Your Property Success Mentor Call September 24-09-2020

Hello everyone and welcome to our September Q and A session for your Property Success Club. Well, what a crazy year this has been so far. But as always, and as we have done every single month for the last eight years, we are here to support you during this strange time and to assist you with your questions. Because I know that there's a lot of people out there that are finding things really confusing at the moment. There's so many mixed messages in the market. I know the property market is almost like different in every single state, which we know has always been the case. But now we have Victoria in lockdown. I have to say it's even different and it is a confusing time. A lot of people have reached out to me over the last couple of weeks and shared their concerns. I hope you've been enjoying the Borrow My Brain series because I've been sharing questions that people have and I'm sure that a lot of people have got some really good insights from that. The last one in the series, the interview with Hilda where she was a bit worried about where to use her money to purchase again, a lot of people came back to me and actually mentioned that it was quite confronting for them to hear me say, look, I don't think you should be buying again because for some people it isn't the right time to buy. But anyhow, if you are out there, you know, please have a chat to us. Let me know that you're there and listening. Say hi, let me know that. Coming through loud and clear. John is not joining us at the moment, so, you know, we will push on. Just assume that I've got the big disclaimer that he usually reads here that says we're not real estate agents, financial planners or accountants and all the information that we share is to assist you and based on our experiences. So please, if you have specific circumstances or worries, go and get some advice from those professionals. Well, it has been a really, really interesting couple of weeks now. I have been attending so many economic summits, getting a lot of information. A lot of good friends of mine have been sending me property information and updates that have come from their research in the market. In actual fact, I've just put together a presentation this morning from two of some really great economic updates that I attended last week that I wanted to share with you. Did a couple of screen captures so that I could share their slides with you. So don't tell them. And also I've just got an email from my good friends over Performance Property who gave me an update on the Sydney and Melbourne market as well. So I'm going to be sharing all that information with you. But as always, I am here to answer your questions. And if you have any specific questions, I can see just looking over here on my other screen that there's a few people on at the moment, type in and let me know that I'm coming through loud and clear. And if you actually have a question, well, sitting here in cold Melbourne and if you hear me shivering, my teeth, you know that I'm freezing. We've had a few nice days, but we're back to cold and it looks like that cold front's gonna continue. And we're just hoping that we're gonna have some bright and happy new news on Sunday that allows us out of our house more than two hours a day. So for all of those of you in other states or, or in regional Victoria who are enjoying catching up with friends and family and even going to a cafe, I hope that we will be joining you soon because we are very, very jealous. And we've just entered into school holidays as well. So not only have we been remote schooling from home since two weeks before Easter, we now have full on lockdown with only two hours a day being allowed out with school holidays. So you can imagine the frustration going on in this house. Anyhow, it looks like we've got some people who've given me some feedback. Yep, you sound great, Jane. Well, thank you very much. The shivering. I think I'm going to make me talk quicker now, guys. As I said, I'm here to answer your questions. You can type them in. I can't see any questions coming through at the moment. But David, thanks for letting me know that you're there. If you have a specific question, just let me know because I really want to be able to assist you. As I said, I've just wrapped up the Borrow My Brain series a couple of weeks ago and if you've been enjoying my Sunday morning emails, then you have been watching my bit of a fetish has been going on with 80s movies. Well, I'm going to be continuing that next week, but I also am going to be introducing you to a good friend of mine, which I'm sure a lot of you know from his podcast Property Couch. That's Bryce Holdaway. He and I are going to be holding a bit of a chat and discussion on the your property Success main Facebook page on Tuesday at 12, so stay tuned for that. I'll be sending out a few alerts, but he and I have been chatting over the last couple of weeks about why people are missing the market and trying to judge the market and where people go wrong and all of these different things. And every now and then when we get together for lunch, we talk about our clients and you know, what we're getting in questions and the worries that people have. And we've been doing that for 10, 12 years. And. Yeah. So I've got something special coming next week from the boys at the property couch. And stay tuned Sunday morning. You'll be getting my email. I know they're a little bit variable in times. It just depends on what time I get up and get in and finish the email and send it off. But watch for that on Sunday morning because I hope that's going to be a lot of fun. Okay, so I've got a question here. Hi, Jane, I have a question. How do I have the guts to just start. Oh my gosh, that is such a good question, Sally. And I really appreciate you asking that question because a lot of the times, you know, what I have found from successful investors is that they take action and they commit to a plan. They do the research and they take action. And if I just pull up, I have a little picture here that's probably going to help. Actually, this is kind of what I call the investment framework. And I've spoken to people over the last 15 years and I'm just trying to distill why some people are successful and some people aren't. And I think this really clarifies it really well. And then it comes down to the amount of action people take and the amount of knowledge that they have. Now there's some people that get out there and they are just action takers and they're buying in the US and they're flipping properties in New Zealand and they're doing NRAs and they're doing this and that. And they jump in really quickly and they do something and they possibly haven't researched it that well. They don't really have the knowledge base to make that entire strategy work for them. And they're not always that successful. And often what happens, they jump from one to the other. They just find out that commercial property tenants pay all the outgoings. So they jump into commercial property and they end up with a retail space in the middle of COVID And then we have the others who go into courses after courses, after courses. Now I have, I have a little app on my phone. It's called Voxer. It's a walkie talkie app. And it's how I keep in contact with my Mentoring students daily. And I got a message from one of my mentoring students early last week that said, oh, you know, Tony Rolmans is running this four day course and it's usually like two and a half thousand dollars and it's only $500, but it's 13 hours a day and I don't know, it's a big comm. Do you think I should do it? What do you think? I'm all about, you know, getting your mindset right so that you have that confidence and the clarity, Sally, to take the step and have the guts to do something. So I encouraged her to go and do the course. And then on Sunday afternoon I got the message that said, oh my goodness, they want me to sign up for the next big dollar cost. And you know, it was like, no, no, take a breath. You, you're part of the hype. You can always sign up later if you want to. I know there's always going to be a scarcity kind of model that tries to push you into action. But just take some time and think about this. You're already doing a lot of courses. We've got an action plan. You've got a lot of tools over the last four days. Step back, consolidate them. Because what a lot of people do is they buy a course and then they buy the next course and then they buy the next course and then they buy the next course and they don't take time to put their learning into action. And I call those the dreamers. We love them, they're lovely people. A lot of them are in this community, but they don't actually take the action. So Sally, my suggestion to you would be find someone. I mean, you're in this community, so hopefully that someone might be me, but find someone that you connect with who has done this before and has done the research and has the success in their own investments and able to teach in a way that you feel that your needs are being met so you understand what they're teaching you. Find a way to get the education, but then have the confidence to take the action. Because I think it's really, really important that you have that confidence in yourself to be able to take the next step. And sometimes it just takes a lot of time of just finding out who to speak to and what resonates with you. I spoke to a person who applied for my mentoring earlier this week and he said he had picked up my book laying around here, picked up my book many years ago and started reading it and then stopped and then he went and did quite A few courses, a $30,000 course on options and all these other courses. He bought a property. He was feeling really, really like he was taking action. And he sat back and thought, oh, I better read the fundamentals again. Started reading the book going, oh, what's my risk profile? My risk profile is not a developer. My risk profile is not taking that chance. And I've just bought a property to develop. What am I going to do? And so he just went back to the fundamentals and just got the fundamentals right. So I really suggest that you just get the education, but know that you have to take action as well. Sally. And I think, you know, hopefully, you know, with this community, there's so many people who are so gracious with sharing their information and their experience. Head over to the Facebook page and have a look under the units left hand side and you'll see there there's some case studies that people have shared, their. Case studies of properties they've purchased, renovations they've done as well. So it gets inspired but also be committed to taking some action. So I hope that. That helps. Great, I'm taking action. We go so topic. Okay, well, I hope that we're back again and that you can see us. Thanks, Sal, for letting us know that you are taking action. So just have that confidence and clarity to go ahead and do you know what, what works for you? Got another question here. Oh, yes, this is a harsh one, Kate. You know, it's disheartening to see that investments attract capital gains tax. So what have you made in profit? Half of it goes to the ato. I know that tax is a bit of a contentious issue and especially when we're in this kind of cash flow crisis, a lot of people at the moment are looking at their cash flows. I know as a small business, I am. And looking at, you know, what things can we get rid of in our expenses and what can we. And when we look at all of the work that goes into creating something and knowing that we're going to lose some of that capital gains tax to tax is really disheartening. Rest assured, there is some confusion about how the capital gains tax on your investment is calculated. So if you own that property and it's not your home and you have owned it for over a year, then 50% of the capital gain that you have minus some of those costs of acquisitions you have to pay tax on, but you pay tax at your tax rate. So for instance, I've just recorded a Borrow My Brain for the upcoming series and spoke to this Gorgeous lady Deb, and she and her husband took off around Australia March 2019, for one year in a caravan. And they hit Western Australia, heading home in March this year, and all the borders kind of locked down, and they're stuck still six months later in Western Australia. And we're talking about some of the properties, properties that they had in their portfolio and what they could do to actually maximize their position going forward. But interestingly enough, you know, they're not at retirement age, they've taken a year off, their income is low. So at the moment, rather than actually, you know, sacrificing the home and not paying capital gains tax on it, we actually looked at the fact that one of the properties that they have that has had good gain because they bought it well, but hasn't had good growth could potentially be sold because it doesn't have potential for good growth either could potentially be sold whilst they're in essentially the lowest tax bracket that they're ever going to be in. So that when they look at the 50% of the capital gains is actually taken against the tax bracket they're in. So, you know, I know it's really disappointing. Unfortunately, we can't fight the ato, but that's just one of the things that we're dealing with. And that's why it's so important to get your numbers right. And often, you know, in my book, I think it's chapter 13, which is no chance to that why most flips flop is because people don't do the numbers. And when they do finish doing the numbers and they actually forget to put in capital gains tax, they might have spent six months doing something to make five to $10,000. And they're the lucky ones. So getting those numbers right are really, really important. Let's have a look. Okay. I'm lagging. Hopefully my video is coming back. It's going back now. Great. All right. Haven't looked at this. There are more and more talks about people from cities moving to regional. Do you think this is really happening? Okay. Well, I think that it is a really good question and this is something that I'm monitoring. If you watched the last August, your property Success club, I went into a little bit of detail on a webinar and some thoughts that I had attended with Bernard Salt. I know there's this whole conversation about moving regionally and personally sitting here in Melbourne and having been sitting here in Melbourne for the last few months in lockdown with, you know, the last couple of weeks, we've been allowed out for two hours A day, but prior to that only one hour a day. I have to say I wondered why I didn't just hire a house in Port Douglas and move up there about three months ago for a short term stay. But you know, in all seriousness, if I put my mortgage breaking hat on which I now have, one of the clients that I've been speaking to should be a bit straighter, shouldn't it? Of the clients that I've been speaking to in my mortgage company and we've been, you know, getting them pre approval for purchasing and we may have a pre approval in February or March of this year and then we've gone into the April, May period and they're still looking for a property. There's actually only been one person who said, you know what, we were going to upgrade our home in a large regional area that they lived south of Brisbane, but we've now decided to go to a block that's self sufficient. So if the, you know, zombie apocalypse does come that we're going to be okay. That was so beautiful too. And so that's the only person I've actually seen make that commitment to really do a substantial flip on their next purchase. I do get the opportunity to speak to a lot of people who are watching the market and then checking out their borrowing capacity to see what they should do. And I'm not getting anything regarding people making a big move to the regional areas. I tell you what I am getting. I am getting people who are saying I think I want to upgrade my home or have a home that allows me to have, you know, the area that I can actually do like a webinar from or you know, do the zoom calls because I want to work more remotely. So I'm having conversations with people about that. I'm having conversations with people who've said, gosh, you know, if everyone is actually moving, you know, should we be moving maybe considering buying in Brisbane if everyone's going to, you know, Queensland, the sunshine area. And I think if you think that people are moving regionally and they're moving away from Sydney and Melbourne, Brisbane is not a regional area. So you know, they'd be moving to areas like Townsville or Mackay, et cetera and Gladstone. And I still haven't seen a real increase in inquiries in those areas. So that may come. But I do think that more and more people are understanding that they're not going to go back to the norm and they're not going to go back to work full time from the office. I know that a lot of offices are Talking about maybe having people there two days a week and rotating people two to three days a week. So not everyone needs to be there at the same time. I know just the logistics of having one and a half meters between people and trying to get them up and down in lifts. They're talking about people starting in, you know, different times of the day so that they can get everyone up into the, the building in a timely manner. So there's all of these great, great, I guess corporate employers and there's a fantastic webinar and I'll put the link in the comments below to you. But Australian Financial Review over the last few weeks in conjunction with Microsoft has done an incredible future series and they did one on health last week, the week before that was on education and further education. That just blew my mind with the person who did the presentation from MIT and what they are expecting to happen the week before that was on remote working and you know, they interviewed Telstra and they interviewed. Rio Tinto and who else was there? It wasn't Qantas number of huge employers and they have been reducing their office space over the last few years anyhow and they don't expect to go back to the same office space. And I just know from a personal opinion, you know, I have three offices here in Carlton in Melbourne and it's really made it aware, you know, obvious to us now that we probably don't need that many offices. Unfortunately we can't get in there to, you know, get rid of the lease and get it, get rid of the things. But you know, it really has questioned in my mind do we actually need three offices for you know, three people? And the reality is we probably don't. So I think we're not going to see a huge exodus but I think what we will see is that people might hit the caravans and you know, take a bit of a break around the country and see more of Australia because I don't think the bubble is going to be opening up anytime soon. In actual fact it's got an SMS to say that my Christmas flights to New Zealand have been cancelled. So you know, there you go, we can't get to New Zealand either. So I'm going to tell the mother in law we won't be there. But look, I think it's a watching brief. I think there's probably going to be more need for people to have more space and isolated space within their current homes, within capital cities and so maybe bigger homes. But that type of change of floor plan takes 15, 20, 30 years to come through. If you're investing for the next 10 years, I don't think it's that necessary to us to be that concerned about it. Okay. Often property investors. So thank you for your questions coming through, guys. And Mark, often property investors buy property in a trust structure rather than their individual name. What are your thoughts? Oh, Mark, there was a huge disclaimer at the front saying I'm not a financial planner or an accountant. I can share my experiences. I bought Property back in 2001, 2, 3 in a hybrid discretionary trust with a company acting as trustee. Back then it was in my mind a risk minimization strategy because I could put all of the assets into the company and put all of the lending into my name. For instance, sorry, the reverse. The lending was in the company and the what way was it? Now I have to think about it. Essentially the outcome was that if I personally got sued, all I had was the debt. So the lending was in my name and the company owned the properties. And then there was a change around 2009, 2010 and was actually through the court hearings on getting funding for in divorce settlements. So a lot of people were putting their money into trusts and companies and therefore when they came to have their childcare numbers assessed, they said I didn't earn anything. So a judge went straight through that and said if you own a company and it's in your name, you know, all the assets are can be taken as well. And so that kind of protection wasn't there. And it costs a lot of money to keep a property. In a trust there is benefits if there's partners and you know, you want, if someone has a lower income, you can assign the, the profits and income to the person in the lower tax rate. You know, it does have many benefits. It's just personally I know that the reason that I went into it didn't really pay off. So, you know, although I can't talk to you about how you actually structure your purchasing or your asset decisions, this is really something you should be to accountant or financial planner about because, you know, obviously there's some great benefits for people who are in unique circumstances or they want to as a legacy pass on their investment in the future to their children. So I really suggest that you go out and get an expert's opinion on it, not mine. Okay, thank you for your great answer about just making the start. We did move regionally in March this year, Sydney to port, kept the house in Sydney and now we're looking to buy locally here before it takes off. Okay, so Great, great question there and just a couple of comments on that. My parents actually live in Port Macquarie and so I know it well. My grandparents lived in Port Macquarie so I've been going there since a wee child in visiting port and seeing the growth and I have to say Port is one of those just it's an unusual town. You know when you have defibrillators in, in places where like the Settlement city you're like obviously this is an older type of demographic but one of the things that just as I find outstanding is the amount of people who in retirement are moving to Port Macquarie and the wealth of information. I know my mum lectures there at the University of the third age but there's people who were, you know, curators of the art gallery or you know, the head lecturer of economics or of all these incredible things who are up there who are now teaching at this University of third age so. So I'm always overwhelmed by the amount of courses that she can attend with these incredible people. Port is an interesting place and I've had a mortgage client who was looking to purchase up there as an investment recently. So I did some assessment for him as part of our strategy call after they had the initial borrowing capacity call with Lisa and I went through kind of the demographics and they were specifically kind of looking at building a non typical type property and we just looked at the area where they were trying to build and we're trying to overlay you know, percentage of renters and demand and there really wasn't that demand for that type of the property that they're after. So I just urge you, you know, if you're going to buy there, this is the forever home, then you know, it's, there's going to be ongoing kind of opportunity in places like Port. But yes, those lifestyle decisions are great and we even saw last year a lot of people in Sydney and Melbourne were selling their one half, two and half million dollar houses and moving to Brisbane and buying your beautiful home for a million dollars and putting money in the bank or paying the house off. So really some really good opportunities up in downsizing to a more reasonably priced market if you can maintain your jobs and your employment as well. So yes, I think there'll be some opportunity with the regional changes but at this stage, you know, I'm not convinced that we're going to see a mass market move regional. Any other questions here? Yep, all good guys. So thanks Ursula for that question. Great to see you here. And so, and it's, it's wonderful. I think I've taken I have an opportunity to speak to a lot of people every week and it's where I really enjoy being able to understand their needs. So you know, that strategy call after the mortgage appointment, the borrow my brains and speaking to my mentoring students every week as well. And it's just, you know, I know that everyone has been going through a lot of confusion and there's a lot of conversations around, you know, where's the market going, what's happening, you know, what can I do to protect my downside, etc. So I think it's really important to keep all of those things in mind. And with that in mind, what I've done, if I don't have any more questions, I'm just going to go to my presentation I put together because I think it's really important that we have a look at what's happening in the market and we get a gauge for, well, what does this mean for me? I know that over the last three or four months I usually only work with about 10 mentoring students at a time and three of them I've approached and said, I really don't think this is the right time for you. And I've paused that mentoring program and just delayed it for them because for some people who, you know, their job's at risk or you know, there's, they have to sell properties in areas that are really difficult and they don't have the employment and borrowing capacity to be able to, you know, take the next step, you know, it isn't the right time to buy. And I've been very, very, I guess, diligent in watching this because I hold a lot of people's hopes and dreams in my hand. So I want to make sure that I treat that with the respect that they give me. And it hasn't been until the last four or five weeks that I've started to see this optimism and there's this incredible resilience in the Australian property market and the Australian economy. And week after week we're getting these surprising results. Unemployment's gone down, household household income is going up, household savings are the highest they've ever been. And the economists have been making predictions from April about what is going to be the effect of COVID on the economy going forward, on the property market, on unemployment, on immigration, all of these things. And the worst case scenarios have all been bought back. So what I wanted to share with you now, if I don't have any other questions and please put your questions in because you know, I'll just keep chatting until we run out of time. But what I wanted to do was I just wanted to share with you, you know, this presentation that I put together of, you know, where I think the market is at the moment and the things that we need to kind of be aware of as we go forward because, you know, the future is looking bright. And I, I look back over the last 15 years since I started educating people based on the Trident strategy and my philosophy on doing good quality research before you make property decisions. And there's been a few times I'm like, guys, the market is turning and you need to get on this before the market takes off. And I have that essence again and that feeling of effervescence really, that this is a really great time for those people. Have the stability of their income already assured. You have a bit of a buffer in place. But guys, this is, this is an incredible time. So let me share with you this presentation because I. Sa. Hello? Hello. It is just me. Okay, so turns out that I've been talking to myself for the last few moments, but it's been rather exciting. So I'm just going to go back and show you a couple of these pictures here. So here's the information. So I'm afraid that I've been not talking to you for the last few minutes, but here's the information that I just wanted to share with you. And this is the CoreLogic Reports. And what I think is really important here is that we look up here, the domain realestate.com and they start talking about people clicking on real estate websites and we start getting a measure which sits up here before pre listing activity. When people start clicking on websites because they're sitting at home, they're thinking, you know, what are we going to be doing in the next couple of months? Oh, let's have a look at some properties. They start doing that when they start getting serious. They come to CoreLogic and they'll download a CMA, so a market assessment, so evaluation report. And this is where CoreLogic starts getting this data. So what's really interesting here, if we start having a look at it, is that we start getting, you know, there's been a downturn over the year. Obviously this was associated here of about 12%. Interestingly, we also had a bit of a downturn in 2019, pre election, etc. But you know, if we look at week on week, we're down from last week, sorry, up from last week of about 1%. But the same week last year, we're still only down 10%, which is really amazing since we're in the middle of this kind of economic change. And then we go over here and we have a look at these newly advertised properties. Now what happens in between these steps is that people come to their mortgage broker. So I put my mortgage broker hat on. So we've been talking to all of these people at the moment about, you know, what's my borrowing capacity, if I was going to buy before the end of the year, if the market's coming back, how much can I afford? So we're having these conversations at the moment which is really interesting because all of a sudden people are getting their borrowing capacity and their loans pre approved and then they go to the agent, so they go to the real estate agent and the real estate agent's going, wow, there's all these people looking now. There is so much pent up people looking at the moment. And I've spoken to buyer's agents in Sydney, Melbourne and Brisbane recently. The ones in Melbourne, like these guys, 26th of October, as soon as the market's open and it is a go. But what we're finding is that the agents then go to vendors and say, hey, you should put your property on the market. We've got someone who wants your three bedroom property in Brunswick for instance. And so then we start getting this newly advertised properties coming up. So there's a couple of measures in here, in between and these have started rising as well. So if we just have a look at this, I'm going to try to turn myself off so that you can hear me hopefully this time and still see me. Okay, solo on, solo off. There you go. So what we see here is these newly advertised properties. So if we're looking at month on month there's an increase of 1%. If we're looking at week on week there's an increase of 3%. If we go back and have a look at this, we can see the rent, properties for rent and properties for sale, they start starting to improve. And what happens once people list their properties and, and we then have these pre approved clients buy them. What happens is we go back here and we have a look and we see that we've got all these mortgages come through and look at this, we're back up with 6% year on year we're back up same week, last year, 1% up. So we've actually got all this activity at the moment. So this is great to see, great enthusiasm. And then my good friend Dave McMillan over performance property advisory, he literally sent me this email at 12:00 clock going, Hey, I thought you'd be interested in seeing what's happening in Sydney and Melbourne markets and the market overall, I'm like, yeah, so check out the houses here. We've got AAA properties which have got seven and a half percent growth. We've got BBB six and a half to seven and a half percent Cs et cetera. So you know, Ds are less than 5.5% growth. Now the reason I really like this is it gives us a view of what has been some of the growth potential in the future based on growth potential in the past. So we've got the major capital cities plus the Sunshine coast and Geelong and Wollongong, the satellite cities, the B6 and a half to 7.5% growth. Wouldn't say no to any of those. So as you can see here, there's some regional areas coming up as well. Mostly we've got those satellite cities coming through too. Newcastle, Gold Coast, Ballarat, Bendigo and what did I say? No, that was it. And then we've got these triple Cs which are the lighter ones. And these are the ones that you've still got some growth coming through. Now, you know, Darwin and Perth, they're just so linked to the market and they're so linked to the market that I of mining that I'd be really concerned about jumping into those markets at the moment. And we know that, you know, you can hardly predict what can happen in those cities. You know, we've always been expecting Darwin and Perth to come back over the last five years. They're still limping along even though, you know, Perth's opened, opened up life as we once knew it. You know, there's still major issues I think associated with the link to the, the mining markets there. But it's interesting to see, you know, all of these areas. If we look at the property clock, you know, there's some real opportunities here to consider. I wanted to jump into the presentation. I went to La Trobe Financial. La Trobe's one of the lenders that we have access to as mortgage brokers. But they've also got, you know, this huge, and have been operating for, you know, 40 plus years, this huge investment arm that they have as well. And so they gave an investment update to their investors, which I felt was really interesting to attend. And you look, their presentation I just found phenomenal, so I wanted to share some of those slides with you. But if we look at the total GDP by quarter and what's been happening in these countries, obviously some significant GDP reductions that occurred. But Australia here, you know, we're kind of holding our own and we're actually doing quite well. And so, you know, this is kind of looking at, in context of, you know, we know there's been an economic downturn, we know we're in the first recession ever, but is it really a recession, if you think about it? Because, yes, technically a recession is measured by the two consecutive quarters of negative returns. But the reality is we actually created that. It was manufactured. We were not on schedule to have any type of recessionary event. The economy was going strong. So, you know, I question if these two quarters of negative growth actually are the indicators of a recession, but we actually didn't have the recession occurring before these indicators were triggered. Are we really in a recession? So I'm not taking anything away from the fact that I know that there's a lot of people out there who have jobs, jobs and that are at risk and have, you know, been made unemployed and made redundant. And, you know, I'm talking to people who are in that situation all the time. But this is just, you know, it's not really a recession that we know traditionally how it used to be. So, you know, good news there. But what I wanted to do is I just wanted to go through what Latrobe had put down as the headwinds and the tailwinds. So let's just jump positive first and have a look at some tailwinds. You know, I said earlier that, you know, I could see that there was a lot of economists getting it wrong. You know, there's. Is this like, you know, there's been a strong increase of housing approvals. There's been, you know, ongoing weakness in Victoria offset by gains elsewhere. There's a contraction, but not as bad as we thought. You know, there's a decline in an offset, but, you know, everywhere else is going well. Jobs have recovered in July, Company profits have been like. There's this. This kind of resilience that we're having which no one expected. And then we get to, you know, these households that are swimming in cash. Now, I don't know about you, but the most that I get to buy at the moment is the taking in terms of my husband once a week and going to Woolies, being the one dedicated shopper and. Or grabbing a coffee you whilst walking on my hour or two hours out. You know, we can't spend a lot of money. We are spending some more online, but I think people have kind of pulled back on that as well. This is our Household saving ratio, this is extraordinary over the last 20 years, you know, look at this, we're up to nearly 20%. And yes, there's been jobkeeper and super and all of those things and people pulling back on their mortgages and having some periods of time off there. But this is still quite extraordinary. So I really suggest that there is some benefits here that we're not necessarily seeing now. What happens when people actually save their money? They put it in the bank. And what happens when they put it in the bank? Well we know that the bank gets money and the bank can then lend it out. Now the government's been really positive as well and they've actually put even more money into the bank. So we know that there's, sorry, more money into the banks for loaning to self employed people. So I know that there's some real positive indicators there as well. So, you know, this is all really, really positive stuff that we should, you know, keep our wits about us. The backs, the fact that the banks have some money, they haven't had to spend a lot of money to get that money and they'll be looking to lend this out. Now we look at headwinds, there are pain points ahead and this is the sad news. The sad news is our youth are in the jobs that are the most susceptible to Covid hospitality and art and rec. And I think, you know, we're really going to have to look to the government for some additional assistance and support in these measures. I know that there's, you know, this whole loss of lots of ritual as well. You know, the kids that are doing the HSC or their last year of exams at the moment, they're not getting the school dance, they're not getting the schoolies week, you know, they're not getting the normal application process to university. And you know, I know from a mental health point of view a lot of people kind of reached out to me about concerns about their kids who are in at that age group and you know, what's the uni look like? Going further, I had a chat to one of my best friends from school the other day. She's a professor at Yale and she's a world authority on climate change. And she was saying that although they've just gone back to university and half of the campus have gone back, she's chosen to just continue educating from home. So she's running her classes from home. So I think and if you have the chance, chance to go and have a listen to that Australian Financial Review summit on education and how the Whole further education is going to change. I think there's going to be some extraordinary changes that are going to come by in the future. And I know just the courses that I do, you know, my luxury time is from six to nine every Saturday and Sunday morning I get six hours of courses in and I usually do two or three courses at the time. And I'm doing a course course through Copenhagen University at the moment. And you're just being aware of the education opportunities that you have whilst we've been at home and looking online to get stimulus and cure our curiosity, I think is really exciting. So I think we're going to have this youth problem of plebi redeployment or them becoming digital nomads and start traveling and maybe do remote working. We might have this move to the gig economy, et cetera. But there's going to be some real work that needs to be having to happen around the youth at the moment and their employment. So just more, you know, headwinds effect. We know Victoria. If we look at all the different states, you know, retail and recreation has increased except for Victoria. Job ads increased, except for Victoria. State spending increased, except for Victoria. We are bouncing back, guys, so let's hope that doesn't continue. We also know as a headwind that we have the jobkeeper coming to a reduction in the next couple of weeks. I spoke to a cafe owner just to see how he was going this morning. I tried to buy a coffee from every different coffee shop every morning on my walk. So that stimulates some economy. And asked how they're going. And he was just saying, you know, they're fine until the 30th of September, but they're not too sure if they'll be able to. Able to continue with reduced staffing going forward. So, you know, this is going to be a hard time and we just have to see what happens. And, you know, I heard this talk. I'm about to give you some slides from Peter Switzer. And he talked about the fact that we're in the process at the moment where we're actually in like cpr. And he said, imagine a real, you know, overweight person running the city to surf. They fall over, they're having a heart attack and people are there trying to revive him and someone stands over them going, you shouldn't have been eating all those Big Macs. You should think about going on the 5:2 diet or keto or something. You know, that's a recovery situation. This guy's just in crisis at the moment. And this is where we have been in crisis at the moment. So, you know, we have had Jobkeeper, we have had Home, Home Builder, we have got all of these other grants and things coming through. They responded to a crisis. And I was interviewed by New Daily just this last week. They wanted to know my thoughts on Home Builder and the journalist was trying to lead me along this conversation narrative that said, but you know, do you think that Home Builder was actually, you know, it doesn't have the finesse of the other grants that have been set up historically, like the first home buyers grant. And I was saying I think we had to give kudos where qdos is due rather than perfecting the perfect grant system. The government came out with a stimulus package quickly, wasn't perfect. We get it. They responded quickly to changes, they put extensions in place, et cetera, and they're making it up as they go. And this is the time that they needed to do that. Coming forward to next year, I think we're going to have to be looking at that recovery plan and that's what's going to get interesting and where the money is. But we're already seeing a lot of stuff. Stimulus for infrastructure, we're seeing, you know, and that takes a while to come through, but we're seeing some of these things come through. And I think the government, the budget coming up is going to be really interesting. So let's watch that now. So that I want to give kudos to those Latrobe for what they pulled up. But what I also want to let you know, which I find really interesting here, is that short term we know the outcome of, you know, all of the economic changes is not going to be that great. But you know, if you come over here and have a look at these economists projections, a lot of them expected the property market to fall between 10, 15 to 20%. CBA last week came back and said we don't think the market's going to fall 10%, we think it's only 6%. Westpac came back on Monday this week and said, we think it's more like 5% and we think the rebound from mid-2021 is 15%. So guys, this is the kind of time where you, if you're the economists, are kind of pulling back on their really negative opinion. And you know, we know that there's going to be this net migration problem, but they've already started opening up the immigration to those with the ability near. There's high net worth visas and there's visas for those with expertise, etc. That has opened up last week as well. So we're going to start seeing some movement here. So I think that the banks are flush with money. The economists think the property market's not going to dive as badly as they thought. We're definitely not going to lose all of the growth that we gained last year. So we're still up from last year. I think there's a lot of optimism and we just look at this long term picture of the resilience of our market. You know, the house prices versus unit prices where it was since the peak in 2009, 19, you know, down 6%, down 6.8%, down 6%. You know, as I said, Perth and Darwin are always consistently negative. Unfortunately, if we go back from the trough 2018, we're still up, you know, look at this, we're still up. And if we go from the change from 2015, you know, other than obviously Perth and Darwin, we're still up since 2014, other than Perth and Darwin, we're still up, you know, and we look at the dwellings, 40% of all dwellings are in Sydney and Melbourne, 33% are regionally. So, you know, 40% of the entire market is actually still moving up. And we're going to have a bit of a glitch in Victoria but come October 26, and I'm talking less than a month away, you know, we're going to start seeing some movement. So this is why if you've got a buffer in place, you've got borrowing capacity, you've got a stable job, I really think getting ready now would be great. And if you do think that the market will reduce a little bit going forward, now might be the time to go and refinance your home or property and pull out the equity. So you have that waiting. Whilst that property's worth the most that it will be worth for the next six to nine months. Once again, dwelling prices have gone down. The economists have started to converge on their views. Peak unemployment, they'll look, looking at 11%, 7.8%, looking at 11%, 9.9%. You know, we are, we are actually getting to a better and better position now. I wanted to move on. I took a screenshot, screenshot here. I am so sorry, I'm trying to steal this information from these presentations and give to you so they don't always look that great but just want to get the information out to you. So please, you know, bear in mind that that's what I'm trying to do. Please, if you've got any questions or comments if you want to just put them up now, let me know that you're still around, still interested, still listening and if you have any particular questions. I see. I do have a question that's sitting there at the moment that I will get to about getting rid of dud investment properties. But if you do have a question, please just let me know that you're there and you're listening and that you've got you're understanding what I'm saying and getting some value because if you're not, I'll move on to something else. So yep, just let me know that we're here. All right, so back to it. Let's have a look at what Peter said Now. Peter Switzer, interesting guy. He lectured me at uni. So I was a mining engineer doing mining engineering at New South Wales Uni back in, you know, 89, 90, 91, 92 and he taught a topic called economics for engineers or economics for non economists. And I have to say I was really fascinated but a lot of it went over my head. But I've kept in contact with Peter over the years so when he speaks I listen because he has a no BS kind of attitude and I want to wanted to show the optimism that he is putting into the market now. Come March last year or March 2020, he wasn't so optimistic. So this is really good. Great. I'm glad that someone out there is saying yes, thank you. Lovely to see you. It's great to see people on the calls that I get to talk to every week as well. Okay, so let's just have a bit of a chat about I want to show you what Pete had to say. So yes, we have a JobKeeper extension to March 2020 in a different makeup. We've still got government debt is still only 50% of GDP one of the best in the world historically low interest rates. Banks came out yesterday RBA saying that we are not going to change interest rates for up to five years. People have access to Super. There's a whole conversation about that. I spoke to a guy who's got a fintech this morning who's about to launch around for those people who bought out. Super. How to catch up some watching brief on that. I'll fill you in Loans bank holidays they came out yesterday with another announcement around bankruptcies to people could trade through at the moment with creditors. So there's a lot of benefits to business. We know that small business runs Australia essentially so it's really important the we know China's recovering well China has infrastructure plans China's infrastructure plans needs iron ore. If we don't piss off China, we have the iron ore. So there's all these really good benefits here. This is just. I know he's a share person, but. Yeah, and I'm not, as you will learn in the email that I was trying to prepare for next week, that I was going to send you out in an update. If you'd seen my share conversation that I'd had with my son last week in the email I sent him out, Bill and Ted's excellent adventure was the reference to that. But, you know, there was this substantial reduction in the share market. Now, I have to say, I don't get shares, I don't get super. I don't understand a lot of it, but every now and then I'll have a look at things. And I had a look at my super statement as part of preparing for my tax this year and what I made at the end of the quarter to. End of the six months to December, I actually lost this last six months. I was like, oh, that's a bit of a bugger. But it's interesting to see that we have had this decline, but we're on the way back up, you know, so we're only 4% to go before we're back to where The S&P 500 was recently. Now, this is Pete's best guess of what's going to come. You know, we manage the second wave of infection, the world manages their second wave of infection. A vaccine arrives before the end of the year. Trump loses Biden. Not too sure why or how that affects it, but the optimism from their vaccine negates the negativity of Biden's corporate tax policy, which apparently is a big deal. And we have this huge response in 2021 to a stronger year. So what could go wrong is we could return to a complete national lockdown. So let's just hope Victoria's got everything under control. Now we can track where all of these new cases are coming from and minimize them fairly quickly. You know, there could be a return to an international lockdown. Trump pokes China, have a trade war. China slugs Australia because we like Trump. Trump loses election. The recession worsens and becomes the depression. That's the bad news story. So if we get a vaccine, we're going to be good. This is another really interesting slide. And the reason I like this, it just shows us how much economic growth we had. And this is, to my argument, are we really in a recession? Because, you know, we didn't have Any of the markers that would indicate we're going to a recessionary period. You know, we had had the number of, the highest number of quarters with positive quarter on quarter growth than any country. So you know, this is just amazing kind of resilience. The Australian market, we have a miracle economy, you know, 29 years without a recession. OECD says we're the third best behind South Korea and New Zealand in beating the virus with record low interest rates. They're not going to put rates up. We've got all of this stimulus in the government and lending banks are giving the borrowers repayment holidays. That's going to come to an end soon. Even little things like moving principal interest loan repayments to interest only. Game changers. And I know, you know, I was reviewing with Lisa, my mortgage broker in Investor's Choice on Tuesday, all of our clients loans and she was saying check out this, I could give someone a 2.29% fixed loan for the next two years and that corresponds with their sell down plan. This is insane kind of rates guys. So you know, we've got all of these great things. We really need a vaccine and I think Trump's pulling out every single single card that's possible for him to have a vaccine before his election. You know, everything's kind of going up now. Look, I find this interesting. I'd never heard of this before and Peter filled it in. This is from City Research. Now City research has these 18 indicators of a recession or a significant economic collapse. Now back in 2000, 17 and a half of their 18 indicators were like, you're about to go into a significant problem. GFC 13 out of 18 now 4 out of 18. So we are definitely not in this like terrible economic situation. There is resilience, even more so than in any other country than in Australia. So you know, I know that 2020 is bad. I know it's been a nightmare. If you've been homeschooling, you've been, or even remote schooling and now you're in school holidays and you're stuck in Melbourne. You understand the pain of trying to run companies as well and everything. But you know, it hasn't been easy for anyone. People have been losing their jobs, their kids are moving home. You know, there's this uncertainty, there's mental health issues, there's health issues. You know, there is a, this, this underlying, you know, sense of pain that we've all had. But this is now, this is optimism that's coming out and I really want you to be prepared to jump on that, you know, we're going into the post war boom and they're talking about having, you know, years of boom and activity. If Australia is the bubble, you know, the people in China and Southeast Asia are, you know, clicking on, on where to move in the world. They're clicking on Australia and Canada. And Australia at this stage has, you know, Covid more under control than anywhere else. So you know, if SCOMO comes up with getting every Australian vaccine because we're going to be in the position to help manufacture it, you know, we're all going to be in a good position. So you know, will our economy rebound? Pretty much everyone's saying yes. So you know, there's a lot of economics statistics here that says that we're in a good position. You know, it is a crazy recession. Employment's rising, we're having, you know, some really good opportunities. If you. I know I've spoken to a lot of self employed people who've been able to get grants, to do courses, to learn how to get online, to sell courses, to make as money as a side hustle and you know, this means some incredible opportunities. So, so I think it is a strange recession. I think there's some strange things that are happening. The property prices really haven't fallen considerably and they're not expected to fall that much more considerably. I think there's going to be a real rush on the market when we get out. Victoria in particular gets out of our lockdowns. But I'm talking to buyer's agents in Sydney at the moment and the amount of stock coming on, good quality stock. We've got mentoring clients who are actively attending auctions and looking to buy in Sydney at the moment and the activity is there. So you know, I think there's, there is this optimism, there is this opportunity. There are some things that we need to be aware of. We're still watching all of these things at the moment. But you know, I think that if we were, you know, truly looking at the market market and truly looking at opportunities out there that we are actually in a great place and I think we should be kind of optimistic. So those of you who are out there and potentially considering is this the time to buy? If you've got all the stability factors that I mentioned, I think it's something that you should really consider. So hopefully that gives you some of the optimism that I'm seeing in the market and I'm kind of happy that the economists have got it wrong and were so negative for so long. So there you go. That's Some, some thoughts there. And let me know, you know, does that optimism, you know, give you a bit of a heartfelt Yay, 2021's going to be good for us? And maybe I should start preparing to look to the future. So keep that in mind. Let me know what your thoughts are on that presentation. I do have question here from Sarah. What would you take into consideration when determining whether or not to sell an underperforming investment property? Oh, okay. So Sarah, this is a really good question because it really comes down to your specific circumstances. And maybe if you're interested, I'll put in the links below the. The link to borrow my brain. It might be something that we can share if you're happy to share your circumstances with others. But I've been through this kind of analysis with a few people recently about, you know, should I be selling my properties or not? And for some of them, you know, they don't hurt, like they're not making money, but they're not losing money. And you know, should I go through the pain of trying to sell the property when it's really not going to be changing any of my economic data? And the reality, in my opinion is that if you have the opportunity to purchase and you have the borrowing capacity, which I would assess before you actually decide to sell the property, if you have the borrowing capacity to move forward, then potentially this is actually an opportunity cost that you are gobbling up because your money and your borrowing capacity could be used elsewhere. So, you know, I think in that circumstance, maybe doing an exchange for one property or to another with having growth potential and some yield opportunities as well, and maybe renovation potential as well would be a great opportunity for you. If you sold the property and you couldn't buy another property and this property is not holding you back, then my question would be, yeah, well, you know, why don't you wait and see. You bought it for a reason. There must have been some type of indication that why you bought it. Which the reason I giggle is I recorded a borrow my brain with someone yesterday and they were saying, I was saying, how did you decide to buy in this area? And she said, oh, it's where I do my grocery shopping. So I thought, oh, I should buy a house here too. Which is probably one of the funniest reasons I've ever heard of for buying a property in a circumstance, in a certain area. Area. But you know, if it's not hurting you, then maybe just holding it for a period of time is not going to be a problem to see if it does rebound based on the strategy that you thought that you purchased it under? Because sometimes, you know, you might just be a little bit ahead of your time. I know I bought in an area called Darlington near Newtown in Sydney and I bought there in 2002 and I had done all this growth prediction, ripple effect. This area is going to take off. 2003, still hadn't taken off 2004, 2005 and then all of a sudden 2009, you know, it had doubled in value. So it was, I was a little bit ahead of my time. I had done all the research. I knew it had pricing disparity, I knew I could go back in there and do a renovation at some stage. It just didn't deserve my renovation dollars at that time. 2009 it did. I went back and did the renovation. So, you know, there's a lot of things to take into consideration. Your personal circumstances are probably the most important that I would consider because you know, it comes down to where you are now and how it's going to affect you. I have spoken to a lot of people who've applied to work with me in the last couple of weeks and a lot of them have portfolio killers in their portfolio. So when they look at what they bought the property for and what it's worth now and just look at what growth it's had, it really hasn't done anything. And my question is maybe it's part of a yield strategy and you've got a whole portfolio, then you've got a couple of yield generating properties to actually help pay for the growth or negatively geared properties. But that's not necessarily the case for everyone. So just work out, does it still fit into your long term goals? And until you actually work out what your long term goals are, then you won't be able to achieve that. So I suggest that you go and check that out. But I'm just gonna put share my screen for a moment. Let me see how well I do this with the skills that I have. So let me just share my screen and come over here. Am I sharing my screen? No. Show and stream investors choice. So I'm just gonna go to my website because I think what you could potentially do is you could go and work out what income you actually need to achieve the life that you want. So this is one of the things that I often do. Well, I do do in the beginning of working with a new client. So, you know, this, this calculator I designed was how many properties do you need, you know, to get ahead and the income that you want. But go back here to these original tab and just work out how much your basic costs are and then add in a little bit more for all the other things you need and work out what is the actual income that you need and then work out are these properties and your super and all the things that you've got at the moment. Are they going to get you there? Because I think a lot of people over stress with how many properties they actually need to achieve the income that they want and they stretch themselves way too far and the reality is you probably don't need that many properties. Now the other thing I wanted to share with you, breaking news. I'm so excited about this. People keep saying to me I don't know where to find all your stuff. So to make things easy, I've put it all into JaneSlagsmith.com if you head down here, check out the things that I have because I've been creating lots and lots of things over the years and I really want to share with you people the first home buyers show and all the resources there. I'm really proud of the youe home is your gold mine that I developed when I was a guest property and finance expert for Australian Women's Weekly. The youe Property Success podcast. You know, really proud of that and interviewed some amazing people. The Borrow My Brain series we've just wrapped series one of that, the Thrive Not Survive series and helping people through Covid. Love that. And this is brand new, which I'm really excited about sharing with you. This is my bolt. Over the years, John and I have put together these webinars and a lot of them were in preparation for, you know, letting people know about our location masterclass course, my mentoring program, the Ultimate Guide of Renovation. We would do maybe six to eight weeks and preparation and every single one of these webinars. And I gotta be honest with you, I just think they're too good to be not sharing. So I've put together my little vault Also look, I'm on a lot of podcasts and information. This is a bit of fun. Last year suncorp had Shayna Blaze and Rich Harvey, myself as experts on a live stream that we did in Sydney. So that's a lot of fun. Elephant in the Room Property Couch mcg Finance and coffee Real estate talks Everyday property investing as you can see, lots and lots of stuff there. So I'm really excited about sharing that with you because I think that, you know, there's, there's so many things that I've been gifted and Being able to share my experience with people and I do it in so many ways and I know it's kind of confusing and trying to work out if it's your Property Success or your Property Success Club or Investors Choice Mortgages or somewhere else. So everything's there in one place. But I really encourage you to go and check out those resources because I've set them up for you. There's no logins, there's no sign up here things, you know, it's just good quality information. If you do want to sign up though, for your Property Success Club, donations to Kids Helpline, we have cracked over $12,000 and I'm just so heartfelt happy that, that I've been able to share that with you and you know, really get some great resources to a great company that's helping the kids out there. So I can see that as one final question. I hate missing questions. What's the best balance between capital versus high yielding properties? Oh, I think if you can actually have a portfolio that doesn't cost you anything, that's going up in value, you know, 5, 6, 7% a year over a 10 year average and you know, it's just moving along. Armchair investor, get it right, get a couple of properties, sit back and enjoy yourself. That would be my ideal for you. And it's funny, I was talking to a business coach the other day and he said, what is the ultimate experience that you want your clients to have? And I really had to think about this and I thought, you know that scene from Forrest Gump where Forrest goes out to the letterbox and he opens up this letter from Apple and it says, you don't have to worry about money anymore. That is my absolute goal for my community. So hopefully you don't have to worry about money anymore. I know that good quality residential property investing will allow you to achieve that goal. And hopefully the bit of presentation I've given you today will give you some optimism about what is happening in the market. I moved from a watch and see to get prepared to buy. So I think that people are going to be making some really strategic, clever property buying decisions in the next six months that will give them the opportunity to get to their goals and achieve their plans. And that is all that we can ever wish for. So guys, I can see we've run over time. Oh well, hope that you have enjoyed this presentation. Thank you so much for your questions and I really appreciate your feedback. I know so many of you are going to be watching this on recording and by then I would have put through a lot of those links that I mentioned to the Australian Financial Review and to borrow my brain and if I can be of assistance, please let me know. And next week, watch out for the conversations that I'm going to be having with Bryce Holdaway from Property Couch and Ben because we've got something pretty special to hatch for you and I'm not too sure what time you're going to be getting the email on Sunday morning because. Because is my study time, but I will be sending you an email Sunday morning once I've got it all ready. And yeah, watch your inbox next week because we've got something pretty exciting. Anyhow, all the best. Thank you guys. Great stuff. I really appreciate you doing that. Go up and click on the link above so I can see your names come up. But you know, it's just, it's so nice to see you guys and so nice to have so many of you here. And yeah, thank you so much for sharing and for making sure that we are here to continue to service you. And as always, here is to your Property success. Bye for now.