Your Property Success Mentor Call March 28-03-2019

And the plaques and so on. Amazing history. And the old photos up in Katumba in the Blue Mountains. Amazing history of that area. And beautiful old, kind of a, a British colonial hotel. Something like you'd see in kind of Africa or you know, Southeast Asia or somewhere. So it was, it was brilliant. I loved it. And awesome group of new people. Oh yeah, we've got some pictures actually.

I've got our little video. I'm not sure everyone saw our video, but let me play it for you. Just a bit of fun. Here we are at the Carrington having our fabulous weekend mentoring and we have had an incredible couple of days.

Sam.

So lots, lots of fun. Hey, I think my favorite scenes there is the man who walks out with the champagne behind me as I'm going. Yeah, we're having a lot of fun here.

Just following you.

Before long. We had a great time. And you know, I think the thing about Obviously it's a 12 month mentoring program and that's one of the three weekends that people are invited to. And the thing that I found so interesting, John, was, you know, there was a self confessed 54 year old property virgin there. There was people there with five, six properties and you know, there's people who are trying to buy. There's people there who've got property portfolios they need revision on and make sure that they've got, you know, the right portfolio structure for the next growth period and to get to their goals. So everyone had a different background but most people were investors in solitude. So either their partners weren't interested or they were single or single moms and investing by that or single single investing by themselves. But everyone agreed when we talked about our family upbringings as well was that no one sat around the table and talked about money. That just wasn't part of the conversation.

Yeah, there was some really great insights for people. People obviously connect with different things. But one of the things we did on the Sunday morning was that money archetypes. And what's her full name? It's Natalie. Yep. So she's based and she's American but she's based in Colombia, right?

Yes.

It was all around how the relationship that you have with money and it was, that was fascinating, I think. And she framed it as a two way relationship that you've. There's a two way relationship going on, whether you know it or not, basically is the way she framed it. And we all have these different ways that we've come to think about money typically based on our upbringing or what's been passed down to us or environmental. But yeah, I found that great. And some of the people found stuff that there was a pretty deep, you know, that they found that they were self sabotaging because some of the beliefs that they had around money and were actually quite emotional about it. So yeah, it was really, really insightful.

And it's interesting of those eight money archetypes and people sat back, went, you know, I don't think I'm that type of person. And they read then through the description went oh actually I am, you know, so it was really interesting. But gosh, what a wonderful group of people. And yeah, we're looking. Some people obviously couldn't make the weekend and, and I don't know, we got a bit of feedback from people who just loved. What were you telling me this morning over 180 people responded to us regarding the video series about the investor behaviors and understanding what you need to do to put yourself into the pilot seat to navigate your way to your goals. And I know that quite a few people didn't get to see the whole video series and I don't know, we might work on something there, John, to help people watch it again because it was really amazing. We put lots and lots of time of effort into making sure that, you know, we could deliver some really good education and learning experiences for people. So you could take it away and use it. So yeah, if you missed it, hang in there, we might be able to do something about it. Hey John, what do you reckon?

Yes, I think so. I think so. Definitely, we'll definitely be well, yeah, contact the office if, if you missed out on it and potentially we can arrange something for you. Although I think we'll probably be releasing it again in another month or so anyway, give people another look at it because there was some really great. The behavioral model obviously was really important for a lot of people and self identified with it and we spent a lot of time thinking about that and it actually came to us from our mentor who's got. Yeah, our mentor who's got the same model that he uses for businesses. And so that was really impactful for us and it's. There's zero. It's a seamless transition to investing too because it's exactly the same behavioral characteristics. The gambler, the dreamer and the cynic and the achiever and yeah, just really helpful. I think those constructs or those models are just really, really, really helpful. Know thyself.

Exactly. And, and I think the other thing is that, you know, the feedback that I got from people was that by understanding where they fit in that model from action to inaction or from wisdom to ignorance. You know, they had an opportunity to sit back and go, well why is my investing not necessarily worked out how I wanted it to work out or not as successfully as I wanted it to work out. And one of the things that I kept getting constant feedback on were people that were saying I really felt that I was taking action by doing course after course after course and building up my knowledge where in actual fact a lot of that is just another form of procrastination. And that was a bit of a revelation for some people as well. And everyone loved the portfolio killer detector I had. Oh my gosh, it was hundreds of comments that were made underneath the videos of people going I've got a portfolio killer. And I didn't even know it. So really we really appreciate the fact that, you know, you gave so much time and watching the videos we had thousands and thousands of people view them and yes, it was really great.

Yeah, it's terrific. It's really, really good. And the, yeah, great venue. I think we should seriously consider about going back to the Carrington again. Although we did have some excitement on the first, first night, didn't we? That we probably would have preferred not to. But three o' clock in the morning the fire alarm goes off and then the loudspeaker comes in through the, the hotel room saying evacuate the building, evacuate the building. So people were streaming out of their doors and into the corridors, you know, and you know, 90s and yeah, you know, barely wearing anything and they were all standing out the front of the Carrington Hotel with the fire brigade running in with their suits on and all that kind of stuff. It was a false alarm at the end but it was a funny experience to see everyone at 3 o' clock in the morning standing at the front of a, you know, very old hotel.

Now guys, if you've got any questions please pop them in or check on that link that's up in above our friendly faces so that you can come online with your webcam and microphone and ask us questions. Because John, we didn't actually get any questions sent through to us us this month and I see there's no questions written below either. So we're going to get off scot free. Not a big deal.

Well, there was a couple of good things that I think came from the workshops, good talking points that I think we can loop back around to. Obviously a couple from the, the money archetypes we've touched on already but perhaps there's some more there. But even from the inspections, there was a couple of things we learned around vendor motivation, which I think is an interesting subject, and also to some of the hidden problems that we learned about in the property inspections too, that came up, which I think are worth touching on, particularly because it's easy to think sometimes when a house looks renovated that perhaps there's not that much more to do to it. But sometimes it can actually be more work, more money than a place that's complete dump with plaster hanging off the walls and so on. So we'll loop back around to that if we can.

Absolutely. Well, look, we have Miriam here who is joining us on the broadcast, so I might bring her up. Miriam, and we're going to see your lovely face and hopefully you've got a exciting question to ask us.

Hi, Miriam, how are you going well, thank you.

How are you Having a good time? How can we help you?

I'm glad this is working. I've just been on my phone because I couldn't because there was some issue with my Internet connection. But anyway, I do actually have a question. I just wanted to get your thoughts on, I guess a issue or issue. Well, it's not really an issue, but we have to make a decision at the moment with an investment property that we have and just wanted to get your. Yeah, I guess your opinion on it. So we're currently just got a wood heater in the property. So this is in Melbourne, it's in Seaford. And the current tenants have been happy with the wood heater we replaced. We thought we had it all fixed last year and then we just recently discovered that the guy who came in fixed replaced the baffle plate. But there's still an issue with the cowl at the top. So we're just wondering whether, you know, do we replace that? You know, it's probably another $300 or so. Or do we look at installing reverse cycle air conditioning in the property, which would then make it more attractive for tenants going further in the future. The current tenants were happy with the wood heater being the only heater because they were used to it that had one previously in their property. And they've now just said that they were going to move out in June, which is why we were thinking about it. But they've now indicated that they may in fact be happy to stay another 12 months. The thing I've just discovered just from we've been trying to get quotes for Reverse Cycle to be put in for the last couple of weeks and haven't managed to get Anybody out there? This is through our property manager speaking. I ended up sending a picture of the. I was suddenly concerned that the electricity switchboard might need to be upgraded. So yesterday I sent that to somebody I know here where we live, and he said, yes, it would need to be upgraded. So I'm now looking at like maybe $3,000 to put in a. An air conditioner heater. So I'm now just thinking, oh, you know, that's three grand versus, you know, $300. I mean, the thing is, we can't get anybody out to look at the wood heater to confirm. That's the only money we need to spend until we get them out there. And then it's like a couple hundred dollars just to get them out there. So just wondering your thoughts on, you know, do we just spend the, you know, the. Roughly 300 now? I mean, we can get the guy out there for like about 150. He can then confirm whether or not it needs anything more doing to it. If it does, then we can make, you know, if it's just the cow, then it might be 300, 350 versus, you know, potentially 3,000 now for a split system to be put in. But knowing down the track, we'd have to put a split system in when these tenants move out in order to be attractive for future tenants. I don't know, what's your experience with wood heaters versus, you know, other forms of heating and spending money now versus deferring it for at least a year and that sort of thing. The property at the moment, two very old conditioners.

When you first said, we've got a problem with a wood heater, I heard mojito and I was like, wow, I've never had problems with cocktails before with my tenants. I think they go, yeah, well, you know, after three, there's no problems. Right. John, I might throw this to you to kick off off while I get a bit of research on seafood going on.

Yeah, yeah, sure. I was going to go straight to the. I've used reverse cycles and so on in different properties that I use. And I've actually got a manufacturer that might be worth checking out for you that I've used in renovations, and you may know them already, they're called Domain Appliances and they're in Rowville and they do a kind of a. What would you call it, a brand. They look like just a regular run a mill brand, but they're a bit of almost like a white label brand, if you know what I mean. So a lot of Developers and so on use them. So they might be worth considering for, to get a cost wise might work. I've used those in the past. I could see why. And I know Jane's going to go through the demographics and look at other rental properties in the area and that kind of thing. I can see why it perhaps would be a buyer, a renter. Objection. Have you been given any indication of from the agents what they think of it and how long has the place been rented for so far? Miriam?

It's been rented about three years. It was own occupied place before that, not by us, but we've owned it since last year and it was rented the two years prior to that. The, the people who bought it had actually bought it to, to move in themselves, but then they wanted to basically extend it and build up and then they discovered that was just going to cost too much. So they ended up deciding to rather, you know, rather than continuing or, you know, kicking out the tenants to actually sell the property. So.

And did you get new tenants for the. They moved out and then you got new tenants.

The tenants that. It's been the original tenants since. So they've been there about two years or two and a half years or something like that.

Yeah.

So from what I can gather, it's just been one set of tenants ever in this particular house and prior to that it was unoccupied from my understanding. So these particular tenants had no issues with the fact that it was just a wood heater because they had had one in their previous property. But I understand from those tenants that, you know, when they were looking around, it was a bit of an issue with others. And when we bought the place, I was kind of thinking, oh, you know, wood heater wouldn't be so good if you've got little kids or that sort of thing. So I guess the question is, you know, presumably at some point when they put a split system in, it's just, do we do it now knowing that from what this guy that I know, unfortunately he's not based in Melbourne, he's based in the act. From what I know from him, we actually do need to replace or, you know, upgrade the electrical switchboard, which means, you know.

Yeah, it's a pain.

So we've gone from maybe a $2,000 install to maybe a $3,000 install. So suddenly the $300 given, we spent 250 already last year replacing the baffle paint and the wood heater. And then they're now saying, well, they'll probably stay another 12 months instead of Thinking, you know, do we now just go with the 300, 350 spend, keep it for another year and then if they decide to move out then look at putting, then putting, you know, spending the three grand or whatever and putting the split system in at that point to get additional new tenants in.

Yeah, yeah, yeah.

I think it's, it's one of those questions that you've got to ask yourself around what's going to be the objection to your tenants? And you know, if I just look at the information around Seaford in itself. So what I want to do is try to get an idea of what people are after and what's kind of typical for the area. So if I just jump on and share with you some information. So you know, first and foremost what I would be trying to do is just get a feel for the typical type of property. So you know, if I jump into the suburb selector software I want to find, you know, Seaford is a three bedroom house, mum dad with kids and mum dad without kids, quite prevalent, a bit older in age groups. 36ks out of CBD Melbourne. We've got some, a good rented percentage, over 30%, good vacancy rate, rental yield. So you know, lots of properties being sold, typical properties are housed. We've had some really good growth. So this is a, you know, we look at say over the last 10 years we've had Brisbane do 1.3%, you know, Melbourne do kind of five, Sydney do 5.8. So this is nice, some nice consistent growth going on here. So I'm just getting a feel for what that suburb looks like. And then I've jumped over to SQM research and said well what's the typical size block here? And it's really kind of that 5-800 square meters. So what that allows me to do is to then just jump into RP data and say, you know, between 5 and 800 square meters, let me just make this a little bit bigger so it's easy to see, you know, let's see what is happening with the rentals at the moment. So there's about 2,500 properties that are three bedroom houses between 5 and 800 square meters. And so I'm just going to see from a rental point of view what's on the market at the moment. And is this kind of wood heater thing even a thing that we need to worry about? Because I think you know, doing the work on the mains can actually be important if you have to, you know, then do a kitchen Renault later and have to upgrade for the oven and you know, it could just be bringing the large cost of renovation and costings for forward or it could just be a bit of a pain. And if these guys like the wood heater, it is an objection to most other people in the area but they're willing to stay for an extra 12 months.

Yeah, I mean they don't, they don't mind the wood heater at all. They don't care what they have. They're happy with the wood heater, they're happy with the split system, they don't care. I'm more just thinking about going forward and it was kind of like, oh, you know, do we spend more money on something? But then we've already spent 250 last year and now with the electrical looking like it needs an upgrade, I'm like, oh, you know, maybe we are better deferring it while they're happy with what they've got.

Exactly. Well, tell me, is it a. These brick houses are these kind of the typical. What's your property like?

Oh, I can't see it. I wonder if I can make that any bigger. So mine, it's a three bedroom, two bathroom place on about 590 square meters or something. It's, you know. Yeah. Renovated bathrooms, unrenovated kitchen.

They're all brick. They're all brick.

No, there's a mixture in that area. Some of the ones which are close by the water or in the dodgy like further south weatherboard. But this particular property in this pocket, it's like it's a newer, a sort of 70s, 70s brick pocket, if that makes sense. So the suburb's been developed in different times. Some of it's weatherboard where this area with this pocket is a 70s brick. So where's that property?

I can't see. We're just seeing if we can find any fireplaces in these properties to see what we're looking at here. So where I am here is zooming out a little bit just across the road from the ovals and the schools. Here's the link.

Okay, so yeah, the pocket that, I mean. Oh, no pointing. That's not going to help you. I mean it's, it's, it's. Yeah. So it's basically where actually where's your.

There was an aircon back there, Jen.

Yeah, I did see one aircon. So this property does have two old aircons. But yeah, it's, it's Lucas Street. So it's in that pocket between the two freeways. The northern, but the northern part of Seaford So for the north. Yep, yep. Yeah, in there, in that quiet pocket in there.

Okay. All right. So we've got this property that's got a new kind of air conditioning system. Did we see one there? Well, an older style one there.

Yeah, that's the. Yeah. So we've got two of those in the place.

Right.

Cooling.

And this would be some kind of.

From when I was looking. Some of the properties have ducted under floor heating, but this particular place doesn't.

It's just.

And how much are you renting yours for?

385.

How old's the property?

So it was built in the 70s. I can't remember when, but yeah, yeah.

So it would have been a new estate in the 70s.

1975.

Yeah, yeah. So it's basically area between Austin Road and Bruno Road. So there's like kind of sort of very light, it's sort of commercial to the north and that's Bruno Road and then to the south is Austin Street. So that area there basically all got underground electricity and it's all. That whole pocket there is brick, 70s built. There's one strip a bit further to the south where it's basically big blocks. So they're all being redeveloped now into townhouses. They're all massive blocks. So that's all being redeveloped now. But the area where I am, I guess long term, potentially. I mean, the neighbour seemed to think she could put three units on her place eventually. I'm not quite sure how, given it was only about 500 something square meters as well.

So we've got this kind of air conditioning thing looking up here at a gas heater in this one. So this is around the same price point of yours and around the same size. So do you have access to RP data?

No.

So what I would be doing is going through and looking at the properties and that are around that same price point and size and getting a feel for, you know, have they got the air conditioning? Because these are your competitors essentially. If these guys move out, these are the ones that are on the market at the moment. So they give us an idea, you know, from what I'm seeing so far older, they've got the traditional kitchen, hasn't really been upgraded. They. Some of them have fans. This one looks like it's got a heater system here, Some nice panel work. Original bathroom. So yours original bathroom and kitchen as well.

No. So the two bathrooms have both been renovated. The kitchen, it's the original kitchen. I mean they've painted the cupboards and they've put on new Bench tops at some point. But they like, if you open, you know, the cupboards and stuff, it's the original cabinetry, it's just been painted.

Okay. So we've got a fan and we've got ducted heating here. So that's what, 420 get two. Which arguably with the two bathrooms and your current rent and the fact that it sounds a bit more renovated than the 360s and 380s we just looked at, you possibly would be in that higher price point. So, you know, I look at some of these and I go, well, I'm not seeing any traditional wood fire heaters. It is a maintenance issue and it can easily be, you know, there could be someone like your current people. So we've got this and we've got this here. So it could be someone like your current people who look at it and go, I've used this before, it's not a big deal. But I think for the majority of the market, you know, just running through these quite quickly where when seeing that there is the split system or that older style air conditioning with fan as a minimum kind of requirement. So I, if these guys are willing to stay, I wouldn't be changing anything other than getting the guy out to get do the maintenance on it. And once that's done, you know, when we get to do the complete overhaul for when the property's back on the market, I would be, yeah, that's, that's when I would be having the upgrade conversation. And because you might actually come back at that stage and say, well, the kitchen, you know, there's, there's some disparity in the area and the kitchen could deserve a bit of a refresh. And then you might have to change, you know, the electricals and the main switchboard anyhow for new ovens and all of those things.

Yeah. And I sort of think these two ancient air conditioners and if one of those goes, then at that point presumably we'll have to replace that with something more modern in that case. Okay.

And I'll just tell you there's a new. Going to share my screen again. Where am I? There's a new. Well, maybe it's not new. There's a report that you can get on RP data. For those people who do have access to RP data, it's just off the main screen suburb report. And one of the things that I really like about this is that it gives you an idea of what the. I'll send it to you, Miriam, what the discrepancy is for the pricing in that area so that you can actually start considering, you know, whether if you did, the property did come up to rent again. And you do that kind of comparison analysis. So, you know, access to RP data, for instance, is going to cost you $150 a month. And you know, by doing that, you're going to get a month's worth of ability for you to be able to decide what is going to work for you. So, you know, if we look at this report and you go, well, you know, I'll go and do all that analysis the month before their lease is up and I'm going to go and find out whether it's worthwhile me doing some renovations and doing that extra cost. You know, come that time, what I'd be looking at here see this, the 25th percentile, the 50th percentile and the 75th percentile. So what this is essentially saying the median price in this area is 675,000. So if we line up, you know, if we said that there was 100 properties in the area, the majority of them would be within that kind of 675. But in the lower 25%, there's those that are at 600,000 and the upper, there's properties over 760. So, you know, when we kind of look at a renovation and we go, let's just use a full of rule of thumb. If I can, you know, buy at 600,000 and do a renovation that costs 10% of the value of the property. So it costs $60,000 and I can add on $2 for every $1 I spend. So the renovation cost is. Sorry, the renovation cost is. So the Property value is 600,000. I'm going to do a renovation that is going to add just the value of the things that I put in place, 60,000. But I want to add the value so $2 for every dollar that I spend. So is there capacity for me to take a $600,000 property up to a hundred, $720,000 property within this suburb? And the answer here is yes. So we go within 600 up to 760. So there's capacity there to add some value. So that's then when you get into, you know, back into your CoreLogic into seafood and you go, okay, so what do the renovated properties look like? So, you know, I'm on 500 to 600 storage square meters. I want to have a look and see, you know, what the five to 600 square meter properties with, you know, two bathrooms. Even if you wanted to, you could do two bathrooms look like and you can look at the recent sale data and what that's going to do is it's going to give you the opportunity to go through and say, okay, so what's the standard of this property that has been renovated? It's only sold for 680. So it's around the median. Does this kind of look like my property at the moment? And you know, you can actually say, well, in actual fact, you know, this has got the split system, it's got the polished floorboards. If the value is looking, it's a new kitchen and the value is looking at this and looking at my property air conditioning here, they'd say, oh, your property's not really up to that standard. And this is sold for 680. So we're looking for two or three properties that, around that type of size block and you know, maybe for the two bathrooms as well. And then we might start saying, oh, look, this, 720. This is exactly what I was trying to achieve with my three bedroom, two bathroom, you know, on 590. What does it look like? And unfortunately, I don't think there's any photos here, but what you're doing is you're working through and you're going, well, what does that look like? And can I achieve that with my renovation? And if I was going to go and spend 60,000 on this? So that's kind of the bigger conversation, you know, about, you know, where, what you can do. But I think this kind of demonstrates the fact that it is possible for you to spend a little bit of money now if the people are willing to stay and because they've stayed, then you can, then once they move out, then you can have the bigger picture and go, well, you know, we'll uplace, we'll change it. Just looking at here, it does look to me like that wood fire is going to be like the typical for the area that you'd expect to see up in the mountains. And it's going to become a bit of an objection. Let's get rid of it, save money over the next year.

Would you actually get rid of it or would you just leave it? I mean, it looks quite nice. Like it's not an old, like it's one of those, you know, fully enclosed. Yeah, I can't remember like a Canara. I mean this is an ultimate but like some like sort of Canara. And I mean, again, you know, the sales agent I guess is one thing, you know, said, oh, you know, that's you know, quite common. But, you know, that's, of course, the sales agent trying to sell the property as well. I can't say I saw that many of them when I was looking either. But would you actually get. I mean, it looks quite nice. Would you just sell, say, to people on a. To tenants, you know, you can't use it. Use the split system, or would you actually look at getting rid of it, given it does actually, it doesn't look offensive or anything. I mean, it's quite a. I mean, I would say it looks quite modern, actually. It's just that obviously it needs a bit of, you know, maintenance and it's not everybody's cup of tea. I mean, I've got two little kids, one of which is on my lap at the moment. So, you know, having a fire is not something that I particularly, you know, find conducive to use myself, even though I know it is lovely. If somebody else.

We can see a nice split system up behind you there.

Yeah, I think, Miriam, like, for instance, I've got a lot of older properties where I've got fireplaces and I say, you can't use the fireplace. And I have kept them as a bit of a feature. And I think from an expense point of view, it. If it's not ugly and trying to get floorboards or tiles or whatever to fix and patch and all of that kind of stuff is a bit of a pain. So if it's not ugly, I would just put in the lease that they can't use it.

Yep. Yep. Okay, cool. Awesome. Thank you both so much. Yeah, the electrician or the guy got back to me last night because I wasn't getting anywhere with getting someone out locally to look at it. Yeah. When I heard about the switch, it, I'm like, oh, it's another grand. Maybe this is not such a good idea if they are actually talking now. But, I mean, they haven't committed. But they were going to retire and then start traveling. Now they're deferring that for another six months. We offered them. Sorry, for another 12 months. So I think it's likely that they will sign. It's just, you know, until we have it signed on the dotted line, there's always that risk, which was kind of why I'm a bit nervous. But I think given now the pricing disparity between getting the existing thing repaired, which they're happy with, versus getting the new thing done, think, yeah, we might wait and then, as you say, when they eventually move out, then look at the big picture and see if we do anything more or leave it at just that. So thank you both very very much, really appreciate it.

Just a quick question. Is there any capacity for you to raise the rent a little? The.

Property manager has suggested US$5 a week which I was hoping for more.

$20 a week is going to get you $1000 switch done for you.

So like they don't leave till it's not till June. But she gave it to us about a month ago which I was a bit surprised about. And yeah, her Recommendation was only $5.

Per week which I, I reckon let's, let's have a chat May again on the next Q and A call. But I mean if there's capacity to put up the rent there and just keep up on the analysis and see what you know is happening next. It's got a low vacancy rate which means a lot more people are looking than you know there are properties on the market to rent. And the other thing is just looking at the data as well, it would seem that yours is more modern than the ones that we looked at around that 380, 390 price point. So there might be some capacity to actually make yourself the thousand dollars to pay for the new mains in the next year.

Yeah, I mean I guess that'll only be. I mean we've made the offer now the $5 per week for them. I guess if they don't find then we might look at doing the works and then upping the rent and then saying property manager can we please you know up the. Because there was another one that rented for like $500 per week. But that had like. I think the reason that was so attractive was because it like it had a five car garage which people put their in and stuff. And so the place only had like one bathroom otherwise I mean the floorboards had been polished and that sort of thing. Whereas ours wasn't shinied up for sale, we got ours off market. So yeah, they didn't pretty it up for the sale. But yeah, I think the other place because it had the five car garage.

Yeah, don't underestimate the power of the garage either. I know that my brother in law and my sister when they were looking to buy a property his he loves cars and his absolute requirement was it had to be a three car, you know, garage which you know is almost impossible. And I took my son to barber last night and he said oh, you know the only thing what came down to for us buying houses I could fit two cars in. And I was like okay. So he was a bit of a car, let's say geek as well. But you know, that whole 5 car, that just takes it completely.

Yeah, yeah. Okay.

It sounds like it's a bit of an outlier. Yeah, yeah.

The other comment I just make in terms of the comparing reef renovations, I know Seaford is particular this way and it may be that other suburbs aren't, but there's particular pockets and the prices, not so much for rent, but the prices that properties sell at is completely different depending on where it is in the suburbs. So there's this expensive waterfront area which has got much older properties, but because they're, I mean, they're not waterfront, but they're, they're not on that waterfront side.

Of the highway between the beach and the railway.

Yeah, they sell, they sell for a lot more even though they're older and they're big blocks. And I didn't, wasn't even interested there because if you look at the sea level rise information, that area long term is potentially flood prone. Then you've got the dodgy south end, which is the end sort of near north Frankston, which is much cheaper. Even though you can get bigger blocks, it's much cheaper because of location. And then there's the getting further north and sort of the pocket that I bought in which is sort of, I guess somewhere mid price of the two. So in terms of doing those comparisons, you could probably do that and you'd be spot on. But whereas, you know, depending whether you bought in that top end or the bottom end doing that comparison, it could be quite different just because of the disparity, pricing disparity for buying just in one suburb, which.

Yeah, three different suburbs.

Yeah. Basically within the one suburb.

Yeah, there's lots of suburbs, lots of suburbs like that.

Are you in the location masterclass, Miriam? No, John, do you want to talk to the price pin map?

Yeah, sure. So one of the ways you can do that, and it's a good point that you picked up, and I was going to mention it before, is the three very different pockets that even I knew about Seaford and not been overly familiar with it. But yeah, there's other suburbs like Kew, for instance, the classic one in Melbourne where you've got the stuff down at Yarra Boulevard and then you've got the stuff over at East Kew and then you've got the stuff at the private schools and they're three very distinct areas in Kew and they might as well be three suburbs as well. So the challenge there is, as you said, getting apples for Apples, you know, comparable sales that are actually like, for like. One of the ways that you can do that is making sure you can use in RP data, you can use a radius search. So for instance, you only look at, let's say a 500 meter radius from your house. That's one of the ways you can do it. Or you can mark territories in RP data and do it that way and bring up all your comparable sales and comparable properties for rent that way. There's a very manual way you can do it if you get all the list of all of the sales, which sometimes an agent will be kind enough to give you. So in a fast moving market, you could probably like at the moment you might just get say a year's worth of sales or even two years worth of sales. And what you do is you have a different colored pin for each price range and you might do it in say $50,000 increments. So let's say that 300 is red, 350 is orange, 400 is blue. And then you just start pinning your pocket with all of those two years worth of sales. And what that'll show you is where the spread of values is on those individual streets. That street starts at 350 and it goes up to 475. And that's what's going to give you a realistic spread of values for that area based on those past sales. Probably need two years just to get enough data, I would say. I don't know how. Did you see how many sales, what the turnover's like there, Jane? I probably imagine it's probably over 100. Seafood?

Yeah, I thought it was 160.

Yeah, yeah, yeah. So that's good. So hopefully that means that you've got, you know, a good, a good amount just even for your pocket. So if you've got two, two years worth of sales, that'll tell you where that spread of values is. The problem with what you're doing there, if you're just replacing the air conditioner. In renovation terms, you know, we're always trying to make $2 back for $1 we spend. In this case, it's what we would call a no return item. It's just something that the tenant expects. You know, it's like, like your walls and your roof and all that. You know, it's just a given that a property would have that in the tenant's eyes and, and in the buyer's eyes a lot of the time too. So you don't really add much value with that alone. But maybe combined with doing other things. If you can see that there is a good spread of values and you can see renovated properties, you know, that are sitting, you know, perhaps 40, 50, $60,000 higher then yeah, that could be a play worth considering.

Yep. Okay. Yeah. Now we just seem to have a lot of non value add issues with this property.

I mean, we've got the building report.

Back and that was glowing, you know, above average for the etc. Etc. But then the tenants started complaining about, you know, the. So it's got a. Well, it's called a garage, but it's really an enclosed carport. So the back's open and so you know, the gutter at the back of that is rusted. So you know, they want that replaced. And then it's got these palm trees down the side of the house which the neighbor wants replaced because I pushed the fence over.

Yeah.

Which is quite a cute studio. But it's got all these vines which you can't get out. We paid like hundreds of dollars to try and get them ripped out and poisoned. But we were there at Christmas and they've all just grown back. So the only way we can get rid of it is to rip the shed down or the studio down. And so yeah, it's kind of like all these non return items. But you know, at what point do they cause more damage? I mean the one that the tenant is the, is the, the gutter at the back of the well, I call. I mean it's a partially enclosed carport. That's the thing they particularly want replaced is this gutter. But it's like it's a carport. So I don't know.

Yeah, sometimes it can feel like you just keep spending money and money and money on properties. And I think one of the mistakes often is just saying yes to everything that the tenants want. So, you know, especially when they taken the property on as it is.

Yeah.

You know.

A partially enclosed carport. I mean, I guess that the property manager said, well, you know, the water could be because there is a hole in it rather than going down the drain pipe, it's kind of dumping there, which is in the middle of the garage, you know, at the edge. But rather than doing coming down the side, you know. But yeah, I mean they've been there what, two years? I can't imagine it would have done that much damage and you know, extra damage and that time and I mean they've just got it full of plumbing gear anyway, like pipes and stuff.

So. Yeah. Well, I'm going to one of our mentoring Students. We did a portfolio review for her and we talked about all of the sales that had occurred in her suburbs. So I'm hiding the suburb. Everyone can't see that this is some of the things. So, you know, taking down the sale price of the property, the number of bedrooms, the number of bathrooms, so this is all the sour data. But she also looked at, you know, was it what the back facing was and she actually had these sections of the suburb which is exactly what you talked about, you know, section 2, 3, 4, and then you know how close they were to main roads or roads that could be objectionable as well. And you know, it gave her opportunity to be able to then go, well, in actual fact, you know, my property is brick. So you know, we just looked at the brick properties and then, you know, we knew that she had two bathrooms. So we just looked at the two bathroom properties so we could just really quickly start coming up with, well, what are the comparables? And this is just looking at these sections and what did they sell for? And you know, if they were in the one section which is, you know, main road, not very good, we saw that the price were at the bottom of that sale price. So, you know, it gives you an opportunity by using RP data and going into these kind of suburb analysis, gives you the chance for you to say what is typical for not just properties that people are buying, but what is typical for the properties that you've got in your portfolio already and how does it start, stack up? So identifying those different sections, you know that price pin map that we talked about, you know, that's exactly what we're trying to do there, is trying to work out, you know, where people want to live as well and then overlaying that with where the renters are. So, you know, obviously there's that layering. So very good, glad we could help.

Alrighty, thank you very much, Bye.

No problem. See Mary. Good luck.

Fantastic. John, we've got a hello here from Susie. Hi Susie, how you going? Good to hear from you. There's been some interesting conversations, John, that have been going on in Facebook over the last month as well that I thought I might just bring up and have a chat too. Yep, I've just posted some information here around some of the regional infrastructure information. There's a lot of people talk about, you know, I can't afford being in the city, so should I go regional? And that is definitely something you might want to consider. Oh, here's a little quick promotion for those of you who are self employed or entrepreneurs I've really benefited from some of the mentoring and micro, what do they call them, micro courses that Roger Hamilton's provided. He's actually going to be in Sydney, Melbourne, Brisbane in the next week or so. If you contact us on supportourpropertysuccess.com John I've actually got a few free tickets to these events. Otherwise if you miss out on that, go and check it out and there's a 50% off code for you to attend it. What I really loved about this is that you actually get access. I think the courses are like, I think the current course is 80 bucks, so it's going to cost you 40 bucks to get in. But the Wealth Dynamics test is the test that we did with our mentoring students on the weekend just to see where you sit as to, you know, who's best for you to work with and what are the challenges and where your genius is and where you can optimize your opportunity. So some really good stuff there. Ash, you know, contributed some more information around that conversation around infrastructure and where the infrastructures are.

Now.

I really love this graph that came out just this week and they're talking about from the peak through to February this year. And we're looking at the SA3 level. So when we talk about census, SA1 is down to the 200, you know, people living in an area SA3. We're kind of up to the bigger council areas. So we're looking at areas that have got back in value. So red is over 30% from their peaks. So you can see here there's considerable regional areas. And you know, obviously there's not a lot of properties in the area, but these, you know, Queensland have all dropped. Western Australia all dropped by over 30% and parts of around Perth, Perth, 10 to 20% from its peak, as we've seen, obviously Darwin as well, 10 to 20%, Brisbane and Southeast Queensland. There has been areas in there that have had that 10 to 20%. 0 to 10%. We have around regional New South Wales and Victoria, 20 to 30% out here, you know, that Broken Hill kind of area and up through the bottom of South Australia. But what I find really interesting here, if we look at Sydney and we've got this blue 10 to 20% drop, it's kind of widespread. You know, we've got the 10km, 20km and then 50km kilometers, it's pretty much, you know, there's been a significant drop. They're calling Adelaide at the moment at the peak. So, you know, here they've still been there has Been a little bit of a drop, up to 10% and out to the north, but the rest of it's still at the peak. Perth, we're looking at 20 to 30% drops and 10 to 20% drops here within Melbourne. The interesting thing is, Remember this is 10Ks, 20Ks, 50Ks, where the drops have been in that 10 to 20% that they're talking about at the moment is over in that eastern side and Bay area. So this is quite interesting. Now what you will see usually is the higher price properties are the ones that drop fastest, quicker. So here's the Tourx and out here queues for these beautiful suburbs and when. And then it starts going out. So, you know, I don't know if you guys saw me on your money Sky TV, which is now free to air on Channel 95 as well, or all the time, 24 hours last Saturday I talked about, you know, is there a recession coming? I disagree, but what was happening. And you know, I also talked about the suburbs that have started going down in value and they start from the inside out, that kind of ripple effect and, and then the recovery starts from inside out. So although, you know, we had this time last year only some inner suburbs of Melbourne starting to show some pricing decline, it's now started to get out to that 50 kilometer zone that you can see out here. So this is interesting. Brisbane here, exactly the same. We're not seeing, you know, more than 10 to 20%. Everything's here at the 10, 0 to 10% mark. Hobart @ the peak, which is that green. But there's starting to be some coming off. So this is really interesting and you know, I'll continue to post this kind of information up there for you guys to see. But it just, you know, there's a whole conversation going on regarding what's happening in the market and you know, where should you be considering to buy and should you wait? You know, we're definitely seeing some amazing buying opportunities at the moment. There's, I worked with domain last week 14 Suburbs in Sydney that have, you know, lost their millionaire price tag and 16 in Melbourne. And I did a review for your Money TV show, Bexley in Sydney. $1.4 million this time last year. 950 will get you the same house this year. And he's a beautiful property. If you want to have a gawk at something gorgeous. This is one of our students who regularly buys houses, renovates the front and builds a gorgeous home on the back and sells the home on the back. So gorgeous opportunity as well. And this Here is another demonstration of that kind of conversation I was having about what happens with the pricing pressure. So we're, we just talked about Melbourne. So let's get past Melbourne, we'll go to another date. So let's have a look at Sydney, for instance. So you've got September 2017, June 18, September 18. So we're seeing that market decline from the early 2017. So June 20% blue minus is orange. And you can see how it kind of filters its way out. And it filters its way out from the inner, then it will come back, usually from the inner and recover. So just be aware of that. But you know, it gives you an idea that how far out you have to be, you know, before you start getting that devaluing. So, you know, June 2017, they were at the peak, 94% of suburbs in the same period, house prices were rising. By September there was a decline from of the interest only lending, obviously. But all of a sudden we started getting some of the western areas starting coming off their peak as well. So, you know, you see that coming up and then all of a sudden, you know, you, you're starting to see the market six months later where every, everyone's coming off the peak. So, you know, this is really interesting. Check out these reports. I put them up there so that you've got a information that you can use to assist you with the things that you're doing. So get in there. And obviously we're in there answering questions and asking questions. Tracy has just finished her granny flat build, so there's some really lovely stories in there about that as well. So check them out. And yeah, that's, that's what we were doing and answering questions for this month. So, yeah, I think we've got a couple of people who've come in, John, to say hi, let me see who they are so we can say hello, where are you? If you've got any questions, please put them in there. Oh, we got sue as well. Hey, Sue. Sue and Susie too. That's nice. So, yeah, if anyone has any questions, please let us know. Otherwise we'll be heading into Easter and we won't see you till after all those Easter eggs are.

Consumed. Now I've popped you a couple of links in your Skype there, Jane, that you might be able to pull up some show and.

Tell. Whoa, let me have a look at this. Oh.

Yeah, more. You do that. Yeah, I thought it was. It's an interesting dilemma with that heater. It's with whether you bite the bullet knowing that you're probably going to have to do it anyway or whether you. And in her case, I think the. The best solution was to. If the tenant was happy with it and they were going to stay, that you wouldn't spend that money now. You'd. You'd do that down the track. But it's always a dilemma when you're not. You're spending money on something that, you know, doesn't really bump your property up into another bracket. But I thought we've got some pictures here from the weekend because we're looking at similar or some properties on the weekend that had also had some repairs that had to be done that were really no return items. So this first one that's about to come up is the. See which one you've got there. Yeah. So this one was a little miners cottage. Now do you remember the year of this, Jane? I think it was maybe late.

1800S. This one was.

1918. 1918, was.

It? Yeah, 1913 or something like that. It was really.

Cute.

Yeah.

Yeah. And it was. Of the two that we looked at, it was quite. It was the least renovated one and it had a little kitchen out in the lean to out the back. A little bit of re. Stumping issues. Not. Not terrible though. Overall it was a bit dated. And we go. We have a process of going through when we're inspecting the properties in a checklist where we're basically recording all the information about that property and then filing it away. So we get a really good understanding of what that market is. So that's what the process we're taking people through and we're also looking out for opportunity, whether it's could have a box on the back and in this case it potentially could have from a structural point of view, if we cut off the. The back of the property where the current lean to is, it had a block that was. It had a decent ceiling height. So it had a ceiling height inside of at least 3 meters and it had a block that was sloping away from the street, which meant that even if you did have to, even if the ceiling height was lower, you could step the. The floor level down and still get a reasonable floor height, considering that you're pushing out, you know, 10 meters out out the back. So from that point of view it worked. But when we had a look at the comparable sales, it didn't look like it was going to work from the point of view of knocking it up into a second bracket. Now if you could add a bedroom or something like that. And it was mainly because there's really Only from memory, if you just go back to the. Yeah, there's really only two and a half or kind of one and a half rooms under that main roof. Even the kitchen itself was out in the lean to. Out of the back. And ideally, what you want is to be able to add an open plan to the back and an extra bedroom. So you're. You're literally forcing it up into the next bracket, taking it from a 2 to a 3 or even a 2 to the 4 or a 3 to the 4. And that way, yeah, you're adding substantial value, knocking it up a bracket and. And also changing the configuration with the box with the open plan at the back. So that was the first one we looked at, and on face value, it seemed like that was going to take a lot of money. The second one that we looked at, though, was actually renovated, but the renovation itself wasn't terrific. And looking at that facade picture, Jane, if you could park on that just for a moment, there was something we discovered that was going on with that roof. And if you know what the answer is, perhaps type it into the. The chat. But there's a. There's a bit of a problem with that roof that's lurking there that no one actually picked up on. And what it is is that roofing, it's actually not tiles, it's corrugated iron. And underneath that it's a. Sorry, it's a fake cladding that used to go do the rounds and would be put over existing roofs. And underneath that roof is a very rusty old corrugated iron roof. And even the cladding now is starting to get in disrepair. And when we went around the back of the property, we could see there that how badly the roof was that was underneath the. That cladding. So when we think of our big five, we've got, you know, restumping, replastering, rewiring. Have I got. What have I got so far? Re. Re plumbing and re roofing. And so that we always say that you're going to drop, mostly drop at least 10k when you run into one of those kind of jobs. And in this one, it looked like re roofing was definitely going to be on the ticket. And then when we went and had a look at the rest of the renovation, it wasn't to the highest standard, was it.

Jane? Oh, my gosh. You know, in theory, they put their own box in the back out here, but they just haven't finished it. This is just, you know, there's no flooring here. They've just put the wood down and there was Just gaps everywhere. It turned out once we did the inquiry that the owner had got sick and was going to have to sell and move quite quickly. You know, beautiful old character. This one was about 10 years old, younger than the other property. So it's about 1900 turn century. But this box on the back that they did out the back, you know, the floorboards had all been patched together and it was.

Just. And the flooring out the back, which was. It had just. It was like sheet flooring, like yellow tongue flooring. Actually, you can see it there in the kitchen, which had just been painted over the top.

Of. So this is like enclosed balcony. You can see the enclosed balcony with the. Down here is like the tessellated tiles that they're kind of, you know, it's just awkward. And at the back they put this spar in and nothing was really finished. Half the stuff had been painted out, the back half hadn't. They hadn't even mowed the lawn. And we were kind of. We've got a chicken coop here. We were kind of targeting this property as a property that had been renovated to a higher level that you could actually potentially consider being the more advanced property to this little one that we looked at here and say, you know, if you're going to renovate this up to this, what would it look like? $200,000 higher? It just kind of gave us an idea of what can happen when someone spends a lot of money in renovation and it goes wrong and it's not finished and they have to sell halfway.

Through.

So. Bit of a sad story that one, really, wasn't.

It? Yeah. And a trap for new players that would look at that and go, oh, okay. Well, it's. Most of the work's been done for me, but the restoration work that you would have to do there would. Would be a killer. You'd be better off starting from.

Scratch. Absolutely. Bus trip, looking through the property. So I think it was a lot of fun and you know, the agent was lovely. Gave it time and, you know, allowed us to ask the questions of her, etc about, you know, what was happening in the area and what was happening to the tenants and yeah, we just had a lovely time. Great group of people. Fun on the bus. Managed to fit in a bit of a few tours and a bit of fun and a few drinks along the way. Not mojitos. So that was pretty cool. The. What else was there too? Yeah, that's about it. I don't think we have any more questions, John, which is in the.

Chat. None got posted to us this month. So questions at your property success. If you'd like to post a question for next month, if you can't.

Make the call and someone says, you know, the wealth dynamics test sounds interesting and yes it is interesting and I suggest that, you know, I do the course personally because you know, Roger's a futurist and looks at what's happening in the business, etc. But you can go and do the wealth dynamics test yourself. I think it's$9.7 for the test. So yeah, that would be something that you can consider. I'll put a link in the, in the chat later on for you so you can consider it. And one final thing, John. I'm going to do a final little call out to support the competition in the marketplace. Once again. We've still on the back end of the Hain report and as we know, you know, the banks have come out and said that within 2 to 3, 3% interest rate rises will go ahead if mortgage brokers leave the industry. So I just encourage you to go to, you know, brokerbehindyou.com au click on I'm a consumer and sign the petition. And you know, sign the petition but also email your politician and this is just like so ultra easy. Put in your postcode, up will come the politicians in the area. Click the button and in your email and it's done. So I really encourage you do that petition. So far we've got 87,000 people who have signed that. Once we get to 100,000, apparently they start listening. So I really encourage you guys to go and do that because I think it's really important. I have a lot of home loans and I do not want my interest rates going up by 2 to 3%. So please go and support your brokers and their industry but more importantly support, support yourself and make sure we keep competition in the market. We don't want to lose those little lenders like Adelaide and Suncorp and Banquest and all of those little lenders that have 100% of their business pretty much coming through brokers because they don't have shop fronts. That's it. That was my last call to action.

John. Yep, too.

True. Okay, well, if there's no more questions, will we be doing another bus tour mentorship? Absolutely. Look, if you're interested in joining our mentoring program, please contact us@supportourproperty success.com we have a 12 month program. We have three of those weekends away. The next one in June will be in Brisbane, the Gold Coast. We're looking at some pretty amazing sites at the moment to enjoy ourselves. So we do all things property but we also go into, as you could see, you know, some of the conversations around that money archetypes. We had the amazing Natalie beaming from Columbia and take everyone through an incredible two hour workshop on knowing that and a lot of people had some very transformational experiences on that. So it's not just about property, but we do have a definite plan to assist people in getting ahead with their property portfolios. Whether it's a purchase purchasing self managed super fund or just rejigging your current portfolio, making sure that you're on track to get to your goals. So yes, we will be planning on doing that. If you want some details please just email us and we'll have a chat to you. But it's something that we're so excited about and just having that experience with everyone's been amazing. So looking forward to June.

Already.

Yep. Well guys, we are going to pack up and we won't be chatting to you until April after April call. So have a very safe holy happy and restful Easter and Anzac Day. And for all of you who are planning to purchase properties before the election, get busy. You've got six weeks because you looks like a labor is probably going to get in and if they do negative gearing capital gains tax are going to be under the axe. So take some action now anyhow from us here as always is to your property.

Success. See.