Q&A Mentor Call - June 2022

Hello, hello, it is Jane here. Let's make sure that I am in the right place and that you are too. So it is June. It is, wow, six months, almost seven months into the new year. So let me know if I am coming through loud and clear on the your property Success club page. So that's what I would love to do because at the moment we are about to hit off and talk about so many different things. And I know there's a lot of questions that people have. I'm just checking to make sure that everyone can see me and hear me. But I know there's a lot of questions people have. Gee, what a month it has been since we have met last time. I know there's a lot of activity happening in the club, people doing things, but there's also a lot of confusion. So it has been a really big month and I understand that we've had not one, but two interest rate rises in the last two months. We've had the election, we've had stamp duty changes coming through New South Wales, shared equity inflation going up, we've cracked the hundred days of the war in Ukraine and it just keeps going. There are so many things that are happening and I realize that a lot of you are busy, a lot of you are confused, a lot of you have reached out and asked me how I can help you through, navigate through these times. And I think the thing that we need to really remember through all of this is that, you know, this is not the first rodeo for many people and this is not the first time that we've seen interest rates rise, but it has been the first time in over 10 years. So it is unusual, it's not expected. Expected. We're comfortable with where things have been, but I'm going to tell you a bit of a story about one of my properties a bit later because after 25 years of investing and having bought multiple properties, I actually sold my very first property in June. So, yeah, it's a whole, a whole story to it, but I'm looking forward to sharing that with you. But first up, you know, if you have any questions or you have any comments, I really invite you to put them here in the chat and we can address them and have a chat about them. But also, you know, I know that most people watch this as a recording. If you've got other questions there, please just put them underneath. And if I can't address them in the chat through chat, we will, you know, address them next month as well. So lots of questions and I think it's probably best that I jump straight into doing the. The presentation that I have planned just so that we can get that kind of out of the way and you guys can, you know, have a look at what I've seen happening in the world today. So I'm just going to play the presentation because I think, you know, if we can just address some of these things, then it allows us to get on and, and look at what the opportunity is for, for people who are out there at the moment and are considering, you know, buying and are considering, you know, doing something in the market because there are so many opportunities. So I'm just going to show this in the stream so you can see it. Let me know you can see it. I'll make myself a run. Off my. So hopefully you can hear me still. Thumbs up if you can. So I just want to, I guess acknowledge the fact that it has been quite a significant change to the finance and the economy over the main June period. Obviously labor won the election. We're really happy that there has been some, someone who can take over the government without having independence, having to adjudicate all of the decisions, be it labor or Liberal, whoever you vote for. I think they call it the. What do they call it? The Churchill effect. He saved the day and got them through the war and everyone got a little bit bored. I think everyone was a little bit bored about what the Liberal Party was doing and that might have been one of the reasons why, why we saw the change of government and, you know, change of people, change of government, change of thinking and a change of way of doing things. And one of the amazing things that they announced was how they would address and assist first home buyers and those who are struggling to buy. So there's the help to buy scheme that's come out that's going to benefit 10,000 households a year. The first home buyers and return buyers actually, actually have an opportunity to tap into a 2 to 5% deposit as well. There are income caps on that and there's a lot of terms. But the fact of the matter is come the 1st of July there's going to be at least around 35,000 new homebuyer assistance or family home assistance or family guarantee, depending on the different policies that will come into play. By first of October there's going to be another 10,000 and then 5,000 that are assisting single parents. So there's about 50,000 households that will benefit from one scheme or the other that really allows them to access the property market with a 2 to 5% deposit. Now what does that mean? Well, obviously prices have got a bit of a pressure on them and a downward pressure on them. We also have the fact that we've got the interest rate rises and the cost of debt. Now we're not talking about significant interest rates in the context of where we had been in the past and where the inflation is at the moment, but we're having rises which creates anxiety for people. So out of that can come opportunity. But for those that are able to now enter the market with say 2% deposit and we throw in the New South Wales stamp duty changes for first home buyers. So up to 650,000 they didn't have to pay stamp duty. But for Those buying between 650 and a 1.5 million, the proposed changes that New South Wales flagged this week is that instead of having to pay $40,000 or so in stamp duty, they really only needed to be able to front up with that 2 to 5% deposit. So you know, there's some real. Sorry, not the 2 to 5% deposit, they only have to front up with $400 plus 0.3% per year of the value of the property. So as the properties go up in value, the cost goes up. So that's a real incentive. But do remember this, it's for people who are buying 650 and the 1.5 million that are going to really benefit from that because the ones below that were actually not paying stamp duty anyhow, their first home buyers. Now will this go to become, and I know Canberra and other states have done, you know, a lot of the pre testing for some of these things that are only just hitting the media. But there is an opportunity for people who are actually in a higher economic position because really if you can afford a million dollar house. Pardon me. There you go, that's life. Afford a million dollar house. Then you will actually have been in an economic position that means that you've got a steady job and a good income. But you know, there is a chance that you don't have to have the huge deposit. So this is great. And will it go beyond the first home buyers? Potentially so. Will other states follow? Potentially so. So there's some really great incentives there. Now we obviously had that first rise of 0.35%. There was a bit of a hike in what we will be paying per month. The additional 0.5% that was added on in the June RBA meeting this year takes us to a cash rate of 0.85%. Now it's interesting seeing how some of the lenders have dealt with this. Some of the bigger lenders, you know, obviously have the bigger buying ability. So now we are able to buy money on the money market to add to the money that we are putting into our bank accounts to loan out at a much lower rate now. And the lower or the smaller lenders had a bit of pressure or difficulty in actually securing money at those rates. Now that we've got these rate rises, the bigger lenders don't necessarily have all of the, the advantages that they had previously negotiating on how much they're buying the money for and therefore handing on to us. And so we're actually seeing like some of these smaller lenders are handing on different parts of the rate rise as well. So it doesn't mean just because the rates have gone up by 0.5% in the last month that all the lenders are passing it on. And it doesn't mean that they will pass on what inevitably potentially will be the next rate rise in July. Now the RBA governor came out this week and said he expects that the conversation in July's rate meeting will say will we go up by 0.25 or will we go up by 0.5? Which indicates he plans that it's going to go up again. So, you know, his thinking there is that he is kind of chasing the inflation rate as the inflation rate increases. And you know, good news for the retirees and the people who essentially have money in the bank and are looking at cash rate to get a dividend or you know, interest off. But unfortunately the banks aren't playing as nice and passing on all of those, those interest rates on people's savings as well. So, you know, it's something that we need to be aware of. There are a lot of people who are concerned about the rate rises. You know, one of the things that we do very much need to be aware of is that, you know, we have also had an incredible period of time where people have saved us this nick and amount of money. The other thing we need to be aware of is finance is getting a bit tighter. So previously lenders would only allow up to nine times a debt to income ratio. So when they're looking at how much you earn compared to how much you can borrow, they were looking at that number. NAB and ANZ reduced that to seven and a half times. So ANZ seven and a half times NAB to eight times. So they're now saying that you can borrow less compared on your income. Apra, who dictates this, has kind of said anything over six times, they consider high. So the lenders are still above where APRA considers it to be risky for you to take on an amount of debt. Commonwealth bank says it uses tighter lending parameters for loans with that debt to income DTI ratio above 6. So if you're, if you're borrowing, if you earn 100,000 and you're borrowing 600,000, then that is a debt to income ratio of 6, obviously. So where, and especially where they have a smaller deposit. So we're hearing from the lenders essentially that, you know, they have an appetite, as you can see. You know, Westpac requires a manual assessment. So some actual person assessing your loan, who knew that it was even possible, when people have a DTI over seven, and CBA and Westpac, the two largest mortgage lenders, have a DTI ratio of nine times. But when it gets over six, they're going to be a bit harder on you. When you have a lesser deposit, they're going to be a bit harder on you. So just be aware that you know the finance, it's not just your borrowing capacity that comes into play in the sense of, you know, have you got the capacity based on the interest rate of the day and your current debts that you have. It also comes into this little number that the lenders are working with as well. One of the interesting things, in April, the Financial Stability Review, they modeled from the RBA data what they felt a 200 basis point, so that's a 2% increase. So what a 200 basis points would mean. So bear in mind, we've had, you know, an interest, we've had some interest rate rises recently. So we've gone from like 0.1, 0.35, 0.8, so we've had a 5, so we've had some changes. Right. So they've said that if it went up by 2%, so we've had a little bit of that, but less than half than that, then that could lead to a 15% decline in house values over a two year period. So those rates go up that much, that could happen. Now this is considered to be really, really conservative and a little bit like the sky is falling. So we need to kind of be aware that there is the potential that there will be pricing pressure put on, you know, when the house money is restricted and people don't have that much and you've got also the fact that you've got people who are worried about how they're going to make the repayments and then all of a sudden, all of, all of this worry and concern and confusion gets people not putting their properties on the market, or they don't wait to spring, or we're going to wait to see what happens. And, you know, there's not that many properties on the market, but there's not that many people who want to buy. Then you start having that lowering of the property values. And that's definitely what we're starting to see at the moment. Now, we know, and we'll have a look at this a little bit later, but we know that there's been some cities that haven't performed as well as other cities over the last year. We know a lot of that has has to do with the local geographic, local political decisions on how they handled lockdown and Covid. But we also know that, you know, we've got pictures of, you know, 12, 14,000 people applying for passports to go on holidays. Well, there's a lot of people over 180,000 that are going to be coming to our shores. And we've definitely seen an increase in rent. You know, one of the properties I've just released, they released it at a 20% increase on where it was before. And there was a little bit of reduction because obviously I gave some reductions to our tenants over Covid, but that's extraordinary. And that was obviously for new tenants, not the tenants that had been in there that we have given them a bit of a discount on. But if you're going to bring in another 180,000 people and say they bring their families in and maybe that's the demand of another 90,000 properties or 60, $50,000. 50, 60,000 properties that need to be rented, then, you know, we're going to see rents go up. And we've seen the uncertainty, definitely crypto, but in the share market and when people are retreating from, you know, that those markets, they go to bricks and mortar. And, you know, I think that we're going to see that come back into the market by the first quarter in 2023. So this may be the period where there's some depressed house prices. There's some people who've already put their properties in the market that have to sell and there's opportunity to buy. But I think that once we start seeing these rental returns really increase, we know that due to building costs and lack of trades and the ability to build due to lockdowns, there's not as many properties that have been built. So we don't have the stock for all the people who want to buy and, you know, sorry to rent and are coming to the country. We also have all of the kids and people who went to the region and stayed in the regions, coming back or becoming digital nomads and working around the world and around the country. We've got a lot of people traveling around the country. I don't know about you, but I've had a great opportunity to catch up with old friends who are just passing through on their trip to Perth or wherever. So, you know, I know that there, there is a lot of that in the younger demographic and older demographic of people are just getting out. So there is a lot of this movement that's going on and I think, you know, we need to be looking at that, but we also need to be looking and not being, you know, it's all rainbows and unicorns. There are going to be some issues that come up and one of the things that has been flagged is that, you know, one in four of loans in Australia are with the CBA and they have got a significant amount of loans that were fixed at lower rates that will be expiring next year, most significantly the end of next year. So if interest rates continue to go up and people who have fixed these three five year loan terms back in 2020 or 2018 starting to come off, they're going to be coming off into a higher loan environment, interest rate environment, and there may be pressure there of people selling the properties as well. However, will there be pressure if there really is pressure on selling these properties? If rents have jumped so much and the increase in their rental income has actually going to allow them to actually cover that cost? So I want you to hear and read what's happening in the media, but I also want you to be observant of it's one story when you're reading about fixed rates expiring and all of these people flooding to the market with their properties and the costs of their properties are going to be so high they have to sell? Well, the reality is that they know this is coming. Like, you know, it's not like this isn't going to be surprised. They could sell beforehand. So you may see that it's not all going to happen at the same time. And you know, yes, there'd be a fixed rate adjustment that they may have to pay as a penalty for selling sooner. But you know, it's closer to the end of their expiry. So it won't be as huge as it would be. For instance, they're selling now. But we do have all these people coming to the shores and I'm Pretty sure the conversation around do we want more than 180,000? And the number 240 has already been floated of new immigrants coming to Australia. And think about it, where are they going to live? They're going to live where the jobs are. Number one, biggest job markets are Sydney and Melbourne. They're going to live where they can get their permanent residency quicker. So you have to get a certain number of points and the more points you get for permanent residency, you don't necessarily then become a permanent resident. There's almost like, I'm not going to say lottery, but it's almost like a competition where they'll let the ones from the most points become permanent residents. And there's only, you know, a cap on the number that they will allow to do that every year. And you get more points to go if you move to a regional area. And funnily enough, Adelaide is considered a regional area. So just watch the space of where people are moving. I think it'll, as these people come in, they will traditionally go to potentially the areas where the jobs are and they will be googling where's the best place to live. And I think it's, you know, the Sunshine State always has better weather. But, you know, their local politicians definitely created a Covid response that was a lot more lenient than what was experienced definitely in Melbourne and in Sydney. So, you know, that might become more attractive as well. So just watch those spaces. I think there's a lot of opportunity to be had. Okay, so there's upside. Oh my goodness, of course there's upside. 30% of Australians have home loans and many of them borrowed years ago at much higher rates and have experienced, experienced high interest rates. So, you know, it's not like it's, it has net the, the most. The people who own homes today have never experienced these high rates. The CBA reported that deposits in their savings were up 12% year on year in February, rental prices are up, you know, so rents are going up 9, in my experience, 20%. Immigration is ramping up. Market is coming off a high 35% growth in home prices since mid 2020. And we all know that couldn't have continued the home guarantee. There's going to be 50,000 people who can enter the market with a 2 to 5% deposit. And there's a lot of retirees and savings out there that, as I said, are kind of happy that they've got some more money in the bank. So there is doom and gloom. The market is depressed. There are going to be markets where you're going to see the prices potentially return to where they were in 2020. But there's going to be opportunity for those who are in the position to buy and those that can get financed. Now, I really like this graph. Tell me if you can see this. Give me a thumbs up. Any indication that you're about. Okay, so I do have a question here, so I'm just going to put it up just so that we can have a little quick look. You may have answered this question. What are your thoughts on the downturn in the market and how they'll affect my property values in Scarborough, Queensland, should I decide to sell? Well, this is a great question because the fact of the matter is if there's a decline in the market and you have to sell, then you've put the power in the buyer's hands. If there's a declining market and you don't have to sell, and I think I know who this person is who's asking, then you actually have the power so you don't have to allow them to dictate the terms to you. If you could sell later and it's part of your grand vision of what you want to create and do and you want to be able to do that in two to three years time and just selling now is taking an opportunity, then you know, you don't need to have I guess the be in the position where you're forced into this. So I'm not hearing that the market is pulling back as significantly as I'm seeing in Sydney and Melbourne in Queensland. I think those kind of lifestyle areas that we've seen like Scarborough that are commutable to the city but next to the beach are always going to have a different dynamic than the, you know, just the, the regular Mount Gravatt in the middle of Brisbane. So I think that, you know, we need to look at the context that there's many markets in the market. When you start seeing a slow of the Brisbane market, then yes, it could be slowing down, but there's going to be people who always want to buy by the beach. So and so I think that there's a different dynamic then will it slow down too? Of course, you know, because we've got the interest rate rises, we've got everyone confused, we've got people worried going, oh my gosh, I have to pay 3.5%. But the reality is that, you know, we know that the median rental return is four to four and a half percent in Brisbane. We push the rents up and you've already got, you know a higher rental yield from what you know what the property is to start with. So you're actually pushing up, your cash flow is actually increasing. If the property value comes down then that equation obviously adjusts a bit. But there's actually enough there buffer of that four and a half to cover the interest rate of say 3.5% and some costs. So it's already kind of paying for itself in some respects. So just be mindful of the fact that there may be some softening in the market. It may not go backwards, it just may take longer to sell. So just be aware of that. And I'm going to once again show this because I think this is really cool. Hopefully this works. Did it work? I don't know. I'm going to show you my page. Okay, let me show you here. So I'll put this link in the chat but this is a really great little interactive tool and what we can see here is the capitals are the dark colors and the light purples are the regional areas. Definitely we've seen some reduction in Canberra, Victoria and New South Wales in the last month. We're still seeing significant growth in, in Adelaide and I think that you're going to see some significant rental growth there too. And that's backed on this regional, regional area that we have Adelaide considered to be. Which is hilarious but that's just the fact of it. So watch this because I think that Adelaide may have some artificial growth and rental growth. Will it be sustainable? Well, I don't know what the numbers look like about where people move to when they first come to a country and where they end up. But I suspect that there will get to be the point where we can actually follow this and see unemployment dropping quite considerably in Adelaide. And as we see that unemployment drop, obviously all those jobs being absorbed, there will get to be a point where people can't get jobs. And if you can't get jobs, you come into a new country. Well, you can't pay the rent and if the rents are really high there, you can't live there. So you do go where the jobs are. The jobs are Sydney and Melbourne. So you know, watch, watch this space. I think it's, there's short turn off opportunities, there's cash flow opportunities. But I'm just my, I'm still worried for my clients about making a long term investment there. Obviously we've still had Brisbane having a bit of good growth as well. If we just look at the quarter, you know, we've definitely had Adelaide and Brisbane being the, the winners there Brisbane over the year 27.8%. Now I just want to put this in context for you. 27.8% growth in one year. Now they were averaging 2% growth over the last 10 years. So Brisbane has been lacklustre, let's just say for the last 10 years. And those people who have invested there and held on have finally, you know, seen some real value exchange. And I think, you know, as I said googling best place in Australia to live. It would strike me that Queensland would come up if I was overseas and looking at that. But I just think that and that's why I think potentially some of what would we consider the regional areas from the how the permanent residency points are allocated might show a little bit more pressure on those regional Queensland areas. But you know, we did obviously the regional areas in New South Wales and Victoria definitely outperformed the cities over the years. But you know, As I said 28% growth, we had 5.8% growth in Melbourne, 10% growth in Sydney. Western Australia, you know, they've had negative growth over the last 10 years. This 5% over the last year's kind of just got them back to where they, you know, they were when a lot of people bought properties. So you know, they're just getting ahead. Canberra's done really well. Canberra. Amazingly, you know we look at the Median house price 1.12 home value. So this is house and units. So it's together average median home value 1.12. Canberra, we pop over here 940. It's above the Melbourne at 86 and Brisbane at 779. Like these numbers are really coming up. And Hobart 730. So Canberra is actually outperforming, you know, all these other areas. So this is really interesting to look at. Right. Interest me anyhow. Hope it interests you. Let me know if it interests you. Just type in chat and let me know if you're still awake. That's always good to know. And look, I just threw this in here because we've got these historic periods of decline to recovery nationally. And it's like how long once you have this decline, how long will it last for? And you know when we say okay, the decline has started on the different years so 2017 to 2020, you know, it took 21 months so there was almost like two years of decline. Now here's a little bit of a heads up actually had we've been in most of these markets, we've been in decline for at least six months. So even if this decline lasts for kind of like the maximum before the turn. We're actually potentially only 18 months away from the worst that we've seen. You know, look at 82, 84, it took 12 months. We look here at 2010, 2013, you know, it took about 2010, 2013, about 18, 19 months. So know that, you know, there is this kind of time frame that you know, it, how long it takes a market to have this decline period. And then you know, housing market recovery trends. So how long does it take to recover? So we look at these, you know, there's this time frame where it actually gets back to, you know, some percentages of, you know, these growth. It can take a period of time for them, you know, eight months for instance, to get to 8% growth. 10 months, 19 months. We're still talking like these two year time frames. And just keep in mind these two year time frames correspond with so many different things. What did we see it corresponded with? We saw two years corresponded with all these interest rates, you know, that were fixed coming off. We've got two years corresponding with, let's say in the next six months all of these migrants start coming to our shores. They spend 18 months in jobs and then they can get loans and start buying. You know, so we've got all of these things we have to apply together. So you know, potentially, you know, this, this time frame for us to recover and go back into a growth phase may not be as long as that, but we do have inflight inflation that risks that are there still. We have a war that's there still. You know, we've got these huge economies of Ukraine and Russia and China who are dictating some terms and conditions on, you know, our exports and how much it costs us to import things. So you know, there are additional costs. But I want you to just look at all the information here because I think, you know, we can get really emotional about stuff and it doesn't need to be, hey, look, once again the pain and gain reports out. I'll put a link in there for it in the notes for you. But houses outperform units. Capital cities outperform regional areas. The longer you hold a property, the more money you'll make. So this is just out this week. Most people have made gains from their properties. The lowest gain is Perth. And as I said, you know, they're just coming back into their own. I mentioned around before, an interest rate rise of up to 2% will possibly make a decline in the property market. We need to be aware of that too. But we're talking About Brisbane went up 30% in one year and now they're back 15. I could go back 15%. You know, I think Melbourne and Perth have probably got up the least and that would take them back to where your property's worth in 2020. If you don't need to sell, don't worry about it. And as I said, look, there's a lot of these housing future funds. You know, there's this help to buy fund. There's all of these different funds and assistance that are helping people to purchase their properties. I think this helped to buy. I don't know. I don't want to become a person who buys a property with the government and sharing the equity. If I can get into it by myself, I'd much rather do that. And I bought my first property with a 5% deposit. So, you know, I think there's some opportunities there that's just me. But it allows people to secure their home sanctuary, you know, for themselves and their family. This is an incredible photo I took off my tv. As you can see, SBS World News. And this is just like the forecast. Now we're hearing these 15% if the interest rates go up. Anz supplied some interest rate rises that they think is coming, are coming in. You know, they've got the market in. Where are we? Sydney and Melbourne going down in the next year, this 2022 by about 6% again the following year. Brisbane, Adelaide, Perth still going up in 2022 and then coming off in 2023, even more significantly than some of the bigger markets. And you know, I think it's one of the things I see with the lenders when they, their economists come out with these predictions, they don't stand by them and they change them every month. So let's not get too caught up in this. But you know, there's been a lot of listings that have come on to the market as well. We're going to see them come off because people won't get the prices that they want. So we just need to watch some of these indicators. I've just grabbed the property clock from Heron Todd White, Please once again jump in and grab their report. It's just fantastic. Their valuers are out there every day. They're giving some real insights of what's happening in the market. Get it, read it, have a look at it. What I kind of liked about this, I've just superimposed it over the April one. You can see, you know, in June they're saying, hey, the Gold coast of Melbourne and Southern Highlands are in the start of a decline. Back in April, it was only Southern Highlands. Melbourne was up at the peak. But, you know, over here we had the, the Gold Coast. Where's the Gold Coast? Pretty sure I saw it over here. Gold coast was over here and approaching the peak. So within, you know, the period of six weeks, we've got the Gold coast that's gone from approaching the peak to starting decline. We've got Melbourne from at the peak to starting decline. And we've got Southern Highlands that are still just starting to decline. And it kind of shows you that although this is the clock, timing does not matter. It really is, you know, where that supply and demand is. And we have a look at the orange ones. These orange ones are the ones that have moved from the previous month. So we can see that they have moved through the cycle. So Melbourne's been at the peak for quite a while. That's, I think it's starting to decline. Sydney has just moved to approaching the peak according to rp. I'm sorry, Heron, Todd White. So interesting info. Also a lot of interesting info has come out on rise of the regions. RP data put out a report in May about where the biggest, best performers are. Hunter Valley, Central Queensland, Ewing, England, Northwest, you know, so there's some real, you know, performers here. Unfortunately, Mackay and Gippsland, you know, really didn't perform as well as we saw some of these other areas. Look, it's an interesting report. If you're interested in buying regionally or you have properties regionally, go and have a look at it. But you know, there is, I think we're having this rise. The regions are kind of coming off. Now I'm going to tell you about some very exciting things. First of all, before I move on to the story I wanted to share with you about my property that I have recently sold. So first of all, watch your emails over the next couple of days. I did this end of financial year offer, end of last financial year before, and look, it was so well received and it really, I've really seen so many people be able to take this and run with it and really be able to buy well and do suburb selection well and understand where they're buying. So I'm really, really proud of doing this. You know, the Location Masterclass alone is worth $995 a year. And you not just get that, you get the book, the book Companion course, there's checklists on how to inspect properties and the Location Masterclass just as a little secret. And you're probably watching. But Susie, who Is pretty much on these calls every single month and has been for the last two years since she purchased the Ultimate Guide to Renovation. Has been an amazing contributor to the the community that we have. She reached out and said, can I do another Borrow my Brain? Because the last one we did two years ago, I just made $200,000 off like yay for that. Now she is acting, she's not scared by rates. She's actually seen the opportunity. She's seeing the market come off and go, this is fantastic. You know, if you are in the market at the moment and you want to purchase and you need to pull equity out of your property to cover the deposit and the costs, if you think you might, your property is going down, your property is probably worth the most it will be for the next two years. So grab that equity now so that you can then go forward and use that as a deposit and cost to buy your property. So so many things to think about. I'm going to be doing this end of financial year bundle. I know it's crazy, but hey, you know, I'm a bit crazy too and I really, I'm really excited about sharing that with people. So check it out, have a look. I think it's, it's really, it's something that, you know, I really think is a great addition to anyone's kind of arsenal. And you never know, speak with your accountant. You might even be able to have a tax deduction on it. So check it out. I will be sending that email out hopefully this afternoon. That was my water just making that. Now. I did promise that I was going to share with you my story about my sale of my property. And I'm going to ask you to really concentrate on this story of this property as I tell you this because I think it's going to be illuminating. My husband tells me that not every moment is teaching moment, but I have to say I do think it is. And in this case I really would like you to go on the journey of, of my purchase of this property. And as I tell you about it, I just want you to think about it and think about what's happening and that might just be the end of the story for you. But for those of you who are interested a little bit more, hang around because I will be sharing a bit more about it as well. So as I said, I started investing in 21 years ago. So 2001, I bought my first property. My husband and I, you know, I had $45,000 and I had a 5% deposit on the Property that I bought in Melbourne, I borrowed $50,000. I did a renovation. It was worth 700,000. Had gone up in value from $425,000 to $700,000 in that period of time. I pulled equity out and had to move due to work, to Sydney. My husband also bought a property at that time. We moved to Sydney, and in 2002, we bought properties as well. So I bought a little property, Newtown. He bought property near Manly. And, you know, happy days. And, you know, we were like searching, searching and searching. And, you know, we'd gone around and we had, you know, we're looking at properties all the time. And it really, you know, after spending almost a year renovating and then start moving state and then spending almost a year looking at properties, you know, it did take up a lot of time. We didn't see a lot of friends. And, you know, to give you an idea, I remember reading a book by rich dad, poor dad, and they said for every 100 properties you look at, you end up with one. And that was true for us. You know, I had a different buying borrowing capacity than my husband. So, you know, I was looking in areas like Darlington, new town, Maruba, etc. And he was looking in areas like Mossman, the better end of Newtown, Manly. And so, you know, every weekend we were jumping in the car, we had the Gregory's out, which is, you know, the road maps. And we had our times. We'd run in and we had a look at these properties. We're going across the bridge and we're going to one property after another, and it was really tiring. And we looked at about 189 property properties. We put in six offers and we end up with two. So those kind of stats worked out. It was exhausting. And then we had a little bit of a break and we realized we hadn't caught up with our friends for a while. And as we're kind of, you know, settling into what our normal weekends would be like, we kind of missed the property looking. And I remember one weekend my husband said to me, hey, you know, there's this area near Ramwick, Kensington, Coogee called Kingsford. And, you know, all of those areas have gone up in value, but Kingsford hasn't. Why don't we go check it out? Yeah, got nothing to do. So we wandered over and we had a look and we had a look at like six units because it's the main property type in that area. And remember, they were all around about $425,000 and there was one in particular. Oh, my goodness. It was so cramped with furniture, and it looked really kind of oppressive and dark, but it actually was quite big. It was just that all the furniture made it look really small, and it had a nice outlook, and you could see Botany Bay, and it was up above the trees. Anyhow, so we kind of had a little vote and went, yeah, that would be the best one. Definitely not interested in buying a unit. And so, you know, next weekend, caught up some friends. Weekend after, caught up some more friends. On the Tuesday, interest rates went up. Everyone's, like, kind of shocked. Rates have gone up. Oh, my God, what's happening in the market? And my husband said, you know, that that unit that we looked at, all the rest of them come down in value to, you know, 410 from 420. This one's come down to 380. I was like, really? There was nothing wrong with it, was it? It's like, no. So we haven't, you know, I wonder what. What's the issue? And I said, well, you know, we could be cheeky and putting an offer. I was like, yeah. And so I took off up, up the Pacific highway to Kari Curry, just west of Newcastle to go to work. And my husband texted me and said, do you reckon she wouldn't offer, like, oh, you know, we haven't even got finance organized. Do we want a unit? But, you know, let's throw something in. So we throw in $310,000 as an offer. Now, did a bit of research, got a Residex report that indicated that it had been bought a long time ago by an overseas buyer that coincidentally kind of correlated to them putting a couple of kids through New South Wales Uni. New South Wales Uni and the hospital were right next to this unit. And so this is kind of interesting, right? So we're like, oh, okay, well, we'll put 310 in. And the agent was furious with me. I was really embarrassed. He started yelling at me. He's like, this is the most disgusting thing you can do. And I was like, God, this is horrible, right? And, you know, how could you dare to do this? I'm like, look at the office on the table. You literally have to kind of present it to the owner. And the owners bought it for less than 100 grand quite a significant time ago. This might still serve them and be in their interest because, you know, we need to make it into everyone's interest. And so he was like, yep, I'll put in. I'll put the offer in. And he rang Back and said they've accepted it. Wow. This was on the market for 420. You know, comparable properties were selling at 410. I just got this at 310. So we bought below the market. Now, anyone who knows the Trident strategy, buying below the market is the first thing. And this is because of this fear and worry about this interest rate rise, which you might just jump forward and go, this is happening now. So we bought $100,000 below the market. Now, after that, we went and obviously got the finance. We did the strata reports, we reviewed everything. It was clean. One little unit in a block of 18. No lifts or anything. Nice view, car park, allocated to the unit, everything that you could kind of want, and we just parked it. But we first jumped in and we had all of our mortgage in half. And we grabbed all of these trades, got quotes, because when the people moved out, part of the contract of sale was that we could go in and jump in before settlement and get all the quotes done. So the day of settlement, we got the keys and we handed them to the tradies and they could get on with doing the work now. So we jumped in and we started doing this. And it was a lot of work. We're there all the time. All these trades driving backwards across the bridge from where we lived and trying to get this all coordinated so that we could hand the keys over and get this renovation done. Now, we did get the renovation done in 10 days. We did a $14,000 renovation. We got an Ikea kitchen put in. We had the carpets done. My husband and I made these curtains, which involved curtains from spotlight that were essentially already had the seam in. And then we just like, ironed on the seam hemmer. And so we had these, like, blackout curtains. Because there's so much light there, we had to black it out and case there was, like, hospital workers, et cetera, who wanted to live there. So they've got a kitchen. Got it painted curtains in, did the. Did the carpet. Two days before the end of the renovation, we're thinking that we're done. We've taken off to holidays in Hobart. We're down there in holidays having a great time. The tiler from the kitchen calls up and says, you're too tile short. What? And we knew that we bought the last of the line. He's like, we're too tile short. We've got to be in. It's really obvious. I thought I counted them, right? We're like, oh, my God, what are we gonna do? We're in the Middle of renovation and we've taken off actually, end of the renovation. We're on holidays, can't do anything like, can you go through all the rubbish and see if you can find some. Half an hour later, he's found the two tiles. All's good, holiday continues, having a good time and think, well, wouldn't it be interesting to see, you know, what that property's worth now? After we'd done this 10 day renovation that cost us 14 grand, we bought it for 310,000, 95% loan with mortgage insurance. The loan was like $290,000. Yep. Interest rates were going up and we had, we had it looked at from real estates. Come through and have a look and they're like, oh, this is 450. So we've gone from 310 to 450 in the period of about two months in a depressed market because interest rates are going up and people are selling and worried because of what we had bought, where we bought and the renovation we'd done. So we increased the rent to provide it was being rented at and Happy Days was pretty much covering itself. So everything was going really well. Now think about this period of time. So this is like 2003, right? Interest rates had gone up. We jump forward to 2008. Interest rates kept going up and we had been buying some properties in between as well. So interest rates were going 6, 7% and they'll talk about it going 8, 9, 10%. Now I knew that if I didn't fix my interest rates, let's say the 8% that was on offer and they went over 8%, I would have to sell one of my properties, I'd be under 2, too much financial stress. And so it became really obvious to me that, you know, this decision I had to make, I could sell the property, but it was a good property just doing its own thing. Or I could lock in these interest rates and just hedge the top, knowing that I could make those repayments. And if the market, if the rates came down so bad, if the rates went up, I was going to have to sell. So I locked in at 8% and of course, you know what happened? Interest rates came down 6%, 5%, 4%. I was like, oh my God, what have I done? But here's the reality. I could have lost everything if I hadn't done that and I could afford that rate change. And obviously it's investment property. So that was going on too. So fast forward, you know, things are progressing, Living the dream. Moved to Melbourne. Real absentee landlord, had Great tenants over the period of time, great rental managers, didn't have to think about it. Never turned up to a strata meeting. And the strata meeting minutes came with a announcement to say that they were going ahead and doing some work because there'd been some cracks found on the top of where the cars park. And our tenants could no longer park where they've been allocated to be able to park. And next the university. It's really difficult. So, you know, first of all, they sat down and said, okay, what can we do here? So we had to reduce the rent by $50 a week. This is like 2017, which hurt a bit. So because they couldn't use the car. And this report comes through saying, you know, it's probably going to cost about $60,000 across the 18 units to fix this concrete thing. So I know, okay, whatever, still not interested. And then the minutes from the next meeting came in going with all the other things that we've thrown in there. We now going to spend 1.1 million. What? How do we get from 60,000 to 1.1 million? And so I was like, okay, I'm going to fly up and go to this meeting. So units, strata, body, corporate owners, corporate committee, you know, all the things that you hear about units and pains. We had none of that up until this point. And so, you know, 15 years of kind of park and forget. And so I remember sitting in this meeting and all these people have always been active landlords and owners and they're like, and so he's the guy who's going to do the work. And I was like, oh, how did. Did you do a number of quotes? I have this work. It's like, oh, no, no. Someone knows him. He's all good. He's done so much work in doing all the quotes. He's in project manager. I was like, oh. And I had my doubts and so I started to speak up and they're like, oh, no, no, we've kind of already like, he's done the work. I was like, okay. And my greatest regret is that I didn't back myself. And I was like, oh, these people have been doing this for so long. I feel a bit guilty. I haven't been involved anyhow. So, you know, they made this agreement and I got rid of the. Were they going to put in a lift and some things that just weren't necessary. So 1.1. And you know, had a look at the works. It really was going to add some value to this property. So. Which looked great. So it's like, okay, we can make this commitment. 1.1. Everyone kind of had the funds across 18 units, you know, 60, 70,000 each, to be able to, over a period of time, you know, add to the value of this. And I was going to get my car parked back from a tenant. And, you know, the works went on 2018, 2019. Just before Christmas, they kind of, like, pulled out. They kind of pulled at Christmas, they pulled out all of the windows and they put up, you know, plywood. And so the tenants were kind of stuck in their property. And then they went on holidays, and then they came back and they started doing works. And our tenants were having a baby, and the contract wasn't up for like, three months. And they're like, can we break it without financial burden to us? Like, we weren't going to charge them for breaking it. And because they had a baby and they didn't want to have all of the dust, so. So we said yes, but of course, we still have no windows. We've got these big boards up and no one's getting any lighting, so we couldn't rent our property. And so, you know, all of these things get adding on and adding on with this pressure. And then the next thing we know, you know, this is fire order that's come down. The 1.1's gone to 1.7 million. I was like, oh, my God. Yeah, this is extraordinary. This little old ladies with, like, their super. Their pensions being used for this and, you know, and the project managers continuing to do all these work and everything. Anyhow, so this is continuing and pressure. And so we're kind of sitting at this point going, okay, we're going to have to get a loan, a strata loan. I said, well, look, you know, I've got mortgage experience. I haven't done strata loans, but I can help come on the committee for two to three months and just set it up. So I came on the committee, we got a loan. You know, everyone's kind of happy because everyone just didn't have the extra cash to throw in. And, you know, we went through that agreement. They said, oh, just while we do the next little bit, can you stay on the committee? Say, yeah, yeah, yeah. And so, you know, people are signing the invoices and everything's going on, and the 1.7 became like 2 million. It got higher and higher. And in the end, it's just like, actually, you know, there's some problems here. So subsequently, you know, those problems were being sought out. And my, you know, three months on the committee turned into like three years on the committee, my, you know, one hour or one hour every quarter to have a meeting turned into five to 10 hours a week. Managing this. This whole situation that had developed in and getting the works done and warranties and all of these things, it just became a lot. And so this was continuing. We can rent the property out again, but it was Covid so we had to reduce the rent. But we did have the car park that they could sit on. And, you know, so this is all going on. The block looks great, you know, but there's the issues associated with it that are ongoing and there's, you know, issues that are being dealt with. That that is just perplexing. And was just taking up so much time and headspace. And my husband finally said, look, you know, this is. This is like taking all your time and you're worrying about this all the time. I think, you know, we should get out. We're in the middle of all this stuff going on. Meanwhile, come to six months ago, October, November, December, at the end of 21, one of the people sold their unit. I put it on the market and sold it for a million dollars. Like, wait, how do you sell these in the middle of, you know, all this works going on? And then someone else sold the unit for like $980,000. Like holy water. Moly, this is amazing. Well, when's our tenant out? April. And, you know, my husband's like, let's get up. I was like, okay, we're out. So, you know, we got Scott from hello House to find us an agent and got us, you know, a really good commission. We got, you know, we dealt with this, you know, beautiful agent and from Bell and, you know, they made recommendations. And our rental agents from McGrath were fantastic. I think you need a new vanity and to paint. And, you know, we're doing this, like, little preparation to sell after the tenant moved out. And we tried to get the tenant to move out early, and we're going to offer incentives. And then we decided not to. And then all of a sudden, they started talking about budgets and elections and interest rates and inflation. We're like, oh, maybe we should have moved them out. And then. But we, the tenant couldn't find somewhere to move because rent started going up. And so we finally got the property on the market. And just as we did, two other units in the same block of 18 went on the market. Everyone's thinking, we want to get out. And for whatever reason, health was mainly the issue. And for a couple of them, and debt. So progressing story progresses. So we gone into the. We got into this situation where we got onto the market. We're thinking we'll, we'll go for 950 million. 980. 950. You know, this is great. Mind you, the other two units started coming down. So they're like 920 and one started, came down to 880 and then he sold for 850. It's like you just set the market but ours is a bit higher and a bit better and yada, yada, yada. We still get, you know, nine something and then the agent's coming back. I think we need to be realistic. Anyhow, end of the story. Whilst on holidays again in Hobart last week, we sold this property for 8:50. So that's the story. Bought for 310, sold the property for 850. Six months ago it would have been a million. Interest rates had just started going up. The day we listed was on the first interest rate rise. On, obviously, whilst in negotiations, the second interest rate rise came. People were, the agents were saying, people are just not turning up at any opens anywhere. We're having auctions that no one's turning up to if we're getting a good offer. And remember, we didn't have to sell, but we had made this decision that we. It's time to go. After 21 years, this is the first property I'd ever sold. So at the end of the story, that's the story of my property sale. But what I want you to think about now is how you react to the story. So if I just go through some of the points, just be aware of what your thoughts or feelings are. When I say things like, it was on the market for 420 and we bought it for 310. We offered 310 and the agent said, that's rude and disgusting. I'm embarrassed to hand that over to the owner. What about when it got revalued for 450 straight after buying it and doing a little renovation? What do you feel when you hear about you're out of town and there's two tiles short in the middle of the renovation? What are your thoughts about interest rates rising and then all of a sudden you know, you're fixing 8% worried that you could lose everything? How do you feel when there's an 8% fixed rate and everyone else is paying 4 or 4.5%? What about when rents get put down due to Covid? What about when the improvement of the property project blows out from 1.1 to 1.7 to 2 million. What about when you have to reduce your rent because your tenants can't get access to the car park? How do you think and feel when you hear that the tenants unit is completely boarded up with no light and fresh air for two months? What about when the brand new baby's brought home to this dusty place and they're begging for you to let them out of the lease and you know that you won't be able to lease that property out for two to three months. So here's the interesting thing. We sold right at 850, but others sold within the six month period at a million and 950 or 980. So how do you feel when you hear that because the prices came down or is what you hear, we bought at 310, it paid for itself pretty much the entire time we sold at 850. So let's just assume that, you know, we renewed interest only loans and for 10 years or so and started paying down the property. And you know, the loan on the property is 250, you know, so let's just say we bought it, we sold at 850, we paid off a $250,000 loan. So we have it. Sorry, 850. We bought it 310. So there's some capital gains there. Right? So let's just have a look, let's do these numbers. So 850 minus 310, there's capital gains of 540. Now obviously we can take off the agents fees and the styling fees and all of those things and the buying costs and all of the things that we have in there. So let's just say, I don't know that we get down to 500,000 of capital gain. So we're at 500,000 because we've owned the property for over 12 months. We only have to pay tax on 50% of the capital gain. So 50% of 500 is funnily enough 250,000. So that's 250,000 that we have to pay tax on. Let's just say that it's at 30% tax. So we're paying 30% tax of $75,000. So these are the kind of numbers that you're kind of looking at. So if we say we sold at 8:50, we, we bought it at 310. That's in capital gains tax, but we make some money. Now. Would we have made more money if we had sold at a million? Yes. But let's look at this property over that period of time. So 2003 to 2022, you know, 19 years or so. Over that period of time, that property gone from $310,000 to $850,000. So it's $540,000. So we divided by like 19 years. That's $28,000 a year divided by 12. That property made us $2,400 a month for 19 years. Am I sad I didn't get a million dollars? That was the market. Am I happy that someone has bought this home and has it as their home or potential investment property and that there's an opportunity for them to secure wealth in the future when it goes back to a million dollars? Yes. Am I sad that, you know, I. That I've sold property? No. The property did exactly what supposed to do. This property is the worst performing property in my portfolio. It's the only one I've ever sold. It took 19 years to sell it, and it made us $2,400 a month for 19 years. So if you put this into context of now, you know, interest rates are going up, the property market is dropping. I made money by buying in this environment 19 years ago. And over the last 20 years, it's made me, you know, 2,400 bucks a month. So I want you to put this in context because your thoughts and feelings about when you heard that story is the most important thing here. And it's something that I've been working with, my mentoring students with over the last three years, because often it's not about the property. It's about how you think and how you think and your beliefs come through as your thoughts and feelings. So if you were really worried about interest rates going up when I told the story story and it made you really sick or, you know, you were like, ah, that's part of the market. You know, how you do anything is how you do everything. And it's your responses to this can actually give you a bit of a signpost to how you will invest in the future. And I can tell you that having worked very, very closely with a lot of people in their mentoring over the last three years, it's that mindset piece on how you deal with these things that is so important. Important. And, you know, I have seen people's relationships with money and I have seen how it has held them back. And even to the extent with a discussion I had with one of the amazing members of this community just today who said, I remember meeting you 15 years ago and has done incredibly well, but there's also still some blocks there and some things and some hesitancy that if it were already gone, imagine when that would have had her 15 years later. And you know, I had a chat to a mentoring client on Tuesday and we had this discussion and she had rung up going, you know, I need to talk to you about buying this unit in Brisbane. And we spent like an hour and a half talking and about stuff and we only spent the last five minutes on the unit in Brisbane. And it was what she felt, that unit in Brisbane was actually satisfying to her. That is where we spend all the time. And at the end it was really obvious that she didn't need the unit in Brisbane. So what I wanted to tell you is that you know and share with you in this story is it is your thoughts and feelings that are dictating everything that you're doing. And here's a super secret. Your thoughts and feelings come from your beliefs and your beliefs come from often, you know, years ago. So you could have like a five year old toddler essentially dictating how you're acting today. And I know that sounds quite a big, a big jump but it's something that I just find completely fascinating. And because of that, you know, I have just created an entire way to support people through masterclasses and workshops essentially in working out their money stories in your successclub.com I'm really, really proud of this because I know that having worked with thousands and thousands of people over the last 17 years in the property investing space, there's some people that just get it and the switch happens and they move forward decisively and they take action in the right way and strategically and their wealth has completely gone to the next level, their security, their abundance, but so is the rest of their lives. And there's others that have, you know, not done so well and a lot of it is around those thoughts, around what you know, your beliefs are. So I really encourage you, you know, if you, if this story that I've just shared with you actually brought up some things for you rather than just a story and you feel that there may be something that I can do to assist you in revealing that. I've got a masterclass that will actually a whole workshop on the 6th of August and the details in your success club dot com. I'm really, really excited about this and the clients that I have been working with in this and just seeing the breakthroughs they've had just in, you know, a very short period of time, this has been extraordinary. And if I can serve you in that way, I'd love to, but if I can just serve you by sharing that story about, about, you know, the property that we bought. The worst performer still made us $2,400 a month for the last 19 years. You know, if that's as bad as it gets by getting it so right. Yeah, take that every day of the week. So I hope this serves you. I really, you know, honestly wish for your property success and I more so wish for your personal success. And if I can be part of that journey and give you some, some assistance towards that, absolutely. I'm all here for that. As I said, you know, the information around the property, information if that will serve you in assisting you in taking that next step and having confidence in this market where other people do not have confidence. So you can take the opportunity like I did buying a $425,000 property for 310,000. Fantastic. If I can just help you in looking at your own issues or beliefs or conditions that you have. And I'd love for you to join me in that one day workshop. I will be doing some free masterclasses as well. Road to Riches and Way to Wealth. And please go to your successclub.com check it out, have a look at it. Because I really love doing this work and I'm really committed to assisting people in every way I can in bringing them to be able to, to make their life exactly what they want it to be. So as I said, please, you know, join me in the future. And as always, here is to your property success. See you.