Q&A Your Property Success Club Call June 25-06-2020

Hello. Hello everyone and welcome. It is John and Jane here and we are bringing you the June your Property Success Club monthly call. And welcome. Hey John, how you going?

Hey Jane. Hey everyone.

Really, really good. Well, I don't know where you are placed in the world at the moment but we're in cold Melbourne and as you probably know as the Monday, we're back into a bit into lockdown, John, so things haven't changed. Welcome to my lounge room.

Yeah, yeah, it's one step forward, two steps back in Victoria. Anyway.

I know. Well, you know we're going to be vigilant and we're going to keep on top of this, but it has been an interesting time and whilst John just pulls up the disclaimer so you know that we are, you know, know we can give you all the information we can but all the action and information we give you is not advice.

So John, over to you, let me do that now like always, we do have to start with our mandatory disclaimer. So it's important for you to take care in applying what you'll learn on this training. Everyone's situation is different. While we go to great lengths to ensure that everything is accurate, what you're about to hear is based on our personal experiences and opinions and not intended to be specific to your circumstances. So we just need to make the disclaimer that we're not real estate agents, financial planners, lawyers or accountants and are not liable for any loss, damage or misunderstanding caused by reliance on any of the information provided or inferred. And that's that out of the way for another month. Jo?

Well, thank you John and hello Darren, thanks for letting us know that we're coming through loud and clear. And just as a reminder, you know, if you want to click on that funny little link I've put underneath the comments that says we can see the comments issued, just lets us see your name and it pops up on screen. So we're not watching two screens all the time. So John, it's been a really interesting month. You know, if we look back at beginning of May, we were, you know, really in the lockdown period had started. We'd had a couple of months of getting used to this whole, you know, working from home situation. What's happening in the property market? We still had the open for inspections, you know, just, just starting again in May. So it's been an interesting month. What have you been seeing?

No, probably not as much as you've been at the coalface, particularly with the mortgages. So I'm interested to Hear exactly what you've seen transpire over the last month. But it seems my limited exposure to it is just my impression, I guess, is that we seem to be treading water at the moment a little bit. And that's been my observation. But I'd be interested to hear what you've been seeing at the coalface.

Yeah, look, it's been really interesting in the sense that I know that speaking to a lot of other mortgage brokers, they've talked about the fact that there has been time to look at people for refinancing opportunities. We've really gone back to our community and talked to them about how they can call their bank and who they need to compare their lender against so that they can actually get their interest rate reduced. Now, as these things happen, whilst we're working from home, I have someone pounding on my door. So I'm going to hand over to you for a moment, John, while I go and deal with that small situation.

Okay, no problem at all. Well, actually, what would be great is if you guys could type in anyone watching and even watching the replay, type into the chat and let us know what your observation of the market at the moment is being in your area, what's happening in your area. Because it's what seems to be happening is different in different places. I was talking to someone in the Gold Coast a couple of days ago and their situation up there is quite different from what I'm seeing just in my local area in Victoria. So love to hear what's happening in your area, your neck of the woods in the property market. Type in and let us know. Are properties continuing to come on the market? Is stock starting to dry up? Is, for instance, the rental market been impacted by the Airbnb still being closed down as the lag time, as people start to feel pressure on that couple of months down the track. So let us know.

Yeah, absolutely. And look, I'm just going to share, just back to the mortgage question that you mentioned. I'm just going to share the fact that we've actually got a look here. Where am I going to share? Here we go. If you can see here, this is kind of what's happening with the blowout. If we can show this the blowout in time frames that is happening with the lenders. It's quite scary really when you think about it. But a lot of these lenders, westpac, anz, et cetera, they have their call centers and their processing centers overseas. And what that has meant is that they've had to go and work Remotely as well. And they haven't necessarily been able to control all of the IT privacy, et cetera. So that means that they've had to really bring their assessments and helping clients back to the mainland and they just didn't have the staff for it. They. So if you put a loan application in for pre approval tomorrow to go to auction in two weeks time and you're with westpac, it's going to be over a month before they even pick it up, let alone, as we all know, with loans, they'll come back and say, by the way, we need this or did you actually get Jobkeeper? Or any of those questions blow timeframes. So, you know, which is really frustrating as a mortgage broker, because for me, I'm always trying to give people the opportunity to have the finance that's going to assist them for the long term. And here we kind of, you know, for people who come and speak to us and talk about what can we do? Right now we're like, well, these are the lenders you have to go to based on time frames. And so it really takes. That really frustrates me. But, you know, we can see there, that's what's happening. And as I mentioned before, I wanted to show you this. This is, you know, some of the things that we've been doing for our clients. So over the last 12 weeks. And I sent an email out with the link to our last Investors Choice Mortgages call earlier on the weekend, so check it out so that you could see what we were discussing. But over the last few weeks, we've actually saved over $140,000 now per year on interest savings. So we've had some clients save like $30,000 a year in interest by having these conversations. And we've had other clients save 1, 2, 3, 4, $5,000 a year, which is fantastic. That's like over 25 years, that's like over $3.25 million of saving in interest. So just be aware that you can have these conversations with your lenders, but if you're with one of the big banks, don't go and compare. You know, don't say Eubank is offering this rate because Eubank just doesn't have the infrastructure costs that the big banks have. And, you know, even with, you know, looking at Westpac has really cheap rates at the moment, they're really trying to chase that market share. But as we know, the length of time to a their loans is really long. But from a refinance point of view, you know, that could affect, you but this is a phone call that says, hey, what can you do to help me with my rate? I hear that Anz is offering me $2,000 cash back, or I hear that, you know, my mortgage broker wants me to do this. So just be aware that there's opportunity for you to negotiate. So that's, you know, to answer your question, John, that's been a lot of where our conversations with the mortgage space has been. But as you can imagine, we haven't had a lot of settlements. And the only clients that we've had purchase proper are the ones that are in our mentoring group. So we're actually curating that experience so that, you know, we've had a long period of time of selecting the suburbs. We know the typical property, the right property has come up, and the only additional things that we have done is actually adding into the clauses. Things like we can use all of the promotional information that they've used for the sale for rental. We can actually advertise from the date of contract being signed, so before settlement, so six weeks early, the property itself, we can have people coming through to look at the property for rental. And if there are some things that you just want to have fixed up, then we can actually have the improvements done. I'm not talking whole kitchen, but one of the properties one of our mentoring clients bought, and there was mold around the. And water damage around the bathroom or around the shower, and it just looked yuck. And it's a renter's objection. So we just pulled it off, put on some new skirting, painted it up, looked fantastic, and got rented an hour after the property settled. Yeah. So, you know, to just be aware that that's what's happening now. Darren just says he's on a rural property in Albury Wodonga, so depending if whether that border gets closed or not, you may not be able to get the milk from whichever shop. The property prices are constant, not varying, and there's still properties going on the market. And, Darren, this is what I'm seeing, and it has been, I think, kind of refreshing as well, is that there has been a resilience to our market. So we've definitely seen that the market has been affected, but there's this kind of opportunity for the market to bounce back. And I think we're still going to see properties come onto the market and there's going to be people that are due to death, destitution, divorce or debt are going to have to sell their properties. But there's other people who are now looking at Their home. And they're worrying and they're saying, oh, my goodness, if the market is going to crash by 10, 20, 30%, what am I going to do with my home? Like, if I'm in a plan to sell this in the next couple of years and the market will crash, I should sell now. I think there's people looking to get out as well.

I was interested to read the other day, and you probably know this statistic too, or maybe you've got a different statistic like it, but in the paper that they were saying that mortgage stress typically takes six to 18 months to turn up in the market in terms of sales, you know, in the form of sales, that's a really long leg. And that's just under normal circumstances. So I don't know how if that will play out in the same way in these circumstances where you're seeing mortgage stress at a much wider. More people being impacted by it. What do you think with that in terms of people that are under mortgage stress because of COVID how long do you think that'll take to turn out in the market?

Look, if I want to put my little thinking hat on here, thanks for throwing me under the bus there with the question, but, you know, my opinion is that the people who have been the most affected by COVID 19 with their jobs. We know these people are in entertainment industry, they're in the retail industry, they're in the arts, they're in hospitality. They're mainly associated with those tourism areas and where there's been the most jobkeeper applicants. You know, when I'm looking through all the suburbs, they're in the lower socioeconomic areas, usually out of town, usually where there has been like a house and land type of development, where people are kind of just getting into the market.

There's no entity in the house.

Yeah. And the fact that they have got Jobkeeper is. Actually means that it's keeping these markets up. It's those that have kind of like, you know, when the writing's on the wall, the boss has gone, you're out of here. Or hasn't been able to have Jobkeeper. And so Virginia has got a message here saying she can't connect because the link didn't work. But Virginia, if you're typing here, you're connected.

So do yourself connected.

Yeah. Consider yourself connected. Just keep watching. But so the interesting thing that I'm seeing with this is that the people who traditionally have mortgages are those that have been vetted by the banks, predominantly being vetted by the banks in the last even three years with if you think about it, the banks have put on a higher kind of gap between what the actual interest rate they pay and what the interest rate that they're assessing them at. So they've already been given this buffer. Most of those 100%, 95% loans came off the market during the GFC. Those that have got a loan out before, you know, three, three years and below that you're assessed at much higher interest rates, so 6, 7, 8%. So there's this buffer in place and you know, 70% of the property market is owner occupiers and, and I think it's something like 60% of those own their own property. So there's only 30 to 40% of people who actually have a mortgage. And if you read the CoreLogic boom and bust reports, you know, over the last few years, although we had, you know, a decline and let's talk about the two biggest markets, Sydney and Melbourne markets, we had a decline of you know, 10 to 15% and then we had it come back January, February, you know, we're at 10 to 15% up and now, you know, it's actually been resilient so we kind of got back to 2016worst case scenario.

Yeah.

So what I'm seeing in the market is A it's been resilient so far, B those who could have the mortgage stress in six months time are actually those that should actually be less affected by this. And what's really interesting, well interests me anyhow is that you know of the big lenders that we've seen like ANZ and Nab etc who have shared their data on how many people have applied for hardship, They've had over 30% of those who applied for hardship go, you know what, don't really need it. So they've actually, although they had quite.

A bit of time initially to kind of COVID their bases and then they gone, oh no, I'm all good but I'm not going to take it.

Yeah, yeah. So I think from that point of view I don't think we're going to see this mortgage stress tipping point in six months time because the market has come ahead and really actually I'm going to find an article I'm going to share with you but the market has come ahead and it's really saved the Australian market a lot. And if I. Guys, if you got it Darren, I know that you there, I can see you. Also Virginia, if anyone's got any questions please pop in and ask. I'm just looking over on my other screen here, but let me share this with you. So this is a really interesting report. This is the Switzer report. And what they've said is they've gone through now Moody's, which is they assess the economy and they tell us, you know, how is Australia going in the economy at the moment? They've come back and out of all the economies in the world, they actually gave Australia, which is one of only 10 of 195 economies, a triple A rating. Now, one of the things that's really interesting here is to look at what the Australian government has done in fiscal stimulus to help our economy through Covid. Now you can see here we are almost, well, we are double any other country in what cash is being thrown at us. So we're talking jobkeeper, we're talking home builder, we're talking all of those things that the Australian government's done. So what's interesting here is that when they're looking at what's going to happen to the economy and into others, they're really saying that we're going to be okay. They're actually banking on the fact that we put so much money into this. Now, we do know that the end of the hardship for the banks is coming up in September. The fact of the matter is most people have pulled back and said I don't really need it. And we also know that the jobkeeper, come September, they're going to review that as well. So I think that there's going, they're.

Unlikely to, they'll stage, do a stage withdrawal. You think they're not going to drop everyone off a cliff?

I think so, absolutely. And the more and more that I'm looking at it, you know, it's really giving us an opportunity to say what is going to happen in the market. Now one of the other things is that I just want to share with you. So this week I was asked to participate in article for Canster. And so they asked three property experts, Chris Gray, myself and Ben Kingsley. Should you buy property? Now, Chris is essentially good quality properties. Buy it when you can. Don't time the market. You know, just if you've got the cash and you've got the confidence in your income, do the same. Ben Kingsley, exactly the same thing. Consumer sentiment, you know, everything is okay. We're going to have, we know we're going to go head into a recession, but there's a belief that, you know, with the stimulus that we've had that the property price growth is going to be back in 2021, so we're talking six months away, so getting ready and I went into a little bit more depth and I really want to discuss this further. I hope you guys can see that well enough. But what I really am thinking is that there's a couple of places and people who are going to be going to buying properties. And so I've done a bit of analysis on this. So if you think about those who are kind of in their 60s, are thinking they're about to retire at 65 or 67 or 70, they had this huge, huge, huge, huge drop in their shares that happened round about, oh, gosh, has happened in the last six months. So the end of last year, etc. It's been this real effect to the share market. So I think from that point of view, you know, we really see that, the fact that there has been an issue with that. Now, what's interesting here, when I look at it, these people could be sitting there going, oh my Gosh, we've lost 30% of our superannuation. And now, you know, the CBA came out saying that the worst case scenario is the property market was saying lose 30%. They've now come back on that and, you know, it wasn't necessarily what they had thought the whole time either. But the other thing is that they've then come back and they've said, you know, I think where I'm seeing it now is that the 10% unemployment is expected to be around 8.5% and the property market will come off maybe 5 to 10%. Now, obviously, in good quality areas, we know there's resilience. If you're in the premium area of over $3 million, arguably they're expecting that market to come off more. So you may see the overall, like Sydney, Melbourne, Brisbane, Adelaide did it, prices come back, but it'll be the premium end of the market that's going to be hit the most. So these late boomers. So they're not early boomers, they're late boomers. These late boomers, I reckon are going to look to downsize early and probably capitalize on selling their property. Then we've got these early X'. Ers. So the early X'. Ers. So I'm kind of a late Xer, but an early exer has grown children and these kids are having trouble at the moment. They may be getting jobkeeper, they may not. They haven't really established themselves, they don't have their first home. I think these guys are going to basically come back and say to mum and dad, I want an Airbnb of Mum and dad. And by the way, can you put a garage apartment over the garage or a granny flat? I want my own space. But, you know, so I think that these guys that are the early exes are probably going to move into the houses that the late boomers get out of. And then we've got the latexes, which is kind of, you know, around our age. John, I'm putting you closer to my age, but I know you're a lot younger, but around our age. And these the guys that are kind of like, you know what, I've been working from home and I'm kind of comfortable about this and do I really have to go back to work? And we've just had a conversation about return to work for us and, you know, talking about what's happening in the city. The big companies in the city of Melbourne at the moment are saying, we don't think till September, October, because it's going to take us 45 minutes to get everyone up in the lifts if you practice social distancing. So we've got this kind of acceptance that it's not so bad working from home and maybe we can continue doing that. So what that is potentially going to do is going to bring the people going. Well, you know, I was going to wait for a tree change, sea change, the Southern Highlands, the Wollongongs, the Newcastles, the Hunter Valleys, the Bendigos, you know, the North Sunshine Coast. I was going to bring. I could bring that forward if I only have to travel to work, you know, once a week or once every two weeks and two hours. I can do that. I think we're going to see some of these latexes start thinking about maybe making that trade change sooner now. I'm going to now mention the coupled millennials now, these couple millennials who kind of in a couple and thinking, one day we're going to have our first home. We do have the first home loan deposit scheme kicking off again July 1st for another 10,000 people. Now, Mark my words, you know, we helped people with their mortgages and getting this in the first round, you know, NAB had won the big bank challenges. Had Westpac, Westpac did something wrong, they lost the opportunity to do it. CBA had to catch up quick. CBA and NAB were the only two big banks for all of January that you could get a allocated spot reserve for you once you've got pre approval with them. And then the other 25 regional lenders came on. The other 25 regional lenders are Ready to go, as is CBA and NAB for the next round. So we're talking days away now. There's one significant change for the first home loan deposit scheme this time, if you have a friend, tell them about it and that is that the government wants a notice of assessment to be part of your application when you're getting the property. Now, what that means is you have to have your tax done, which means you have to have your PAYG group certificate. So you're actually going to have to be ready on the 1st of July to go to your tax agent, get your tax put in, two weeks later, get your Notice of assessment. So that's what most of the lenders are going to do at the moment. NAB has said you can get a pre approval in today and whilst we're assessing it, if we say yes to your approval in principle, we will reserve you one of those spots and we don't need your notice of assessment until you find a property. One of the things that has changed that you had to find the property and buy the property within 90 days and now it's 180 due to Covid and the fact you can't get into all the properties and supply, etc. So it took months for that 10,000 allocation to go. In the first six months, we're going to talk about maybe a month or two for the next 10,000. Now, you combine that with the home builder and I did a bit of a video yesterday, I'll put a link to it in YouTube. But my First Home Buyers, First Investor Facebook group and that is the home builder. You know, you've got the same income restrictions as you do for the first time, loan deposit scheme, 125 for a single or 200 for a couple. But you know, John and I ran a whole brainstorming, storming session around this with our mentoring students, you know, a couple a month ago, around where was the opportunity for homebuilder? And really, I think it might bring these coupled millennials forward by going, oh wow, we could build a house and land package and have everything we want. We're going to get $25,000 and they're going to end up in the burbs. And these house and land packages that we know historically do not go up in value very much and when the most desperate person has to sell, they're going to sell that property at a loss. And that then becomes your market value of your property. Because it's new, you can't really do anything to distinguish your property from other People's properties. So this is actually a $25,000 windfall, is going to set them back for years. So this really concerns me. And then we've got the home builder renovator package. You have to spend 150 grand up to 750 on your home, which can't be valued over 1.5 million to get the 25 grand. Now, John came up with his unique back on the box on the back technique, using commercial building techniques to get a box of a butler's pantry in the kitchen, a living room and a, you know, lovely glass doors, etc. For less, like $120,000. So we know you can do that for less than 120 grand. So 150 grand is a lot. As you can tell, I'm very passionate about this. I think these couple millennials are actually setting themselves up for a world of pain. Then we have a couple millennials who are the, let's talk, let's call them expats. So they've been to London, you know, they've been to the States. They've done their oe. They've seen, spend a bit of time traveling or working abroad. They've come back and in actual fact, in the Australian last weekend, there was an article just on one of these couples. They've come back and this couple on the weekend have come back from Hobart and they're like 40 minutes away. We can get like a block of land with a beautiful old home for $250,000. Now, I know traveling 40 minutes in from Hobart is the equivalent of, you know, Victorians traveling to Albury or Queensland is going to Townsville because it's all what you're relative to. But, you know, 40 minutes, if you're going to work from home once or twice a week, is that a big deal to do that? And they're buying these beautiful homes and they could then do, you know, potentially a whole renovation. So I think we're going to see the market have that kind of activity. And I think the millennials as well, you know, with the millennials, we're going to see them kind of go, oh, look, I want, I'm all about community. I want to be with my friends. I want to be in the inner city, new towns and Collingwoods. And I don't know, you know, I always forget the one in Brisbane, Fortitude Valley, where the coffee shops and all those emerging areas. You know, I don't want to own a property. So I think they're going to be renting out good quality investment grade properties that are close to the city. So all in all, I think that we've got a market that's going to be ongoing. I think we're going to a market that is buoyant and I think there's some really good drivers behind it. If I just have a look at. Let's make this so you can see it. If I just have a look at this. This is this week's early market indicators from CoreLogic. And they come out and they say, you know, what's been happening now with activity compared to 2020 and 2019. PRE listings means people inquiring to real estate agents and saying, should we list now? Now, obviously this went down in April, May, but check it out. We're back to last year's figures. Auctions last week in Sydney, I think there was 400, no, 528 auctions in Sydney last week last year there was 580. So they're almost back to auction status. So this is. Should we go on the market in spring inquiries. This is newly advertised kind of properties. So we can see we're getting back up there. It's down around about 10%, but up 10% from last week. And we've got this mortgage activity and this is where we've seen a lot of these refinances, but mortgage activity is very similar to what it was last year. So all, all of these things are coming together to say it's interesting times ahead. And I'm just going to share one more thing with you. I'll give you all these links below so you can grab them. But once again, the guys over at Ripe House have done a bit of a study on the population shift and what they think is going to happen. So, as you know, in our mentoring group, we have a lot of conversations about where people are buying and what are buying. And we had a really interesting lively one this week and last week about where's those two hour points that we would expect the people to move to. But this is really interesting just to.

Just so people understand the two hour points. You're saying that it's a tree change or a sea change, but not too far away.

Exactly. You can commute, you can get to work if you need to be a bit of a pain, but it's okay, you can do it once a week or once every two weeks, et cetera. So I think, you know, this is really interesting because they gave us all this baseline of saying, you know, there's going to be a vaccine in 12 months, etc. But you know, these kind of articles that are coming out at the moment, I think, you know, there's nothing but optimism that I'm seeing. And, you know, people, all of these experts, 130 experts who are interviewed and I have, sound probably more conservative and negative than most. But everyone's talking about prices being back to where they are or a bit higher by this time next year. All the banks are saying pretty much the same thing. And those property, you may not recognize me, that's me with makeup and hair done. But there's some real opportunities that we're seeing in the change at the moment. And I just want people to realize that, you know, it is a change. But if we can actually, as investors ride this out, I think there's a lot of benefits that we can, that we can take from this. And, you know, it's definitely, as you know, I'm not telling people to rush out and buy property. I'm saying get ready. If your property is at the highest value it is at could be for a while, refinance to get your equity so that you can be part of this momentum. If you have job security and you have a buffer, you know, you make sure that you are in suburbs where there is that rental requirement. So the rental demand. So at least 20 to 30% renters and make sure that the vacancy rate is under 3%. And if it's over 3% because you're in Sydney, it could be affected by units. So check if it's affected by units. If it's not affected by units, there's not a lot of units in the suburb you're looking at. Then be worried that there's more houses to rent on the market than people who want to rent them. So there you go. That's my thoughts on that. Opportunity awaits.

Yeah. See, Darren's got a couple of questions in there.

Jay? Yeah. Do you want me to read or do you want to read them out?

Let's. Which one are we starting with? Is it the refinancing initial hit?

Hi, guys. I was wondering.

I can't see that one, unfortunately.

All right. Hi, guys. I was wondering what the general time frames are on A, pre approvals and B, finance approval. Taking this into consideration, what time frame should we be including in finance clauses on purchasing contracts? Thanks. Okay, so I'm going to jump over to Facebook to see who that was actually from. Christy, really good question. So as you saw from that kind of traffic light picture that I showed before, there's actually different. Lenders have different timeframes. So first and foremost, go and get your pre approval and get that in place. Now I spoke to someone last week on Friday who wanted to go to auction on Saturday and we rushed through and did an assessment for him and it was just like, in actual fact, you possibly could do this. We're not going to have a pre approval for you. With the extra vigilance that banks are doing and how they're checking things at the moment, just be aware that this is the last lender that will actually get you to the purchase price that you want. And if they say no, you are really stuck. So just be aware of the fact that you should have your pre approval set up first. And for the first time ever, I've never seen this done before. When you do get to getting a formal approval, the banks are calling you up and saying, has your job changed at all? Have you had, you know, if you are on jobkeeper, whatever it is, some lenders will take jobkeeper, so that's okay. But if it wasn't how they assessed you in the beginning and it's not a bank that will take it could be a big deal. So get your finance done first, Christy, understand what that is and get your mortgage broker to tell you what the timeframe is for the bank. Some are still doing 24 hour turnarounds, which is fantastic. I would have at least a 10 day working day finance clause in place so that you can do all of your due diligence and just make sure that potentially your broker can order the valuation upfront rather than waiting for the bank to give approval. So different lenders have different policies. Depend on your broker to let you know that, but also get the pre approval in place before you go ahead. It's really, really important. And as I said before, or watch back this on rewind replay in case you missed it, you know, we're including for our mentoring students some of the clauses in there so that you can actually rent the property out prior to taking settlement. And the way that we did that, we said that the owner would get all the rent and pay 25% of the leasing cost. So just know that there are opportunities. The next question is around principal and interest or interest only for your own home. If you're in that acquisition stage as you suggest and still investing, I would be keeping the money in it. I would have my home loan set up as a interest only loan and the money in the offset. So you're kind of making the same repayment every month, but the money that's not going against the principal is just going into your offset account and we had a $400,000 loan and $400,000 in your offset in 15 years time. Well, that's a really good place to be. Just be aware that interest only loans are not all the same. There are some lenders that will do 10 years interest only, which is fantastic. So in five years, if you're thinking they could have an income change or difference, you don't know what's going to be happening in the property world then. Having a lender that does 10 years interest only is better than 5. Having a 5 year interest only loan is fantastic as well. But in the acquisition stage, I would say, you know, keep the money in your pocket as a buffer. Especially in the times where we don't know what's going to happen to vacancies and rentals and all the Airbnbs coming onto the full time market and all those things. From a risk minimization point of view, that would be a consideration I'd take into account. Obviously not knowing all of your numbers right now. I can't give you direct advice, but it'd be a very good way to look at minimizing your total cost. I don't know if Adam's pudding I was trying to keep in.

Is it.

Okay?

And now the question was around the jobkeeper and unfortunately names just disappeared. But the question was, Jane, you mentioned some lenders will accept jobkeeper. My broker suggests this would be really difficult. Have you got any tips and apologies to the lady who asked that question. Your name's just disappeared from Facebook comments.

Okay, so, and just so we can see your names in the belive comments, just click on that button that says Facebook issue or whatever, I might be able to do a quick little search. But look, your mortgage broker will be able to do this search for you. There are different lenders that are definitely allowing jobkeeper. And so it's just about her or him going out and doing that work for you and doing the analysis and finding out who it is.

What are the, are they doing that based on industries or how from the, from the bank's point of view, are they saying, well, this person's going to get a job back, you know, in a couple of months. Is that the way they're doing it?

Or essentially what they're doing is they're saying, okay, you know, you were paid, you were paying, being paid $1,500 minimum a fortnight anyhow. And we know that, you know, if your employer has said that they're happy to keep the. Just trying to Type and talk and your employees saying that they. You want to keep you in business and on the books, that there's a commitment that they'll be able to do that. So at this stage, what they're saying is they will accept Jobkeeper. That I haven't seen extra questions around the industry and who your employer is, etc, but let me just see if.

Yeah, it seems like a bit of a risk from the bank's point of view, just given that, you know, if the. Once the Jobkeeper disappears, there's no real guarantee that the job will stay there, you know.

Yeah, exactly.

It's over without Jobkeeper, which I'm sure.

Exactly. So if you work with Virgin, I think there's going to be a problem. Right. So it does depend on. So I've got here. CBA has taken a Virgin flight attendant on her Jobkeeper allowance. So I know that cba, I think bank west and Anz lenders that I have seen come up, but as I said, speak to your broker, make them do the research. That's what our job is to do, is to basically find out what's the lender for you. So just ask them to go and find the lenders that will take Jobkeeper. They will aggregate through an aggregator, your mortgage broker. And the aggregators are running talks nearly every week on this kind of stuff. So they could just email the aggregator and say who's doing this? And they'd know very quickly. Yeah, Catherine Rawkins is. Oh, Julie. Catherine Rawlins. I don't know what the whole conversation about Captain Rawlins, I think the name.

We couldn't see before.

Oh, okay. All right. There you go. But, yeah, my choice seems to be everyone's come back and said they're a mortgage broker, so they're actually going to different lenders. So they're personally going to cover your interest repayment and someone's going to be taking that from them. They're paying them that. So just work out where it is. Okay. Any other questions there? No. John Keepers. Okay. Southern Highland Refinancing. Oh, God. We're doing well here. Oh, Darren. The injection from 25,000 and the 20,000 first home buyers has indeed had an effect. The land available is now low, which hopefully means it might have a larger demand into existing dwellings and pushing properties up. So, yeah, so that's what Darren is saying. I think we're really going to see, John, the first home buyers rise in the market here. I just wish I could talk to every single one of them and go. Be wary. This is the time that you can make money. Don't be looking at the shiny $25,000 because it can set you back lots of years. And you know, just to that point about the house and land packages, I don't mind new builds. Like I don't, you know, there's time and places where, I mean, you did beautiful new build in a blue chip suburb. Yeah. So I'm not saying I'm against new. I did have a strategy call with one of our mortgage clients in the last week who was looking at building a townhouse in a regional area. And we looked at the area and there was all these house and land packages going, the builders going, oh, people will love townhouses. But they hadn't built any other townhouses there. And it was like a very low rent or 17% renters, I think it was. And so, you know, there really wasn't that demand for A renters or B for townhouses at all. The builder said it was good, follow the money, who's making the money. So, you know, there was this whole, well, is there an opportunity or not? And I think people need to look at that. You know, building a townhouse in a, you know, middle suburb is fine if you know, because it's a scarcity of land, etc, but building where there's.

Then even with that though, it's good. Even with that caveat. I mean, you're not affected by the whole green acre thing, but it's still a highly specialized strategy that people spend years perfecting. You know, a development strategy, so.

Yeah, exactly. And developments aren't a. I mean, gosh, you've done quite a few of them, but you know, developments aren't an easy thing. And you did yours with a coach, right? A mentor.

Yeah, yeah, yeah.

And you've been doing property for 20, 30 years. So it's not like it's something you go into by yourself and go not.

For the sake of 25 grand. Like the 25 grand. It'll be a drop in the ocean if you go. If it goes south, you know, or even one along the ways, go south.

It's interesting, John. I shared this story yesterday with the first time buyers, but I had been at this barbecue with this lady. Now for those of you who know Melbourne, you'll know these suburbs. She had a home in Hawthorne, Beautiful blue chip, you know, elegant home. They bought an investment property, house and land package In Point Cook, 25, 30K's away down south, brand new, lovely, rented it out easily. All good. The developer then built the next house and land packages and all the tenants and these ones went to the newer property properties because, let's face it, they're not that loyal when it comes down to the next night, shiny thing. They moved on and her property was vacant. And they started to feel the financial pressure of paying the mortgage and not doing this. So they actually moved from Hawthorne to Point Cook, you know, driving twice a week back for the violin lessons, the kids to school, like nightmare kind of stuff. But you know, they did this and they rented their home out, did very well. And she was telling me about this, she said, we know we got it wrong, a house. And we bought this house at, you know, in the outskirts. It's not in a good area. And so then she came back and she said, well, in actual fact, what I want, you know, what I want to do is I want to be able to. I feel like my video's gone weird. But anyhow, and so what she did is she came back and she said, so now we're not going to buy a house, we're going to buy a unit and we're not going to buy out of town, we're going to. Hello? Hello.

Yep.

Can you see me? Okay, I was having a very interesting conversation with myself.

No, you're going, you got you up to the part where she wasn't going to buy a house, she's going to buy a unit.

You know how we talked about the joys of working from home. I can feel my 12 year old son on the Xbox playing some kind of video game at the moment, interrupting my signal.

Throw something at the side.

There'Ll be words. Anyhow, so she, she said, we bought a house, we made a mistake, we're now buying a unit, we bought out of town. We've, we've fixed our mistake, we're buying in a city. So she's gone from house and land package. You know, no scarcity of land, everything's the same. When someone sells the property at a low price point because they can't afford to keep it, that then becomes the new price point to an inner city unit. Exactly the same issue, which is nothing distinguishing it. You can't, you know, add value to that brand new unit to make it different to anyone else. When anyone else sells at a low price, that becomes your price. She was actually walking into the exact same issue without not seeing it. And this is the biggest concern I have for first home buyers is I honest to God believe that if your first home is your first investment, you use all the incentives that you can to get you into the best possible possible area that you can buy in the typical property in that area and wham it with adding value to get you into, you know, renovation potential and create equity out of thin air, then that is just so wonderful that you can then after a year, you know, suck it up, live in the burbs or wherever it is, suck it up and then move to your inner city cool place where all your mates are and you can cycle to work and you know, you've got the ability to turn that to an investment property and actually have that foundation for everyone. Because I know you only need two or three of these properties to be good, you know, you don't need hundreds of them. And what better chance of having like the First Home Loan Deposit Scheme, 5% deposit, no LMI, or having stamp duty concessions as a first home buyer. Or even if you can't get that, a lot of the mortgage insurers give you a first home buyer stamp duty, first time buyer concession. So there's ways that you can actually get ahead by being a first home buyer, utilizing what's available to you and also then being able to buy in a good quality area with all the investment mindset. That system set you up for life and that's not house and land and that's not inner city units. So you know, if you know a first time buyer, know that I'm pretty passionate about, go to my Learn with Jane Blacksmith Facebook page and yeah, tell them to listen to the links, the talks. But first time buyers I think are going to be rising market, most of them are going to be ripped off by developers. Along what we've kind of just spoken about today, we're going to see some clever marketing genius being put into play where people are going to offer you things to get you to do this. And I just, I don't think it's going to be in your best interest. No.

Normally.

Virginia's just asked, will lenders take your super as income? I'm going to have to ask you to clarify that, but I'm going to answer it in two ways. First of all, the 10% or so that your employer pays into your super, they will actually take that as income in super for you to have a loan within your self managed super fund. However, many of the lenders are stepping back from that. So we've only got three lenders on the books now that will actually do the self managed super fund lending. And with the changes with legislation, it's just too hard for the banks to keep up. So more and more what I'm thinking is that self managed super fund lending is going to become obsolete and difficult. So if you're thinking about that they do isolate your expenses etc within the self managed super fund. So they say expecting $10,000 a year to come in from the employer. We're expecting rent of 15,000 a year. The mortgage is 10,000 a year. So that's good use service with that. So if you've got personal debt or credit card debt or whatever outside and you can't lend anymore, self managed super fund could work. But also be aware around that that if you're self employed it doesn't work, they go through your financials. Anyhow, if you're talking about hey I just applied and got $10,000 out of my super fund and there's $10,000 now in my bank account then you had to have a reduction of 30 hours, I think 30% or reduction in hours to actually being qualifying for that. So if you've qualified for that and the bank is going to see that in your something's askew there so they're going to have some issues. So just be aware of that if you. So Virginia's saying so if it's income that you've currently got in retirement income through super or you've already starting to pull down on your funds, lenders do not want to end up on A Current Affair. So what we will see with that is that they will be very risk averse to putting someone who's in their retirement phase 60, 65, et cetera into a property with no end game plan. So if you're buying your first home that could be I'm in the later stage of life. Yeah, we're retired. So if you're in, we're talking about endgame here. And John, I know you need to go at 1:30 so buy if you do. But if you're at the end game now and you're of an age that they're going to say you're buying your first home with funds from your super, then they're going to have, they're not going to give you a 30 year mortgage, they're going to have some real considerations and problems. If you own your own home and this is for an investment and the end game is I'm going to sell this in 10 years time they'll probably give you a 20 year loan. Will they actually take the income from your super? Different lenders have different policies. The smaller lenders are going to have more of an issue of that. They're more risk adverse. But you know if you are in a stable economic position all over, and this is you've got a really good exit plan strategy that can be communicated easily to a lender. It's worth having the conversation definitely. Darren. Also, another big problem we have currently is we're being hit by bushfires which puts up the mortgage insurance and now Covid, which we were hit again due to turnaround on the approvals. Yeah. So mortgage insurance doubling in bushfire zones. So one of the. I'm going to have to check on that. Darren. Mortgage insurance premiums are usually different by a lender. So. But not via zones. Like I know mortgage insurers will have like a. They'll let you get to 95% in some suburbs and 97% in other suburbs and 90% in other suburbs or areas. So I can see that they might change the lbr. I definitely haven't heard of mortgage insurers within one lender saying this is the mortgage insurance rate for this property because it's been affected by bushfires. So I'll have to look into that and come back to you on that. I don't want to give you information I'm not aware of. It does sound unusual to me. But I do think there's definitely areas that have had, you know, bushfire issues and then being fault in tourism areas and being followed up with COVID and have a lot of people who've had to leave their jobs. So lots of concerns there. Yes.

I'll say goodbye Jane. Goodbye everyone.

See you next month and thank you John. Until next month. But yes, just from an investment point of view. Okay. So Darren's saying he had to change banks. So Jaron, what normally happens is the bank is given a premium based on their risk profile and the volume that they have with the different lender, QBE or pmi, the different two mortgage insurers. And so the bank has a number and it's not necessarily area. So if you've had to change banks, it's probably the bank's LMI premium that they're talking about and their premiums can change by depending on the LBR as well. So it might just be that that's your situation. My six months in processes. Yeah, it can take a long time and that's another thing. Just be aware refinances can take up to three months. So getting ready and getting refinance done now if you plan to buy in the future is something you should consider just with the mortgages. I'll just share this with you. Let me just get through this show this is the property clock and you know, Heron Todd White, if you haven't had a chance, I'll put this link in so that you can see the latest report which is always very good. But you know, this is the property investment professionals of Australia and they've been talking about, you know, what the optimism is with people buying properties. And what I found really surprising here was that there's actually people who are talking about over the next six months, 30% of investors were more likely to buy a property in the next six to 12 months than previously just because of COVID And you know, Peter Switzer, as I quoted before, this is from the Australian Financial Review. They've been talking about, you know, softening of property prices. But all of the different lenders that I'm reading and all of the what I'm seeing, they're all talking about the fact that they believe that within the next six months property prices are going to be rising again. I don't think people should time the market, as I said, buy the best possible property you can afford when you can afford it. But that is the thing is that you should probably be getting ready now if you have some confidence around your income and confidence around having a little bit of a buffer in place. What have I got here? First time buyers scheme. I've talked to you about that and oh look, just. I know I've had some people ask me about mentoring. I am opening my mentoring again for a limited period of time just because I don't want to leave people in the lurch. And I guess the issue that I had recently was that I had been speaking to someone who had said that they had wanted to work with me in mentoring and I wasn't available because I said I was only opening up my mentoring in January and hence I went and bought a off the plan unit and two other mentoring practices. And they've now come back now and we've kind of fixing things up for them. Haven't made too many problems, which is great. But you know, just be aware of the fact that, you know, at the moment there's some of the people I've been working with that I do think it's in the best interest to take a break. So I have got capacity. I don't take any more than 15 people actively at any one time. You do get me and you get my network and you get all the opportunities to work with me. So if you want to organize like a quick little 10 minute call just to see if we're right to work with each other. Just go to www.jane slacksmith.com because yeah, I do want to be able to help people set themselves up for the future at the moment. And as I said, limited time. We have a weekly catch up. We have a monthly catch up. We have three face to face normally catch ups a year on on over a boardroom sessions. But you also get me curating the suburbs. Exactly for you, setting up all of the watch lists for you negotiation plans. And in the last couple of weeks we've been doing a whole lot more interesting things on me, on brainstorming what we can do with the future of of what's happening due to Covid. So yes, there's some opportunity to work with me there as well. I don't think there's any other questions. Let me just see if there's anything that I wanted to share with you that I haven't as yet and oh, I think the only thing is now I'm going to put up all these reports for you so you don't have to go and try to find them. But just a heads up and a huge thank you for everyone who has participated in this. And that is where we are right now with the donations to the kids helpline. We're over 11 and a half thousand dollars. So for everyone who's made a donation, thank you so very, very much for those who've made a donation and I did had someone this week go was that a rip off because I didn't get my link to the course. Sorry about that. We did have a bit of a glitch and our glitch fixer when it had a baby. Beautiful baby Diego. Congratulations Benjamin. Probably cutest baby I've ever seen. I shouldn't say that because I've had one but he's a really cute baby. So if you want to make an end of financial year donation, go ahead and throw another 50 bucks on there and get your donation. But you know the kids help line is still taking over 9,000 calls a week and they need as much help as possible because only 40% of those calls are actually being answered. So guys, thank you so much for that donations and for being committed to causes I believe in and you know, want to assist as well. I really appreciate that as always. You know, we're here in the club to answer your questions when you have questions and if you have any issues. There's been some really great conversations going on in the club recently. I just want to remind you because I feel like a real taskmaster that please don't pop up properties for sale in there or try to sell your business or whatever you're trying to do in there. This is an area that we've created over the last eight years for our community to feel safe and get investment advice and renovation and tips and search tips and all of those kind of things and professional tips from people who have been through it before. So, you know, getting there, support each other if you, you know, feeling shy, ask questions. We're here to help as much as we can and we really want to make sure that, you know, you are supported through this entire strange times that we're in. But anything we can do to assist, know that we're here and we're about and if that's it for me. And I can see that there's no other questions coming up. So I just want to thank you very much for joining in. As I said, you know, this has been eight years we've been doing these monthly calls, John and I, and we really appreciate being able to keep in touch with people, answer your questions and let you know that, you know, we're here to support you. It's not just a new thing that's happened in the last couple of months. We've been here every single month to support you and more constantly in the group itself and really appreciate all of the really lovely messages that I'm getting from people and, you know, the thanks, et cetera and just letting us know how we've helped you as well. So if you are in the club and you're watching this right at the moment, go and head over to the unit section. Unit 10 is where I created that Thrive, Not Just Survive series to give people some inspiration around health and wellness, et cetera, parenting and all of those things during the strange times that we're in. But you know, I've also created a first home buyer show. You can access that through Learn with Jan Slacksmith Facebook page. And you know, we're here to continue to support you. So just know that if you have any problems, hit us up and we'll be here for you. Anyhow, as always, guys, here is to your property. Success. Don't touch your face, stay inside, wash your hands and look after each other and be kind. All the best for now. Bye Bye.