Your Property Success Mentor Call - May 28-05-2015

Hello and welcome to the Call for May. I'm looking forward to hearing from you all tonight. So there's a lot coming up, so settle in and get comfortable and get ready to chat. So of course these calls are exclusively for my mentoring students, the students of the Ultimate Guide to Renovation and my Investors Choice Mortgages diamond clients. So welcome to you all and if this is your first time on the call, a very, very warm welcome to you. So don't be sh. Say hello. Now these calls generally take place on the last Thursday of every month at 8pm so you've got lots to look forward to for the next few months as well. And of course you'll receive email reminders each month when the calls are approaching. Seven days out, three days out and on the day of. So you will get plenty of reminders to put in your calendar. And with me, as always, I have my co creator of the Ultimate Guide to Renovation with me tonight. Hello, John Hubbard.

Hello.

How are you?

I'm good, how are you?

Oh gee, it's been a busy month. It's been busy for you?

Yes, it's been very busy for me.

You've got the development on the go.

Yep, it's all been happening. A lot of bit of wet weather here, so it's been a little bit frustrating, the progress. But the builder assures me we'll catch up.

Yes. So and, and other plans afoot as well.

Yes, more plans too, but more to come on that one.

Can't keep a good person down. Right?

Yeah, that's it. Or just sucker for punishment, one of the two.

Well, talking for sucker for punishment, we've been punished a bit by some of the changes in the lending rules in the mortgage broking business this month.

I saw your post there on Facebook. Very informative. But what a change to the landscape in a very short period of time.

Yeah, look, APRA gave us a heads up at the end of last year that they wanted to step in and regulate some things. And I guess when you look at the marketplace, the RBA can change interest rates and stop the lending kind of frenzy that we've seen. And by doing that, by keeping interest rates at the same or putting them up. But what we've seen is that you can't actually change an entire economy or base the entire rates on just a couple of centers of property, which is where the Sydney and Melbourne market are really moving very quickly. So RBAs reduced the rates and APRA stepped in and put a lot of pressure on the lenders that have had an increase in investors Lending, some of.

The examples you've seen. How has it affected people?

Oh, people with Pre approval of 700,000 have now got pre approval of 400,000.

Wow.

So big changes. I mean, in September they announced in New Zealand that to kind of stifle the Auckland market, that's grown at 16% this year, that they're going to bring in 30% deposits or 70% LVRs requirements for investors. What we've seen in the last early May was a couple of lenders, Heritage Building Society and Banquest came out and said that investor loans will be limited to 80% loan to value ratio. And as of 7 o' clock tonight, a announcement came out from Macquarie bank which sounds, I think they might have got the wording wrong, but they said that homeowners loans will come back to 80% but investor loans including LMI will stay at 90%. So I think they, they might have rushed that announcement, but if not, a little bit strange. And the lenders have pulled back on some of the extra discounts that they're doing. That's kind of off market discounts for investors. So we've got some amazing 1%, 1.2% discounts off publicized rates for clients in the last month or so. But most significantly has been the change to borrowing capacity. So there's been quite a few lenders who take negative gearing into account. Westpac being one of those, they've just stopped negative gearing in their calculator and, and AMP has just included negative gearing in their calculator. Other lenders have pulled back on where they would take actual interest rates at actual repayments. So for instance, you know, 100,000 or million dollar loan with a four and a half percent interest rate is $45,000 a year. They've changed those to principal and interest over 30 years at their assessment rate, which is seven and a half percent. So you know, they've all of a sudden go up to like a $90,000 inclusion a year for interest, even though you're paying 45,000 doll offering a lot of interest.

And for people that had their loans in place already prior to whenever, whenever the change was a week ago or whatever. What happens to them? Are they under the rules that they signed up for or are they.

So new rules, Any new lending. Okay, grace period about some gave us a grace period of 14 days. Some like Banquest announced, made their announcement and said as of 5:00 today there'll be no more investor lending. So even though we had pre approvals for clients in at 90%, they, they would not honour those. So I don't know if there's anyone who's, who's online at the moment who's had some changes to their. Let us just type in the chat if you've had any changes to what you've heard from your banks in the last week or so. But yes, there's been some changes.

So what's going to be the result of people going to scramble in different directions? How are people going to get around it, as people inevitably do?

Yeah, look, the thing is they're assessing interest rates at seven and a half percent and there's always a reason why you should include a buffer in how loans are assessed. I just think as sophisticated investors and as mortgage broker who looks after investors predominantly, we always kind of include a buffer of a line of credit and we might fix some of the loan and we're always including those buffers in those hedges. But we're being forced into doing that now. So that's interesting. We've also got the interest rates went up, so a lot of people, when they took out their loans, interest rates were 7.5% and they were being assessed nine and a half, 10%. So, you know, there's a lot of people are in a good position. A lot of people's properties gone up in value. According to RP data that, you know, there's some information out there that indicates that over, you know, 43% of people's homes are valued at double what they bought them for. So that's great. And we recently did an assessment of our mortgage clients over the last 10 years. So, you know, we've been celebrating last year, the last month, the 10 year anniversary and I think we had an extraordinary amount, was like 70% of our clients had a lot of equity, more than $100,000 worth of equity over, you know, under an 80% loan to value ratio. So, you know, the market has done well for a lot of people. There's no doubt that the economy's in a bit of trouble and we're seeing more and more people being made redundant and, you know, a lot of economic pressures on, on families, et cetera. So, you know, it's a, it's a time in my mind to kind of consolidate and save some money while you can and, you know, plan, plan for the worst and expect the best.

Yep.

So, but yeah, it's, it's been great. It's been, you know, gosh, lots of things happening. It's been pretty exciting watching what's happening on the, the Renovator network private Facebook group. There's been a lot of people doing some pretty exciting things.

It was good this week. I saw Kelvin finished a project there which is great. And a lot of people had input. A lot of people can claim some.

Credit in that one every everything from what do you think about looking at this and buying it and renovating it? Hey.

Yeah, that's right. And good on him for. For putting it out there and taking advice and acting on it as a great result. I see on the post there he'd what it is. He'd raised his rent from 370 to 390 a week up to 430 a week.

Nice.

And he's. Last time last post I saw he was still waiting on the valuation so we hadn't heard what the equity added is yet. But hopefully that's a good result too.

And I saw there was a bit of commentary around what to do with the ugly fence out the front. Everyone was trying to do some pretty fancy things and you came back with something simple John. And it turned out to be okay.

The front rail. Yeah, he took that one too. So he had a ugly old kind of white rail out the front and I, I had said to him well you probably don't need to spend too much on it. And to his credit he did this throughout the whole thing. He really didn't. It was all about the numbers. He didn't go overboard and try and win a design competition or anything like that. He just really did the. The stacked amount that he had to. To add the value to the property. Yeah. In any under. In his predefined budget. So that was really good.

It staged it as well.

Him was for the. The handrail at the front just to add a sticker timber route the bottom of a bit of timber out and he used I think some 70 by 35 treated pine. Stick it on top of the ugly old iron handrail and paint it and. And paint the thing black and. And or dark gray like I think we think he used Monument in the end. Dulux Monument and that kind of makes it disappear and it's no longer a buyer. Objection.

Great. Well, it looks good. I saw some staging to some photos before and after. Might get some permission off him and maybe put some of them up.

Yeah.

Yeah.

And it's great seeing that was his first. First go as a. As a renovator too. So that's great result.

Love it when people are successful. So look and we've got the. The new make a call line as well. The new message line 1376, 119. So if you can't jump on here, I can see we've got many, many people on here tonight. But if you can't get on the call and you've got a pressing question, please call up the line. Leave us your message, leave your name and the message. One question per message. Ring back if you've got lots more questions and yeah, we'll play your question and answer it.

Answer it and then you can hear it in the recording which is available within 24 hours.

Yeah, so, so that's great. And where are we, people? In the Ultimate Guide to Renovation, we welcome some new students in March and we were up to module 10 tonight for them. So finished module 9, which was the really exciting structural box at the back. They went through the cosmetic renovation in module 8 and module 7 was the exciting budgeting information. Yeah, so. So we've done some really good things. We've got module 10, 11, 12 coming up and then it finishes. But tips and tricks and accessing equity and reviewing and improving. So we've got some really great modules ahead for those guys and, and gals. But. Yeah. So, well, shall we get into it?

Why not?

Okay, well, let's get the housekeeping out of the way. So I just want to check. Can everyone hear me still and can you see the screen? Just chatting. Just put in the chat line. Yes, you can. Otherwise we're sitting here talking to ourselves again.

John.

Yep, won't be the first time. Now, if you are on the computer and you are experiencing problems hearing or perhaps you can't hear during the questions, there is the option to call in on the telephone. The telephone number can be found in the sidebar under the Audio Options dropdown menu. And you can call that number from a landline, mobile or even Skype. So all good. Now, if you are on a PC, it looks like this. So when you have a question, all you need to do is raise your hand by pressing the little hand icon in the sidebar menu. It's quite small and hard to see. Only raise your hand if you've got a microphone and I can take you off mute and have a chat to you. Otherwise, type your question into the question box. So by clicking on the hand button, you'll notify me that you have a question and you have a microphone, hopefully. And we'll turn you on and unmute your line and you'll hear automated message saying your line's been unmuted and then you're on. So you can ask questions by writing Them in the chat box as I said. And you know, we will get to those, we do give priority to those people who put their hand up because we just frankly like loving talking to people really don't we?

Chat?

Yeah, we're up for a chat and it's a lot easier for us to fully get the question from you and explain it what give you some answers. So look, it's more engaging for the group as well and bit more exciting. So remember there's no such thing as a silly question and I really encourage you to make the effort to engage in this process. Now these mentor calls typically go for about an hour and a half and usually we look at our clock at a quarter 10 and quickly wrap things up but we try to finish about 9:30. Look, and I ask you for the sake of the group that you know, limit yourself to one question and maybe one quick follow up question initially. And if we call in for more questions and everyone's quiet, then you know, put your hand up again or put a question in the chat box and we'll get going. But you know, we want to make sure that no one misses out. And I don't think we've missed a question yet.

No, I can't recall one.

So back onto tech support. Look, just as a reminder that this is not a tech support call and really I'm not the right person to be speaking to about tech support anyhow. So if your video doesn't download and and you have some issues, please just send us an email@supportourproperty success.com and we'll get onto that as soon as practically possible and get someone answ the call. So the call for help. So shall we dive into some questions?

Yeah, and we've got some hands up.

Oh no, hands up again. These people know know it all. It's good. Come on guys, give us a question and we'll, we'll get going. Otherwise we just have to go home.

Oh, there we go, Helen. Good on you, Helen.

Hey Helen, we're going to unmute your line. Can you hear us?

I can hear you. Can you hear me?

Hey, we got you loud and strong.

So my question is I've been trying to get a tradesman and I've been doing the try and get three quotes and then go from there. But my problem is I can only get one quote each time because no one turns up. Is there a trick to getting people in so that you can choose or get, you know, price reference?

It's one of those things that, you know, it's Always it's easy when you watch a video and says, get three quotes. But as you've experienced and as most of us have felt the frustration, we have sat around for hours waiting for the tradies to turn up. Look, there's a couple of tips that I'd suggest. First of all, if you've got a tradesperson that you do like working with or has been highly recommended, and, you know, maybe they're a tiler and you're after an electrician, ask them who they'd recommend because, you know, they're putting themselves out there, too, and making a recommendation. So a bit of peer group pressure doesn't. Doesn't hurt at all. And there's organizations like SeekingServices.com where you can actually go on and list your job. And tradies can bid to quote, basically, or have a quote and then come out and have a look. Now, if they don't turn up three times in a row, they get kicked off the site. And from what I hear, there's a lot of really good tradespeople available there. If it's kind of general. General work, you know, hanging blinds or digging holes or some of that boring kind of stuff, you might want to jump on. Gosh. I was gonna say. I was gonna say Airbnb, but it's not Airbnb. That's the. It's.

That's where you go when you're fed up.

Yes, the gray one's called Gray.

A gray Nomad.

Yeah, it's like that Gray army.

The Gray Army Army.

You get, like older tradesmen that can't do framing or whatever anymore, but they do all sorts of odd jobs, like, you know, hang doors and, you know, curtain rails and shelves and all that kind of stuff. So it's where old chippies go to retire.

Oh, gosh, I've kind. I've completely had a memory bank here. We've got services seeking says Patricia Airtasker. Thanks, Stephen. Airbnb. I was sending everyone off on a holiday, John. Oh, look, there's Viv2Airtasker. So, yeah, I've jumped on Airtasker. And as I said, you know, if you're looking for. For a qualified electrician, you may not find that person there. But I was on Airtasker the. The last couple of weeks, and I've noticed that they have, you know, the. The person who's got the top services for the week or who's made the most money out of. Out of Airtasker, and they're often cleaners and people may Be doing an odd job. I've seen, you know, you've got, you've got that piece of furniture that looks really easy to put together from Ikea and I have to say I was very proud of my seven year old weekend. He got one of those little tables and put it together himself in my care for the budgie to sit on. So it is possible for a seven year old. But I have to say I've spent hours myself trying to put things together for my care that have never worked.

Helen. The other one I like is if you're after an electrician, I don't know if you've got like a MIDI store which is like an electrical wholesalers or the hardware store or some kind of specialty, maybe the tile store if it's for a Tyler. So often they have guys that they work with regularly which are good to get a quote out of. I found a couple of good tradies that way.

Good point. But yeah, sometimes you're just sitting around waiting for people. Yeah. Well, good luck. What kind of work are you after? Yeah.

Well, actually this one was framing out a carport so I could get a roller door put in. So it's carpentry and then put storage in it. And the funny thing was the first guy who I actually went for turned up straight away, was fantastic and he ended up doing it. But the second guy turned up after he'd forgotten the first appointment. But he actually turned up to quote. That's what I thought was odd. The third guy turned up to quote and then never got any quotes. It's that sort of thing that I, you know that it's getting so frustrating.

And it's probably good that you found that out about them early too. I kind of have a, have a rule. Occasionally I break it. But that is the guys that don't return my call at the quote stage, they. I just move on. So I don't call them back because I figure if they're going to, if they're unreliable this early then I'm going to have to chase them during the job.

Yeah. And you know, sometimes tradies like I had five quotes last year for painting the outside of the one of my properties and you know they're going to need scaffolding and council permission and it's a bit of a painful painting job and those guys who didn't want it either didn't quote or they quoted really, really high because they didn't want the job.

Yeah. Which is quite common.

And then so sometimes you might get a quote but it seems ludicrous and you know, if you think it is ludicrous, persist because it might just be they don't want the job but there's often tradies for what job fell through or I don't know, it's raining or they just, you know. Well, they were so focused on the current job, they didn't line up the next one that they might need some work and they might come through a lot cheaper. So don't give up on the whole three quote thing because you know, it really. Although it's nice to have a comparable against what the market is, you know, the reason we also recommended is because of those things because sometimes you are going to get the very high quotes and then you're going to have the people who a job, you know. So, yeah, don't persist, persist. I'm glad you got it done. Yeah.

I've got an excellent electrician who I keep going back to actually. You know, he's been fantastic and same with the plumber. Yeah. But it was just for all the other jobs and I had, I had to replace guttering. I could only find one guy. But as it was, he did a fantastic job and it was reasonable but you know, it's that sort of thing.

Perfect. Well, good job. Glad you got it done and thanks for your question.

Thank you very much.

I thought of one more thing before you go and that's if you're chasing, sometimes you can get by looking in the local papers in the outer suburbs you can get tradies that are cheaper than if I don't know where you live. But if you live in the inner city like I do, then often the tradesmen that service those areas can be quite expensive. And if you get, you know, if I go out to the western suburbs to find a roofer, for instance, you can still find really good tradesmen and they're used to working in their local area, but they'll come, you know, work on your place and they won't be charging city rates.

Exactly right.

Okay, Good advice. Thank you.

All good. See ya.

Okay. Anyone else have a question? No, no.

All yours again.

Cool. Making that really easy. Hey, look, I did actually get a question.

Oh, here we go. Sorry. Oh, Kristen's come in.

Kristen, great. Kristen, hi, can you hear me?

Yep, loud and clear.

This is a bit theoretical at the moment, but it's also topical because it's about finance. So I have been on fixed term contracts for a few years with the same organisation, but I'm thinking about switching so I've just refinanced bought a new house for us and hoping to buy an investment property in the next sort of six months or so. And just wondering what the impact of going to a fixed term contract with a new employer. Similar type of job, different industry, but one I've worked in before is likely to be finance approval. Can I ask what lender you used this time? Amp I have a good mortgage broker, so if you amp for reasons that couldn't be avoided at the time, even though he doesn't recommend them normally. Okay, all right. So the reason I ask about that is because often when I'm looking at someone's fact finder and what lender they're with, it tells me a lot about what policies they come under. So AMP is a great lender because up until last week they would take 100% of the rental income at an 80% loan to value ratio when everyone else takes 80%. So you can often service a lot higher with them, et cetera, et cetera. So and they have a basic loan with an offset. So nice. So and one of the other great things that AMP does is that if you've got debts with someone else and you can show that they can cover their debts, then you only take on half of the debt if you've got, if you're responsible for it. So every other lender will say you guarantee the entire debt. So AMP has got some really nice niches. So that's my eyes. So, so fixed term contracts, a lot of lenders, as long as you're being paid your super and your tax by whomever is the person who's paying your pay, then you're almost considered to be an employee, especially if they're rolling contracts. A lot of people in the mining industry these days have got a six month contract. A lot of it people have six month contracts. Most of the Queensland government has a six month to one year contract. That whole fixed contract period, not such a big deal. And a lot of school teachers are covering from maternity leaves. The thing is that if you're changing industries or you have a long period of time between the contracts then they often don't like that. And also if you all of a sudden you're paying your own super, you're considered to be essentially self employed. So you put in an invoice and they pay the invoice. You cover your super and your tax. Et if you're self employed you'll need two years worth of consistent income. For that income to be taken you need a two year abn, CBA and ANZ will take A and bank of Melbourne will take one year's worth of financials. But they have the right to look at the two years and if there's more than a 20% difference, they want quite a clear explanation around it. Lenders like CBA, though, Chris, might be someone that you look at. CBAs, although most lenders are tightening things at the moment, they've actually loosened some of their employment criteria with a payslip and a contract. Even one day in the job, considering you can get a payslip one day in the job, they'll actually take your income. So as long as you are still, you know, and it doesn't matter that you're in another industry, but you in the same kind of skill set, using the same kind of skills. And if you got a good mortgage broker, they will write extensive notes around that. So they will write, you know, Kristen is a. Whatever you are in this industry. She's moved recently to this other industry. There's been no time lapse between employment and, you know, her income now is consistent of what, you know, we can see in a tax return and income in the last few years. Here's the contract, here's the first pay slip and not a big deal. So just remember that cba, though, is one of the tighter. Well, traditionally was one of the tighter. Everyone else is tightening up now servicing calculators. So although they do have some negative gearing still in them, they do take any existing debt at P and I at the actual rate over the remaining term of the loan. So they do kind of buffer what your other debts are, be it with them or be with another lender. So not such a big deal. But, you know, if you have gone from IT to human resources recruiting, then that would be a big deal. They want to see consistency. Yep. Okay, good. Glad I could help.

Okay, here we go. Stacy.

Hey, Stacy, how are you? Stacy? She's got a hand up. Maybe she might have to type a question in. Hey, Stacy, you got your microphone working yet?

No, not looking good.

I'm sure Stacy's got some exciting news to share too. And I see someone's name there on our list of people. He's just had a new addition to the family, so congratulations to that person. I won't break your privacy there. Okay, Stacy, you're trying one more time. Do you want to chat? Put your question in the chat line. Stacy, do you want to Just put your question in and. Okay, anyone else got a question? Do you want to put your hand up? Oh, there's so many exciting Things at the moment. I'm sure there's lots of questions. Do you know the median house price in Sydney is over $950,000?

That's extraordinary, isn't it? Patricia's got her hand up.

Hey, Patricia, how are you?

Hi, I'm good, how are you?

Good, good. How can I help you tonight?

I had a question about landlords insurance. Is there a better company that does.

Landlords insurance compared to others?

Where do I go to find this information? Just all questions regarding landlords insurance.

Look, there was this fabulous article about two years ago when your investment property did a complete, complete review of all the landlord's insurance and I tore it out and kept it. But I've got Landlords Insurance actually with quite a few different entities and so I have some with Westpac and some with others. Terry Shear, based in South Australia, she actually has a really good landlord's insurance package and I've had a couple of clients that have got to settlement and all of a sudden settlement was going to fall over because they couldn't get building insurance. And Terry Shears policies are a little bit outside the norm, such as maybe two properties on one title that were, you know, individually valued and insured rather than insured altogether. So, you know, we've, we've had them actually do some really great stuff actually in Investors Choice mortgages. I've just aligned myself with alliance and trying to negotiate a bit of discount for some clients there. The diamond climate. They've got a really good policy as well. Westpac was actually the only, and correct me if I'm wrong, but I believe they were the only insurer during the Brisbane floods that covered the flooding issues for landlords. So different landlords insurance do cover different things. You often get a loss of rent, you'll get damage done by visitors as well as the tenants, you'll get theft from visitors, you'll get. There's usually public liability that's included in there as well, but I can't tell you specifically which one might suit you. But you know, shop around and have a look. There's some really good policies and you know, it's tax deductible for obviously for as an investor. So you know, you're often looking at maybe 400, $500 for landlords insurance. And as far as I'm concerned, it's a great, a really great investment to have. And in actual fact I ran a course once when a lady put up her hand and said, I wish I had landlords insurance. One of my tenants committed suicide in my property and the police seized the property for three months while they did investigations to make sure that it was all under control. So it was, you know, loss of rent and obviously damage to the property and associated things. And landlords insurance apparently would have covered that. So, you know. Yeah, so. Yeah, so there you go. So, yes, landlords insurance, really good question. You know, it surprises me continually that people don't have depreciation schedules and landlords insurance. So, you know, I'm, I'm always kind of going on with, you know, protecting yourself and minimizing risk. And as far as I'm maximizing your dollar, those two things for investors just should be an absolute. Do it, tick the box and. Yep, move on.

Yep.

Lovely.

Thank you.

Okay, all the best.

Okay, a few more. Hands up. Chris.

Hey, Chris, how are you?

Good. Jane. Hi, John, how are you?

Yeah, well, thanks, Chris, how are you?

Yeah, good, good, good. My question is regarding renovation for a strata title apartment block. That's the one that you saw before, John, that I renovated last year internally. And this year I nominated myself person of the whole apartment block. And because I saw the opportunity to renovate the external of the whole apartment block by doing rendering and repainting. Do you have any tips in terms of ironing pitfall to look for in terms of. Before rendering the whole apartment block? Like getting council permits, getting my neighbour's consent even though they're not part of, I guess, the subdivision of the Parliament block.

I don't know anything about the whole body corporate side of things, but in terms of. I'm not sure it might be different from council to council.

That's what I'd say. It's. Check out the individual council requirements in.

Terms of changing the facade. You might, you may find it's not too. But yeah, that's. That'd be the first place to check if it's painted. Just from a, you know, technical hands on point of view. If it's painted brickwork, you're going to need to do it in acrylic render, which is a little bit more expensive. But if it's, if it's a. Just a plain brick. I can't recall if it's a plain brick or not. Is it painted, Chris?

No, it wasn't painted. It was, you know, the original brickwork. 1970s brickwork.

Yeah.

Very pale sort of orange color type of original brickwork.

Yep.

Yeah, that's the reason why I saw opportunity to do rendering. I've. I've gotten the quotes from renderers as well as painters.

Okay.

Now it's just Looking at the technicality from the city council approval as well as any things that perhaps other neighbors might object to the rendering of the whole building.

I haven't been part, I mean currently we've got a DA in for the improvement of the facade and the building changing of windows and you know, having like the kind of six inch ledge kind of balcony at the front of one of our properties that's facing Bondi beach along with the rest of the entire strata. So that's been in for like six months with the council but we're actually changing the windows and I'm just thinking of that painting job that I mentioned earlier that required you know, parking permits because there was going to be, you know, parking disruption to the sidewalk with the scaffolding, et cetera. So I imagine you know, over a one story building you're going to have something similar to that. So you're probably best to get council involved anyhow just because you. They're going to be obstructing potentially the floor footpath and create having a number of workers there that requiring extra parking etc. So you know I'd contact the contract, contact the council and just find out what requirements. But yeah, I wouldn't, I don't think I'd leave it to chance and risk an inspector coming, stopping works and adding extra cost that you haven't planned for.

Pre application.

Yeah, I've sent them an email, I've sent an email to request for more information to the council.

So yeah, I find the pre application meetings really handy. You can go and just meet with the duty planner anytime, just walking off the street and taking your. And they'll look up your address and work out, you know, what overlays are there and all that kind of stuff. And any, anytime that we submit plans which have been doing a fair bit of lately we meet with the, we we've had you know, up to four pre application meetings prior to submitting plans and then we always submit commit actually at a pre application meeting. So they walk away with our plan. So but yeah, make good use of them. They're free most of the time and yeah they can get to the bottom of a lot of questions really quickly. Whereas I found personally I found and I'm sure it's different from place to place but on the phone I've had less joy in terms of getting to the bottom of things.

Kathy's got a comment there for Chris. Let's say John Strata title properties usually require the facade to remain the same. Even the colors are so are supposed to not differ and approved by body corporate by laws. This is my knowledge on Queensland. Thank you for sharing. So, yeah, so I guess if you're in charge of the body corporate, you might have those bylaws knocked off. But yeah, the good point about changing the significance and facade of a building.

Great idea that.

Now it looks like Stacey's back. Thanks, Chris.

Thanks, Chris.

Yeah, typing in questions this time.

There we go. We'll give you another go.

Stacy, let's see if that microphone's working. Stacy, I heard something.

Good evening.

Can you hear me? You're on.

Yep, loud and clear.

Hello, good evening. I don't know what's up with that technical problem, but anyway, if it's working, that's good.

What's your question, Stacey?

So I'm a bit on theme, I think with Helen. I missed the start of her comment. I had a four year old issue so I had to break away. But I've been getting some quotes on the new acquisition that we have.

Congratulations.

Thank you. Yeah, very excited about it and scared too.

Good. But we.

I've done. Yeah, it's probably healthy fear, isn't it?

I think so.

We are two hours from the property. So far I've done two quote days and on those two three hour blocks we've seen six tradies in each block. So yeah, pretty tight planning. But it was really interesting seeing how much the quotes vary. So for example, one I wanted to get your thoughts on. When we bought the property, what we were expecting after building inspection was probably some degree of RE blocking to level the property and we couldn't, as is probably common with a lot of building inspections, we couldn't get a really good look underneath without removing baseboards, which of.

Course we couldn't do.

But we could see a mix of concrete stumps and red gum stumps under the building. So we knew that something had been done and there was some existing damage in the areas of the house that are still lather and plaster. Anyway, so I've had three quotes so far for levelling all companies that have a very reputable name and they've come in at. The first one suggested 13,500 for a total restumping, the second one 8,889 for what was a mixture of some re stumping, some reblocking and then finally another local crowd for just reblocking only for 3,800. And it's really interesting that they're differing so wildly. So I'm sort of interested in the builder's perspective and your perspective too, Jane. As having done a number of renovations.

I've never restumped those. Stacy, you're on your own with John here. Yeah.

You've probably run away from that one. But we couldn't.

There's opportunity abounds when people walk away from those kind of things.

Is it when you walk in, Stacey, does it feel really at sea? Like, does it lean down in all the corners?

No, it's solid. Well, yeah, it does. Yeah, it is, it is. The floors are wonky. No doubt that it varies up to 50mil. You can see it with chimneys on either side of the building. It's an Edwardian building. So, you know, you can see based on where the chimneys are, where everything else is kind of sagged.

Yes, that's right.

So when the building inspector went through and had a. He's a big man and he said he jumped around in all of the rooms to get to really test out how strong the floors were. And he said it's really solid. But one.

Okay, so where you can see it's. It's you always. That's a telltale sign around those chimneys because they've got the big blue stone foundations and the. And the joists kind of will stay. That's the original level. And the rest of the house sinks in this and the chimney stays where it used to be. So. But you're saying it's only still 50. Like if you were to stand in the corner of a room that's got the chimney in it and you looked across to the chimney, you reckon it's only a 50mil rise?

50 to 60. One of the reef dumpers used a water level to get a fairly accurate idea.

Yeah. And the re blocking is because it's solid brick on the external walls, is that right?

No, it's not. It's weatherboard because some of their stumps have already been replaced and replaced with concrete some time ago. And we can't know for certain because it's a deceased estate and the family bought it in 1958. So we can't know know for certain why they spent what they did or whether it was a failed reblocking or whether they just said, we're not spending any more than X dollars, but we want you to hold the house up. So they just did it to that level. That's what. That's some of the theories I'm being presented with.

Right, so when you say reblocking, though, is it concrete stumps you're talking about? There is. Reblocking is normally the terminology you use. If it's A solid brick wall and you've got to basically excavate and pour new footings as opposed to restocking house.

They're referring to the re blocking as going with. So if the concrete stumps, they turn out to be solid when they check them that they're not wobbling, that they'll either use some concrete board because it doesn't compress or they'll actually cut for the higher, say the areas where it is 50, 60 mil, they'll use some red gum blocks. It cut exactly. To get it level.

Yeah, yeah, yep, yep. Okay.

Yeah, of course that's the price I'd prefer, but I just want to know what I need to be wary of.

Yeah, the, the other question or one more question, then I'll try and give you an answer. In the, in the rooms, let's say how many rooms are we talking about? How big's the house?

It's three bedrooms and a living room and a dining room and a kitchen and a back veranda area with 11 foot ceilings.

Yep. Okay. And are you going to have boards, are you looking to have polished boards in the hallway and the bedrooms or.

Yes, yes. In the hall.

Well, yeah, in the hallway. And carpet in the bedrooms probably. But I'll have to do the numbers.

Still because one option which will cut down your costs, and I normally do this before I try and do it before I quote or I let them know that I'm going to do it, is pulling up your floors in the bedroom. And if you've got carpet going down, it's not expensive. You've got to be willing to let go of your floorboards in the bedrooms, but you can actually sell them to the yards because everyone loves the old floorboards. But if you're willing to lift the floors in your bedrooms, you can shave thousands off your re stumping that way. And it's quite cheap to replace flooring just with sheet flooring. Yellow tongue, orange tongue, whatever it is in your state, chipboard flooring, which is only let's, let's say 200 to $300 for each room. So that's one option. Lifting the floors.

And why does it make it cheaper? Because you've got easier access.

Yeah, because they're not crawling under the floors. So it's a really horrible job having to crawl under floors to do. And inevitably fights. You always end up with fights between restoppers and owners if they chop up sections of the floor and because the owner never expects it to be that drastic because yeah, it's, it's a, it's a big job. They've got to dig down, you know, often 600 minimum to get some clay before they pour their little footing and then stick their. Hang their stump in. So. Yeah, that's.

There's a lot of room in the. Under the house.

Oh, is there? So they can do it all from underneath.

Yeah, there is a lot of room. They can do the entire thing from underneath. And they were big guys, but they also don't have plenty of room.

Okay. All right. So that's not such an option and not. Not such an issue with that. Yeah, it doesn't, I mean it doesn't sound like a major if, if it's 50 mils. I mean it's just a little bit past kind of wedging because often what you'll do is the, the loose ones. If it's not bad is you just stick wedges and the stumps are solid. You just stick wedges over under those bits and, and shore up all your joists and it's gets rid of all the bounciness and. And that will kind of do for the most part. If it's. Is it a rental property or is it going to be a rental property?

It is going to be a rental property. Yeah. With the possibility that we would use it down the track. If it's 50, that muddies the waters just a little bit.

But if it's 50 mil, John. What in. Across a room, you're saying that's not such a big deal.

I'm surprised you can even see it, really.

And so what would be significant? What would constitute restocking?

A lot of the ones you go in, period houses in open for inspections would be. Be 100 to 300 mil.

Okay. So 50 mil, you could just use wedges and fix. Did anyone suggest that if I would.

It won't fix. Yeah, we'll fix the bouncy bounciness.

Yeah.

So. And it's the kind of job that a, A carpenter could do. And often carpenters do that kind of thing. And it's, you know, maybe half day a day kind of work.

Okay.

But.

So less than 500.

Yeah. Yeah. Typically. Yeah. So it might. I don't know if you're thinking about. I mean, it's kind of something you have to make a call on because obviously you want to hold the property for years and. But it's definitely not a bang for buck. It's a low return or it's a no return item. People just expect the floor to be level. So it's, it's. You know you won't make anything back on it. But at the same time if you are selling it is a buyer objection. Potentially it's a renter objection as well.

So if you're going to do carpet in the bedrooms you can kind of COVID for any falls anyhow. So it's only the floorboards that are going to be visible in the living and hallways that are significant.

The other thing you've got to consider, if you are doing any replastering or anything like that, particularly if you're putting new sheets up, then you should do it. Because what happens if you decide to replant you re plaster and then you decide in 10 years time after it's sunk to 100 mil that you want to jack it up, it's going to pop all your plaster off the walls or your new plaster.

And that's really where the issue is right now. It's like there's two scenarios. There's you do the foundation and have it absolutely right and there's already some cracking from whatever from either the previous job or from the consequences of it over some time. And if we do the floors, but if you just do the plaster now and leave the floors as they are, the property manager that I had in and had a good look through the place said look, a person in this area in this market anyway won't not rent it because the floors are bit wonky as long as everything else is fresh and nice to be in. However, from our point of view, if you're going to spend money painting, plastering, painting, there's a few wiring touch ups that have to be done to have to go back and then redo all that again once you decide you do want the property.

Yeah. Particularly if you're putting new sheets on walls. If you're adding any walls and putting new plaster sheets as opposed to just patching the lather and plaster. Oh, if you. So yeah, I can kind of see that there's, there's the two options there. I think if you go down the restumping road I would just be getting multiple, getting more quotes and you'll kind of find a, a middle ground there somewhere that you after gleaning some information off each one of those, those restumpers, I think you'll just get a bit more informed, be able to make a, a good decision.

$10,000 is a big difference, isn't it?

Yeah, it's huge And I, it's, it's a no return. Yeah. See this in a lot of cases too that you get a huge variation between quotes. So I always try and get four quotes myself. The other thing is, yes, the. With lather plaster, one of the best ways to patch it and it patches up pretty well and will hold for years, is using corner cement. So if you get a plasterer and what they do is they get like an old chisel or a big wide screwdriver, they rake out the cracks and this is something you can do yourself. It's not a really skilled job job. They. So they rake out all the little cracks to make the mouth of the crack wider and they wash it out with a bit of water and a paintbrush so it gets all the dust. And then they fill it with corner cement, wet corner cement, which is an adhesive, which is really, that really gets in there and sticks. And it's also flexible, not just like normal, you know, base coat plaster or something that use on plasterboard. And then they scrape it back, stick another coat of corner cement and then a little bit of topping compound, which is what you'd use as top coat on plaster. But you can get that from Bunnings and the little tubs and so on as well. And sand it back.

I'm scribbling.

Yeah, you can listen to this in recording.

So two lots of. Two lots of corner cement and one coat of top coat. Or sometimes you'll see in Bunnings they'll call it a pre. An all in one, like a pre mix, which is exactly the same thing as top coat.

And that flexible corner cement just gives you a little move, a little bit of movement without cracking again.

Yeah, you can get years out of that sometimes. And often when the crack comes back, it'll come in a different spot. It'll actually hold where the cornice venues and it'll crack somewhere else in the wall, which wasn't correct. But you can get, you know, it might buy you another five or six years. I don't know what you, you know, if that's going to be a better.

Situation down the track, especially if you're thinking about moving into it as a home in the future, you know, you might want to suspend some of that big expense until you, you, you can do that.

Yeah.

Oh, that's really good. Thank you very much.

Maybe we just saved $10,000. See these calls just so worthwhile.

It's good to hear the extra perspective. I appreciate it. Thank you.

Yeah, no worries.

Pleasure. Stacy, I just have a quick question for you. You mentioned that you're renovating a property that you bought two hours away. Did you? We were always asked some comments to comment on how you buy and renovate remotely, did you want to share a bit of your experience that you had about doing that?

Sure. Yep.

Sure. Do you want to ask me to target the questions or.

Oh, no, you can just go free flow here. We're all friends. So you decided not to buy near your own home. You. You targeted an area, you did the analysis, you came up some target areas, and then how did you go about doing it?

Okay. We decided on the area because there is a possibility that our work may move down there in the future. And it's a fabulous location, two hours outside of Melbourne, and at the same time, it's exhibiting reasonable growth. We couldn't afford to buy in Melbourne, so that was a factor in. In not doing that. So then the area itself, we looked for one that, of course, had the proximity to all the good things. So we settled on that, and I actually used a buyer's agent to help me because I was just a bit concerned that I wouldn't be able to close the deal out, especially those I've already spoken to know that I've got two small children. So I made a trip once a week, probably for a good number of.

Weeks.

And looked at a list of properties that I kind of shared in finding them. I just, you know, on the Internet, just kept on looking and looking and looking. And once a week, I would go down and inspect all of the properties. And then we. And we just. We settled on. We landed on this one and saw some potential in it, and the buyer's agent basically helped me with the negotiations. And I think, really because of the experience, probably saved us about $15,000 and well and truly covered her fee.

Perfect.

Perfect. So you had a really good buyer's agent experience in helping you target the properties, but you really saw that skill in that negotiation at the end.

Yes, exactly. And it was important with this particular buyer's agent, it was a mentored program, so it was very transparent. So through the process, you could glean skills from the negotiation to take away with you. But also because of. Because of what I'd learned in the course, I was really keen to make sure that even though I was using the buyer's agent, it still fit my strategy and that I, you know, had. So I'm sure I had them coming. But it wasn't just them saying, this is the house view. It was me also saying, I've also looked at the numbers the best that I can, and I. And I also think that it's good. And it. Just because it was someone who was so experienced. It just gave me that extra bit of confidence and that ability to keep. Keep moving through the legal stuff and all the things I hadn't done before.

Perfect. Excellent. Oh, look, I'm so glad you shared that. And, you know, I'm going to blow privacy on my sister because, you know, in the private Facebook group, she shares most things anyhow, but she's in the process of going through a similar mentoring program to buy her own home. And she had this discussion with me two weeks ago going, I think we found a property. I don't think we need a buyer's agent. And, you know, obviously she's been through the Jane School over a number of years, and, you know, we've talked about buying criteria and targeting areas, and she. She's the only person I know has got a dot map for Sydney, Melbourne and Queensland, but she's thinking about doing all the other states as well.

But, you know, initially saying she'd rather stick pins in her eyes.

She still says she's gonna stick pins in her eyes, but she still does them. But houses and units, you know, there's this key for you. So she's got like six of them going on. But she, they, they, you know, found a property and she was really keen on it, and in the end she said, no, look, I'm gonna go through the mentoring program and I' to present this to the buyer's agent, have a chat to her and the buyer's agent, essentially within an hour. And she'd been there a couple of times, had me to the property, had been lamenting over it with her partner, fiance, et cetera. The buyer's agent rang back within half an hour and said, I know the agent. I know someone within the agency. Here's the real deal. It's going to go for at least 150, 250,000 over what they're predicting. They've got an offer on the table, they're pretending they don't, and she could lay everything out so quickly, and they had the walk away, you know, onto the next opportunity before getting all caught up in it. So sometimes just having that experience at the end is so valuable.

Even though I've. I've finished this, but I've got this purchase and a project ahead of me that'll at least be two years before I'm ready for the next property. I would use her again if my circumstances were still limited, for time and for experience, and. And they all offer something different. And the agent I chose, I think I could find the property next Time, but they also offer much cheaper service. Just to negotiate for you.

Yeah, absolutely.

And so if, you know, having done all the research, this is the property for me, but I'm just not sure if I'm going to get it. Their contacts are so, because they're doing it every single day of the week, their contacts are so deep that they very often do know the agents and they can read and this particular agent reads people very, very well.

Vicki's just got a question there. What is the buyer's agents mentoring program? Can you just describe what that is briefly?

Yeah, yes. Well, the agent that I used. Sorry, yeah. The buyer's agent that I used or advocate, they were called is Kate Bacos. Kate Bacos property. And she has on her website it outlines a few different levels and the mentoring one was where you start with the inspections of the property. She first meets with you and you outline what your needs are according to you. But she's also got a lot of target questions and gets an understanding of what you need and then outlines which areas and so on. And then they start to produce a list for you as often as you can, I suppose. But once a week it's probably normal for people to go and look through the properties and then all of the aspects, all of the steps through to purchasing right through to getting the property tenanted. They're basically with you the whole way. It's a hand holding service in many ways, but it's also a cutting through of all the other. The noise that, the noise that's out there when you're trying to buy a property and cutting through that and getting to the heart of it.

And Vicki, if you go into the Investors Choice diamond member section, there's a professional discount that I've negotiated with Kate and she's the. Of all the buyer's agents I've worked with, she's the only one who I've seen offering this mentoring program. So, you know, it's quite unique. So don't think you might get it in every state. You might ask them. But I haven't seen anyone else offer it. But yeah, it's. Kate looks after Victoria and it's not.

If I can add, it's not, you know, a massive amount of money in the end with that discount especially that's about $7,000. But as I said, in my experience, I'm adamant, knowing the prices and knowing how we acquired the property in the post auction negotiation, that that was well and truly saved and then some.

Yeah, great, that's great.

Thanks for sharing that, Stacy. I think a lot of people want to know how to do this kind of stuff remotely and. And that's one way of doing it.

Great.

Okay. You're welcome. Thanks.

Good night.

See ya.

Okay, few more. Hands up. Let's have a look. Patricia give you a try?

Wait, spoke to Patricia. Hey, Patricia.

She's back. You there?

Sorry, I must have pressed it by accident again.

Oh, that's right, you want to have a chat.

Come on. It's fine, I'm here.

I must have pressed it by accident. Sorry.

Maybe you were subconscious. You've got anything pressing you want to.

Do.

Through webpages at the same time? But no, I don't have any other questions. I'm still looking at landlord insurance.

Ah, good. Check out that cherish you speak to soon.

Okay, so we've got a couple of written questions.

Okay.

Do you want to take Helen? Helen. Helen says can anyone get another loan if they have the deposit but are between jobs? I'm renovating my home at the moment. Helen.

It comes down to how lenders assess you. So lenders assess whether they should give someone money and can that person pay it back. And the only way that they have to assess is whether you can pay it back is whether you have an income that exceeds your current expenses. So the easy answer might be, gee, if you have a lot of money in the bank and it's earning a lot of interest and you can prove that interest over two years and it covers your immediate expenses plus your debts, plus this incoming debt that you want, then the answer would be, you know, that's an income that would be considered. If you're between jobs and you're dependent on a job and you have some savings that you're getting by with, but no other real income, then it's going to be really difficult to get that deposit. Now there is on commercial properties and obviously this is your home. But on commercial properties which aren't under the NCCP regulations, then there are asset lends. So maybe at a 60% LVR, you know, as long as the rent covers the interest, no questions asked. But you know, they're, they're far and few between since the global financial crisis, we saw a lot of those low doc loans and creative lending for homeowners and investors of residential property drop off. So at the moment, if you are between jobs and you don't have a proven income, alternative income over the last two years, it will be difficult for you to get another loan. And you know, I've got clients who have unencumbered properties that are Renting out really well and they have some income from that, but it's just not enough to comply to what the lenders need to be comfortable that you can cover a 30 year mortgage. So you're probably in the position at the moment where you might have to wait until you get a job. And the problem about also if, when you do get the job, if you're halfway through a renovation and you need to have your home revalued to get more lending, then the value isn't a comment on the fact that you're living without a kitchen, bathroom, bedroom, floorboards, plasterboard. So if it's a half done kind of looking property, then the banks probably may not want to take that on as a security either, unless they already have it. So refinancing to another lender could be difficult. So you might have to stay with your current lender. But what the. I've seen valuations come back saying, you know, the bathrooms, it's unlivable because there's not really a bathroom there. And lenders won't take on a property that, you know, isn't basically livable straight away.

So sorry to interrupt, but with valuations, what, what percentage would you say a curbside and actual full.

Gosh, that's a very good question, John. I've been thinking about it because it's funny you should ask that question because bank of Melbourne changed their policy last week, which is this completely, you know, strange. But there's some lenders like CBA and Anz that if the loan to value ratio is 80%, often they will take the contract of sale or they'll take a, what they call an avm, which is a basically automated valuation model from RP data. And that is, you know, if, if you say your property's worth 900,000 and the AVM comes in at 880, they go, yeah, fair enough, you know, it's 900,000. They won't go and order evaluation. But bank of Melbourne came, which is St. George in other states, then Victoria came up with a policy last week that essentially says that they'll go up to 90% including mortgage insurance, as long as you meet a number of criteria such as the, it's in a metro zone, you know, it's less than a million dollars. If it's a, if it's a Unit less than 1.5, it's house, blah, blah, blah. So there's a lot of criteria. Speak to your mortgage broker or the branch. But yeah, you can get away with a, usually a contractor sale or that that automated valuation model.

Yep. So they might not know your renovation.

And they may not know you're renovating.

So you can roll the dice.

Not that I would prescribe to say that, but yeah, they may not know. And you know, banks, like, speak to your broker, if you bank with, say, Anz, for instance, because they've got a little. Brokers have access to a little tool that says whether the bank is going to order a curbside or not. So, you know before you even start.

Oh, that's. That's good. Yeah.

Yeah. So good luck, Helen. But you may have to wait a bit. And if you've got another property, you might need to refinance that to get the cash to finish your home.

Great. Okay.

If you're halfway through renovating your home and it doesn't look good in front.

Of a value, got a no hands up at the moment. So there's an opportunity, if you'd like to stick your hand up. Another question or a question from Robert. I was going to buy at $400,000, renovate, revalue and extract the equity and buy another investment property. I assume that means for $400,000, both at a 90% plus LMI, but with the bank changes, I'm now tempted to buy one at 550 to 600, renovate, sit and wait for a while. Obviously everyone's different, but what do you think of the general concept?

Concept? Have I answered this question previously? I have this feeling, this deja vu. Not recently, like within the last two or three weeks or maybe the last call. No, maybe not. Maybe it was on the private Facebook page. Because it's a really great question because what you've kind of touched on here, Robert, and I just want you to type in. In. Is that 550, 680% or 90% still, but whilst I continue chatting. But it's. What you have touched on here is that sometimes the external environment means that you need to reevaluate your strategy and what you need to do. So. Yep. So at 90%. Good. So what I'm saying there is that what we've seen here is a change to the lending environment and specifically, you know, borrowing capacities, et cetera. Now let me just think of. Oh, yes, there you go. I did ask this question three weeks ago, but let's say. But things have changed. Yes. Okay, good. So I know I answer a lot of questions out there, but this seems so familiar to me. Okay. So the thing is that the benefits and the differences of where we are now. So if you had two properties at a 90% loan to value ratio, then depending on your serviceability, in theory, you are going to have some difficulty in servicing the current debt that you would have. So you buy one $400,000 property, you go to a lender or another lender and you say, I want to buy another $400,000 property. Here's my 40 grand, I need another 360. They're going to look at your first $360,000 loan. They're going to service it at seven and a half percent and they're going at principal and interest over 30 years. So depending on how much income and expenses you have, you're right, that might be a little different. Difficult. But if you do go and buy say a $600,000 property and put in 60 grand, then you're also going to, they're going to assess you at P and I at 7.5% on the $540,000 loan that you have. So in theory, you're going to have less of a loan on the $600,000 property than you're going to have on the two $400,000 properties. So you might have better borrowing capacity. Now the thing around having a $600,000 property compared to a 400,000 do thousand dollar property is that you may also be able to bump yourself up in that higher price point into an area that has better growth potential and better drivers as well of, of economics. So you might be looking at a, you know, I don't know what state you're in, Robert, but maybe a $600,000 two bedroom unit in, you know, outer inner west, Outer inner west Sydney, kind of like Canterbury. I'm thinking outer, inner and, or a $400,000 property is going to be an outer, outer, outer area house or it's going to be regionally based that may not have the same dynamics of the growth that you want to get into. So I often say buy the best that you can be in. Buy the best that you can afford in the best area that you can afford. But there's also the pros of having two investment properties of $800,000 in value against one property of $600,000 in value, geographically spread across different markets and having the ability to have two markets working, when one's up, the other's down. So, you know, I think that if you can, if you can service the second debt and there's still, I mean, you know, don't rush out and take my word for it. For those people who might be listening for this, a couple of weeks in advance or years in advance. But you know, there is still a little bit of a period of time where there is some lenders that are still assessing existing debts at existing rates. So depending on how fast you, you're prepared to act or how close you are to buying a property, you might still be able to have, you know, be under those kind of bylaws. But I'm thinking that if it was me, well, I have completely different circumstances but you know, if you have the servicing ability, I always like the, the positives of having the, the best property you can afford in the best area. And however, I would definitely value up against that having two properties in potentially two different areas. So for $400,000, I'm seeing clients buying, you know, good quality stock in Newcastle, in, out of the 10ks from CBD Brisbane. Where else have I seen some good, you know, couple of hours out of, out of Melbourne. You know, there's some really good value properties that you can get in some good areas there with some good dynamics. But then, you know, $600,000, as I said, I'm seeing people who are buying, you know, almost blue chip areas in capital cities as well. So it's, it's down to your personal circumstances and gosh, I'm glad I remembered the fact that I'd answered this question from you previously because it was so familiar. But I think that the lending, the lending landscape has changed. You do need to reassess your strategy. You're doing the right thing about doing that, but really it comes down to the foundations of, you know, weighing up the pros and the cons of each and playing the market policies or bank policies and the changes as they come along. But plan for the fact that interest rates will probably go down again by the end of 2015. Sit around there while the economy recovers for, you know, 12 months or so and start moving up again. I don't see the lenders pulling back on their servicing rates at all. You know, things if will probably get tougher. But I do think within the next two months we're going to see a reduction of investor lending, which is what APRA wanted to occur. And the RBA can, you know, stop thinking about that as being an issue. But we still, you know, we've just had a budget and you know, there's a lot of benefits to small business that could benefit the economy. There's, you know, we still have a low iron ore price. We still have coal mines being sold off, we still have people losing their jobs. So the economy is not in a great state. And that's why the interest rates are being reduced. So I. If you know, as I've been saying for the last six months to my clients and anyone who'll listen to me in the toolbox is your properties are worth more than they've ever been worth before and your borrowing capacity is the highest. Just get yourself if you can afford a line of credit and bank that is a bit of a buffer for the hard times. And. Yeah.

Okay. A question from Diego. If I was not happy with the manager of my property and wanted to change agent halfway through the contract contract, is it okay to do so? Is it recommended or should I wait till the end of the contract? Will this affect in any way the relationship with the current tenants?

Hmm, it's a good question, Diego. It's not one that I've actually faced, so I'm probably going to have to wing this. And if anyone has wants to type in the chat box. I remember picking it up in Fair.

Trading when I was going to do this.

Did you really?

Yeah.

And.

And I didn't go through it and actually I regretted it when eventually I did change at the end of the contract because I wish that I got rid of this particular property manager years before because the new property manager came in and it was just night and day. So I regretted suffering under a rubbish property manager for a long time.

Look, I can't from memory.

I had to give. This was in New South Wales. I had to give. Maybe it was either four or six weeks notice, something like that. Yeah, that's where I found out about it from the Office of Fair Trading.

Okay, so yeah, well, maybe contact the Office of Fair Trading. Diego, I know that I negotiated with an agency in Sydney for four properties to be managed and three of those were with three different agents. And I negotiated that all at once and changed all the contracts over management over to the new agent. And there was one of those properties that was up for con, you know, up for new tenants, but the others weren't and I really don't remember any difficulty and it might have just been that There was a 12 month contract period with the agency and that has expired. But I've never re signed any contracts with agencies. You know, I've got, I've got tenants that have been in properties for six years and there's never not been a new. You know, it's been gone month to month and I know that there's new tenants in there and every now and then they put the new tenants names on the lease you know, and whatever. But we, we definitely haven't renegotiated any contracts. So, you know, go and as John said, have a chat to Fair Trading.

Your rental agreement, your contract should say what the. The terms are for going your separate ways.

It's making me itch to get in my computer and have a look at mine. But yeah, Diego, I, I look having a bad property manager, as Jona said, and we've all had bad property managers and by the fact that they might have had a great one when you first got them on board or they promised the world and then things didn't work for the loss of maybe rent or renewal of rent or not doing inspections and the damage that can happen to your properties if you have any doubts or issues and you don't feel like they can be rectified, not with the property manager, but maybe with their manager, then I'd be getting onto finding out how you can change it over. And I can't. You know, I'm not aware of it having you being contracted to, staying with them forever.

So, yeah, just got a bit of feedback. I had this problem. This is Chris's comment. I had this problem with my current.

Property senior management team. Yeah.

Yep. Two months ago. And I contacted the property manager's senior management team to express my disappointment. The state director replaced my ex manager with a new one. In addition, waive my leasing fee.

Look, my first thing would be going up the chain. I'd try to rectify it with the current person and then go up the chain to the director within the company. And that goes for. I've had a few clients have come to me who've been through mentoring programs as well and felt that they may not have been given the right advice and have gone up the chain and found out that the mentor probably wasn't acting in their best interest. And the directors at the company companies, you know, stepped in and kind of saved the day. So, you know, if you have any doubts with the people who are giving you advice or giving you professional services, you know, you're paying them for a professional service and if you're not getting a professional service, move on.

Yeah, yeah. And I said, I've done this twice. Two different houses with no significant issue for the relationship with the tenants. But remember that you will have to pay a new letting fee. The property manager will do all the work in collecting keys and change over the details.

And I think Jean's got something up there too. I had a property manager that wouldn't tell the tenant to bring the rent up to date because he'd been a tenant for years. Yeah, so. Absolutely. And look, I've. I convinced my best friend to buy a property within the same street. I have one in, in Darlington in Sydney and she's three doors down from me and her, her father had a trusted rental manager from a long way out of town and he was an out of town renter and we're getting like $100 difference a week in rent for pretty much the same property. So you know, sometimes there's, there's some issues but the tenants never really know, they don't really care. They just want a phone number to ring if they've got issues and know where they put the money in the bank.

Yep.

So yes.

Question from Christina. I'm not sure if this question's been asked. We'll let you know.

I'll probably answer it anyhow. Again, you know me.

What is your view of purchasing in Melbourne market? Right now I'm nervous because it's a rising market for so long but the indicators are that it's still rising when trying to. And then to follow up when trying to purchase in the best pocket of a suburb. How do you purchase below the median? Do we consider medians as the whole suburb or just for that pocket?

Good question. And I think you can probably substitute the word Melbourne for any rising market because you know, we've got people who are buying across Australia and facing the same dilemma that you're facing which is in a rising market. Do you just wait? And I think I shared the story previously. Back in 2006 I had a conversation with a lady who wanted to buy in Sydney when the median price is 450, I think it was and it got a bit hot for her. And I spoke to her again last year and obviously property prices have gone up and she's gone from a house to a unit to being able to, to outer suburbs. And you know, I'm not going to say that property prices always go up, but what I'm going to say is that if you've got the right dynamics for an area that has the population growth and all the things that we talk about in location Masterclass of you know, the infrastructure and the demands and the proof of prior interest and you know, the ripple effect of, of other surrounding suburbs and people wanting to live there and hence, you know, the next suburb might be where they want to live, all of those things combined together are going to mean that you've got some underlying need for people to want to buy in that area and hence Some growth in the future and it might be stagnant for a while but if we're long term investors is about the long term view and if that's the case then I think I've always just bought when I can afford it in the best place that I could buy. And often I was told that it was the top of the market and I was insane. And you know, it's one of those things and you know, I think back, I've got a slide actually that shows the 1970 median price in Sydney was 17 and a half thousand and ten years later it was $60,000. So you know, you kind of, you kind of, as far as I'm concerned, if you can afford it, get into it. But what that does mean is, and it brings us to the next question that you ask there Christina is how do you, you buy below the market or how do you activate prong number one of the triple prong trident strategy when you are in a hot market? And the reality is often, you know, that's why I kind of have the three ways of making money because sometimes you can't make money one way and one, one way that I'm never going to give up is the capital growth because as far as I'm concerned that's money in the bank for the longevity of a buy and hold strategy which is, which is my strategy. But the sometimes you have to by virtue of getting into the market not be able to buy below the market. Now I still have clients that I'm talking to, you know, day in, day out who are finding opportunities and you know, there's the death and there's the disinterest and there's divorce and all of those characters might be a twist. They don't see the twist. Opportunity. Yeah, yeah, good point. So you know, and as John just said, there's some things that sometimes can apply even in a rising market. And when there is seems to be a frenzy and everyone's buying and we had over 80% clearance rates in Melbourne and Sydney last week, you know, in, in auctions. So there's still that demand. I think we're going to see a bit of a, you know, within the next two or three weeks they will kind of drop back as some of the investors are going to find a bit of difficulty. But you know, once again sometimes by virtue of buying now rather than waiting and buying in three months means that you're buying below the three months time, you know, because the market has moved so greatly. So sometimes you have to give up on that prong of, of buying within the market. And you know, we do talk about buying at the median and, and which kind of moves me on to your next question. And one of the reasons around that is, is like the general bell curve of the fact that 80% of the population want to buy the median typical type property that looks like a typical property in the typical area that rep is represented by, you know, in that suburb kind of thing and is not not too different. And from a buy and hold strategy, you know, you want to be renting to the largest market that's available to rent to and you want to be even as a flipping strategy sell to, you know what the typical. Well, usually when you're flipping owner occupier wants. So you know, as far as I'm concerned, median allows you to mitigate some risk by not being at the top of the market and not being at the bottom of the market. And, and medians as you have highlighted can be a little bit different in some suburbs. Some suburbs are small enough to be represented by a general median. But John, you were looking 18 months ago in an area that had kind of three medians.

Yeah, it's an interesting question. And some suburbs really have a real diversity of housing stock, particularly inner suburbs where you've got single fronters, for instance, which kind of have their price, let's say they go up to 700000 and then the double front of start from 700000 through to 1.2, 1.3 and then you've got the, the kind of new, you know, let's say 80s brick veneer kind of places which has got another price. So when you've got really extreme. So yeah, the, and the median price, I'm just thinking in my suburb, I live Brunswick, the, the median price doesn't represent kind of any type of housing stock. All of them are outside that median. So do you think of it as still as that's the middle of the suburb. So therefore the closer, almost regardless of the housing stock you can be to that middle point, the safer you are. Or do you. Do you. Would you say? All right, well over this section where they're all this kind of. This is the median over here which is representative what the housing stock is.

Because you were saying, I think it was Q, wasn't it that had two distinct.

Well, Kew for instance has got the Yarra Ben section which is the most expensive because they've got city views and they're overlooking the arrow and so on. On these beautiful modern 60s you know, modernism kind of places that were done. And then you've got a section over near East Q which is not. It's the lowest section. That's the kind of entry point of the market. And then you've got another section over near the schools which is quite kind of in the middle. But there are three very distinct sections of that suburb. It's quite a large suburb and you know, there could be an easily, oh, maybe a 400 grand at minimum, right up to a million dollar difference and more actually between the, the top and the bottom section.

Yeah, I, look, I, some, as I said, you know, you can do like 90% of the research online and there's some indicators in the ads that are going to give you a feel for the fact that there is different areas within the suburbs, such as on the right side of Parramatta Road. You know, when you're looking at Granville, I remember doing for a seminar one weekend and I went through extensive, you know, allowed the students to choose a suburb and we did everything on Granville. And you know, you just looked at the ads online. I was like, and this house is on the right side. Or you might hear about the, the golden triangle. Triangle or circle or whatever it is. But you know, some of the marketing, if you're looking at specific suburbs will start indicating to you that there might be some areas that are a bit better, you know, on the right side of the train tracks back to the old Footloose days than the others. But was that Breakfast Club? Anyhow, and you know, so, so that will give you a bit of an indication that there could be some differences. And you might have to specifically, specifically go, okay, so within this area, what are the, what are the differences? And one of the interesting things around the Ripe House data is that they have within the suburb kind of like 100 houses within a kind of. Yeah, geographic, you know, I don't know.

I can't remember what he calls them. But yeah, 100 house. Lots of.

Yeah, trapezoids or whatever they are. But. And they have medians for that kind of area. So that can give you a.

Also has median per se street in the, in the reports.

In the reports, exactly. So it kind of. That kind of gives you a feel for. If you're using those kind of software tools to assist you in doing your analysis. But buying within the median, you know, get a feel for. If it says, you know, for instance, let me think, you know, redhead beach, medians $500,000, then I would be looking@domain real estate.com I'd be putting in $500,000 and see what comes up on the first two pages. If they're all three bedroom weatherboards, I'm thinking, well, that's the typical house. Right. So but if they're, if they're, you know, two bedroom brick, then that's the typical property. So all of a sudden you're getting a visual representative of what that typical property looks as, as well.

Yep. And you're hitting the widest, the widest point of the market.

Exactly. And, and so when all of a sudden you've got, you know, you know that the three bedrooms weatherboard is the median kind of property at 500,000. And then all of a sudden up comes the bargain of a century when it's a two bedroom brick and you're going, wow, it's 450. I've got such a deal. Or in actual fact, that's not the typical property. So just be mindful of the fact that you can find out what the typical property looks like by just putting that medium value in and then start reading the information about the golden triangle angle and the right side of the train tracks and stuff. So. Yeah, hope that helps. Christina. I feel like I was rambling, but.

Another one here. I'll just paste it in here so we can see it. They're aging eyes.

Okay. Is it foot?

Yeah. Hoping to sell a property in July and I'm wondering, is there a best point in time to contact a broker to discuss restructuring loans? And then he's got some information there. Current loan is cross collateralized and after the sale, the remaining Property is near 80% LVR, but serviceability is low. Would the bank anz let me keep.

The majority of the proceeds to offset the loan interest and as a line of credit to JV on a future project? Oh, that's a big question there. Do you want to take this one, John?

No. Yeah.

Dang it. Okay. All right, let me think about this. Cross collateralization. You know, you know, I'm against it and only because it does affect people who are trying to grow portfolios. As I've said before, you know, if you only got one property, you cross collateralize. Most people don't know they've done it anyhow, but you know, if you have, it's not such a big deal. However, you do get into situation when you, you get to pay down. And I know there was a. Most of you may have heard of summersoft, the forum. Summersoft forum. There was a well known poster in there and was very excited. Post or in the middle of the gfc that he'd finally got to the point and the age point and the retirement point that he wanted to be in where he was going to sell down half the properties and live off the proceeds. And he, and he was with the CBA at the time and he started enacting his plan of selling down the properties and CBA said we'll be taking all the money, thanks. And he had nothing to live off and he had only half the properties. So banks can do that. If you have all your lending with one bank, that's a lot easier for them to do it because they've got the titles in their vault and they can dictate the terms. So a, try not to get yourself in that situation to start with. But B, if you are in that situation like you are foot, then you need to just be mindful of the fact that things the banks as you've heard in the last couple of weeks, banks are changing policies. If they feel that your serviceability is low and there's some risk to them then of repaying those loans, then they may not give you access to all the cash. But if it is below 80% loan to value ratio after you finish and you and you might be pleasantly surprised when you sell this property in July that you know what you thought you're going to get for it is a lot higher than what you think you're going to get for it now. So you might actually push below 80%. If you've proven that you've had abilities to pay your loans in the past and have had no issue and things are as they are at the moment, then you're possibly not going to have any problem with just releasing the the other security. But what they will do when you do cross collateralize and you are releasing securities is they will go and revalue all your portfolio. So if you've got five properties that cross collateralized and you sell one, then they'll probably go and revalue the entire portfolio. A lot of lenders when they do that will charge you for that. They'll do one valuation for free, but the others they mightn't. You might be on a professional package and be able to negotiate your way around that. But you should probably, probably start doing in June some planning around this because if you're selling specifically because you think you're going to get some funds and be able to free up those funds for the future, then you might find that your loan to value ratio might restrict that and you will be paying down some of the funds to get to the 80% if you are. So you may not want to sell but if you have to sell and there's reason that you need to do that, then just be aware of what the issues are. So I'd speak to someone soon, sooner rather than later and start working out how that portfolio is going to look post the sale of the property and if you do have other properties that are cross collateralized then I would look at it as a whole portfolio and start considering maybe moving elsewhere. Anz is very, very tough on servicing. They've always serviced all lending and lending of other lenders debts at a higher rate. So if you service with them, even though your serviceability you may have gone indication that your serviceability is low, there might be other lenders out there that your serviceability is better with. So you know, don't let one bank dictate to you what your serviceability could be.

Very good. And we're out of questions and it's time as well.

Oh, I've got something there from Helen. I don't really understand what that is. How do they ever describe a house representing the median?

Sorry, that was related to the median.

Yeah, I might have covered that up. Now I did have a. Jean's on the call and Jean had a call. She had a email question. Jean, you little cheat. Here you are as well. Let's just see if she's still on the call. She is. There you are Jean. Ah, her hands up. I've shamed her into putting her hand up. Hey Jean. Hey Jane, how are you? Good.

Hey Jane.

Sprunk, you had a question around profit, wasn't it? Yeah, the 140% you were talking about.

In the, in the videos and I.

Just still wasn't sort of quite sure.

What, how you worked where you got.

To make up the 140%. Yep. Okay, well what I might do is just. Can I show my screen here or. Sure.

Swap across.

So when we talk about. And this is around. I'm just going to share my screen, hope that I can do this, show my clean screen. Okay. Hopefully you're seeing that. So this is just a methodology of kind of working up a rule of thumb and as you've heard previously with rules of thumb they're rules of thumb for a reason. So it's kind of giving us a bit of a guide the way that we come up with 140% and this is for usually a hold strategy is your purchase price is 100% and then you've got acquisition costs of 6% and then you've got a renovation cost. Now, another rule of thumb, usually on a cosmetic renovation, your cost is around 10%. However, that's if it's a rejuvenation. If it's just a repair and a replace, it could be down 5 or 6%. So once again, all of these things are rules of thumb. Holding costs for having the property. So maybe six months of a $400,000 loan at 5%, and there's $10,000 worth of holding cost there. So that's interest rate dependent. It's time dependent on your time frame, and it's also dependent of how big the loan is to start with. And then you've got selling and refinance costs. Now, if you're just refinancing or there's not, it's a buy and hold strategy, there's usually not a cost there. It's usually zero. I put 0.5% in there just in case there was a bit of mortgage insurance, extra mortgage insurance, but, you know, and 4%, you know, you'd usually look somewhere between 2 and 2 and a half percent for selling costs and a bit for marketing and your profit margin, you know, 15%. Because we're trying to make at least, you know, a dollar back for every dollar that you spend or $2 back every dollar you spend much. So, so if you work up those costs 100 plus 6 plus 10 plus 5 plus a bit and 15, you're getting around that 140 point. So that's how that number comes up. So this little presentation here basically says if you bought at 400,000, times it by 140. So this is kind of, you walk into a property and you go, the agent's saying, 40, 400,000. If I times that by 140, could this possibly be with a 10%, $40,000 renovation, a property that could be revalued at 550, $6,000. And you know, if you, if you're looking at a property and you're going, oh, I need to be doing the roof and there's a bit of these no return things and $15,000 or, you know, as we talked a bit early with Stacy, you know, maybe $5,000 is going to be in re stumping then am I going to be able to, to add as much value as possible to get it up to 560, because it's no mean, you know, task go from 400,000 to 560. So, you know, just.

And you want to see that there's good resale figures at that level. In the street, too, that at 556.

Exactly.

That you're not. That's not the very top of the street too, because it's very easy when you're doing your analysis to take the, the street records and think, oh, I can renovate up to that. But in reality, you really should, probably should be around the 80% mark.

Exactly. And if you're looking at medians, you know, you're not. That 560 should represent, you know, I'd be saying the median there would be maybe 535, 40. And you're doing a little bit better to try to renovate just a little bit better to above what the median is. But finding something at 400 and renovating to 560 with a $40,000 renovation, that's why you need to be buying often below the market or seeing the twist or adding some value, maybe an extra room under the current floor plan or some minor, you know, minor works that can make major differences. So, and this is, this next slide just shows what that looks like in numbers. You know, 400,000 represent 100%, 24,000 represents stamp duty. Acquisition costs 6%, the renovation costs 10%. Holding costs, I've estimated there at a high interest rate, six months, refinance costs, a bit of profit margin. So that's, that's where that new valuation comes up to. So you can kind of, that's how the, that's one methodology of kind of being able to walk into a property quickly and go, yeah, what's my gut feel here? I do have. This is another method that you might want to use, which is, you know, you start at that median price, 550, and you say, okay, what's the renovation works going to cost me? So you grab out your quick cost calculator, quick quote calculator. John always laughs at me because I always get it wrong. It's a tongue twister. But. And you know, you work up the costs of what your plans are. $40,000. Once again, the holding costs, stamp duty. And so you work up the, you know, 550 minus 40 gets to 510 minus what's another 40 gets down to, you know, $470,000. So if you're buying at 470,000, there's no new equity there, there's no profit. You buy at 450, there's $20,000 in profit. You're going to go, well, you know, I'm spending 40 grand in renovation. I'm making 20 grand. Is that a good deal? Or, you know, I'm buying at 420. The new equity is 50,000. Is that enough for me? So, you know, there's a number of ways you can work this up. You can work it from the median price backwards or you can work it from, you know, the purchase price price up times 140. And this is for a cosmetic renovation that you would have got covered off in module 8 and.

But resale price backwards.

All the resale for flipping the resale price backwards.

Yeah. Or revalue price if you, if you're holding. So yeah, what's it, what's going to be worth in the end, realistically? So looking at the other comparable sales in the street and nearby streets and then working out how much the renovation will cost, how much profit you need and all your costs, so you're holding costs and everything Jones outlined there. And once you subtract that, that kind of gives you the figure you need to buy for.

So it's about, you know, once again, rule of thumb giving you just a quick guide to, to walk in and say, can I make some money here? And then there comes in all that extra stuff that we know about pricing disparity and you know, you know what the, what the biggest bang for the bucks are, which is going to be in Module 8. But pardon me, I sneezed obviously. So, yeah, so that's about it. I hope that helps. That was great. Thanks a lot. Okay. All the best. Thanks.

Okay. I reckon that might be it.

Okay. I just want to throw, you know, we chat a lot. I've been asked to write, provide a few thoughts for Money magazine's article coming up in future months. So pretend you didn't hear it here so it can be a surprise. But they want me to come up with John Some the top 10 thoughts of renovation tips that you could use on your home. So we're talking money's no object. You're all emotional. We're taking our investor hats off and taking our investor home homeowner hats off as well. We're getting. Having a bit of fun.

What not to do.

This is what to improve your life. So the, the initial suggestion was gee, you know, solar panels would be great and, and I threw in there that I thought, you know, a great big open plan box at the back where you had like a entertainment hub where you can watch the kids doing the computer work away from the, the bedrooms where you can monitor them, etc, was great.

I've done that in places that I've sold because parents love that. The idea of having a central computer Thing where the kids can be on it and they can walk where they're walking past when they're going to the lounge room from the kitchen and they can kind of see what they're doing, monitor what they're doing.

And so has anyone else got some thoughts of what you might add? I had a. We could make your house electronic so you could, you know, have the fridge that scans your milk when you run out of it. And, you know, I've seen recently at Dick Smith's that you can have the light bulbs that you can turn on with your iPhone, monitor the alarms. And, you know, I'm really excited about having fire alarms that you can actually tell you when you're away from home that they're going off.

Yeah.

So, you know, I'd like to have a vacuum cleaner that's pointing every. Every house. So, guys, a conversation pit says Vicki. Oh, is that. I think they used to call that in 70s a sunken lounge room. Yeah, I always wanted one of those.

Still think it pretty cool.

So do I. What else would you have?

Well, I've been seeing a lot lately. The second kitchen in the pantry. So the wok. The wok kitchen.

Is that another kitchen to clean or is it?

Well, it's. The idea is it's the dirty kitchen. So you have the. The kitchen out the back with the. Where all the, you know, the stir fries and so on have done. And then your kitchen, which is in the lounge room, is more of the showpiece with the window splashback and all that kind of stuff.

I like that idea. I like the idea of being able to hide the washing up. Up as well.

Wireless everything, says Vicky. A lift?

Yeah, a lift. Nice work, Robert.

Yeah.

For 20 to $25,000. Without footings. Actually, I. I had some. A friend who did a very large home renovation and they put. Is it sonic? They had the. Yeah, the sound. The whole house wide.

Sonos.

Sonos, yeah, whole house wide for sound. And they had an account and we're running music all the time, which is pretty exciting.

Yeah, all that C bus type stuff where you can, you know, from your mobile phone, turn on the coffee machine and the heater and all the rest of it.

Oh, yes, that's what Helen's put down there. There's a sensor that you can install to tell you what appliances are drawing, what power, and one day it can redirect the time something is on to maximize solar power. Once they start picking up the washing, putting in the washing machine, turning it on and then hanging out and cleaning. And I'll be pretty happy. But it sounded to me I was. I had a bit of fun with it, I got to say. I've come up with a few ideas that it. But it sounded very Jetson to me. I remember watching the Jetsons where they push a button and out comes a pill and you know, it's a four course meal and always something I have.

Aspirations come to be. By the time I was.

So did I. Especially by the time I had to be responsible for helping cook the house. Thank goodness I'm not the only person. Tesla batteries. So electrical companies pay you. Nice that.

Yeah. That's great.

So yeah, I think there's some, you know, renovating your home with a bit of luxury to make your living easier once again. I could never go past the painting and the skylights. Light and bright and make your life easier. Opening out the back of the property into a landscaped additional living space.

Natural light I think just such great bank for bar. It's you know, not expensive and it just makes the place lift. It's just an instant lift. The skylights.

Which reminds me of that. That beautiful glass panel that backs in the box at the back. Example that we have in module 9 of the ultimate Guide of Renovation. The. The glass panel from the kitchen that you can see out to the lounge.

So Florida. Yeah. Like a fixed panel of glass that goes all the way to the floor.

And I've seen. I've had friends that have actually then put in a lap pool there so they've kind of got the watch the kids while doing things. But yeah, there's. There's some really lovely things you can do and yeah, get it staged and keep it says Beau. Agree. That's the thing. When it's your home you can go a little silly, right?

Yeah.

So anyhow, watch for that Money magazine will be coming up in the next couple of months. But. Oh, John, I think it's. It's time for us to get going. I celebrated a half birthday this month so you know. Yeah, we have half birthdays in our house. So it's been a nice month. Yeah, yeah, true.

Right.

Should celebrate every six months. So I reckon anyhow, so it's all about celebration and enjoying the life that we have. So guys, you know, I thank you very much for your questions. I encourage you to ring that 1300 number and you know, leave some questions for us. 1370, 1376, triple 1 9. Leave some questions whenever they come up. If you're like me, you wake up at 2 o' clock in the morning with some burning Question and you know, jump on the line, leave it for us and we'll answer it next month, 25 June, which is the last Thursday of the month for June. And yeah, I think that's about it. So we have time for tonight. You'll probably see some announcements coming out from us for some pretty exciting things that we've been working on. John. And the next month.

Yep.

And we're also going to run a bit of a survey to see with some people if looking at a new opportunity.

Yep.

Shall we tell them about.

Yeah, go on.

Okay. I'm not sure if anyone's interested, but we're looking at that partnering with RP Data and giving people access and it'll just be a paid monthly fee. Access to the RP Data data reports so you can generate your own reports that will tell you, you know, within 300 meters of this point. Other three bedroom houses worth.

You were just talking about the AVMs.

Yeah. So the AVMs, most of the banks use these automated value models and you know, if it's green, it means yes, this is a good price. If it's yellow, it means we probably should do a curbside. And if it's red, the banks then order a full valuation. So if you've got any concerns about valuations of your own properties or refinancing, financing or buying a property and what the estimates are, you could pretty much do an AVM that the banks are going to be using as well. So you'd have unlimited access to that and it's nationwide.

And the other thing I love about RP data is the radius searches. So if you remember, we're just saying there before about the looking up the nearby properties to work out what you're renovating up to or what the end value or the sold price would be, you can basically do a radius search of 500 meters on the property you're interested in and then it comes back with all the prices of those properties. I find it really handy that way. Doing the due diligence or feasibility.

I'll tell you something really clever. Okay, here's a tip that they're trying to get mortgage brokers like myself and maybe real estate agents to use. But I think as investors this could be a really strategic tool and I'm going to have to test this out. If we go ahead with this and we have enough, I think we probably need what, 20 people to say that they'd be prepared to. I think it's like $100 a month or so.

Yeah. Which is going to Be, you know.

I know a lot of people charging a lot more than that for national access. Well, you can buy the reports $30 each directly or if you, if you wanted to do it commercially, is unlimited. But here's one of the things that they're selling to professionals of having this service and I think clever investors could use and that is that if you look at the back of say API magazine, it says the average hold time for a suburb is nine years. For instance, you can actually go into this RP data and you can say pull up the properties that have been held for seven to 11 years. And it might be that especially if you've got a flipping strategy and owner occupiers are high in that area, you might actually be able to target the specific addresses of properties that might be interested or more likely to be selling. And you could actually do drop or those directly and obviously not be specific saying, hey, I looked up your data. I know you've had your house for 10 years, but you know, say you might be considering and selling. On average, census says that people in this suburb hold their properties for nine years. Your property's probably doubled in value. Back in 2010, when you bought your property, it might have been worth 500,000. The median price in the area is now 800,000. If you're interested in selling. Yeah, chat to me.

So you know the ones that statistically are likely to sell soon.

Yeah, okay.

That's right. Yep. So we'll see how we go. If we get a. We'll put an email out, we can get enough interest, we might be able to put a deal together, a group deal so we all get a discount.

Excellent. Well, let us know if you're interested and we will speak soon. And all the best, everyone have a great month and we'll catch you next time.

See ya.

Sam.