Your Property Success Mentor October 26-10-2017

What you will hear on tonight's call is based on our personal opinions and experiences and not intended to be specific to your circumstances. We're not real estate agents, financial planners, lawyers or accountants are not liable for any loss, damage, misunderstanding caused by reliance on any of the information provided or inferred. Now, we also routinely record these mentor calls and reserve the right to share the content down the track. So by participating in this call, you're acknowledging this and if for some reason you'd be you would prefer not to be included on a recording, we just ask that you contact our office on 1300, 963646 within 24 hours and we can edit you out of the recording. And with all that out of the way, I will hand over to Jane Slack Smith.

Hello and welcome everyone to. Hello, can you hear me?

Yes, I'm just getting you there. Jane might be your.

Hello, can you hear me?

Yeah, loud and clear now.

Oh, perfect. Well, hi everyone. Sorry for the false start there, but welcome to the October call. And my goodness, isn't the year just flying by? Well, as always, it's wonderful to be here tonight and we're looking forward to another exciting call and answering all of your questions, of course. So, so a big welcome if this is your first time on the call. And please don't be shy, speak up, say hello, ask us a question or just fill us in on what you're doing and what your strategy is and maybe where you're up to in your progress down the property journey. As always, hello to everyone from your property Success club. Make sure that you jump onto the Facebook page and just engage with everyone there. It's an incredible community and there's so much activity there and so many people supporting each other and there's so much, so many things going on, renovations and purchasing property and questions about what to do. So once again, jump in there and take as much value out of it as you can and please let us know a bit about yourself as well. Now, these calls are exclusively for my mentoring students. The students the ultimate guide to renovation, the your property Success Club members, the mentor calls, subscribers, and of course, my investors Choice Mortgages, Gold and diamond clients. Now, they generally take place in the last Thursday of every month. However, we won't be turning up on Christmas Eve. So December is always a little bit different and you will receive reminders a week out and obviously 48 hours, 24 hours out so that you can't miss the calls. And we do record these calls and within usually 24 hours, but we say 48 hours. They will be up on the website so that you can listen to that. Now, if you can't make a call, as always, you can leave us a message on the message line. 1300 76, 100, 119. Now. Surprise me, John. Did anyone leave a message?

Oh, you'd be surprised to know actually this week, nothing.

Crickets. Okay, well, you can always email us a question@questionsourpropertysuccess.com as well. But before we get into your questions, I should introduce the person who is in the control booth right at the very, very moment, the co creator of the ultimate guide to renovation and your property Success club and the your property success podcast. Hello, John Hubbard.

Hello, Jane Sake Smith. How are you?

So October, it's been a big month already. I'm exhausted. How about you?

Yeah, I am exhausted. It's. You're right though. Hasn't the year flown? It's just insane. I don't know if I swear time is speeding up. Although I'm told it's just because you're getting older. But either way, both might be true. Yes, we've been busy this month, haven't we? Particularly with the done for you, the new done for you suburb service, which has been fantastic. A lot of people through and it's been cool. Actually. It's been nice to. I mean, we do this in the workshops, doing the whole process of, you know, narrowing down from, you know, 16,000 suburbs all the way down to a handful of suburbs into a short list. But it's been kind of nice just doing it for people and having to do it to their specific criteria. And in that, you know, they have a choice of states, they can be all the way across Australia. So we do a big wide search or maybe it's just Victoria or New South Wales. So that's been a really cool thing to be part of, don't you think? Certainly sharpened us up a bit.

I know, I know. Well, I think the thing, for those of you who don't know the dumpy service that John's referring to, we kind of, kind of launched it at the Renault Fest and it was only we kind of get pushed into things. You know, people go, why don't you do this? And go, oh, we could probably try that. But you know, we're so much about, you know, teach the man to fish and you can continue to fish and, and hence, you know, the ultimate guide to renovation the suburbs Lecture software. We really understand the importance of location. And since then, you know, we, people said, look, you know, I Don't have the time to go through all the course material myself. So we condensed it into one day and we run the workshops around the country and come up with the four or five suburbs. Sometimes, like in Brisbane, we come up with eight suburbs and then we're getting to choose one suburb. We get down to the streets, you should buy in the suburb. And we've just had people take those. Those streets and go to a buyer's agent and within weeks buy or do it themselves. So we know that that process works, but then we have people saying, well, look, if you've got all this intelligence, why don't you just tell us where to buy based on our criteria? So.

And it is different from. Yeah, it is. Someone asked us the other day, isn't it just the same once you've done it once, can't you just tell us what the suburbs are? But it is. It's absolutely different for each person's criteria based on what they're trying to get to and how soon and where they would like to invest the region. But it's also even like a 10 or $20,000 difference in the purchase price can make a difference, we've found, because it's ruling suburbs in and out really, really quickly. So hence the reason we do the capacity first.

You know, we have 30 filters that we put suburbs through that we teach people how to assess and run suburb at one suburb against the other. But, you know, as you said, you know, 15,622 suburbs in Australia now, there's less than 150 that I know with confidence that, you know, have the characteristics that have the growth potential that I would like in my portfolio and that fit within a certain price range and, you know, for someone who hasn't got that expertise or maybe access to our training, et cetera, to come up with those. And if they limit themselves to maybe one state and they're not geographically agnostic, that's just a hard ask. So, you know, I get it. And I was talking to actually, Nat Jones today about it, and he just went, oh, my God. Like, this is the missing link. People who don't want to pay $15,000 for a buyer's agent or they don't know that they need to find a buyer's agent in eastern suburbs, Sydney or the northern suburbs of Brisbane or somewhere specific, they don't know that they haven't got down to that area yet. So this kind of gets them down to that area. Well, this is not really something handed over to them.

Sometimes I see people making the mistake if they think that the buyer's agent can do the suburb selection for them, and they really can't, because they're not. I mean, I mean. I mean, maybe some are set up that specialize for that and start with your goals and your criteria and the whole bit. But mostly it doesn't work like that. I had a friend of mine, it was really quite upsetting for me, really, because he bought a property and he could have easily. I could have easily helped him, you know, but he was, for whatever reason, didn't. Didn't want to ask, and he bought an investment property with the buyer's agent. And I said, oh, good for you. You know, what criteria did you use? And it was. And the only criteria that they used was his buy price, and they were looking at suburbs that were kind of all over the place, totally different demographics, and there was just no rhyme or reason to what they were doing. And. But so the buyer's agent was really only a negotiator, and potentially you could get him something off. There was just no strategy at all.

I know, and it's funny because I think we're moving into two to three years where, you know, we've always preached the importance of location, and we've definitely seen our students take opportunity and, gosh, flourish and make hundreds of thousands of dollars by nailing that. But I think there's an opportunity in the next two to three years, and really, you have to be very careful about where you buy because there's not going to be a lot of growth. And where there is growth, you can ride that out. And so I know, and I know some people have just got paralysis from analysis and they've given up. And you and I talk to those people all the time, John, when we're talking about this with. But there's also those that just like, geez, you know, I don't have the time to do the research. And I know and should be doing it because I've listened to a few podcasts or a member of maybe this club or whatever. I know it should happen. I just am not that person. So I think that's really nice.

You get to that point, don't you? I know I've done this in other areas where you know enough to know that how much work's involved and you're either someone who can do that work or you just need to sometimes be. Is there another way? If you're honest with yourself, if I'm going to do all of this and not do any shortcuts, is there Another way to do it. But I guess for just. There's a couple of comments there. The methodology is identical to the Ultimate Guide. There's no, there's no real difference in the methodology. The only real difference. Yeah, that's right. The only real difference is we're literally going through all. Every single step. So there's no shortcuts, it's very thorough. And that.

We do it for you.

Yeah, and we're doing that. Yeah, that's what I mean. We're doing it for you. So sometimes, I don't know, you know, even if you're doing it for yourself, you can maybe cut a few corners, but there's a. There's a duty of care there that we don't cut any corners. And also we've. We've got a couple of more tricks up our sleeve with the, with this. We've got like a stealth version of the suburb selector software that's got a couple more bells and whistles on it. Jane, do you want to let on a bit about that?

Oh, it's. There's nothing that's sacred about it. Like, we, as you know, open book here. We share everything with you. And, you know, you probably watch the 50 hours of videos, Ultimate God Renovation, if you're in that, to know that there's gems throughout it and sometimes you miss it. But just some simple things. Like, you know, we always talk about, say, the absolute minimum around, you know, the percentage of renters. If you've got a buy and hold, you want to minimize your risk. So we always talk about having a minimum of 30% renters and maximum 70% because we don't want to be in a whole suburb of renters. So, I mean, that's one criteria. We want to make sure that people want to rent in that area. So vacancy rates need to be below 3%. We want to make sure there's enough sales there for you. Actually, it's one thing about finding a great suburb, but if it's tightly held and there's no turnover of stock, you're going to be sitting there for three months going, why am I wasting my time? So we want to make sure there's. Just to make it easy for you. But also things like we physically are doing the dot maps for these cities that when new clients come in, because as we know, they do change and we're looking at the suburbs and we're saying we want to have suburbs that are higher in value closer to the city than away or along an arterial that is actually putting price pressure on the suburbs. So, you know, we know that the dot map shows us the ripple effect, so we're actively applying that. We're buying all the reports, you know, the, you know, Terry Riders hot spotting reports and the boom and bust, you know, SQM reports and the Residex predictions reports, and we're buying those and we're looking at what the experts are saying at the time. And then we're looking at, you know, we want to make sure that this suburb has had growth in the past. So we're looking at the overall growth of the capital city or major regional and we're saying, you know, with this in mind, you know, has this suburb actually kept up with what the average of hundreds of suburbs are doing? So, you know, it's. It's nothing we haven't taught, but it's pretty much I've created the spreadsheet that allows me to do that analysis, you know, and gets hands in dirty criteria.

Yeah, yeah. Which actually in reality would be impossible to put into a course where you're teaching because it would just. There would be, it'd be complete information overload. But yeah, there might be a few tricks though, because we're learning, we're correlating a lot of things at the moment, so there might be a few tricks that will come in over to the course, but anything we'll learn, we'll pass on, obviously.

Absolutely. And just, I mean, just little things. We're doing some analysis today on turnover and you know, what, what percentage turnover is characteristic in a capital city, in the larger suburbs and how would we reflect that in the major regionals so that we're not excluding some of the smaller suburbs that you find in major regionals. So, you know, we're always modifying and improving.

And it was because the regionals had less. They were smaller suburbs and had less sales, less turnover.

Absolutely, absolutely. So if you applied the metric, the turnover percentage was the same.

Yep.

You know, looking around 2%.

So the percentage was the same. But if you had applied the Metro rules, as you would just typically in, you know, Sydney, Melbourne, Brisbane, wherever, number of sales, regional, then you would miss out on a whole bunch of suburbs. Yeah.

So, I mean, so we were learning all the time. And the thing that John and I. Well, I'm talking on your behalf here, John. What I'm really enjoying is we start with someone saying, you know, this is my goal and what I want to achieve. And we go through, you know, that process and we come up with, here's the suburbs that we've selected for you. This is why we've selected them. Here's the streets in the suburb and here's RP data. We've actually set up alerts on these streets for you. So hand it over. Here it is. You're going to be getting alerts now when these properties come on the market or you can be active. And we've got templates for giving to agents and inspections and templates for office, etc. So we've given the people that and they come back and they're just like, oh my God, I just waited seven months looking and going, what am I going to do? And it's done. So know. And obviously we've only just started doing this, so, you know, we're really excited about seeing the first purchases come through. But, you know, just checking in on, on some of these guys, you know, they're the whole, it's a big shortcut. Temperament has changed. Temperament's changed. It's like, I know exactly what I'm doing and where I am and I can validate it based on this information to anyone who says, so why are you buying in this suburb? You know, Wyndham has these characteristics because we always have very helpful parents and friends and family and partners who go, what are you doing? No one's ever heard of xyz. And you're like, well, let me validate why. You know, Yarraville's a great area. Or Wyndham's a great area. Coochie's great, you know, whatever it is. So, yeah, it's really exciting just to put confidence back into people. So. No, it's good. I'm really enjoying it.

Yes. So it's fascinating, actually. I think, as I said, I think it's going to sharpen us up as we do more and more of them. And I think there'll definitely be some trickle down into the course material too, as we discover new things and correlate new things together. So it's really, really cool now, Jane.

And we'll share with you some of the people too.

I just wanted to show. I put a question in Facebook. Can I bring that up? I just wanted to. We have a. I stuck a poll in Facebook. If you didn't see it, I'm just putting it on the screen there now. So we're going to hold another Sydney workshop before the end of the year. And the question was we speak. A lot of people we've been speaking to are saying, you know, they might have, let's say, you know, a budget of over 500,000, for instance, but, you know, maybe below 900 or 800 or even 700. And they're just priced out of Sydney, so they're looking at other places. So one of the suggestions that a couple of people said, would you hold a Melbourne workshop in Sydney? So obviously they didn't have to fly down to Melbourne. So that was the poll I put in the Facebook group today just to see if anyone else was interested in that who was a Sydney sider who was interested in investing in Melbourne. Yep. So four so far, Jane. And I see you voted for a Melbourne workshop in Melbourne. Is that.

I could actually. Of course. But the only way I could actually put in a suggestion of somewhere else was actually vote for us. So there you go. I was like, oh, maybe we could do Melbourne again. I've got some thoughts on Melbourne.

Yeah. Yep. So any thoughts on that? Go on, please vote.

Yeah, well, let us know. Just type into the chat as well.

Yeah.

Somewhere that you can.

Yep. Now, Jane, you've got some news here. I've got another bit of show and tell you. Do you want me to bring that across?

Bring it over.

What are we looking at?

Well, I'm not sure because I can't see it. Oh, that's the back of my car. So. Packed my husband off yesterday to renovate in Sydney. So there's the sleeping bag. He's got a stretcher, too, which apparently is very noisy. So he's taken my son's.

The sleeping bags for your nosy.

No, the stretcher.

Oh, okay.

Every time you turn over. So it's like my son's kit from Cabaree, where, incidentally, they had 1700 cubs for four days. Who would take that on is just beyond me. But anyhow, they did. And so, yeah, he's packed up the car. And it's interesting when you, you know, you are putting all of your renovation stuff into one place so that you can not have to obviously buy. So he's taken off from Melbourne to Sydney and you've got the things that you always forget, like the buckets and the cleaning and the. Well, there's the vacuum cleaner and the extension cords and then there's the painting and then little things like that funny little tool. And I'm sure it's got a special name that you run the rubber into the side of. Screen fly screens.

Oh, yeah. Yep.

Like, I think we have five of them. Yeah. You're like, oh, I forgot. It's such a good buy. And even, like, you know, the metal syringe systems to have your elastic or your builder's bulb you know, that working. So there's all of those little things that you really have to think of rather than go, I'll just pop home and get it, or down to the garage. When you're traveling, you know, into space with your renovation kit. So, yeah, so. And there's the ladder, et cetera, and there's even a rake. So I'm not too sure what that was for, but he assured me it.

Was headed up the Hume in that. Did he?

Yeah, headed up the Hume. So renovation. So for those of you who may have been watching in the club this week, and I might just get you to pull up that Facebook page again, John, I have a unit in Kingsburg, as many of you who have been through my course have heard about my Kingsburg analysis. And there I am. Short term leasing is it for you? So I'm obviously having a bit of a chat with you there. But I did a Facebook live earlier this week with Mark Hodges from Masonettes. Now I had the opportunity of meeting Mark actually at an interesting event called Meet the Press where they pull together the producers of Today show and Current Affair and, you know, they give you the opportunity to talk to them about what you're doing and they decide how they're going to place you in their shows. So I met Mark and he has this really interesting business and it's kind of like, you know, we talk regularly about with people remote renovating, is it possible to buy in Brisbane and you know, live in Dubbo? And the answer is yes. And as some of you followed, you know, I last year renovated in Sydney from Melbourne. You know, FaceTime is a wonderful thing. But you know, this is the question about, well, what about short term leases? And this is what Masonette's was all about. And Mark had a really interesting experience where he had a property that wasn't renting and he thought, well, maybe I can short term lease it. And he furnished it and you know, he was getting an insane value for it. Oh, this is pretty good. And then one of the problems, and we were all aware of Airbnb, it's only been around for a few years, but there's over 200 short term lease platforms out there and stays, etc. They've been around for 20 years. Well, apparently one of the problems is if you're actually a lease or you put your property up on stays and Airbnb and five different other sites, and when it gets leased on one, the other platforms don't talk to each other, so it's still available on the others. And it can create issues. So Mark actually saw the opportunity. So he's got a platform that actually has 50 of the 200 platforms that integrate. So when one gets booked out, it goes replicates on the others. But he also manages the short term leasing, so he charges a management fee. And he has concierges in Sydney, Melbourne, Brisbane, and some regional areas as well. So this unit came up for rent and it been vacant for a couple of weeks. And we're getting a bit of feedback and that we needed to have a laundry, etc. And I had the good fortune to talk to Mark, sorry, at this conference and I wrote this masterclass and I was asking him about, well, how would I do this? I live in Melbourne, this property is in Sydney, you know, Airbnb. I thought, I'm gonna have to turn up every week or every second night and change the linen. It's like, no, let me explain to you. So this Facebook Live or this video that you can watch, and I see 254 people have watched it, you know, is really me exploring the opportunities of doing this for my unit. And as I said, I think we're going to have a slower growth period in the next few years, and I think there's going to be a lot of attention put on cash flow and how to improve your portfolio and your serviceability for when growth does come back and you want to start building your portfolio again or exercising some of the equity, et cetera, these kind of yield plays. Good option. So he shared a story about one of the guys who came to him. So he has this management business. And so I think it's 15% if you just want to be on two platforms, but if you. He charges 15%. But if you wanted to be on 20 platforms, it was 20%. So he had this gentleman in Rush Cutters Bay came to me and said, look, you know, I've been moved. I can't rent my place out. I'm off to Brisbane next week. You know, it's vacant, I don't know what to do. And the guy came in and he had it on for renting at 550 and he dropped it down to 520. It's like, you know, and Mark said, well, if you want, I'll take over the head lease. And so he paid him $500 a week. Mark went in and fixed it up, did a little bit of cosmetic improvements, spent, you know, $10,000 or $8,000 on furnishing the whole place out. And I rent it out for $1,300 a week. Okay, so there's a few opportunities. And I think Jody. I think we said Jodie's name there. Jody asked the question that she had looked at trying to do something similar, taking over head leases and furnish them. And it was funny because Todd and I did this in Sydney in 2002. So maybe we were the first Airbnbs, like 15 years ago. But we looked at this little rent, this little unit that Todd's going up to fix between tenancies this week and paint, etc. We renovated that and, oh, gosh, you probably remember the numbers better than me, John. But essentially, in what was it? It was like, I think we spent about $11,000 in about 10 days. It added, you know, we bought it for an insane amount of money. It was insane, as in low. We put in a low ball offer and I think we bought it for like 3:10. And it had. When we first looked at it, it was on the market for 410 and it was revalued at 450 straight up. So you know that. That kind of ways. And we're like, geez, we're pretty good at this. We could do this again. And then we're like, we don't really want to own, like, all these units everywhere. And so we thought we'd approach people and say, hey, we can renovate your unit for you, or we can take the head lease over. So we looked at actually maybe just renting a lease out and furnishing it ourselves. And being as low risk as I am, we wanted to have that risk minimized. So in case someone did use the toaster or the heater or something, got electrocuted, we were protected.

Yeah.

So we went to every insurance company in Australia and. And none of them are prepared to actually give insurance to someone who wasn't the owner of the property.

Pamela's just got a question about that. I'm curious to know how to take the head lease work or how the head lease works. And spending money. So obviously spending money on rental property.

Yes. And Mark actually took the whole cost of the furniture and some small cosmetic changes, so he covered that cost himself.

And what's the terminology of head lease? What other types of leases are there?

So head lease is kind of like if you can think of, like. So for instance, when we bought a house that we bought in 2006 in the Eastern suburbs in Sydney, there was difficulty in getting in some of the bedrooms because they were individually rented out and locked, but they did have a head lease. So he had actually rented the property at 480 a week from the owner and then he then as a little entrepreneur went out and rented out the rooms individually.

Okay, so we have full knowledge of the owner. Is that right or not?

I don't believe he had that at the time. And as, as you might recall from my, from our last call in September, this unit that's just become vacant, it was being leased by someone who was on leasing it. So we were leasing it to them at 580 and he was really leasing it out at 6:50 or something to the others. Yep, nice little profit and so. And that was without permission. Got it. But there's landlords who will do it. So you could go to the landlord and say, look, you know, I'm happy to take a 3,5 year lease at 500 bucks a week and I furnish it. I'm going to, you know, I'm going to sublet this or I'm going to make it an Airbnb. However, I'm going to have this insurance in place and these insurances now exist that didn't when we looked into it. So I'm going to take this insurance out etc etc and you know, mitigate some of these risks that were, that I wasn't prepared to take on 12 years ago.

Yeah, right.

So yes, it's really interesting. So Mark came and had a look at our property.

Pamela's got another one.

Who's that?

Insurance Jane, who's the insurer.

Oh. So Mark's negotiated this with two insurers. One is Westpac directly and it is definitely a short term lease insurance. It's not like he sent us the piece of paper and said do not tick holiday house tick short term lease. So there's really specific things around it. But he also had a broker who had a product and she was based in Queensland. I'm sorry, I don't know her name. It was something like MLG or something broking. But she also had a product that did it so that these, these do exist. So the good thing is that, and I was speaking to a guy yesterday and he was talking about this one of his students who had turned her house into like a semi boarding house and her ex boyfriend had this. Had. They were in a, like an associated mining town, like you know, one of the peripheral mining towns and not as heavily hit as the mining towns but you know, they had bought a four bedroom land and house build package. She bought one, he bought one. Yeah, they weren't renting them out. She went and you know, created these mini rooms and Rented it out hers out at you know she was getting like back up to $800 a week or something and she went to the boyfriend who couldn't ex boyfriend who couldn't rent his out and said I'll take the head lease for five years. And I went oh yeah, beauty mate, pay me 300 bucks a week. And she did and she's now renting that one out at $800 a week. So it's.

And got a bit of revenge into the deal.

Yeah, woman scorned and all. Excuse me, Glass of water?

Yep. Hey, just while you're doing that, a couple of questions there about the suburb dump for you service. So I'm just popping that into chat the link.

Oh good. And oh yeah and so I think that, so we did the numbers on this and I'm going to just. So he was saying to get the whole thing's around reviews and getting good reviews. So start cheaper than what you think. So here's some tips. Start cheaper than what you think. Please go and listen to the interview. It turns out he was driving whilst he was doing it. So you know, I take no responsibility. And he was saying, you know, let's just say $150 a week at night for seven nights and then take 85% of that. So you know, vacancy rates, etc. Now they then take. And I said 20% so 80%. So we're getting down from like $1,020 if you did it yourself down to around about 714 if, if they took on the management but then if you wanted to meet and greet service and what they found over the years is that you know, if there's someone who turns up with the keys, meets them, takes them through the property, shows them, you know, if it's a block of units, you know, shows them access and where the bins are and everything, you know, the local haunts are etc. Then there's a lot less likelihood of damage being done and they take care of it. So it's not a just a, you know, a lockbox. I'm letting myself into the property and yeah, you know, no care, no responsibility.

Yeah.

So they did that and so but that's $50 and then if you want and one of the things they also found. So Mark had actually had the issue when he had rented his property out between tenancies and they didn't know what tenancy it was and this is when it was a long term lease. Someone took the washing machine, stole it. So one of the things that they do is their team that comes in and cleans, actually takes the photos of everything. So very quickly. And apparently there's some issue with Airbnb and trying to guess things back. You have to claim it within before it's released. And obviously some of these places are turning around within 24 hours. So there's all those kind of things. But, you know, it's interesting. It was a really interesting exercise. So I looked at that and went, okay, so it's 50 bucks for the meet and greet and that's 40 bucks for the linen service. So that's, you know, another 90 off. So I'm down to 620 and I can release this for a long term at 580. And someone's not actually leasing this for the whole week. And maybe it's two or three changeovers in the week, then that's $90 each time. So for me, starting at the 150 and looking at that, I just went, oh, and on the weekends they charge more. Then I was kind of like, well, I don't think this, in this circumstance, I don't think this economically stacks up. Yeah. However, in. And this is an old, you know, 60s red brick eastern suburbs block of units, it is boring. Like, this is not a property that's, you know, water views or anything where you would be getting 250 or 300 a week. And it's a two bedroom, you know, boring little unit next to the university, next to the hospital, like all of my properties are. But, you know, so it'd be nice to get someone who takes it for three months, someone there or sabbatical, you know, as a guest lecturer, all of those kind of things. And I was talking to my husband tonight who's finished painting the lounge, and he today, and he was saying, look, I was thinking about this and we had the opportunity last weekend. So my husband, for those of you don't know, was in it, gave up work when he was 40 because of his property portfolio and not allowed to say the word retired in our house. But he pursues other interests and he's a very, very talented artist.

Sure is.

So he does photorealistic paintings and, you know, has entered the Archibald Moran, et cetera. Anyhow, when he gets bored, he does these gorgeous little sculptures on Perspex, three dimensional sculptures. And they're just his little, you know, funny little thing to keep him interested between these great commissions that he's done for his paintings. But they're insanely popular. So on Thursday night we went to the St. John's Art show and he came second. And on Friday night we went to the Albert Park Art show and you know one of the guys from the ngv, the National Gallery, Victorian Gallery selected him as the Small Sculpture Award. And then on Sunday we went to the Yarra Valley to you know very prestigious, these guys are world renowned sculpture sculptors to the Yearing Station exhibition and he was one of the few selected but wasn't a winner. And you know it was amazing that when we were in the Yarra Valley we stayed at this B and B and it was a Mad Men B and B in Healesville and they actually designed it based on the 50s madman. And so we had this cocktail bar and There was like 15 different types of gins and the whole day. Yeah, it was beautiful. And Todd was saying to me tonight I was thinking about how we could decorate this unit. We could go with the whole 60s look because it's got a whole 60s red look. So he's now coming up with ideas whilst he's spending too much time painting I think. But yeah, I think there's some really cute little quirky stuff that you can do as well. But it was a really interesting.

So all those prices are obviously Sydney prices and that'd change if you were Regional or Central coast, all that kind of thing I assume.

Yeah, absolutely. Well I mean I referred a couple of friends to Mark since then and he's looking at their properties in Dalesford. So they've got okay little huts in Dalesford so the prices are characteristic of where the demand is. It's all. It's just like you know, properties, government value and people want to be there.

How would you go about approaching a landlord do you think if you were, if you were wanting to get something like that up? Because I imagine that the agent would be a bit of a gatekeeper there if you're trying to get something like that.

Well this was Jody was saying when she asked Marcus question about in Brisbane. She's tried to approach the agents and the agents have said it's illegal. You know we can't because she's offered them a bit of a commission too because obviously they're going to lose a commission. Right.

Yeah.

If she manages. And then they said it's illegal and I do not.

It is illegal for them to take a commission. Yeah, that's for sure.

Yeah. And not declare it. So. But, but obviously if you went direct there's opportunity.

Yeah.

And I just think. And there was another lady slips her mind on at the time, I think her name is Lee. Lee. You Might be there right at the moment, but Lee has, yeah, Lee's in our group. She has a business where she does the same thing in Newcastle. Manages People's Airbnb's.

Okay.

So, you know, I think that, I think that there's some real interesting opportunities to look at. I think you need to mitigate your exposure. Like, you know, I wouldn't be rushing out and spending $20,000 on furniture and decorating to your own tastes, you know, but I think there could be some opportunities. And we know we've had people in the ultimate guide of renovation who've rented out their couch at 40 bucks a night whilst they've been building up their deposit for the next property. So, you know, it's, it's an interesting, it's an interesting phenomenon. But yes, so that's, that's something that I've been playing around with.

That's very interesting.

I think, I think that, oh my goodness, you know, I'm solo parenting at the moment. Anyone who's got kids, you know, back to school and you get through the first couple of weeks and Todd taken off to this renovation. I've negotiated with my 9 year old son that at 8:30 he's in bed, but I can still hear the TV on. So I think by the time we get off this call at 9:30, we're gonna have a very, very tired little boy and angry mother. But yeah, you know, we've got, I think there's, I think we're going into a new phase and I've been reading a few reports and I might bring them up a little bit later if, if people get too shy and won't ask questions. But I think there's some real interesting times ahead and looking at some alternative ways, you know, low risk ways to capitalise on those is a good way to go.

Yeah, definitely.

That's my thoughts.

Good.

So shall we move on?

Yes. I got a couple questions, so we better do the housekeeping.

Sure. Well, basically, if you experience any problems hearing us, you probably are in silence for the last 40 minutes, but please type questions in if you can or you can call in from the phone. So next time, if you're on and you're having some trouble, you're listening to this and you want to be on live, you can call in from the phone or from the computer. So if you don't have a microphone that works. And we've had people on buses listening and, you know, being driven to Geelong listening on the iPad. So it's a very flexible format. You can ring in by mobile Skype landline. So you know that's how you can sort out your audio. When you do have a question, please raise your hand. Just press the little hand icon button in the side menu. And maybe there's some of you there who have an experience with short term leasing that you want to share with us this evening. So I think there's probably some good and some bad about it, but it's definitely something interesting. So you know it's not just asking a question. Please make comments. And if you hear someone ask a question, you don't think that we've fully answered it or you might have a solution or something better, please also jump right in. We're part of a community and we're all here to learn. If you click on the little hand button, that's going to notify me that you have a question. And when it is your turn, John will unmute you and you'll hear a little word that says you're unmuted. Speak now. And you can also type in your questions if you want into the question chat box at the bottom of the control panel. And if we do have time, we will get to those. But I do really love having a bit of a chat to be honest. So preference does goes to those have a microphone and can have a chat because I just think it, I don't know, it's a bit more engaging and I don't often get the full grasp of what your question is if you just type it in. So if I can ask you some further follow up questions, that'd be great. And once again, there's no such thing as a silly question. You know, we're here to help and we all started somewhere and sometimes we forget what we didn't know when we were starting off as well. And look, these calls guys are not tech support calls. We have an incredible customer happiness manager in Diana and our tech team that are there to help you. So please send an email to supportourpropertysuccess.com and they will get back to you as soon as possible. And nothing else from me. John, let's hand over and see if anyone's got a question.

All right, well there's been a couple of questions in chat, so I'll just grab those first. Firstly, one from David. Hi guys, can you please comment on the concept of renovating interstate and managing the process yourself from a distance and whether you think this is feasible. Thanks, David.

Look, David, I think it is feasible. As I said, I did this last year, now I was in Melbourne and the property was in Sydney. And I did want to have a new kitchen put in, new flooring in the kitchen, new carpeting and painting. And it turned out I also needed to have some roofing done as well. So essentially I used my reno safe card and I had purchased some of the products from like Carpet Core, where there was a national distributor, for instance, and from Harvey Norman Commercial. So I got. I saved like $1,800 off the kitchen package there by using them. And I had them just delivered to the property. And I had the agent, the property management agent actually give access to different trades for quotes and for measuring up. And I think this is a really unknown service of your property managers. And the more property managers I speak to, they actually have, some of them have someone on staff who can actually manage the renovation for you as a complimentary thing. Otherwise you might be spending somewhere between 10 to 15% for a project manager managing it for you.

Because every real estate agent has a group of tradies, don't they? Like every. I mean, I used to work with, when I was a tradie, like 20 years ago, I used to work with different real estate agents that I was just their go to kind of plaster or solid plasterer. And every, you know, every real estate agent has their circle of tradies that they use. So if you can, yeah, if you can leverage. Yeah, your property manager do that, that task, you know, that project management for you. That's great. Free project management.

Absolutely. And you know, a lot of them, the ones that I've spoken to recently, they've. There's someone on staff that always seems to have a bit of a flair for that kind of thing and they kind of like getting involved. But the way that I've had my projects, my sorry, rental managers involved is, you know, three quotes for carpet, for instance, or, you know, just making sure that someone's available there to let things in. And one of the things I've had trades do is just put a lockbox on the front with a key in it. So the trades that are there actually then have access to that. So the property manager is helping me getting the quotes done. And you know, I might be using one of their trades and then two others to get the quotes. And I mean, I have trusty Lenny, my builder in eastern suburbs, Sydney, and Lenny, I engaged him to measure up the kitchen and put the kitchen in. And you know, I had, I chose the tiles down here in Bunnings and I had the local Bunnings store deliver them from Sydney. So David, it is possible. You know, it turned out that Lenny noticed that we needed to have some improvements on the roof and they just happened to be the guy next door doing some roofing and he said, hey mate, you want to come over and do a quote? Olmeto gave us a quote and which kind of worked and, and he used to send me videos at the end of every day of where the work was up to and every now and then he'd, you know, throw some music behind it. It's Raining Men would be playing and I get a new update on my roof. But, you know, so it's, it does sound scary and difficult and I am a little bit more of a control freak than most with this. I think John would agree. But I only went up right at the end to sign off on all the work. I managed the entire rest of the process.

I was speaking to you at that point too, weren't they?

Yeah, well, not seeing the property for three years, going through a full renovation and walking into the nice end result was quite nice. So it is possible you could engage a project manager if you did have a builder on side. They usually bring their trades in, might be a little bit more expensive, but they manage that process for you and you know, obviously project managing itself. Yourself, a project on site, you have the luxury of, you know, just making sure that when the tiler hasn't fully finished the job, at the end of the day you can give the heads up to the kitchen guy not to turn up first thing in the morning and you know, you can, you can play with those kind of differences yourself. But yeah, you know.

Lenny on the.

Tools was it shipping, became a builder. Yeah, yeah, yeah.

So that's a good thing too where you've got, if, if with those type of renovations, if you've got a, a builder that's still on the tools, it's going to be, you know, you're getting a day's work out of a carpenter as well as him organizing everything else, which doesn't work for bigger developments but definitely works for those smaller renovations, small little cosmetics.

So yeah, and I mean, you know, painting the property and doing the carpet and putting a kitchen in and you know that it was a short term kind of renovation and we did really well out of it. You know, I had the valuer come in beforehand and it was valued at 820 and we'd spent 33,000 on it, including holding costs and it was valued at 920 by the same valuer, you know, weeks later. So we added at least A dollar for every, you know, a couple of dollars. $3 for every dollar spent. So. And that, you know, that we're talking weeks. We're not talking, like, growth.

Growth.

Hid my renovating mistakes or anything. And that was, you know, paying. Not paying a premium on having a project manager either, so. So it is possible, David, you know, with confidence, finding the right team, speaking to people in the. Your property Success Club about trades they use in the area. Get recommendations. Get recommendations from your property manager and. Yeah, start with your property manager and see if they can help you out.

Yeah, can't beat those recommendations. Or you can just jump in the car like Todd did. I've done that as well. Packed up, bought everything in Melbourne, packed up the van and driven to New South Wales and said mine was a little bit more packed than Todd. So he's obviously doing it better than I was because I could barely.

I got it halfway through. Halfway through the packing.

Okay, right. Because I remember driving up the Hume and there was barely enough room for my feet to get to the pedals, you know, had the whole thing in the front of the van stacked with stuff, kitchens and all sorts.

I imagine there's. What would you call them? Imagine there's a way to renovate without taking your stretcher and your sleeping bag for a week and sleeping in the property as well. There's some property. There's probably some people who are Airbnb, you know, next door.

I just went to the pub.

Pub, yeah. Cracking the whip. You know, it's gotta work around the clock.

I know I did.

Well, that's what he does.

Yeah, definitely. You want to do that if you're. For a while, you get it over and done with. Now, Pamela's got a question for you. Jane. What is the outlook for the property market in 2018?

Pamela, I'm so glad you asked. I have been studying this and I've been reading the reports. And. And I think the easy answer to this, and maybe the cheaty answer, I'm not sure about that, is that as we know, every single market is different. So there is not one market. And I think that the importance of that is understanding a why you're buying, where you want to buy, but and what your strategy is, and potentially being geographically agnostic, to target the best area for you to purchase in. So I guess what I mean by that. And I might just grab the page off you.

No worries. Come here.

See if I can.

All yours.

Sure. Okay. So this is a report that came out just yesterday. So I've been watching this over the years. And this is QBE's housing report. So let me just move this. Just make sure you can see my screen there. Can you guys?

We're seeing it there.

Yeah. Okay, so scale up so you can see the top of this. So this is the QBE Australian housing report. Now, they put this out and it covers three years. Now, their information comes from BIS shrapnel, a lot of it, which are usually very conservative. And I remember that I was looking at the BIS shrapnel. Gosh, I can't remember the years. Maybe 2009, I was looking at this report and they were saying interest rates are going to go up to nine and a half percent, and they're at 7.5% at the time and having as many properties as we had and exposure, obviously to the mortgage market. I was like, oh, if all of my mortgages go to 8.5%, I'm in a bit of trouble. So I locked in all of my or most of my rates at like, I think it's 8%. And of course, the market dropped and it went to like, you know, 5%, 5 and a half percent. I was quite happy to pay the 8% because I had mitigated, it went over. I would have had to sell. So I guess some of the interesting things around what I'm reading in this report is, Pamela, every market is different. The cash rate they're talking about by 2020, so we're talking three, two and a half years down the track, they're talking about it just being a little bit higher, so only going up by 0.25. So that's one interest rate rise in the next two and a half years. So this is interesting. They're talking about employment growth going down. So this is constraint on the economy. And to some extent, there's been some discussion around the fact that, that we usually have a market cycle. Sydney moves, Melbourne moves, Brisbane moves. And Brisbane hasn't had the growth that Sydney and Melbourne have had. And I think a lot of that has come down to the fact that it hasn't had the job growth. There's been redundancies up there. Obviously we're back off the construction phase of the mining industry as well. Immigration's going up. Melbourne at the moment, 1800 people a week moved to Melbourne. 1600 people moved a week to Sydney. And by 2036, census is saying that Melbourne's going to be the biggest capital city in Australia. Inflation's going up, we've got population up. Housing affordability is going to come down. A bit. But here's, I guess, the interesting thing. This is the forecast on borrowing rates and this is the first time we've ever seen the fact that they've separated the standard variable to the interest only owner occupied to the investor rate to the investor interest only rate. So we're really seeing that differential of up to a 1% difference between homeowners paying principal interest to investors paying interest only. And I think one of the things that we're going to see, and as a bit of a disclaimer to anything that I'm reading in all of these reports, is that we possibly there's a lot of people I'm speaking to who in my mortgage business where they're now looking a year or two ahead going, we're going to be going to principal and interest. Our 5 year or 10 year interest only period is up. What's that going to look like for me? I can't afford an extra $800 a month. And so they're actively looking now at saying, what should I be doing? And I think there's going to be some price growth in some markets, but there might also be some opportunities to buy when people can't afford to hold onto the properties just because those loans are going to principal and interest. They can sell.

Yeah.

They can. And a lot of people at the moment, we're doing serviceability for people, you know, different lenders, calculators, and on their existing loans, existing lenders, they can't loan this year that the lender gave them last year based on the changes in the calculators that the banks are using.

Okay.

So, and I read a report today from a mortgage, large mortgage brokerage business who said, you know, 80% of our loans always settled and now we're at 50%. And there was some discussion on a mortgage broking forum that I'm a part of that was saying that. And one gentleman said in the last three months, every single loan that he's put to westpac has been declined the first two times and he's fought for them to get through and approve the third time. So we know the assessors are getting tougher. We know Lisa and I are talking to banks every day and arguing cases on behalf of our customers. So we know that you have to have it right the first time and put it in. And there's silly little things. We're getting people looking at assessors, looking at your bank statements going, you know, for the last two Fridays in a row, they were at a club taking money out. Do they have a gambling problem, you know, so. And they want us to have conversations with people down to what their living expenses are. And we're having these conversations. But it can be quite intrusive and personal in the fact that we've got assessors saying to us, well, they're newly married. How long before they're having children? I mean, you know, some people can't have children, some people elect not to have children, some people are planning to have children and just don't think about telling the mortgage broker about it, you know, so it's just we're seeing that kind of change. So Pamela, I think there's the. What's going to happen? I know I'm like wafting on here, but I think there's a lot of factors going on and I think we're not going to see the lenders pull back with these restrictions that have been put on them. Having said that, post GFC we saw the banks like AMP and Adelaide were the first to pull back the LBRs and get out of investor lending. They were the first to do it again. They all came back to 90, 95% lends. We know it comes around and goes around. I just think this time with the APRA stepping into making these changes, rather than banks self imposing it, it might be a bit harder for those to come back. So I think we will get people who have trouble in keeping their loans when they become principal and interest. And if you do think things are going to get a bit tougher, speak to your broker about maybe trying to get a reassessment now under interest only. Yeah, there's been a lot of talk about the oversupply of units in Brisbane and Melbourne. But I'm seeing more and more reports saying due to, you know, people affordability issues, etc. Issues, people are taking up those units. So I don't think it is as bad as what people are talking about in oversupply. But this is the interesting tab. Finally get your question which is, you know, what's actually happening in the different states? So this is, you know, the current position and this is the growth over the last three years or four years that has been in the different states. And as you can see, you know, Victoria's outperformed New South Wales and we can also look down here and what they're predicting.

So that's 10 years. Is that what that is? Or is it.

That was four. That's four years. So yeah, yeah.

Okay.

So here we've got what they're predicting is going to be the growth in house Prices in the next couple of years to 2020. And we see now, you know, according to BIA Shrapnel there's going to be you know, 1.1 million. The 1.1 million dollar median house now is probably going to be about the same in two years time. However will there be the same amount on the market and will people, you know, hold onto that stock and is now the time to buy? Because we've got more properties on the market in Sydney than have been for a lot, a lot long period of time. So there's people kind of capitalizing on the fact that that homes being worth more now than it has ever been worth and potentially ever will again if there's some price drops. So we're seeing a flood on the market too. So there's more activity at the moment. So will there be activity in two or three years time if you kind of hold off It's a bit of a risk. So interesting what they're talking about in Sydney, Melbourne 10%. They're talking about a forecast of the prices going up still and in Brisbane and in Perth. So you know, once again I think there's a lot of median house prices 850 in Melbourne. And you know I've seen in other reports it's similar to what the unit price is in Sydney, you know and you know we look at the unit price in Melbourne's equivalent to the house price in Brisbane. So you know we're kind of looking at the fact that I think with all the population changes and immigration changes and infrastructure changes and you know there's more land available, we can spread out a bit more in Melbourne. I think that we're going to see Melbourne, you know, in the next 10 years time overtake Sydney's median price and it will once again continue to have that growth characteristic, you know, up until that period of time. So I think there's a lot of legs to be had in the Sydney market and buying in now if you wanted to. Even though this predictions the prices won't change now this is one lot of predictions. The other lot of predictions and Metro too, isn't it?

It's metro wide so we're not taking into account markets within markets yet.

Exactly. And you look at the Brisbane workshops we did Last year, John, 2.3% was the median growth in Brisbane and we chose suburbs. I think we came up with eight suburbs. Six of them were over 4% and one was 9%. So we know there's pockets in pockets and we know that you can do that. So, you know, nice to see for those poor people in Perth that have had that huge drop over the last year that they can make some money back.

Yeah.

I think what's also very interesting is this complete outperformer here is Canberra. And I just do not pretend to even understand the Canberra market. I think, you know, it is so susceptible to government changes and where they get contractors or where they sack their staff. And, you know, there's been a very, a huge amount of units being built down in Canberra. And I think that's why we've seen some of these price drops as well. But, you know, this is an incredible story, Hobart, from the affordability point of view, I don't think economically it's kind of like buying llamas. You buy a llama to sell to the next guy who wants to buy a llama because he heard that people buy llamas for lots of money. I don't know, I think Hobart's a bit of a llama. But, you know, it could be a short term play for people. I do love Tassie.

What's going on in Adelaide?

Adelaide. I can't ever really pick Adelaide. You know, they close down some their big car factories and they're kind of a manufacturing hub and a hub for the big mines, you know, the biggest uranium mines, deposits in the world, you know, north of Adelaide. But you turn around and within 5K's of Adelaide. And we've done some analysis for people, haven't we, John, in Adelaide? And we're talking at suburbs sometimes that have like four or five hundred residences in them. It's so hard to do dot maps when there's, you know, there's such small suburbs. But, you know, obviously the suburbs close to the city have really outperformed. There's some beautiful sandstone properties that, you know, have done really well. We talked to our good mate, Peter Kalisis. Property professor. Yep. He buys everything in Adelaide and develops and. Yeah, and. And he knows that area. I didn't realize he's a buyer's agent. He's also done some buyer's agent. Tell him I sent you. But yeah, I think Adelaide, it's almost like from an affordability point of view, everyone's gone through the Sydney move, Melbourne move, Brisbane kind of move. Now it's Adelaide's turn. And I've just. The economic drivers. Yeah, no, it just, it's. I don't know, I think if you want to.

Can I just put a plug in for a video? You did, Jane, if you go to YouTube, type in your Property success. Have a look at. It's called the Great Property Shootout and it's got Peter Kolesos, Ben from the Property Couch, Ben Kingsley, and if he is from Money magazine's the host. Who else was there? Jane was. It was the three of you, wasn't it? Yep.

Thank you.

And it's very, very funny, especially the, the Adelaide kind of banter that goes on.

Poor Adelaide. But you know, I think there's, you know, it's horses for courses. If I had $480,000, would I be buying an Adelaide or would I be looking at maybe one of the commuter cities to Melbourne, you know, Geelong, Ballarat? I'd be really tempted to be following the long term growth characteristics. So, you know, I think. And that's me. So that may not be you. I'm not here to give you advice. I'm here to give you some direction and information that you can take under your wing and apply to your circumstances. But I think we're going through a really new change and John and I were doing some thoughts today about how we can best serve our community in the next couple of years to really assist you in building your portfolio in a strategic way that enables you to do everything you want your portfolio to be able to achieve for you, you know, going forward. And I think, you know, there's some really interesting opportunities. And obviously, you know, we're, we're investigating like the short term leasing, we're investigating those ourselves so that we can bring those to you.

Yeah, that name is the Great Property Shootout. If you go to, if you type in your property success, you'll find our channel on YouTube. And then if you look out, if you just scroll through the videos there, you'll see it. It's got a, it's got a couple of guns on the, on the, on the image from Emory for shootout.

So I mean, you know, you look at, you know, 17 years here, 17 years of, you know, back in 2000, if anyone said to you, you know, the median house price in Sydney is going to be a million bucks, you just like really, you know, you're having to lend. But the reality is that, you know, there might be some years of going backwards a little and there might be some great leaps forward, but, you know, where people need to live and they need to work, they need to be housed and if they can't afford it themselves, they're definitely going to be looking this interesting. Back in 2000, the unit price was 311,000 and the house price is 308 in Sydney. So I think guys just Google the QBE Australian housing report outlook, I think it's really interesting. And our good mate Louis Christopher as well over at SQM Research, he's had some really interesting reports. His boom and bust report came out last week as well and you know he's made some recommendations around what he believes the growth is going to be predicted up to 8% for Melbourne. Basically the predictions he's pretty, you know, it's one of the reasons we go to SQM and buy their data for our suburbs selector software and our dump view algorithmic solution because you know, we know that he's got a lot of rigor around what he does and his prediction is still growth ahead. And we're talking about growth coming back to maybe 5 to 7%. If you think about the Rule of 72, my little calculator, 72 Rule of 72 which is, you know, divide the capital growth by 72 by the capital growth. So if you think you could get 7% it's going to take you 10.3 years for your property to double in value. If you think that you can get 5% it's going to take 14 years and if you think you can get 10% then it's only going to take 7 years. So this is why, you know, just a small amount of growth and we're talking cumulative growth too at that period of time small amount of growth is going to make a big difference for you.

And I was just reminded of something there too Jane, with we're doing, when we were doing one of the workshops in Sydney someone said with one of the predictions that come up on the shortlist that you know, last year that suburb only did 3, 3 point something percent. How do you expect it to, you know, be a high performing suburb next year? And we, when we went back and we looked at and it had, it had fulfilled our prediction. But that thing there of you're not looking for the suburb that's already done the growth. Obviously you want to see that it's had some growth. You don't want to be a total underperformer because there's probably something wrong with it.

You want to be an outlier.

Yeah, that's right. The idea is you want to catch it before it has the growth, not afterwards.

So I still think you're going to see a lot of media around the fact that they're is going to be a subdued time ahead. And I think to some degree that's right. But I think the very savvy investors and I think there's the savvy buyers are going to be able to take opportunity out of this. So I really think that, that, you know, it all comes down to location again and obviously our trident strategy. Buy below the market and when there's confusion, there's an opportunity for, for doing that and buying with the renovation in mind. So you can add the equity and doing that in the long term and buying with the growth. With the growth thing. But I think there's going to be a real focus in the next couple of years on yield and people manufacturing yield. And obviously you can do that through renovation, push the rent up. You can do that through multiple occupancy. And we're also investigating, which we might talk about next month, John, another opportunity for people to do multiple occupancy or the short term leasing. So, you know, there's a number of ways that people can do that still in a low risk, you know, not going to developments and you know, or high risk maybe flipping strategy. But I think that yield is going to push up their servicing so that when the banks do come back to their senses, we will be able to borrow again.

It's calmed down a bit. Yeah. Yep, that's right. Anne's got a question. Hi, Janet. John, what's your opinion on buying townhouses in Melbourne?

I think if you said townhouses, I would say find the area. Yeah, it's really specific to the area. Like if you're buying it a townhouse in Dubbo, then it may not be the typical property for the area and you might be, you know, left with a bit of a property you can't rent and no one wants to buy off you if you do need to exit it. But in Melbourne and Sydney, I think, you know, it's kind of like. What do you call it, John, the infill that's going on in so much.

That 2050 plans and all that kind of stuff of where are we going to house all this population? So it's all the infill development along infrastructure lines.

Yeah.

And I'm seeing more and more the fact that people are happy to forego the big backyard and they're. I mean, I guess if you think technically I'm in a townhouse and you know, we have a little paved area.

Your one was built in 1860 though.

One of the first townhouses maybe, but you know, a terrace. But, you know, it's. I think there's. It reminds me often, I mean, we have more space than we need and most families have. But, you know, I know that, you know, when we go and stay in the one bedroom units or whatever, we're in a family of three. We could go back to that if we had to and I think, and be quite comfortable in downsizing to that as a family. And I, and I think that we just, you know, Australia has the biggest sized properties, houses in the world backed up to New Zealand. Australia, first New Zealand and then America. So, you know, there's. We have kind of gone to the big McMansions to some degree and I don't think we necessarily need that. So in Melbourne, within, I'd say 15Ks of the CBD, townhouses really starting to, you know, just being an acceptable way of living. So I don't think there's, you know, I don't think it's a large risk in taking that up.

Yep. I think the other thing I always see you do, Jane, is when you, when you're looking at what the percentage of dwelling type is. So you always want to see that there is precedent. So there is actually a market there, which is kind of the, the golden rule there.

Exactly.

Which you can see in census for free.

Exactly. That's what I was going to jump into. But I was going to just jump into the suburbs like the software and let me just pull this up. But just say, you know, we've got a breakdown in the software of, you know, townhouses and houses and units, but per suburb. So you can actually, you can actually have a look at how acceptable that is. And you know, it's nice We've got the 2016 census data now, but, you know. Yeah. So we're not playing with 2011 anymore.

I was just going to add my 2 cents worth is the. What we found when we were developing the last couple of years. Years is townhouses can also be in demand from downsizers. So you get suburbs that really. There's not a lot of options in terms of housing stock for downsizers that are coming from big homes that they might have lived in for ages in the old established suburbs. And then they've really got nowhere to go apart from a single terrace or a, or a townhouse or into some kind of shared, you know, shared living, you know, so. Yeah, that's often one of the drivers, the demographic drivers for that.

Yeah. And I think the interesting thing about this also is there's, if you remember the podcast that we did, John, with Kim Kiyosaki.

Yep.

And you know, that kind of man's not a financial plan. And you know, 55 or 60% of marriages end in divorce. And within the first year after marriage, women's income standard of living reduces by 75%. There seems to be. I mean, it might be subject to the later in life, marrying, getting married or whatever, but there seems to be a lot more. And I know that we have a lot of ladies that we've spoken to recently who are single and my age are a little bit older. How old am I? 47 next month. So who are single. And they're very much along the lines of, you know, I've got to get this right myself. And I'm happy to live in a safe and secure unit or small townhouse. So I think we're going to see some demographic changes there, too.

Yep.

So this is just an example I just want to show Pamela, wasn't it? So I'm just looking at Belfield in Melbourne here, but, you know, in the suburbs, like the software and the ultimate guide to renovation. The number of houses, the number of semis, the number of units. So I wouldn't be looking at a unit in this small suburb because there's only like four out of a total of 700. But, you know, there seems to be, you know, whatever that is, 179 by about 560. So it'd be about 30% of these are units, semis. So it's something not to, you know, to.

It's a decent, decent number. 30%.

Yeah. There you go. That was the answer for that question, John.

Yep. Okay, what else have we got here now? We've got a big question coming up now. Is anyone. Would anyone like to actually have a chat? Oh, there we go. Lorraine Ripper. Let's unmute. Lorraine.

Lorraine. We love chatting to Lorraine.

There you go. Hey, Lorraine.

Hello.

How are you guys?

Good.

Hey, great. How are you going? Good, good.

Still looking missing out on peeps.

How's the Central coast? Is it completely gone insane?

Booming, booming, booming. Going crazy. Yeah. Selling very quickly, you know, very quickly. Lots of competition. Prices are going up. Up.

Yeah. Okay, that's good. I was looking the other day was like median of 750 in the Central.

Coast, maybe down the other end of the coast, you know, down near your Minor and Evoker and all those.

Yeah.

Not so much up our way, but, you know.

Sorry, tell me, so you've been.

What.

What have you been looking at? And since you've been looking, what have the prices?

Well, we've been looking for the Renault on Flip still, and we're finding them, but, you know, the owner occupiers have got more money than us to Spend so you know, they're offering higher prices so you know, just keep on missing out. And you know, when I was close I should have spent the extra few thousand and got it and yeah, I didn't.

So that's just the way it goes.

But you know, I was just ringing up, you know, talking now because the data that you've got on your, your system there that you just showed on the, on the call, how up to date do you change your data? You know, as in like how up to date is it?

Actually John, I might take the screen back again if that's okay.

Sure.

Yep. I'm just going to show you a little hack here, Lorraine.

You're gonna. I know what you're gonna. Yep. So you had told you not to muck around with this and here you are showing it to her.

I know, I know. This is just for those select few on the call and few that were going to watch this for the next 10 years until this little hack is lost. So I'm looking at Newcastle here. So obviously we've got the major key capital cities and regional. And so I've got the purchase price in here and I've gone down to 60% so you know, around about $300,000 up to 770. Now I've put in here in 180 kilometers from Newcastle. And what comes up at this stage that we have in here is we're actually pulling up some of the central coast areas as well. So you're going to get all the way out. You're going to get from the scone all the way down to some of the Gosford areas. So you can grab some of that details here, Maitland, etc. So until that little, what do you call it, John? Glitch, glitch is fixed. This is my workaround.

I thought you were going to show the actual backend API that you were.

Told not to play with. I know.

To answer your question, Lorraine, it's updated every month automatically from SQM research and the, and the.

So by the 18th of the month you will find everything's updated 18th of every month.

And the demographic information is the latest we're going to get for the next probably three and a half years I'd say.

Okay, the demographic information. So that's the, you know, the percentage of families and owner occupiers and typical property and all of that kind of information is straight from census. The one caveat on that is the income data. So the income data is from. And I can show you and group this up for you. So you can have a look. But the income data is actually from census. I don't think is that, you know, what would I say?

Accurate.

Yeah, I'm going with accurate. Good answer. So if you come down here to this, I'm just going to show you where it is so you can have a look. So this is on sensors here. So it's got here the family income and it's got here the household income and then the personal income. And then when you actually go through and say, well how do you actually calculate this total personal income data? What they've done is they've actually gone through and they've done estimates on some of the ATO data but they've also got. This is what they actually asked people about how much they earn and it's like, you know, oh yeah, add in the rent as well and add in your allowances and add all these different things in. And you know, I know as a mortgage broker looking at people's fact finders, when they say, you know, we earn between 12, 50 and $1,500 a week and then you have a look at the pay slips, there's usually a lot of difference here. So this here in census is a bit of a. Yeah, you do it once every couple of years. It's a tick and flick. So the only caveat on the information is the income information comes straight from the ATO and that ATO only reports their information 18 months behind. So the 2014, 2015 end information is what's in there at the moment. So you will find that that is very different to what is in the census because it is more accurate in my opinion and up to date. So when we get through. So let's just go somewhere. Hawke's Bay. Where's somewhere that looks central Coastish Train.

Valley Bay, Trumhaven.

Camel.

They're all.

Col Point.

Col Point's Newcastle.

Yep. Get a little bit Dungogs. And West Eldersley. No, no, Etalong Beach.

That's down south and that's expensive.

Further up. Gateshead. No, close, close, close. Gorikin. Gosford. Yep.

Gorakhan.

Okay, let's go. Goricon. 7:30. So this is where. So we've got these neighboring suburbs here. Wow. Two million Erina million. Insane. So 71% renting. Little interesting. So this is where you're going to get that kind of demographic information. So this is the census kind of, you know, data that we pull through the public housing etc. This average income, weekly income, that's straight from the ATO. But the rest of the data, the number of properties and dwellings and all these characteristics of demographics.

Pretty good figure for. The. Oh, that's the rent. What's the median price again?

730.

Okay. Yep.

Lots of units in central Gosford.

Yeah, there is.

And I think we're at 71% renters, so. But yeah, so that information is updated, will be through on 18th of every month. And yeah, the demographic stuff doesn't change until 2020.

Okay, can I just ask one other quick question?

Sure.

Okay.

For instance, if I don't have any luck in the next month or so, and I was going to look further away to do a Renault and a flip, like, I don't know, maybe your data here is good enough. But I was thinking of buying a report and I mean, you all know Terry Rider, and I was looking at the predictions report because it sort of tells you what areas are going, you know, having more sales, you know, increased sales, etc. Yep. And I don't want to waste my money either, but Jane, you know what I mean?

Like, are they worth it or. Yeah, I think his report came out yesterday, the predictions report that he's promoting. And I mean, I purchased his reports for the workshops and obviously for our done for you clients because we want to get as many different experts opinions as possible. So, you know, Residex predictions report, you know, writer prediction support, boom and bust. Even location score. And we, Ben Kingsley and Bryce came to our offices for this week, Monday, it's been a long week already. And they were, we were sharing with them some of the things that we were doing that they wanted to implement and they wanted to show us the location score and what they're doing with that. And they've got. I don't know if you've seen that. Have you seen the location score?

That's pretty cool too.

So let me just pull that up. But they've got. And it's pretty fair pricing as well.

Terry's really great on infrastructure, Lorraine. He's got great. He does lots and lots of research.

This is, this is interesting. This is kind of based on Jeremy Shepherd's DSR score. So it doesn't go into like the 50 filters that he uses, but it goes into like eight filters. So if we just looked at New South Wales.

So you're in, you've got a subscription here, haven't you, Jane? Just for people.

I mean, I'm in the subscription. Right. So, Okay, so this is the top 250 suburbs, you know, kind of report.

Yeah.

And so basically what it goes through you can go through, you know, these top kind of suburbs, etc. So we've made a suggestion that he puts in the median price here so we don't waste our time going through all of these and Wurongo Heights, etc. So Engadine, for instance, we might pull up. But what's interesting here is, you know, this is all around using a number of filters to look at predicted growth. And John, what we might do when we put this call up later is we'll put a link to this to location school, but typical value reliability. So you want to make sure if it's at 50%, you know, 50, 50, you're not really interested. But we're looking at somewhere that's between excellent and good. And basically they're saying all of Australia is at 58 and they're at 74. And I mean, honestly, you can find this data yourself like anything. It's just about having the time and inclination and making sure you're getting the right information. Yeah, yeah. So auction rates are going down days on markets going down, percentage stock on markets coming up. So you can start looking at this. The percentage of renters, online searches has deteriorated in the last two years. You know, vendor discounting has gone up, yield vacancy. And we actually had an interesting talk around the clearance rate, didn't we, John? And we're talking about, you know, using clearance rate as a measure of what's happening. And Ben Kingsley is like, if it's not Sydney and Brisbane, it's Sydney and Melbourne where they do actually have auctions. There's no point. Regional areas and Brisbane, you know, they're just not auction savvy. So I keep reading about people saying clearance rate is the number one measure, but hardly any. There's only two markets in Australia that always have auctions as a predominant way of selling. So it's nice for those markets, but it's not like a be all and end all. So the Terry Rider reports.

Let me pull one up.

I don't actually have the predictions report at the moment. Let me just think what I was.

Just going to say. Well, you're searching. There is. We love all those reports is what we're getting at.

But we buy them all.

Yeah, basically we feed them all into the software and then apply the criteria. So if it hasn't got, if it's in the report and it still hasn't got 30% renters or if it, you know, hasn't got enough sales and all of that criteria that you've done in the Ultimate Guide, then It's out, it doesn't make it through. But we kind of look at them at the same stage as we're looking at all the results from the dot map because sometimes we'll pull some one increment suburbs through from the dot map just because we can see a nice pattern kind of there. Ideally we're trying to pull the two increment ones through for the. And by two increment if you haven't done a dot map, I'm, I'm meaning we're using different colored dots to represent the average 10 year capital growth. So it might be the difference between a 5% 10 year capital growth and a 7% capital growth. So that's a 2 incremental. So we'll pull all those in the reports and the dot map stuff and then plug it into the suburb selector software and then put our criteria to it. So we don't really, we don't really care where it comes from because we know it's going to have a really thorough kind of process of elimination once it gets in there.

We know every expert has their own way of doing things. So rather than us trying to pretend we are the experts in everything, I'm happy and you know we have good relationships and we with all of the data providers and for us it's about giving our community the best possible information rather than pretending that we know everything ourselves. So this is the 2016 prediction report. So if you haven't seen it, I want you to be able to see what you would be buying. So you can see it's a 70 page report. The way the predictions work based on these two fundamentals, sales volumes are better way to chart. So he's always looking at sales volumes over growth of median prices and he's looking at rising sales volumes as well. So he's got a methodology. So locations where sales activities rising likely to have price increases where it's falling stagnation. So when you buy the report, once again guys, it's 2016 so don't get all excited about. So this is the top 30 suburbs and towns with rising property markets. So you're going to get basically this with you know, there's a rising number of sales he then goes through and he looks at, you know, breaks the numbers down in different formats. So let me just go down here. So the consistent markets are the top 50 kind of consistent markets that have had, you know, they're sitting in the middle of the market, blah blah, blah. You know they're kind of nothing has really changed but they've had some good growth. So it goes to that. So this is kind of, you know, it's, it gives you a measure of information. It's, it's not going to be the holy grail of here it all is. And I just need to go and buy in this section, buy the report.

And you know, buy in the top suburb on the list. But even Johnny would say that. Didn't he used to say the, the, the report that they do that he likes the least, which he produced and invented, was the predictions report. And the reason was that people just took it at face value and didn't take it as a, a first step to go and then do the research. He's, he kind of lamented the fact that people would just pick the sub off the, the list which might not really be matched to their circumstances, you know.

So, yeah, I mean, this is going to give you an idea what's happening around the market here. We are regional, you know, regional ranked New South Wales. So, you know, what's the ranking consistency? Rising steadily. So this might be an area you start looking at. So I think back in 2006 we actually did a webinar with Terry on Aubrey Wodonga. So, you know, it gives you some indication of his measure, which is what's happening in the market. So it's one tool to put in there. If you were going to, if you were going to do this, other than in the central coast, would you still be looking at flipping?

No. Like ours is, we've got a price that we can only go to and because we want to flip. Look, to tell you the truth, I've got a couple of deals that might come off in the next few, couple weeks. So I'm just saying if they don't, then I'm gonna have to start looking further on because there's too much competition here. I don't want to go somewhere where it's dead, but just not as much as what I've got.

Well, this is definitely going to give you an idea of where there's a rising market. And, and I mean, just like when we're talking to the guys from Location School, they're like, you know, if anyone could give you the, we're at the bottom of the market, it's about to go up. And this is like, you know, the way that they measure this, I just jump up here is we're looking at, you know, the market. Here's the consistent ones. Let me just go up to the next one. So we're looking at the market increasing so the sales are already happening here. You know, this is quarter on quarter. So there's already been a year's worth of increase. So it's so hard to pick the bottom of the market. And when someone comes up with that algorithm, fabulous. That's the report will be buying. But at the moment you're really looking at the areas like the location score, the hot spotting predictions report, even the.

SQM research.

You know, the boom and bust report, they are looking at giving a weighting to an area based on when they look at 15 different characteristics. So you know, everyone uses something, this is using two. None of them are actually going to, you know, they talk about being predictors but we've already got a rising market here. So you know, it'd be more interesting to have a look at maybe. And this is something that in the future we want to build into our algorithm is that, you know, looking at potentially these consistent markets from 2016 that haven't moved. And what was the trigger that made the move to get into 2017's report on the rising market? You know, so it's trying to work out what those triggers and is it a move of the Italian community to the area? Is it sudden increase in wage growth? Is it infill and townhouses and people with more income to spend? I don't know. And you know, we're constantly kind of looking at that. So we're going back, you know, at the moment looking at 10 year data back and saying if all those suburbs that have outperformed, what did they have in common? And it's an interesting exercise but you know, you can do it yourself and tell us the answers. Wait for we asked to do it, we'll tell you the answer. But yeah, there's, there's definitely some outliers that you just, you know, there might just be some change of council policy or whatever that's allowed subdivisions or something that has really created some growth and some activity and sales. And you don't really get a feeling from this report has that sale increase been due to something like that where there has been a zoning change and all of a sudden you can have two townhouses and we have more sales because there's actually more properties actually physically in the suburb. So you know, I think there's, there's a lot of characteristics that we don't fully understand.

That's why it's good when you buy somewhere that you know and you can see.

Yeah, exactly.

And photos are such. Well, they paint the picture that they want you to see, you know, Like I went somewhere last weekend and it was like I said to them, I said, oh, is that got bush near it? No, no, no, no, that's just a few pictures of trees and I get there and then it's like this steep backyard that's full of trees, you know, so I mean I've personally bought three houses I haven't seen yet. But I don't know, the more I got into, you know, the further along I did, you know, like your course and stuff like that. I would never not go and look now. But you know, I've still got three houses I haven't seen but I wouldn't do it anymore.

Well, and I think that the thing is that.

I was too trusting.

No, it's not that. I'm sorry, I'm not laughing at you. I have a 9 year old son who was supposed to be putting himself to bed an hour ago. He's just turned up when he forgot he watches.

He's still on. He hasn't changed the daylight savings time, obviously.

Obviously, yes. So, yep. So I'm waving him away. So I think, Lorraine, I mean with knowledge, you know, you can, you can look back retrospectively and go, oh my God, what have I done? But the thing is it kind of learning from that and moving on and that's where you are now. But I think that I still honestly believe and I mean, you know, I'm looking at these numbers every day and you know, we've got even more into this with coming up with the done for you methodology because we just take that responsibility so seriously because we know we're not just directing people how to do this, we're pointing them in the direction of where to do it. And so we're looking at these numbers every day. I know that. I don't know John, is it 80, 90% of the data can be done from your lounge room. But that final 10 to 15%, I would be hitting the ground and going, okay, I'm getting on a plane and I'm flying to Hobart and I'm really going to check out and I'm going to go to the chemists and I'm going to the news agents and I'm going to go to the real estate agents and I'm just going to see the type of people in the area like I remember, you know, was coming up on my radar in Melbourne Reservoir about three years ago. And I went out there and they had the Blockbuster, a video store that was closed down and the smashed glass and they had the same day pawnbroker lender kind of business on every corner. And I was just looking at it going, oh, this is. My numbers tell me that this is going to go up. My numbers tell me. But if there's going to be a period of time for the gentrification, am I, do I want to be a little bit closer or is this okay? And you know, it was a number play and I knew that it would be a short term number play and it'd be okay. But at the time I was helping my sister look for a property and I say this is not an investment for you. It is an investment, but you're buying this to live in. Now you're going to be walking around this neighborhood for the next three to five years. How do you feel about that? And so that just completely took that area off the table. But as an investment three years ago, geez, you know, I would have been delighted to have that today. So. Exactly. So if it's a numbers opportunity and you can see the gentrification, I could see from the dot map that the ripple effect was going to hit it. I could see that it was going to be gentrified. I knew that that area was going to happen. And because it had happened to the other suburbs that had been creeping up on it, I would have been happy with that. But it was a decision I made knowing full well what it looked like at the moment and that I might have a couple of years before I got to that. And I did the exact same thing in Darlington when I bought, which is just near Newtown in between Eberleigh and Newtown in Sydney. And I did all the numbers, I walked around, I went, oh, Newtown's a bit grotty, Darlington's a lot. Grottier and Everleigh, you know, they were still having quite a few issues with the indigenous population there, with the housing commission there and with, you know, riots and things every now and then. But the numbers stacked up. I personally wasn't going to live there. It was safe and secure. So I knew my tenants were in an area that was, you know, they weren't going to be attacked on the way home. So it was a place I bought and it, you know, went from 420 to a million dollars, you know, in the period of whatever it was, you know, 10 years or something. So the numbers don't lie. But I would still be walking around to do that last 10, 15, 20% of the searches myself. Yeah, no, that's true.

Can I just tell you quickly, Musselbrook, you know, Musselbrook, I've got that house there and it's, it's been really bad obviously, you know, like really bad rent. They're mining you and high vacations.

Just remind me, you were in the, in the, you were in the new estate, weren't you, when you first.

No, I mean nice night, I know. No, this house we've got is an older house, two story. But I was just going to say to you in case anybody's listening that, you know, we've gone from 280 a week rent probably 15 months ago, 18 months ago to they reckon around 370 a week now. So it's definitely coming back up. And I looked at the vacancy rate last night and it's like 1.2, 1.5.

Yeah.

And a couple of years ago it was 16%. And I was just wondering what's your thoughts on, you know, that area like with the mines.

Do you think it's.

Ever going to improve or.

It's always going to be, oh, you know, it's only going to go. Yeah. The thing is. I've got a lot of friends still in mining and obviously I lived in. Well, I don't know if it's obvious but I lived in Singleton and worked in the mines there for quite a while while I was in mining and so I know that area very well. I, you know, and then later when I moved the explosives business, I worked in Curry. So I know that area very well. Musclebrook has always been that top of the hunter and gosh, I spoke to someone just yesterday about one of the mines there. Was it Spring?

Mount Pleasant's the new mine going ahead?

Yeah, but I think that there was one of the mines that had lost. They came up for renewal and the EPA said they couldn't renew their lease but because they needed the coal for the power station they got it through. So I think there's this huge, huge move politically at the moment for clean power and some commitments that are being made for it. And you know, the coal mines are definitely linked to non clean power at this stage. Moving to, you know, nuclear or solar or wind or whatever it is and replacing coal in the short term is just going to be such a difficult thing to do. And I think, you know, the Australian dollar and all the things that are compounding at the moment, there's people making money out of coal mining and, and I think we're starting to see some of the non viable operations becoming viable again. But I think at this stage I'm not across what's specifically happening in this area but if we just well I've just pulled Musselbrook up here on the location score and it's down here at a maybe which is, you know, it's a healthy market for investors wanting to apply some value adding strategies so you might be able to renovate. Buyers are sometimes able to get away with low ball offers. Sellers are getting the prices they ask for. Expect growth to marginally exceed national average. So you know it's. If we say the Australian average is around 58, they're picking it at 60. So demand and supply ratio, you know it has been going up so it has been improving. So you know this is from beginning of 2017 so it is on the upward trend looks like, you know and this is difficult in those regional areas where they don't do auctions. So I wouldn't be looking at that. The days on market have been gradually dropping over the year. So this is indicating that, you know, of the properties on the market they're selling a bit quicker. So but you know we were up here at 150 days so you know we're still over 100 days. So a normal campaign six weeks, you know, percentage of stock on the market. So this is around that 3% mark. So no as 2% is kind of like that minimum from the analysis that I've been doing today. Percentage of renters. So there's over 40% renters. We've got online searches. So this is just a percentage of you know, people who are actually looking in the area to purchase. So it's coming down investors interest, not their discounting yield. So they still got the yield at 5% which is quite healthy. Vacancy rates really low and the reliability is 75%. So yeah, this is, I guess it's kind of, it's one of those hard things where you're looking at your portfolio and you go should I be substituting this out for another property or has it got opportunities? And you know I'd be talking to the local council. I might try to catch up with some people I know who are in that area and just find out for you Lorraine, you know there are any plans ahead? Because I've got, I know people that are in that area. Yeah, they're in both sides of it. They're kind of like in the inspectorate and they're on the mines doing long term resource planning. So we might see if they're planning to expand mines in the area. So I'll try, I'll come back to you with, with some data on that. But yeah I just Singleton and Maitland and Curry to some extent, you know, they still had that kind of, you know, the horses and the wineries and the tourism and a little bit extra. The upper, the upper valley is very much, there's mines and agriculture and you know, if we're not in drought, we're in, you know, some, some kind of mining issue. So it does have a more restricted kind of economic opportunity for growth. Good to see that you.

Yeah, well. And you know what, back in the days when you bought it, 2010, you know, the Residex reports were, you know, it was 10% growth, you know, per annum over 10 years and stuff like that. So you sort of thought you were ticking all the boxes that had mining, it had the power station, it had this and that no one foresaw or what, you know, what was going to happen. And so, you know, you just. Yeah, at one stage it was worth a hundred thousand dollars more than what we paid for it and you know, seven fifty a week rent. And then, you know, it happened so suddenly or it didn't really. The thing is, I think most what we don't do is we don't keep a check on the market. Like, you know, sometimes you buy a property and then you just don't keep an eye on what's happening in the area. You know, just think, oh, it's renting, it's okay.

But you don't, you know, I learned.

That you need to keep an eye on all your properties and how things are going in the area.

And to the extent either, I mean, I know renovating, you know, for instance, you know, I would say that we were successful renovators. Right. So. But Todd's up, Todd's renovating at the moment. He's sleeping on a stretcher bed, you know, saving a bit of money. Yep. Sleeping on a camp stretcher. Yep. In a sleeping bag the week whilst he's renovating. So he can paint around the clock and do all the things that you do when you're renovating. But you're really mindful about your money when you're renovating. You're like, oh, should I get this tap set at $70 or this one at $140? And you're making these kind of $20, $30, $40 decisions with every selection that you're doing. And then you rent the property out and the rental manager says there's a new water saving tap that you should get or there's some kind of thing and my plumbers are to come in and put it in for 70 bucks and it's a hundred Dollars. And you're like, alright, okay, that sounds like a good idea. And then you sit back and go, wait a second, I delivered for hours over the $20 differential and the taps when I first put one in. So I think it's not just your properties, it's also the renovations. You kind of lose that connection that you have when you're on site doing that day to day decision. I know. John, did that happen to you?

Yeah, yeah, definitely. Yeah. You've got to, you've got to keep that mindset going, don't you, during the renovation? Because I'm the same very, very, very cautious about the way I spend my money on the Renault and shop around and go to a hell of a lot of trouble to do it. But then yeah, afterwards you have to be just as conscious with what you're spending. Yeah, I agree.

I know. So, but I mean Lorraine, you've done a lot of renovations. You know how mindful you are in your budget and your budget. But once you kind of, you kind of like it's printed out now, let's move on to the next one. You know, sometimes agents, you look at your statement. If you, if you are mindful enough to look at your statement every month, you might actually see something slipping. You're like, oh, what was that electrical Costco. Oh, you know, a fuse. Blue. Like really $80 for a call out. And if you heard the call, you heard the call. Last month, you know my, I had someone go in and plaster one of my rental properties and I went and did an inspection and it wasn't sanded off and it wasn't finished but I paid, I paid for it to be finished and painted and, and when I called them on it, they went, oh. The tenant said they didn't like the dust. So we decided we'd wait for the tenant to move out. I was like, oh, ok. So the tenants now dictating my renovation spend and, but I had paid for this whole amount. Tenant could move out in five years time and I can bet you bottom dollar the guy wouldn't have come back. But the tenant did move out and because I was very vigilant on this, they did get in and clean it up. And I went in to do an inspection just last week on it. And I was looking at this bedroom going, this bedroom, I know that they fixed this wall, but this whole bedroom's looking a whole lot better than it's looked for a long time. I thought maybe they're like new lights in here and it's looking brighter. And when we went downstairs and I saw there was still paint brushes out the back that hadn't been washed up. And I said, oh, did the painter leave these here? You know, was it not cleaned up? And the guy said, oh, no. I realized that they painted one wall and it looked so good. I just went down to Bunnings and I got a color match and I painted the rest of the room for you.

I was like, wow, how nice was that?

Thanks for that. Lucky it wasn't one of those. We were changing kind of rental laws in Victoria. They could have made it purple. But he didn't. But, you know, and I was like, I knew there was something wrong, something different here, but I couldn't put my finger on it. But it just gives you an idea, you know, you can lose control of what's going on.

Now, Jane, I have to rein you in. We've got a couple of questions here. We're still going to get through and we're 20 minutes over.

Okay, let's go, let's go.

Thanks, guys.

Thank you very much.

Thank you.

Thanks, Ryan. See ya.

Bye. Bye.

Great. Okay, so we've got one from Pamela. Pamela says it's a question about elderly people in homes and that idea of striking some kind of off market deal to tap equity. So she says let's say older people cannot afford their houses. The asset rich, cash poor, so they get together and renovate one house for both parties, live in one and one they can sell. Do you think this can fly? Baby boomers and I think that should say are the largest number in the world. So there is a lot of need. I just have one comment on that before you respond. There's a really good podcast episode with Peter Kalisos and I'll put it in chat to you, Pamela. I'll just actually I'll share it with everyone. So if I just go like that, that should go to everyone where he talks about a system called poppy where they do a deal with people that are in that position that are asset rich and it allows them to get their hands on cash. And yeah, so it's kind of along the lines of what you're thinking about and it goes into it in quite a lot of depth. So it'd be well worth listening to that if you're interested in that kind of thing.

Pamela, can you just put in chat and just answer this question? Me? Are you talking about two groups of baby boomers and they both the couples move in together and they sell the other property and split it? Is that what you're saying? I Just want to get clear in my mind of what you're suggesting. Okay, we won't come back to the chat.

So Sarah's got another question, but I.

Can answer that because it's interesting. A friend of mine approached me earlier this year with an idea that was similar to this and she had been putting together something like hedge fund that was actually looking at doing this specific thing for bomy boomers in Sydney. So they were actually going to buy the property or engage to buy a property, allow them to stay there and live there with an agreement of what the property purchase exchange would be in a certain period of time. So there is some really innovative programs around now. She was doing modelling on some similar programs in the UK that does this and when we went through the numbers, they weren't quite stacking up with what she was looking at doing and the equity share with them. But if your question is around.

Yeah, there's nothing in chat. I think Pamela might have left us now. Yeah.

Okay.

Well if it was around that other. That's something I haven't seen before. Having said that, I have just done an article for Daily Telegraph for next week for home about intergenerational living, which is the grandparents and parents and kids living together and how, you know, zoning a property and how that is becoming more proper prevalent. But baby boom is moving in together. I just, I can't. I'm thinking about my parents here, John, and I'm thinking could I imagine them moving in with another couple? I think they're so set in their ways. I just don't know if it's possible. But it might just be due to affordability and asset rich and cash poor that it might be something that we do see come up in the future.

The downsizing from that living comment that I made earlier to when I was talking about the baby. Sorry, the downsizers moving into townhouses and when I talked about shared living, I was actually talking about, you know, retirement homes or aged care facilities. So that's, that's maybe where the that question stems from. Question from Sarah Jane. This the last one we've got. There's no more hands up and yep, just check that Sarah's question is regarding selling my PPOR principal place of residence which will be impacted by future infrastructure. Should I keep my home as an investment because it is 4km from our new hospital or sell it because of a planned bridge duplication? I have a number of investment properties in a trust and I'm in a good position to upgrade my current home for something closer to the beach. I consider keeping this property currently owned by my husband and my name. But it will be impacted by a future bridge and I'm concerned it won't grow in value. Although it is very well located in terms of schools and new hospital and it's 2.6 kilometers from the beach. The current bridge is 50 meters away but the new bridge will be 30 to 35 meters away and at least double the noise. And it goes on. There is one house between the existing bridge and the property plus a bikeway, protected green reserve. The property is a family home, four bedroom plus study, triple garage in a cul de sac. Median is 500k. Current bank val is 650. This is conservative and I believe it would rent for 600 to 650 a week. It's in a school zone with a good school. There's planning provisions for a duplication of the two lane bridge over the creek that my property adjoins. Yeah, I think that's about the gist of it. The rest of it's a little bit more background Jane. So yeah, the question is should really, should she keep it given that the bridge is going to be a lot closer given all the things it's got going for it.

I think Sarah, if you're in doubt and there's, I mean obviously an experienced investor and you've got investment properties, you understand the infrastructure and you understand how all of those things can add value to a property. But sometimes there are just these kind of being too close to something. 30 meters sounds really close. 50 meters which is what it was before sounds close. So I guess in one respect. Yeah, I'm thinking In one respect 50 metres would have been something that would have concerned me initially. But if that hasn't had the effect, we're talking the medians 500 and the bank bow is 650. It would seem to me that that proximity to the bridge hasn't really dampened or had a problem. Would bringing it 15 meters closer actually create even more problems? And I just can't, I cannot fathom visualise a bridge that close to a house and how that the sound and the noise and how that extra 15 meters would be and how they can't design that with the impact analysis done on those surrounding houses and having the sound walls or screens or whatever up anyhow so that you've got the school zones, you've got the new hospital, you know, you've got the fact that you've got proximity, you've got a typical proximity property. That's nicely done. It has all of the right drivers to say keep it. But you know, turning an owner occupied into an investment property is often a mistake that people make as well because they may not be in an area where the investors or the renters want to live. So you know, when we talk about where to buy, we talk about buying in the right suburb in the right streets for your target market. And often we find that. And I think this is why, you know, so many people who have an investment property don't buy more than one because they've actually just converted their home into an investment property. So I think I would be doing more analysis around whether the agents think that what the impact is going to be on this property. And I'd speak of rental agents and selling agents because the rental agents will want to rent it and the selling agents will want to sell it. So they're both going to give you both sides the story. And I would be looking more into what kind of sound minimization or what kind of works they're going to do to reduce the noise. I mean you've said it's going to double it. So it's got all the infrastructure that would be sound for an investment, but it is, it sounds a little bit iffy and if there's any risk to it and you know you've got all your investments in your trust name, this is in your own personal names. It's capital gains tax exempt. You can take the opportunity and maybe purchase by it somewhere and upgrade your home to be near the beach which it sounds like what you want to be in. And you know, your kids are here, the kids are uni. It's time to enjoy your lifestyle. I think that. What am I reading here, John? This bridge may not go into 2030 as well. So you know, it might be. It may not have any effect. It may not be something that happens in the short term anyhow. So I would be speaking to the agents and seeing what they think is going to happen. Do the numbers and just find out is this where renters actually want to live? It might be from a proximity point of view, very convenient for them. It's above the market for, for the area. Find out if there's got growth drivers for the area or it might have growth drivers, but this might just be a black zone due to the fact that you've got that much infrastructure going on in very to the really close proximity to you. So can't give you a hard and fast answer but I'd be doing a lot more research not just on that suburb, but on this area of the suburb and finding out whether there's rental demand and finding out the impact of what's going to happen for this bridge on that property.

So when you talk about portfolio review, Jane is just looking at the properties in your portfolio as if you were, you know, putting them through the same stringent criteria you would, as if you were buying them new today. And that's, that's just a nice way of clarifying that for yourself.

Absolutely. So, yes, that's. So I hope I've helped there. Sarah, big question. But yeah, I think you need to do a lot more analysis on this. And just remember, you know, if you do change it into an investment property, get the valuation done when you change it because the capital gains tax, you know, you can claim one property for every six years and once you've moved out of that property and comes in investment property, it will be a percentage of the time that was a home compared to investment property of how much capital gains tax you can save when you do sell it. So, so you do have to have that valuation done, but I hope that helps.

Great. That might be it. Jayden. Yeah, there's no. It's Janet done as usual. Yep. Some nice thank yous coming in. Thanks, guys. Oh, hang on, hang on. We've got P.S. great news today. This is from Deanne. Yeah, the money for my kitchen and flooring Renault will be through in six weeks after two years. Wait, I'll keep you up to date.

Oh, make sure you post some photos for us. We can't wait to see this Renault if it's been in plans for that long.

That's great.

Well, guys, I think it's that time again. It's time to wrap up. It's been terrific. Thank you so much for your questions and I hope you have a really great October and Halloween and we will speak to you in November. But look, it's really special being part of this community. We love answering your questions and helping you and just getting you over any roadblocks. I've noticed that the Facebook page has been a little quiet recently. I know there's people out there doing things and you're just being a little bit humble. So put up what you're doing or any challenges you have that we can help you out. You don't have to hang out to the next call for us to be here to assist you. And once again, thank you for your contribution. Thank you, John, for manning the desk and let's chat. And as always, here's to your property success.

See you later.