealth to the next location. The next opportunity if that's what you wanna do. Now for some of us we might have children and you know commitments and all that sort of stuff, the right school. I wanna be in that location whatever, you know moving you couldn't even comprehend it. So then potentially you would be better suited in that upgrade strategy which is the renovation strategy, add value, maximize the value at a point where it makes sense to with your principal place of residence. Okay? Hopefully that makes sense today gang as you go. And yeah, Alison here she said, I don't have a principal place of residence but I only wanna buy investment properties which is perfectly fine. Alison you know for some people, the PPR is not part of the strategy and that's okay. There's nothing wrong with that Alison but potentially we could tweak that strategy, potentially we could get you to live in one for six months and then we call that your principal place of residence for the next six years. And if we needed to do up like a trading boost to boost your capital, we could sell one tax-free and then upgrade to another one. There's a couple of ways to do the strategy. So it's not always the only way but that is one of the ways you can continue to grow your wealth tax-free as a property investor. Remember this gang you've only got certain amount of resources and everyone else is always trying to take those resources from you, right? The government, the banks, like everyone's trying to say, oh give me your money. You know trying to take the cash. Your job is to keep as much of that money as possible. The gross to net difference, you earn $100 and you put you know $700 in your pocket. That $300 that's gone missing. That's been taken by others. We need to get more of that back. Okay. The more we get the better off we're gonna get the longterm gang. And it's you know real wealth is about you know the compounding effect of $1, you know over the next 30 years, saving $1 extra everywhere rather than you know one big hail Mary decision to make the wealth all in one guy like that's gambling. Having a clear strategy about in 10 years time, I'm going to upgrade my principal place of residence capital gains tax free and double the exit value in 15 or 20 years time after that. That's strategy that's real wealth. That's planning. That's smart. And it's totally doable by everyone as you go. Oh yeah. Anthony, good question about demolishing and building. It's a little bit of a technical one that Anthony and it's certainly one that you'd have to chat to a good accountant about but certainly what can happen mate is that you can sell that property to another entity that you own, a company or a trust and then build those two properties and keep them for the future for investment. There's a few ways to make that work Anthony, which is quite clever so. Made a good question. That's one that many people do actually. So I might, if you need a good account and let me know but yeah you usually sell them to an entity, your own entity, which is a company or a trust to keep them for investment purposes moving forward. And especially if you do it at the end Anthony, if you do it when you're a bit older coming close to within sort of five or eight years of retirement, there's a very different, there's a very different opportunity to roll quite a lump sum of that gain potentially into your super. Now I'm not a financial planner. I'm not giving any advice here but I know this is a strategy that you could talk to your financial planner about or you could ask me about the right planner to talk to about this strategy. You can roll over a significant amount of money if you're super in a certain position, tax-free for income tax-free and capital gains tax-free, future gains in your super. So you know there's some good conversations. This is all strategy gang. This is all strategy as your go so and it takes time to let this strategy mature. It's certainly not something that's gonna sort of all play out in 12 months. These strategies are good chunky wealth strategies that you have to have a bit of runway a few years in advance locked away to make sure you get there. Chuck Kilz asked about a good accountant and financial planner might all have got an excellent financial planner in Melbourne. Send me a DM. His name is Andy Fenton. He is amazing. He is awesome. I can connect you with him. I don't have an accountant contact in Melbourne, for you might but I've got them in Sydney, Brisbane and the Gold Coast, if you don't mind. So I DM me Chuck Kilz and I'll hook you up with the details might. Oh good. All right gang hopefully that makes sense today. Thanks for the shout out. Whoever did that one yesterday about the PPR Upgrade Strategy. I'm always happy to dive a little bit deeper in our morning coffee chats about explaining some of this stuff in a little bit more detail. Obviously this is strategy but implementation down to the nuts and bolts tactical, guys you gotta have the right people to help you execute this stuff. Okay don't try and do this by yourself because there's a lot of moving parts to get right The idea is a big idea. We call it a clouds idea and to get it right you've gotta get down into the dirt and make sure everything's lined up, all the nuts and bolts are sorted. You know your coach, your financial planner and your accountant should be part of this type of strategy conversation. Okay? You'll property coach. If it's property, listen I've said this a million times accountants and financial planners, aren't property experts. You need a property coach to lead you with these types of decisions but the execution, the implementation of the nuts and bolts of the strategy, a good accountant and a good financial planner who are pro property, who believe in property, who support property who don't wanna then confuse you is vitally important. So there you got, I know again that's it. Coffee and a chat done. It is what's day Thursday, I think it's Thursday. I'm a little bit disorientated but have a great Thursday. Join me again tomorrow, Friday coffee and a chat. If you haven't already. Another little shameless plug about my podcast. It got launched on Tuesday, the first episode. So if you haven't already, download my podcast called The Wealth Faculty and have a listen. It's the kickoff of me interviewing many many people about you know, what is true wealth to you or them and learning about the people that you're gonna need in your team for the future to create, you know significant, sustainable longterm wealth and health for your property portfolio. All right gang that's it for me signing off for another coffee and a chat. Thanks for dialing in everybody and have a great Friday. Wednesday, is it Wednesday or is it Thursday. It is Wednesday. You're right. Anyway oh good. See I told you all these aren't Thursday. Anyway join me tomorrow. Whatever day it is. All right gang. Take care and see you tomorrow. Thanks for joining. Bye bye.
 

What's it going to cost to buy that next property

Good morning, everybody. Morning, morning, Jason here. Welcome to another coffee and a chat this morning. I thought, my office, my studio was all set up tonight. I dunno if you can see it here, I've got my mentoring on tonight where we sit down with our team from Positive Mentoring Program. That's my studio behind you. All around, anyway I'll give you a bit of a tour. Morning Ellison. There's everything set up for this evening. If you can see it anyway, it's not a very good tour. Oh, the cameras, lights, action for this evening. But great to see everyone jumping on this morning. Good morning. Marvelous Monday it is. I thought we'd go outside this morning anyway, because my studio is all set up for something else. So we'll sort of pop out. So it's a beautiful day anyway, but for those who are joining for the first time, Jason Whitton's my name. Property investing 20 years, coaching property investors over 18 with my business partner, Sam Saggers, my life partner, Shay Whitton. We've been running Positive Real Estate for that period of time. There's my office up there, actually. If you guys can see, I've got a little office, which is pretty sweet. I live on an acre, not far from the house. So I get to go to the office every day, work from home, but I still get to work from an office. It's kind of nice. So then anyway, I love it. So I thought we'd go outside this morning because absolutely gorgeous outside today. But welcome along for those who are joining me for the first time and those who are coming back, fabulous to see you again. Each morning, get together with everybody. Just talk about property investing. Being like I said, been property investing over 20 years myself and share a little bit of wisdom each morning over a coffee and a chat. So great to see everyone here, a few chats coming through, which is awesome. So give us a shout out if you've got any questions, but this morning I was going to talk about what's it going to take to buy that next property? Because we're all building our property portfolio and often getting started is actually fairly straightforward. You know, you've already got some resources in play. You've already got some income in play. You've already got some deposits or some equity or some cash that you can use, but once they're used, once they're invested, once you've got your deposits, your initial deposits, let's say it's 100, you know, 150 grand. Thanks Carolyn. Let's say your income is, you know, maximized for the servicing. Well, what next for you? What next? And that's what I thought we'd talk about this morning. Two parts to this process that we need to understand about what's it going to take to buy the next property? Number one, actually the easiest one, is where you're going to get the next deposit from? Okay? Unless you've been strewing cash under the mattress for ever and a day, you know, your deposit is going to come most times from two places, okay? Number one, the equity growth in the properties that you already have. Your properties growing in value over and above a certain loan to value ratio. Grow in value and they create the next deposits for you, your own home, your investment properties, or multiple investment properties. Where is that deposit coming from? Now, the challenge sometimes is that growth is a bit slow. Sometimes you need to boost it with your own saving or cash put towards the next deposit. Now this is the tough part. This is the disciplined part of property investing, you need to be disciplined enough to get enough deposits going in a market place so you don't have to save cash anymore, okay? And in my experience, usually two to three deposits in the market working usually then become self-fulfilling, self-rolling, self-replenishing going forward, okay? Two to three deposits. On average, a $500,000 property right now will take you at a 90% loan to value ratio. Approximately 75 to $80,000 to purchase that property depending on the state that you live in, depending on the state that you live in, depending on their statutory expenses and costs, okay? So the stamp duty and so on. So that's why it's like 75 to $80,000, depending on where you're buying, what you're buying, and how you're buying it. If you're buying an owner-occupier, it's a little bit less, if you're buying an investment property, it's a little bit more, okay? So two to three properties, two to three investment deposits would be 150 to $225,000, okay? So that we need that amount of money in the marketplace. You're saying, "well gee, Jason, I don't have that." Well start where you are, okay? So the deposits are created by two mechanisms, one: capital growth from the properties that you already have, and releasing the equity from those properties and two: you saving more deposits, like Alison saying, here, "saving after-tax dollars is a marathon." Now there's a little twist in this, which is something important to understand, when you buy investment properties, if you buy newer properties that give you tax deductions, you get to save your money. You get to create saving for future deposits, from pre-tax cashflow, from dollars before you pay tax, which is good because you get depreciation, okay? So deposits, some people use deposits or create deposits by joint venturing with others, okay? Joint venturing with others, with friends and family or business partners, not my favorite one, but some people do that. One way to create deposits also is to borrow money from family. I quite like that one, especially moms and dads lending money too, when they've got lots of equity and they lend money to their kids, that gives their kids a real good boost because often, younger people have got good incomes, older people do not, joint venture up that way or lending some money that way can be beneficial for everyone at the same time. Where are you going to get your deposit from? Number one, that is the thing you've got to focus on. Where are my deposits coming from? Now into the future, if we're able to borrow up to 95%, then we might need less money to get into properties and that's going to be excellent for us as investors also. Now let's get to the next one, next part of this conversation, which is the tougher one, all right? Like saving's pretty tough. Like Alison said, that you know, most of us haven't got a gazillion dollars hidden under the mattress, use your extra cash flow, Use your tax benefits, tighten the belt a little bit on things that you don't need to have right now, that you can buy your properties with. One of my clients, Justin, he sold his car and his motorbike and saved his butt off for his first deposit, okay? He didn't need a car, he didn't need the motorbike. He sold them, got the money, bought a property, consequently, he's made a hundred thousand dollars in equity and now he's going on and he's getting set up for his next property. Now he did the next thing, which we talked about for a little while as well. So often we get to the point where we might have equity, we might have deposits, we're ready to roll, but servicing, the ability to service the loan, holds us back. And we're like, well, what are we going to do about this? And this is the tough talk gang, that maybe some of us need to have. If you want to build that property portfolio, you have to increase your income. End of story. End of story. "Oh, what do you mean by that, Jason?" Well, sometimes all of us are sitting in jobs that number one, let's talk about this, number one, you're sitting in a job you don't like, it's easy, it's not that hard, but it doesn't earn you that much money, okay? You know, it's not a career, you don't really care about the job. It's not something that you love doing. Well here's my conversation with you gang, come in bit closer, 'cause this is for real. It's time to get your arse into gear and get a decent job that pays you decent money, more money than you're making right now, and go and find somewhere that you'd like to be instead of just coasting life in a comfort zone, all right? You need to get out of your comfort zone, income comfort zone, and you need to get into a zone where you're earning decent money, all right? Now, just because you finish high school or university doesn't mean you stop learning. There are people in your industry earning more than you. Double, triple, I know there's every single industry in the whole of Australia where you are right now, I would say 95% certainty, you are earning less than the best people in your industry. Yeah, it's hard for you in the world of the military, Alison, 'cause you've got to sort of stand in line, right, to get there. But look at you, you're starting a degree as well and I love that, okay? You're never stuck. There's no such thing, it's bullshit, gang. It's bullshit. You increase your income, 20, 30, $40,000, right? By getting a promotion, you know, Alison studying after-hours, getting a degree, so she could increase her income. Gang, like now's the time. Now's the time. I'm telling you right now, stop stuffing around in the comfort zone, right? "Oh, you know, I'm a bit scared." Well you know what? It's going to be worse when you're 50 or 60 and you didn't do it when you were younger and even if you are 50 or 60, it's certainly not over when it comes to this stuff. Get your finger out of your butt and get going, all right? Get your thumb out. Because life goes by, the big wheel keeps on turning, whether you're in there or not. And I'm telling you right now, those who get up each day and go, "yep, I'm going to fix this. I'm going to go for it." Get up an hour each day, show up to work an hour early, every single day for the rest of the year. Go and do that. Go do one more hour, get noticed by the boss, ask for the pay rise, push for the pay rise. Go for it, all right? Study after hours, do one hour every day of study, like Allison's doing, right? Look for that extra job. Look for the look for those employers who are paying 50 grand more for that person for your role somewhere else and go and ask why, okay? Because gang, there is more money in the marketplace than ever before. Like, there's zero return for cash. Businesses, industries are looking for the best people who want to get up and go for it every day. And you guys who want to be property investors, you're not slackers, right? Like you guys are going for it, you're pushing for it. You know, many of you guys are in the top 1% of Australians who own real estate. It's not like you've never pushed yourself before, but this one's the important one. You have to increase your income. The faster you increase your income, the better off you're going to be for borrowing, the quicker you get your acquisitions done, like the purchasing done, right, the quicker more properties you get to purchase, the better your wealth becomes into the future, which is important. So and Melinda's into it as well. Good work, Melinda! Well done. Right? Gang, don't miss this one. Your deposits are important. You can only save so much. You can only reduce your expenses so much. Your income, by and large, is expediential, you can earn any amount of income into the future if you choose. Up-skill, increase your capacity, get you degree after hours. Wow, man, like you can literally study now online with a degree and you can get it without ever having to attend a university. Oh, a physical one anyway, all right? That's amazing! I love that stuff. Taif, uni, online courses, up-skill, it is never been easier to connect with the ability to increase your income. Up-skill, push for the promotion and if the promotion doesn't come, find somewhere else that will pay you better, more money. And like I said before, my client, Justin, he was working in the Gold Coast and then he got himself a job in the mines in Western Australia and now we're getting set for his next property, all right? So there you go. Hopefully today's conversation landed. You need deposits. Where are your deposits coming from? You need two to three deposits in the market working for you. So you can rotate those deposits at least two or three times over the next 5 to 10 years, that will replenish and land for your deposits and income. Don't sit around complaining that your servicing is no good, all right? Don't come and complain to me or your coaches, right? Because I can tell you right now that is 100% your gig to fix. And if you're sitting there and you know that you could get better income, more income, you could be pushing yourself, you could be getting a degree, you could be earning more, then you need to do it. Get on with it gang. Time to crack on with this stuff because the world's not going to wait. The big wheel will keep on turning. And in 5, 10, 15 years, you'll wish you went back and did one our each day. Imagine that, one hour. One hour, every day, get up one hour earlier, put in one hour extra. When? Every day for the next year, two years, five years, the compounding effect of that, where would that put you? Where would that put you, gang? You know, I chatted to Tim Forester the other day. I don't know if anyone knows Tim Forester, he's worth about half a billion dollars and nice work, Brendan! And he said, well, you know, "I'll get up every day. And I work hard and long all day, because I love it, love it!" He said the money's, you know, and sure he's got plenty of coins, right? But at the end of the day gang, you know, go and find something you love to do or love what you're doing. Love what you're doing. Shay just put it in there, you know, there was one of our clients in Tasmania. She went and got extra work driving a bus. Driving a bus. Driving a bus. Had a great time chatting with people. I've got clients who drive Uber. Uber for a couple of hours on the weekends to make extra coin, to get that extra property. Gang, there's always something you can do. Right now, in this world, it's never been easier to get access to good education, good information, good opportunities. So hopefully my conversation landed today. A bit of encouragement. Crack on gang! 'Cause the world's not going to wait. And I'm so pumped about the next decade of property investing because interest rates are the lowest ever been. Ever, ever been. Servicing is tough. It's going to get better, but you need to increase the income and away you go. So Julie said, "I'm not sure about understanding the three deposits." Julie, what I'm saying is the first two to three properties that you have will require some capital, some investment. On average, depending on who you are, that'll be a 10% deposit plus 5% for your costs, okay? So that's about 75 to $80,000. Those three deposits in three different properties, once they're in that property, we want those properties to grow in value and return those deposits to us so we can go again, okay? So it's called recycling of the deposit. Hopefully that makes sense, Julie. If you need a bit more info, reach out to your coach. If you don't have a coach, you need one. Yeah, reach out if you need a coach, buddy. If you do have one, cool, give him a call, talk to your coaches have a little chat with him. All good. I think that's it. I think I might have had a little bit of rant today. Hopefully that was fine, gang. But yeah, listen, don't wake up in 5 or 10 years time and say, "okay, I could have done, I should have done better." It's time to do it. Every day it's time to do it. Wake up, make it happen. Alison said, "link it to your goals," which is awesome. Aw, thanks Mel. Okay, I'll check that. We launched, yeah. I chatted with Trevor Hendy and I don't know if anyone remembers Trevor Hendy and the podcast launched today, actually. Mel reminded me, thanks for that, I was off on a bit of a rant. I chatted with Trevor Hendy, six times IRONMAN champion, member of Order of Australia, Sporting Hall of Fame. What a cool dude. And it was a pretty cool conversation to sort of see, you know, he had fine fortune, the world at his feet, and it all blew up. Divorce, bankrupt, the lot. And then he made a comeback and amazing stuff now. So yeah, go have a listen to that one. That one's a really cool. Yeah, he's a champion all right, Mel. What a cool conversation I had with Trevor Hendy, so. Hey listen, if anyone's listening in, do us a favor, can you subscribe, leave us a comment, and download an episode? That gets me up the charts! Which is cool. All good. Oh, Julie, you want to invest in the Gold Coast, not a bad place. You've got to be careful where you invest in the Gold Coast, 'cause it is a bit of hit and miss. Give us a shout out if you want some help with that, buddy. Anyway, there you go. I think I've been on camera for a bit this morning. So hopefully everybody is well, it's been a great conversation. Looking forward to mentoring tonight. Everyone, mentoring is on tonight. We're talking about finance, which is why my rant this morning. And we're talking about actually off the plan tonight. How off the plan is going to be very useful in the next little bit about our strategy. You've got to get it right. It can be absolutely disastrous if you get it wrong, but it can be an absolute winner if you get it right. So we're talking through those strategies tonight at mentoring. That's why I've got my studio up there, all set up for tonight's mentoring. So make sure you join us tonight, gang. It's gotta be a Cracker. So download my podcast. I know Sam would have had his podcast launched today. Actually his launch is on Wednesday and join us tonight for mentoring, gang. Other than that, that's me, done and dusted. Another coffee and a chat. Hope you're all well. Have an awesome week. Join me again around about the same time tomorrow for another coffee and a chat. Stay well, stay awesome. And if you need some help, that's what we're here for. Reach out. All right, gang, take care. Have a great day. Bye-bye.
 

Living on Red Beans and Rice for 20 years

Oh. Good morning. Hopefully the audio is working. Well, I, get this gang. Well, morning gang? People just jumping on Good morning. Good morning. Jason here. A few of the team jumping on right now. So while everyone's just jumping on for the morning coffee and a chat, quick intro, Jason is my name. In property investing 20 years, coaching property investors across Australia and New Zealand over 18. And each morning. Morning Karen. Get together with whoever's available. Quick morning, live coffee, and a chat. Morning Alison. Just to talk through property investing and you know, the ideas of going the distance. Morning Julian good to see you. There's my brother, hi bro. So I get this question all the time. And today I wanna talk about the idea that there's a miss understanding or a misconception that being a property investor means that for the rest of your life, you decide you're gonna be a property investor for the rest of your life you're skimping and you're living on red beans and rice and you know, you'd never get to have any fun. And then, morning Philippa. You have to wait to have all the fun and all the good things like for 20 or 30 years. You have to go without now, go without now to have something later. And the reality is that's not true. That is, there could be anything further from the truth. And it just depends on what you're trying to achieve. I call it, I say red beans and rice because my wife and I, many years ago when we were basically living from paycheck to paycheck. Well, before I took money seriously, well, before I read a book called, "Rich Dad Poor Dad." And if anyone's never read that book, you should go read it. It inspired me. So, we were living budgeting a buffer. Absolutely Alison. We were living paycheck to paycheck and when we'd literally we'd run out of money for the week and we'd have a day or two left before we got paid. we'd have a tin of red beans and some rice, and you'd put a bit of a, coriander in with it. And that's what you'd have for literally a day. Breakfast lunch, and dinner. When you run out of money. But you know, we're a long way, a long, long way from those days. But I remember those days. And some people believe and think that... Hi Karen, how are you? You guys are traveling in the car also, make sure you don't crash. Some people believe that a property investing is about going without and I'm not gonna have any money. I'm not gonna have any fun. That's always going to be stressful and stuff like this. And the answer is no that doesn't have to be the case at all. Now, certainly I've seen property investors take on properties that are highly negative cashflow, not structured well, old properties that require maintenance, properties that require high touch. You know, you might take on a high cash cashflow property. You might take out a multi-room property. You think, Oh, it's gonna be better cause it's high cashflow and there's more problems. There's more challenges. And you know, for me as a property investor a long-term buy and hold property investor. There's a little bit of a sweet spot when it comes to owning the properties. And so for me, we wanna make sure and hopefully for you too, I don't wanna be being called all the time. I don't want maintenance. I don't want my agents calling me every five minutes. Okay. So for me, newer properties work in that sort of space. So, but it, how does it work? Here's what I sort of say to everyone. In the beginning in the, maybe let's say first one to five years, it is a bit of a focus on getting your deposits ready, getting your ability to purchase the acquisition strategy going. Okay? The acquisition strategy going. And it's a choice, it's a choice from you. It's a choice for you to take the resources any spare resources that you have which are spare cash over and above your buffer. And let's just quickly talk about buffer. As we think about, how we do this. Alison mentioned it before buffers, in my world I can, I coach my clients to make sure they have a minimum of $5,000 per property in their buffer for liquidity and safety reasons. So if you've got four properties that you need $20,000 for your property buffer sitting over there. And that's always just sitting there you don't go below that. And for me that gives you a bit of comfort factor for your properties to take care of themselves as we go along. Now, you should have a buffer in your personal life as well. I always say, you should have at least four months worth of personal cash buffer or sitting in your offset account for your personal world. So if your expenses for the month cost $3,000 times that by four, that's another $12,000 in liquid cash always. So I teach this concept called the zero line. Your zero line should not be, oh, I've got no money in the bank and don't worry. I'm gonna be safe cause I've got a credit card. That's an insane zero line. That is the wrong zero line. Your zero line should be as a property investor certainly, or anyone who's managing their and money. My minimum liquid cash balance sitting my offset account, or if you are listening in and you don't understand offset accounts you've got your money in a savings account which is actually called the losings account. All right, put it in the offset account. So the money in the offset account is $12,000. And the moment your balance drops below $12,000 that's below zero. You go into overdrive. You start saving, you're shopping, your shit up. You know, you stop spending, you get sorted. That's exactly what you have to happen, right? And your property buffers, five grand you've got four properties. You've got $20,000 in buffer in there. When it's below $20,000 then you make sure you get 20 grand back into your buffer. And buffer can be, gang, buffer can be redrawn equity from your properties. So let's have a look at that. But let's say you've got your two buffers organized and you've got some deposits working with your acquisition strategy. First one to five years sometimes is the most powerful time where we can get out acquisition done and it's powerful long-term okay. Powerful long-term. However does that mean that we have to live on red beans and rice forever and a day? The answer is no. When can we use some of the money? When can we use some of the resources to have some fun, with our property investment portfolio? You don't have to wait 20 years. You don't. Okay. So my advice or my encouragement is this, first thing's first. We've got to get our acquisition strategy going. We've got to get our momentum going. At least two deposits into properties that you're looking to cycle two to three deposits. Now that's gonna be anywhere from a 100 to a $150 of equity or cash in your properties as your deposits. And what we want those deposits to be doing is recycling and coming back out of those properties in let's say, two to five years and then going again. So you're not having to always save and scrimp for the next deposit. So once you've got a couple of deposits, two to three deposits in, then you can let them recycle and roll forward. You've got your personal buffer set aside. You've got your property buffer set aside, and any money above those amounts we can have fun with. So let's have a look at this. Let's say every year you're getting back 10, 15, $20,000 in tax money back. Now you can be putting that straight into your offset account. You can be making another extra payment on your mortgage if you want to. Morning James. Or what I do is I say anywhere between two and 5%, do the mathematics. Two and 5%, of your surplus tax money or your cashflow money out of your property portfolio for the year can be used towards fun. Sometimes you can get up to 10% if you want to of your net equity and your net cashflow back in your pocket. But usually, very usually between five and $10,000 a year. Once you've got three or four properties going, and if you're on a combined income between a couple anywhere from a 100 to $150,000, you're gonna get 15, $20,000 back in tax. You're gonna get some extra positive cashflow. You're gonna get a little bit of equity growth in your properties. And there is no problem. Zero problem at all, taking five or $10,000 a month. Hi Jeff, how are you, Mike? It is beautiful day in the Gold Coast. There is no problems at all taking five or $10,000 a year and having fun with it. Buying some toys, going on a holiday, fixing up the house at home, doing something special for yourself, whatever it is. And, hear me when I say this fun, gang. That money has to come from renewable sources. It's like renewable energy, right? The sun comes up every day. Don't miss the little secret in this. Don't spend your income money that you exchanged your time for. Your life for, okay. You go to work, you exchange your life. You exchange your time and you get some money. Nothing wrong with that. Okay. But don't then go and spend that money on things that de-value. Because once it goes there, it's not replenishable. It doesn't replenish. Instead of spending it directly once you earn it, you then take the money and put it into an asset. A property, shares, I don't mind. Put it into an asset. And that asset now earns, creates money and wealth. It creates capital growth. It creates tax deductions. It creates cashflow and the renewable, the renewable cash return from the asset, you can then go and spend and have fun with. Don't spend the non-renewable earnings which is your energy and your life for the money. It has to go one step further to an asset that asset earns cash, growth and tax deductions, gives it back to you and then you can go have fun with it. Everyone following along? Give me a thumbs up on the chat if you get what I mean, gang. All right. Don't spend your money directly from earning it. Give me a thumbs up or a love heart or something if you're following along, understanding what I mean. You can spend money that is created from your assets. Aah. Sweet ass. You can spend money created from your assets, because it's renewable, it's replenishable. It just keeps going. The, rent keeps going. The tax keeps going. The tax returns keep going. Long-term the capital growth keeps going. Do not consume non-renewable assets. which is your time and your effort. Put it into our investments as you go along. Well, hopefully everybody got the hang of that today, it was question... Hi Henry. There he is. All the way from Emerald in Rio. Hi Emerald. Hopefully that was a cool one today. A bit of a chat, a bit of a coffee and a chat. Hi Marie. Great to hear from you. a thumbs up. Yeah. Facebook's changed a few things on their apps and yeah, thanks. I couldn't see the chats the other day, but hey, listen gang. Hopefully that was a good one today. Join me again tomorrow for another coffee and a chat right about the same time and hi, listen. Anyone listening in. If you're interested in finding out a little bit more about what we do at positive coaching and mentoring and so on, tonight, we've got a bunch of Webinars on from my coaches all around Australia. There's four or five Webinars on tonight. If you wanna track one of those down and have a listen in, to listen to the strategy, the highest strategy that we do with coaching property investors across Australia and New Zealand, track us down in Facebook, under events or on our Website. Love to see you there. Love to help you out if you need some help. And if not, keep being awesome, keeping being amazing and keep joining me for a morning coffee and a chat and track down my podcasts. I actually chatted to a guy last week, Tim Forester. who's worth close to a billion dollars. Close to a billion dollars. Come on gang listen to that podcast. What is a billionaire, almost a billionaire say about wealth. The true meaning of wealth. It's a pretty cool one. So track us down, track us down on iTunes or anywhere else. You know, you can listen to those podcasts. Hope you get a bit out of it 'cause I certainly did chatting to, almost a billionaire and finding out about his attitude towards investing and a true meaning of wealth. You might be quite interested to hear that one. Anyway gang. You're awesome. Keep being awesome. Thanks for joining me and see you tomorrow. Right about the same time for another coffee and a chat.

Interest rates won’t rise for years

Good morning, good morning. Morning, everybody, Jason here. Hopefully everyone's well, on this fine Thursday. Hey listen, Josh Frydenberg. It was Frydenberg, anyway, somebody important, came out and said, yup. Yup, we acknowledge that interest rates Interest rates will be low and you know, not rise for many, many, many years. Something that's pretty cool, as a property investor is having a low interest rate because your cashflow as a property investor becomes more reliable. Hey Warren, how are you mate? Morning Trina, low interest rates, more reliable cashflow, the safer you are as a property investor. When you invest, if you can, mourning Danielle, if you can understand, you know, your future costs because in, you know, the big risk about owning anything, owning, morning Naraj, owning asset is, you know, is there a risk in my future? And what risk is that? No, really the risk for most property investors is the one that we don't really control is, you know, will banks and other people put interest rates up and down. morning Justin, I look forward to catching up to you too, bro. So interest rates are not gonna go up. I'm gonna call minimum five years minimum, but a bit longer interest rates are gonna stay low, Australian bonds and American bonds at all time lows, interest rates are at all time lows, bond yields are all time lows, what is that mean to us, morning Nicole, morning Canal, what does that mean to us as property investors? But you know, not only property investors were putting, we're taking our money, we're putting it into the market and you know, what can we take from that? Well, listen, one thing that I do know, and I think my, my wonderful friend, Andy here, we, we sit and do one of wisdoms on a Friday. I think he's on this morning. You know, we talk about, well, you know, money has to find a place to go to work guys, like, you know, you think about this right now. There's trillions and trillions of dollars that were invested in things like cash, cash is a defensive asset. We're invested in things like government bonds, defensive asset, and now literally they are worthless. They are worthless. And let's say you're a medium you're, you know, you're an okay self-funded retiree right now with two or $3 million, 3 million bucks in the bank. And you know, you might be 70, a defensive asset cash. Oh, you know, not getting you much money. So listen guys, there's a silent, there is Silent boom going on. I don't know if Andy could probably mention right now that the Australian stock market is back up at a certain point. You know, went down a long way and then back up to where it was before, and then, you know, there's a lot of carry on malarkey with property right now, I don't know if any of you guys have attended auctions to the corner real estate agent or lined up and tried to buy a house of recent times. People are paying over, over what the asking price is less certainly in the places that we're in right now, in places in Melbourne and in places in Brisbane, there is a solid burn going on, I'm trying to buy and subdivision right now. Always trying to buy it just before covid hit, you know, the vendor, got a stay of execution from the bank that he didn't have to pay his mortgage for a while, and now, now the, the builder's boost he's put his price at 500 grand on me, alright, So he was willing to drop his price, and I was, I felt I had, I'd bought a bargain before COVID and now he's putting his prices up. Interest rates are gonna stay low, the marketplace is solidly riding along with good quality stuff, you know, where are you right now as a property investor? Are you sitting around waiting? I, you know,lot of people talking about are you wait till September, you wait till September, it'll all be pear-shaped then, rubbish. The government is not going to let that happen. they've already extended the $150,000 right off the small businesses, they haven't spent as much money as they budgeted for in the job keeper and job seeker, they've got plenty of, plenty of tricks up their sleeve, they going to soften the landing in every way, shape or form they can. And it's not like the GFC or anything like that, you know, where they said, well, you know, let's just let that play out in this way. There's going to be softening. But right now, what a lot of people aren't really grasping or aren't really thinking about is, is sure unemployment is high 7% at the moment, I think might be on its way to 10%. But guys, you know, flip that question around, flip, there's 90% of people still employed. And a lot of those people who are employed are in, you know, fairly solid jobs, I speak with them every day in our mentoring program, fairly solid businesses, fairly solid incomes and so on. So they're, those ones who had, who haven't had their incomes affected, are out there buying assets smartly with low interest rates, they've got solid jobs, so the banks will lend to them and you know, those who are fearful and unfortunately ignorant of the facts, of the marketplace are selling the assets for some of them, you know, maybe when they should be keeping them. And so morning Steve, you know, for me, low interest rates into the future, what's that gonna look like for you right now, getting a hold of your equity and building your portfolio has never been cheaper, never been less expensive, never been less risky as a property investor, right? The gap, the spread between an interest rate and the yield right now is in a capital city, the biggest I've ever seen in my life, 20 years of paying attention, in capital cities for property investing and the interest rate spread, you can get a 3% loan for an investment property, which is 90% interest only. And you can get a 5% rental yield at 2% positive cashflow spread, depending on whatever your costs are, your overheads, you know, your maintenance and your rights and whatever. Most people are needing a percent of full percent in their pocket and then still getting their tax back after tax more tax back, from a cashflow in a property. So I'm pretty pumped, interest rates are going to stay low. And my question to you guys, is what are you gonna do about it? at first time buyers Wow, Michael, I see you watching this morning again, first time buyers and the builder boost, you know, now I've done the math on those who could borrow at 95% and qualify for the LMI grant from the government they're putting between 15 and $20,000 of cash in their pocket after owning a home. And it's cheaper than their rent, so gang, let's say maybe a little bit woefully this morning, but I was just pontificating about the interest rates. They're gonna stay low, what are you gonna do about it? Because for me as a property investor, the risk has never been less and, you know, buy a good asset right now, locking a low interest rate. You're gonna be nice and solid for three to five years with decent cashflow, decent cashflow, better than what I'm saying in 20 years in my life. Anyway, that's it this morning, I think I've had my coffee or maybe not enough coffee. Hopefully everyone's well and fired up and maybe Donald tomorrow, we'll have another little chat. See what pops up on my radar during the day, but stay well. You know, if you wanna catch up with us, if anyone is watching here, haven't met me before coaching property investors, over 18 years investing in property 20. And listen, if you wanna find out a little bit more about us, we do webinars and coaching and stuff like that. So track us down on our Facebook page and maybe we can catch up some time, alright. Take care. Everyone, have a good morning, thanks Nicole. Thanks everybody, and have a good day. Alright, chat soon, bye, bye.