Your Property Success Q&A Call - November

The broadcast is now starting. All attendees are in listen only mode. Hello everyone, it's Jane Slagsmith here and welcome to your Property Success Q and A call for November. These calls are exclusive for my premium clients, so that's students of the Ultimate Guide to Renovation and my Investors Choice Mortgages diamond clients. And if this is your first time on the call, a very, very warm welcome to you. Now these calls take place on the last Thursday of every month, so you have got lots to look forward to. And of course you will receive email reminders each month when the calls are approaching so you won't miss out. Now, Christmas is next month and we're going to make a few allowances for that, but normally it'll be the last Thursday of every month. So a big hello once again to my Investors Choice Mortgage diamond clients. As property investors, I know you'll get a lot of value from these questions and answers and discussions that the Ultimate Guide to Renovation Students are having. You may have some lending queries and this is your chance to ask what's on your mind. Obviously we won't be covering your personal loans questions here. This is a forum though to clear up anything you need to know and as part of building your property portfolio and you know, on your journey to make it bigger. And of course, welcome to all the Ultimate Guide to Renovation students. You guys are working diligently through module eight. Well, you've just got it this morning, so I'm sure a lot of you have had a look at it, which is all about the renovation itself. Remember we spent the first six modules looking at how to find the right property and assess the property. And now we're really into the fun stuff, the renovation. So yes, this week you are enjoying the cosmetic renovation case study. But today of course you can ask about anything, where to find property, what's going on in the world. And I have with me my trusty pal here as always to help answer the questions, my co creator of the Ultimate Guide to Renovation, John. Hello to you.

Hey Jane. Hey everyone.

So what have you been up to in the last month?

Oh well, been a pretty big month. It's hard to. I can think about the last week, not so much the last month. I've got my property development projects not far off, starting now, so that's probably, I'd say another couple of weeks and we're just going to get some shovels in the ground prior to Christmas and yeah, probably about that. And what else? I've spent the week speaking to some coordinators around the country for the mastermind groups and the ultimate guide to renovation. So that's been really good.

Yes.

Meet some new people. And most of those groups are now up and going, which is fantastic. And couple just about to start now.

We tried this for our ambassador group last intake in March. And we know that those people that were on those calls in that mastermind, they're still going strong now, six months later. And they've had a few purchases along the way and been really amazing support for each other.

So it was probably their feedback actually that made us decide to do it.

Yeah, I know there's. There's always a bit of teething problems with these things, but you and I have both been part of these kind of mini masterminds of five, six people in them in the past. And. And just having. I think it's almost having like an unreasonable friend there. It's there to give you encouragement, but also to say, come on, buddy, you set some goals for yourself this week or month or whatever. And you haven't stepped up. So. Yeah, we all need a bit of encouragement.

Yeah.

Cheerleaders as well.

Yeah. I. I find it really valuable. I know in our group we have a. A couple of rules where we. We've got kind of three. Three main rules. We kind of at the end of each meeting, we kind of pledge that we're going to get something done by the next meetup. And the rules are if you show up to the. The meeting and you haven't done what you said you're going to do, you got. No, you got three strikes. So if you do it three times, you're out. If you don't show up to a meetup three times in a row, you're. You're out. Yep. Is there another one? No, that's the two. Yeah.

And always play fair with others.

Yes, that's right. Always play nicely with us.

And what goes on in the group stays in the group.

It must be what kind of groups.

I'm going back to my mining days here. So what else? There's been some other exciting things happening this week.

Yeah. The trade cards have been sent out. So some of the people within the ultimate guide to renovation would have received trade cards. And if not, keep a lookout because they'll be there pretty soon.

They'll post it last Thursday.

Yeah. Yep. And in that envelope, you'll also find a form for the master's application for their program. So fill that out. It's well worth it as well.

Yeah. I've been using that for plants. We've been doing a Bit of planting around the garden and hitting up Masters for their discounts.

Been nice. There's lots of goodies at Masters.

Yeah, it seems warmer than Bunnings too.

Oh, really?

Yeah. I don't know. They said that they cater to women and it feels less warehousing to me.

Right.

So maybe whatever they've done works. And what else? Well, I have been. Gosh, I've been chatting to so many people in the last few weeks and listening to what they've been doing with their, their property portfolio plans, which has been really exciting. And we've got people from the Ultimate Guide for Renovation from around the world as well. So in our, in our group. So just talking to some people about expat trying to invest back in Australia and, and looking at the whole Australian market and what's happening has been interesting. I had a chat to John Edwards from Residex before he jumped on a plane to head over to London for a month to renovate a house. So they bought a place over there and they're about to rent it out. Amazing returns over there, you know, the 7, 8% just for standard properties. So they're. He, he and Barbara jumping straight in and. Which is good. And he. I talked to him about what's happening in the market and his latest Residex report has come out and state of the market and Investors Choice diamond members. You can jump on and see the economic overview that is updated there quarterly and the monthly local government area updates in your member area. But he's really of the opinion that there's still growth to be had, but it's not going to be anywhere near what we've seen. The rental yields are definitely going to push up, so the overall return still, you know, that 13, 15% as a standard, but there's going to be a bit of a change between the rental yields and the growth.

So as the rental yields grow and the capital growth slows, the yields will become better as the rental return.

Yeah, exactly. So, and I think from an affordability point of view, he and I differ a little bit on what's affordable and what's not. But from an affordability point of view, it makes sense. When people can't afford to buy, when they want to live, they're going to rent and there's still going to be those really good areas in with that the demographic suits in the right property with the right demographic are still going to have growth that is going to perform better than other areas because people want to live there. So we're still seeing that, you know, close to the CBD areas. And, you know, there's still a large oversupply and development of a lot of units in Sydney, Melbourne and Brisbane at the moment being built. That is creating some issues. And yeah, it's interesting talking to people who've been looking at some of the slick marketing that's been going on with. It's amazing what they offer. And what else? Oh, I think in the your property success toolbox this month, I shared a cute little game that I've been playing as well, which is in an itunes app that I. That I downloaded, Dream home, which allows for those flippers out there. It's all about buying a property and selling it really quick before it starts going down in value so you can get to your end goal of having the mansion on the hill. So, you know, I might have to. I might have to have a competition going and see who can beat me. I think I'm pretty good at it. Not even a flipper. There you go. So that's about it. Well, I guess before we move on, John, we might to take your questions tonight, we need to get some quick housekeeping out of the way. And firstly, if you're on a computer and you're experiencing problems hearing us actually, please type in now. Can you hear us? It'd be handy to know that people are out there listening. We've got a few people who've been sending us some questions. But you're having any troubles hearing us, please let us know. You do have an option to call in on the telephone, and the telephone number can be found in the sidebar under the audio options drop down menu. And you can call that number from a landline or a mobile phone. Or if you're like me and use Skype, you could use Skype as well. So I can hear that. See that some people are actually saying they can hear us. Anyone else want to say hi, how you going? I can see some good people I recognize there. Tim. Bridget. Nice to see their names there. Hey. Yes. And Angela. All right, so when you do have a question, guys, all you need to do is raise your hand by pressing the little hand icon. It's small and hard to see. And from what I understand, it's not always that location either, is it?

Yeah, if you're on a PC and it looks different than that, can you take a screenshot, please, and email it to johnourpropertysuccess.com?

Oh, we're getting lots of people here. That'd be great. We've got a lot of people here saying hey. Which is nice. Hey, welcome back. There's a duty too. All right, but look, basically, you know, please raise your hand by clicking the hand button. You're gonna let me know that you've got a question. And when it's your turn, I'm gonna unmute your line. And when I do do that, it's gonna say your line's been unmuted so you know that you're on. And you can ask questions by writing in the question box as well at the bottom. Or you know, if you need to. If you can't miss this call and you're gonna listen to it recorded, you can always send us a question if you have some. But I really do give priority to the spoken questions and that's because it's easier for me to ask you backwards and forwards and get some real engagement on what you're doing and I can answer you properly. So that's all about it, I guess. It's, you know, once again, there's no such thing as a silly question. And you know, please, please shoot us questions because I know sometimes the question that you're thinking is something that someone else is thinking. And if you don't want me to mention your name, I won't mention it. But let's get it out there. Now, these Q and A calls go for about an hour and a half maximum. And just for the sake of the group, please limit yourself the first time for one question and maybe a quick follow up question. And once we've done that, if there's no more questions, please ask questions again. So you're more than welcome to keep asking questions. That's what we're here for. Hopefully we can answer your questions, John.

Yep.

And if we can't, we won't lie. We'll let you know, we'll get back to you and let you know what's going on. So lastly, just a reminder, this is not a technical support call. If you are experiencing any problems with videos that won't download or access. I'm really not the right person to ask, but I do know people who can fix it for you. So please email us@supportyourpropertysuccess.com and we will get people onto it straight away. Well, as soon as humanly possible. So let's dive into some questions. I am really keen to hear what you guys have been up to. I am so excited the guys in the Ultimate Guide to renovation in Module 5 got access to that. Oh my gosh, amazing. Budget spreadsheet.

Budget spreadsheet, Yep.

And the private Facebook page has had a bit of a raving fest about it, but every time people kind of get into that module, it is really an absolute blinder, I think. What, 20 years of intellectual property on the costs that are associated with. Breakdown of. Of all of those, the different trades and the different requirements you have in renovating. We've used it for developments as well.

Yeah.

And it's just amazing.

Yeah, it's. I mean, I. I am benefit. Benefiting. Yeah. From it every day. Yeah. It was hard to put together, though, but, yeah, I don't know what giving birth is like, but must be. Must be similar.

So you don't remember pain, but yeah, it was, I guess. And just having the ability to say, you know, what level of standard of. Of finishes that you want, you know, if you can get discounts or whatever and add it all up into your budget and then track it, you know, that. That is just amazing. And actually, we. I don't know if Carl's on the phone. Yeah, Carl, I see you there. I want to. I want to hear from you. Are you prepared to. To tell us your exciting news today? Type in yes, he is. He put his hand up. We're going to unmute you. Hey, Carl, how are you going?

I'm doing fine. Jane, can you hear me?

We have got you loud and clear. You've got some pretty exciting news.

Hey, I bought my first investment property this week.

Congratulations.

That is. So we need a round of applause, really. CROWD GOES well, tell us about it.

Well, it came down to the negotiation stage and it's clear to me that it's not only money is the issue when it gets to negotiations. The price had dropped. I've been watching this property over six weeks and the price had dropped from 330 down to 310 down to 370. So it was fairly obvious I had a motivated vendor and I don't like all of this messing around with the real estate agent. So I did play it a little bit hardball and then told him I was prepared to walk away if he didn't communicate 300 to the vendor. I know you said in one of the modules that it's New south or it's legislation in some states that they have to communicate all written but not all verbals to the vendor. So they were very keen to get my name on a contract and have a small holding deposit check, which I wasn't very comfortable with. But one of the things I picked up from you was that you could negotiate on early release of the deposit, which I Did. And I've got four weeks access to the property to renovate before settlement.

Fantastic.

Didn't cost me any more than the 300. I just allowed release of 10,000 of that deposit straight to the vendor.

Nice. Wow. Yeah, it's always great when you can negotiate around several points at once. So it's not just at price if you've got other things going on, like early access.

So you made the other thing. Yep.

Sorry, sorry. The other thing was that the properties in Newcastle where I live, but the vendor's son lived in Sydney and was driving at weekends to cut the grass and look after the property. So again, allowing me access freed up his weekend.

Yeah.

Excellent. And sometimes it's just asking the right questions that allow you to then negotiate. So, as John said in that module we really talk about. It's not a yes or no answer that you want to get into at negotiation time. You want to get into the. Did you want either the blue one or the red one? You know, so, you know, being able to offer, you know, a release of some of the funds, because when you put down your deposit, basically that 10%, and usually you can negotiate 90% of the time, you can negotiate that or down to 5% of that holding deposit before settlement goes into a trust account. So no one's actually benefiting from it anyhow. So by being able to say to the vendor, I am happy to release a certain amount of money you, you know, prior to settlement. And that's the thing that can sway them. And that's fantastic. And for you to have that four weeks of planning to get the renovation done, you know, you can't put money on that. That's four weeks of not having a loss of rent. Are you going to rent it out or what's the plan?

Yeah, the plan is to hold. So one of the reasons it attracted me is that come January, because of all the new intake of students, vacancy rates is down to less than 0.5% rent and hold.

Nice.

Did you use the dot map and a lot of that analysis to locate where you're buying?

I did, yes. I have selected something very close to my home suburb, which I know is not necessarily the best strategy.

As long as you can verify it with data, it's fine.

I've also found that there's a lot of information out there about the big three capital cities, but not much about smaller, more regional areas. Newcastle is the sixth biggest city in Australia, but still there's not a lot of information out about it.

And what are you finding in the Newcastle Market at the moment?

Well, it seems to be quite a lot of buoyancy. There's a place called the Junction, which is a cafe lifestyle in Newcastle. It's hit the top 10 growth suburbs 45% last year, which is huge. And there's infrastructure happening because of the lease of the port and so there's a lot more infrastructure in Newcastle happening. The mood is generally buoyant and I.

Think, you know, the, the money that they've put into the rejuvenation of, down the, the main street, that area, I mean that's, that was really like a ghost town for so long. And even though they moved a lot of the local council, you know, people out to near the lake, where did they go? It was northern Charlestown. Where is it? Oh, you know, the local council people moved out to. Is it Meriwether where some of the.

I'm not sure that the council's moved, but there has been a lot of businesses migrating out to Charlestown.

Yeah, I've had quite a few clients been buying out there and like yourself buying near the university and I have one client who converted into a property into a five bedrooms and renting them out by room and getting $1,000 a week. So, you know, there's, you know, as you know, most of my properties are all around universities and hospitals as a fallback.

Yeah.

But yeah, yeah, it's interesting. It reminds me actually, I know I spoke to Carl during the week. Carl's a coordinator for one of the mastermind groups and one of the other coordinators I spoke to, Steven Ryan, is actually using that Airbnb thing to rent out rooms. He's insane. Speaking of renting out by the room.

Yeah, it's. I had a lot of trouble finding a real estate agent that would manage that for you. But there's a lot of people who do it and do it well, so manage it themselves. But congratulations, Carl and thank you once again for being coordinator for our little mini mastermind.

Well, thank you.

Now, do you actually have any questions other than the exciting news that you've shared with us? What's the plan for the property? What are you doing?

So Skip's coming in tomorrow, so that's my weekend gone. But we're looking at painting floorboards, new carpets. I was talking with my mastermind group about benefits of air conditioning, how much money to spend in your total budget. Also I pasted posted on Facebook as well, there's a very ugly looking curtain sort of window sort of type thing. So we're talking about gyprocking that in, covering that in to get rid of a high window in a bedroom.

Yep. Yeah. Air conditioning is always a tough one. Do you have a rule of thumb around that? With rentals.

It'S once again fit for the market. So if that's what everyone else is doing, then yes, I'm all for it. But that's what the rental market needs. If you're creating an exception or something that's a little bit better to get your place rented, then sometimes you need that as well. Honestly, in Sydney and in Melbourne, I've put in ceiling fans and had, you know, a lot less. Less expensive. Less expensive to run. But have actually, you know, added. Added that little bit extra that people might be looking for in Queensland. You know, I'd be. Those towns I'd be throwing in air conditioning. But. Yeah, I don't know. Is. Is it kind of standard, the properties that you're.

Sorry, you're asking me.

Yes.

It'S probably not. I mean, particularly if you are going for the student market. I'm not necessarily going for the student market, but that's probably a little bit of an upsell. Saying that there's a fair amount of overseas students thinking people that come from Saudi Arabia, they probably want the air conditioning to warm the place up. We had 30 nights, 39 degrees last Friday, which was a little bit unpleasant.

Yes.

And I was building my deck at the time, so that was even worse.

Okay. So there's potentially a need. And that's just it. You know, one of my properties in Sydney, I actually put air conditioning in the lounge room and had the lounge room being able to be closed. And this having the. So you could actually have a cool room where you're doing most of your living and then the ceiling fans in the rest of the property.

I've done a similar thing. A split bedroom, a split system in the master bedroom and then a big split system in the lounge room.

Yep.

Just when it was. There's almost a kind of gray area there at a price point where some have, some haven't.

Yep.

I guess what I'm thinking around the kind of 5, 600 mark in Victoria. But yeah, so you could kind of go either way, but it's. It's quite pricey to do the full thing. If you're going to do the ducted option and so on, you can kind of drop 10 grand pretty easy on something like that.

Yep. Yep. And yeah, I'm not too sure you're going to get the return back 10 grand. You're not going to get that return back quickly on a property less than 500.

Yeah. So it definitely doesn't add any perceived value, but it's just in some cases, it's going to be a must have. You can't kind of do without it.

Exactly. Maybe you can use your master's card and check out what they've got available there.

I can do that. Thank you.

Great. Fabulous. Thanks, Carl. Really appreciate you sharing that with us. And I'm so glad that tips are. Well, gosh, Saved you. So it started at 4:30, got down to 370, and then you.

Sorry, 3:30.

3:30.

3:10, 307. And I got it for 300.

Oh, yes, sorry, three. Oh, that's fabulous. Well, just some negotiation tips to be able to save seven grand.

Money for words. Yeah, that's what I like about it.

Yeah, that's right. Well, thank you so much again.

See ya.

Bye.

Cheers.

I think Cornelius had his hand up. Let's see if I can find him. Hands down.

Cornelius is now offline. Do you want to see if Stephen wants to share us with us, his experience with Airbnb and tell us all about what Airbnb is all about? Stephen. So Stephen's one of our superstars who was in Australian Property Investor magazine. No, you're in investment property.

Tell me, Stephen, Australian property Investor, how are you guys going?

Ah, there you go. Good.

Last month. Great, great, great. So tell us, what are you doing?

Okay, well, I'm doing lots of things, but the Airbnb hosting have just a little apartment up in Marrickville in Sydney, and he opened the doors to guests maybe about 18, 20 months ago. I was away for a little while, so I thought I'd see if I could rent my place out. I got somebody in there pretty much the whole time I was away and got back and then thought, well, I wonder if I can continue this. And realized I could rent a room privately to travelers or even just rent my couch out. And since then, I've had a pretty high level of occupancy, and I've actually had to be turning down people just to get a bit of space for myself.

That's brilliant. Hey, Stephen, just for people that are not familiar with Airbnb, can you just explain what it is?

Absolutely. Essentially, you can list a house that you live in and open it up to people who are traveling around the place and need somewhere to stay. So, you know, it's basically like an alternative to a hotel, usually much more economical for the people staying.

And it's all much more experience, too. And it's all organized online. So it's a website, essentially, like a kind of. Yes.

So basically, Airbnb does all the work for you. You literally just take some photos of your place, write up a description, click a few buttons, and you're up and running. And then the inquiries will start feeding through.

Yep, yep. And how do you go about, I guess, searching for security? Yeah, that's right. Screening your guests. Yeah, you there?

Can you hear us?

I think one of his guests got him.

Yeah. Stephen, can you still hear us? Guys.

Just put your hand up when you're back again, Stephen, I'll just mute you there.

Okay, guys, who else has got another question for us? Otherwise we're gonna. We're gonna have to make up. Oh, he can't hear us. Oh, can anyone else hear us?

Put his hand back up.

Okay, let's see.

Steven, you there again, Stephen.

Hey, guys.

Oh, good.

Yes, I am. Can you hear me?

Yeah, we got up to. How do you screen your guests? We lost him again, I think. All right, we'll come back to Stephen later, I think.

Okay. Anyone else is having trouble hearing us or you can hear us, please type in here. You can say, hi, you can hear us. We'll make sure you can get as much value as possible. Hello? All right, well, I guess some of the other things that have been happening around the traps and we've had some discussions, John, on Facebook about. Oh, people can't hear us. It's interesting now.

Yes, we can hear. Yep.

Okay.

I was actually, I just wanted to follow up on a point of. Stevens, the plumber that worked for me has got a place that he's. He's moved out and kind of spending half his time between the city and the coast. And he's. What he did on his place, he lives in Coburg. He built a garage out the back and put accommodation on the top of it, which is where he lives. And he rents out the whole property now via Airbnb. So five bedrooms and. And he's making a killing on it. But I wondered how would you go about if you. Because it immediately occurred to me, oh, you go around, buy houses and just have them all rented out to Airbnb for $5,000 a week. But how do you go with the. In the eyes of the bank in lending against that?

What if, if that was an issue, then I guess what they would do, if you're going to make an income from doing that, they'd probably treat it as a self employed business and they'd want to see the financials for two years to show consistency. So you know, I have clients that flip properties and they're making money and it's considered to be kind of like just a capital gain. If It's, I made 80 grand and I just put it in my bank account and I did that for the last couple of years. But if they're doing it in a company and all the costs and all the profits are in the company and then allocated to the directors of the company and can be shown in the company's personal tax returns, then what we've got then is, you know, you've got a business and you've got consistency and what the lenders are trying to see is, you know, they're giving you a 30 year loan in theory, so they want to see that consistency. So in one respect, if you ran it as a business and you can show two years worth of consistency, then it would work.

Yep.

On the other hand, I recently had a client, very, very strong client, mortgage client, very strong income, very strong, you know, history of paying mortgages, etc. Has an investment property, rents the room out, room by room and lenders come back with a credit assessment to say that they felt that they were too rental reliant. And we weren't dependent on the like thousand dollars a week that she was getting in rent. We were actually just considering the 4.5% general yield based on the property value for her serviceability. So we didn't require all of the money for her to actually afford the loan. But they've come back and said, you know, when mortgage insurance is involved, we're, we're a lot tighter these days and you know, we're not going to allow you to take use that income. Even though it's shown in her personal tax return over two years, has individual leases and bond agreements with every single tenant and we didn't need it for servicing. So you know what, what makes sense to us on one hand and what the lenders see on the other hand is, is really difficult.

So and what about if you, if you're not in that business category, would they consider the, they can see the income there for a year or two, let's say, and it's well above median rent. Would they take that into account with serviceability or would they just use median.

Rent or yield once again, if it was going through your tax returns? Yep, they would, they would use, you can't say if there was no mortgage insurance involved that they'd possibly, you know, look at that as a mitigant for the strength of the Deal. But usually for servicing, I wouldn't be depending on that. Especially for something like Airbnb where it's this week I've got someone on my couch and next week I don't, and the following week there's someone in the bedroom and, you know, I'm in the backyard kind of thing. So, you know, that's for that kind of situation. I would say I wouldn't be depending on it for serviceability. So it would be improving your situation. And once again, you know, for self employed people, we all know that our accountants want us to make no profit. But the reality is that if you're going to have to have some income, you're going to have to have some income if you are planning to have a portfolio that's growing and using that income to convince lenders to give you money.

Yep.

Okay. So I don't know, some people seem to be having problems with the audio and other people aren't. So we're.

I think everyone said they can hear us clearly pretty well, so we went a little bit quiet there. But I think that's because you're just a bit away from the microphone.

That's because I'm looking at you, giving you a really interesting answer. I like looking at people. Okay, well, Steve, shall we try Stephen one more time and see if we can grab him?

Yep. Give me a go, Stephen.

Hey. Third time lucky, I hope.

Gotcha.

Hey, can you hear me, guys?

Yeah, we were just wondering about security. How do you vet. Through vet your people?

Yeah, essentially there's a review system, so if hosts have stayed with other guests, they'll get a review of the experience. I'm usually pretty cautious about that stuff, but I also ask quite a few probing questions before people arrive. Get to know them a little bit about their plans, their background, their interests. It's a pretty social site, so people are usually willing to sort of engage a bit and tell you some of their background info. And on top of that, Airbnb has about US$900,000 insurance policy for damages. So if anything goes wrong, their reputation is pretty important to them, so they'll rectify the situation immediately. So never had an issue. That's always the first question that comes up. And it's the bottom of the. Well, the kind of thing is most people are generally good and human, so it's pretty rare that you're going to have a bad egg anyway. And the vetting system is there to pick and choose. If you don't want to have somebody that has no reviews, you don't have to accept them. I've actually found it to be one of the most enriching things I've done. I've just had a wonderful stream of really nice people from all around the world coming through. It's been really enriching.

Yeah, that's great.

I had initial concerns, but it's been fantastic.

It's kind of like traveling without having to go anywhere.

That's what I've said to a lot of people. I'd happily be doing it for free, to be honest, but the extra income certainly doesn't hurt.

So how much to sleep on your lounge, Stephen?

At the moment, it's 39 bucks.

How many can you fit on there?

Actually, I've packed a few in with their consent before, but.

That'S fabulous. And sometimes it's being a little bit innovative because as we just had a conversation, John and I, regarding how lenders look at your servicing and your income, etc. Sometimes it's not always about the servicing. It's about getting that next deposit or the funds to create the next renovation.

And that's kind of what my income from Airbnb is kind of being directed towards, renovation of my principal place, which is going to fit back into the system, because when I renovate my place, it's going to be nicer. I'll charge a little bit more and higher income coming in.

I think you should be buying some more lounges, first of all.

Yes, Right.

The air mattresses are actually the fallback from that.

Great rental yield, actually. Great return on investment.

That's completely right. Yes.

No, that's good. I really appreciate you sharing that, because sometimes it's just the innovative things. I know I speak to a lot of people who, when you're talking to lenders, you usually either constricted by your income and debts or by the cash you have to contribute. And that's why when you go to a lot of these seminars, they talk about getting a JV partner, etc. But, you know, if you can. If you can balance that and increase the cash that you have to A, improve a property or B, to, you know, get the next deposit together, then, yeah, that's just as valuable. So good idea.

That's the big issue that I've had is a bit of a ceiling on my income at the moment. So I've had to find other ways to get those that cash together for deposits and buffers and that sort of stuff. And I've even used some of the profits to reinvest in another asset class to produce even More income to then throw back into the property stuff.

Nice. So the diversification, I think, is pretty important.

Absolutely.

That's great. And what would you. If you were. Would you consider buying a property with Airbnb in mind going forward?

I actually am at the moment. I think obviously there's going to be difficulties showing that as income for servicing loans, but in terms of cash flow, most definitely. I actually was in the US Last week speaking at an Airbnb conference and met a girl who's in Austin, Texas, who I think the numbers approximately. She was netting about the Australian average income, which is around the $80,000 mark per year on one.

Oh, we missed it right at the important part.

Stephen, we've lost you again. I might just. You got the really exciting video of how she made her $80,000.

So tune in next week.

Let's try one more time to see how's this? Okay. So how is she doing it? Gosh. She's gonna leave us on tenterhooks here. Stephen, we're gonna have to come back to you. I'm not sure what is happening.

He's offline, so his connection's not too good. Yeah.

Okay. Who else has a question?

Few here, but no. Hands up. So.

Oh, there's so many people lurking. I can see so many familiar faces that I know are doing so many exciting things at the moment.

Oh, there we go. Stacy.

Hey, Stacy. Thank you for putting your hand up. How are you? You don't have a microphone. Hey, Stacy, can you hear us?

Yes.

Hit the unmute button. Sorry.

Hello.

How are you? This is.

He just gave this intro about all these people doing he just gave this intro about all these people doing all these exciting things. I'm not quite sure I'm in that category, but anyway, all plans, too. Yeah, I'm. My question is different subject, but it's just about the Residex reports. The Renovator reports are. The Renovator reports, are they good to use in the lower end of the market in the 300 to 450k bracket, or are they really more designed for.

The higher end of the markets? Ooh, good question. I would like to answer this part. I'm going to ask John for his feedback. First of all, because John has been doing a lot with Resurrects reports recently, haven't you? And you've actually been trialling a couple of different ones.

The Renovator reports, in my opinion, do favor suburbs that are higher in the market, and they do favor larger suburbs because they're ranked on the number of Streets with that spread of values.

Yes.

Disparity. Even though they don't actually. They don't actually know. They can't actually look at houses and tell whether they're unrenovated or not. They're looking at the spread of values in the street. So. And it's ranked in order of 1 to 100 by the suburb with the most streets. So it definitely favors suburbs with more streets. So larger suburbs and it definitely and just I think just inherently there is more streets with a spread of values in higher end suburbs. So with a higher median price.

That's good to know that that kind of confirms what my hunch was.

Yeah.

So does that mean then outer Melbourne, outer East.

The upside is the other report that they've got the predicted growth seems to be the other way around. It tends to favor. Not always actually. That's a bit of a generalization. But the recent one anyway seems to be favoring lower suburbs. There's a lot of sub 500 suburbs in the current predicted growth. One for Victoria.

People that have that right on hand. Shall we just jump to it? Don't tell anyone next that I'm showing you the top.

No, no, go ahead, post that.

May not be able to post it. Get ready to screen capture.

Just kidding.

As John said it. Hopefully we get this right now. Let me jump over here and see what I can show you. Show my screen. Okay, so this is the top, the October renovators top 100 report that you should be able to see now.

Yes, can see it.

Yep. So basically what it does is it you can see it goes through houses and units making it smaller and larger. So just to confuse you completely. So basically it goes through and it looks at the disparity. So it looks in one case of up here we can see predicted capital growth. So it looks at growth. So the suburbs that have the growth as well and it also looks at the yield so it compares the yield that you can just going to try and move it over so you can see more of the units as well for those units. Sure, if that works. Just trying to get it so you can see as much as possible anyhow. So basically what you can see here is the predicted growth, the top suburbs and then it also goes through and it does the disparity and this is based on looking at properties that have the major difference between renovated and unrenovated and the potential based on the number of streets in the suburbs that have that benefit. I mean this report I think is $195 and if you ring barbed woods with that direct line and say that you're with us discount.

But from what I understand, and correct me if I'm wrong, that there's no analysis or kind of scraping done of real estate websites or anything like that to work out whether the place is renovated or unrenovated renovated or, you know, as some, some people do. I think Jacob Phil from Ripe House is starting to do something like that. It's purely the spread of values in the street.

Yeah. So basically it looks at if there's 100 houses in the street, it puts 10 in each category of, you know, one up to 10. And so, you know, if you've got two out of 10 rating, then there's 20 properties that are, you know, worth 500 or below and you've got a, you know, so that's how it kind of rates it. So it's looking at, there's enough disparity there for there to be opportunity if you're going to do a renovation, basically. So if you were looking at street and it had a 5 out of 10 was $500,000 and a 10 out of 10 was $550,000, there's not enough disparity there for you to actually do a renovation and make money out of it. So going from the average house on the street to the best house in the street, and that's kind of what it looks at. So, you know, it also, it also.

Then reservoirs the top, which is. What's the median? 537. Okay.

So I'm just trying to let you see this. And I'm not sure how I can do this cleverly. So you can actually see how many. So basically this is what it looks like. And you can also see in it the number of streets. So, you know, Malvern, it goes through the predicted growth. It tells you, for instance, the median house price is 1.29 million. So, you know, obviously very expensive. And the rest of the report actually shows you how many streets in the suburbs. So we've got, you know, Brighton, 1.8 million, 690, Preston, number seven. So there's 119 streets that have renovation potential in, in Preston. And then if we have a look at 1.7 million, 1.3 million, you know, so as you said, a lot of these are the higher price suburbs, but There's Point Cook, 460. And I'd be concerned about Point Cook, quite frankly, because of the large amount of house and land development, new development and the fact that a lot of the newer developments are on smaller blocks and they're not really apples with apple comparisons.

Also, a place like Reservoir, which I know a little bit about, is there's a lot of new development going on there. So you might find that the difference in housing stock is causing that spread of values with new homes and townhouses.

Yeah. And I think what you can't see to the side, and I'm not sure why, but it says there's 172 streets there with renovation potential. So. But, you know, as John said, there's, there's other Residex reports and sometimes there's the, the cheapies, so. And the best rental reports. So there's. There's different reports there depending on what you're after as well.

Yeah, they're shortcut. I mean, they're, they're good. Sometimes when you dive into them a little bit, you work out why that. Why that's where it is. And it might be because there's a really low turnover of stock. For instance, that means that when one house comes on the market and the next house in the same street comes on the market, you know, a year down the track, that the market's gone up and you get a huge spread of values. Because I found that with one, I remember one year, Ivanhoe east or Ivanhoe, one of the. I think they're both up there were really high and it seemed like they had the highest spread, like an almost unbelievable spread of values. And it turned out that they, that the, that they're held for such a long period of time and that that contributed to that. So even though there was a spread of values there, you couldn't, couldn't buy anything because hardly anything ever came for sale. And when it did, it just got snapped up straight away.

Yeah, exactly. And that's what you're finding on your, your spreadsheet is, you know, that's how we kind of break things down too, is about, you know, the turnover is stock. Because there's no point in concentrating all of your efforts if there's only five houses a year that are actually, you know, in the, in the market for you. So you don't want to be spending every weekend out there just for the hope that one of those come up.

Yep, yep.

And this is just that cheapy report. So I think it's less, well, cheapy, less than 500,000. So, you know, with some predicted growth.

So this is the predicted growth report under sub 500k.

Under sub 500. And this is kind of what that report looks like. No idea what I know.

Caroline Springs and Tarneap.

Those are areas, aren't they?

That are lots of new development.

Yeah.

And the growth corridor that has been.

Predicted, hence the growth.

Yeah. So I mean I have some, some thoughts around that and for those who don't know Melbourne, I apologize, but basically this Tarneet and Caroline Springs and Melton and that kind of western growth corridor that's been predicted, you know, Melbourne's supposed to be the biggest capital city in the by 2050 at least, but. And a lot sooner is prediction. And that's where they're seeing the migration coming into Melbourne area. I think what you're going to see is there's going to be a really nice pricing pressure that's going to come from the aspirational people who start out there and start with, you know, aspirations of, you know, starting the family in the home, having a home and it's affordable, et cetera, and maybe working in the city, getting a higher income as they go up in their career and they want to move closer to the city. And then you've got the standard inner city people who can't afford the trendy inner west Kensington, so they're moving closer to the sunshine area and you've got that pricing pressure and that kind of ripple effect happening. And I think there's going to be a kind of collision of the west pushing in and the inner west pushing out on some of those medium ring suburbs. And so whereas there's a lot of talk about that western corridor and the western growth. I think if you think kind of strategically about it and you think what the long term outcome of that's going to be, there could be some really good opportunities in that middle area to start looking at.

Yeah, it's really interesting.

Thanks.

Yeah.

It goes to show though, they're all just at one tool, aren't they? Like you wouldn't invest just off the predicted growth report alone.

No, not at all. But you know, it gives you an opportunity to see what it's about and. Yeah, there you go. Anything else, Stacy, that you wanted to ask about? Those.

Not about the reports. I think that that's good to hear because it saves buying a few. Just to confirm a hunch. Yeah, but the. But I think leads then into. If you're then trying to price pin for yourself in a few suburbs, that outer ring, for example, is you don't have the population density as much as the inner rings of Melbourne for example, or the other capital cities. So you've got a greater spread. But as John was saying, not quite so many sales. But if you're then trying to price pin it's quite a large geographic area then to try to get a handle on to narrow down the suburbs in that price bracket. It's just that getting your foot through the door, those first few.

Yeah. And it really is. They're just really one tool. So, you know, I wouldn't hang my hat on the fact that it's one report or one website or one property expert's statements are the be end of everything. So that's why, you know, we really kind of push you in those spreadsheets to go, well, you know, go to this website and try to check out the information that Australian property monitors has in the back of the magazine or you know, SQM and their vacancy rates and validate that with what you're looking at by putting the median price into domain or real estate and having, you know, having a look at the properties that come up at the median price and what is typical. I mean, I know I have to confess I'm responsible for the renovator report from Residex because I was sitting there talking to John about three years ago, who was then still the CEO of Residex and said, I cannot believe you have this pricing spread for every single street in Australia. And you know what the properties have been sold for, what they've been resold for and you've got all this information and for us mere renovators that are trying to find pricing disparity, you haven't pulled it together. So he went and pulled together the first report and he actually, it was funny, he came up with this assumption, I mean we kind of say cosmetic renovations, you know, 10% of the value of the property. And he's his renovation costs were a renovation will cost $25,000. I was like, how can that happen in Toorak and how can that happen in Double Bay and how can that happen in Blacktown? Like 25 grand is not going to get you what you need to have done in too rack. And he's like, oh yeah, maybe it is a percentage of the value. Like John, you've done hundreds of renovations, you know this. And he was trying to come up with the 1 number to work out on the, you know, if you did a renovation based this could you make money? Which is basically what the renovation report does. And he went back and went, you're right, I'll use 10%. And. And then I was sitting in there and looking at what was happening with the report of, you know, a few months later and these guys running going, we've got a big problem with the Renovator report and I thought oh my God, what's happened? Maybe they've been putting all the wrong information in. He said and because they print it and send it to you because they it so big, he said someone's just ordered Frankston and there's 175 streets and we have to print them all out. And it was a printing problem, so big problem to have. But you know there's. I guess what I'm trying to say is it is one tool and you know there's so much information and John's just mentioned Ripehouse and Jacob Field and we've been working behind the scenes really closely with Jacob. John's been doing some phenomenal work on this of pre populating one of those spreadsheets for you which hopefully we have as an early Christmas present. But it might be a post Christmas delight. But Jacob has got the means with his software to actually troll through all these websites and come up with the areas of gentrification and it's almost like the price pin information. Anyhow, we've got his data and we're shortcutting it into a spreadsheet for you.

It's particularly good for the module 3 stuff when you've actually selected the suburb. So it kind of covers like Jane's census tutorial for instance where she goes and looks at the high home ownership for flippers and percentage of renters for if you're holding it does all that and puts it in the one map. So rather going through all the tables and so on that you have to do with that census tutorial he does all that. But so it's particularly good for that. So it might be the case when you get down to your short list of five or six suburbs that you use something like that to do your, you know, you help you with your final selection and then when you get your final suburb you pin that with your price pins. Because the price pins does take a bit of time but I still think it's a really, really solid method for, for looking at a suburb because you really don't know a suburb until you can see all of those sales prices.

Just for the diamond members, do you want to give a little overview what the price pin is?

Yeah, so the price pin map is. It's a map of a suburb and you essentially take a different colored pin for each price range. Now typically that might be a $50,000 price range. So you know, 350 might be yellow, 400 might be grain, 450 might be red. And you just go through and pin.

It and what you find is. Yeah, so typically agent will give you.

Yeah, that's right. Sometimes you can say if you're looking at a property and ask an agent if you. If they could give you the last two years worth of sales data for a suburb, which I've had that happen a few times. So they don't always tell you to piss off. And yeah, once you've pinned the map out it kind of reveals to you all the little pockets where you've got stuff that's selling in the one street for let's say 200,000 less than stuff at a higher price point which, which tells you that there's capacity there to, to buy and renovate. But the most important thing is, is you'll. You can see for instance on a renovator report say a top 100 that let's say essen the example that we use in the course that essence. Right. It was right up there at the time we did that, the filming for that in the top 100 report. And then you look at the suburb itself and you find that a lot of that pricing or spread of values in the street might be up one end of the street. And then if you go across a couple of streets, a couple of blocks, there's streets there that have got absolutely no pricing disparity. So if unless you had that on the ground knowledge of the prices, you. You're really flying blind.

Yeah. And I think that I did one of these live in a seminar once for Granville in Sydney and another one for Riverview which was kind of out of Brisbane and the one in Granville we found this incredible high prices on one end of the street and the other end of the street they were really low. And it turned out there was a huge hill that people were walking down from a train station and the people didn't want to walk down up the hill in the morning pretty much. So there was kind of buffer zone with the train noise and then there was the high priced properties and then down the bottom of the hill the low priced properties.

Yep.

So it really. For people who are buying interstate and trying to get some clarity, you know. You know, as John said in the census tutorial, you get a real feel for where the public housing is. You get a feel for all of you know, where the owner occupiers are when the renters are obviously. But with the price pin max is that extra level of. Okay, let's really narrow down where we're looking and streets where we're looking at.

What have you found Is the best map for the best map format for doing that? Is it the census one with the density for owner occupiers versus rental or do you source something else for your maps when you do a price pin?

The one we used in the course was. It was the zones census one, I think. No, it was actually the one for the price pins was actually the heritage zones and the overlay zones and all that kind of stuff special.

Oh yeah.

Where do you get those?

I cobbled that together by going to like one of the, the statistical place that you go to find that. I, I can't think what it's called now, but it's. If you, if you are trying to work out if your suburbs in a heritage zone or your neighborhood's in a heritage zone. No, it's actually not council. There's a vic. There's a vic site that does it and it's maps, slash something or other. It's a big long URL. But I'll find it and post it. Yeah, but yeah, and then what I did is I literally just, I can't remember. Oh, you can download it in PDF. That's right. And I had to download about a dozen PDFs, kind of moving the map each time kind of thing. And then I gave it to someone, a no desk and they put it together for 10 bucks or something.

But a lot of people are buying the maps and getting the plasticize at the map.

Yeah, that's, yeah, that's for the, for the suburbs. Yeah. For the whole.

Yeah.

It's just a bit different.

Yeah. But I think if you're flipping, I think there's, there's good, probably a good argument for using this, the census maps like home ownership or high income and stuff like that.

I don't think they pronounce.

Thank you very much.

No problem.

I think the era that I was using there, I was just thinking on the nestern map was the, the reason I used heritage or the zoning maps is because you wanted to avoid a lot of those heritage areas because you just couldn't get in and out fast.

Heritage overlay.

So it was just no point me looking at a place if it was like I could quickly reference the map. Oh, it's inherited, forget about it.

Yep, exactly. I think Angela has a follow up kind of question to that about the price pinning that we might just open up the line for her at the top. Angela, you've got a question around the fact that you're looking at some suburbs with some good growth, but there's not enough pricing Disparity, but you don't have a microphone. So what would happen after pinning a map? Five suburbs with 6 to 7% growth. So you found your suburbs and ordering the reports.

Okay, so that's the dot map rather than the price pins.

Just. And then ordering the reports and looking at the prices and there's not enough differential between renovated and unrenovated properties. I'm worried about purchasing properties in the mid range of 500 to 600. Angela, is your strategy flipping or holding could make a bit of a difference. So you're going to hold. Okay, so basically what you're saying is that you've located the suburbs and then you've ordered some reports for those suburbs and you're looking at the prices within the different streets and have you done the price pin map for those suburbs as well and you're not finding any differential, is that what you're saying? Don't have the reports yet.

Okay, and you must mean that the dot map, I guess if you're talking about capital growth, the price pin map is just for the actual prices.

Okay, I think she's saying that she's actually found a five suburbs and she's done the dot map and now she's gone onto the price pin map and she's pinning the maps and not actually finding any pricing disparity between the renovated and unrenovated. The reports you're buying, are they the renovator reports for those specific suburbs? We're gonna have to get Angela a microphone, I reckon. Look, I'm gonna try to generalize answer and I'm hoping that I'm guessing what you're doing. So basically the strategy is, you know, what you would do is you would go through and you would have a look at the. The dot map. And your dot map allows you to look at the ripple effect and some hot spots and anticipate based on some past growth and the pricing pressures and affordability that outward pushing of where's the next suburb of people can't afford and looking at some opportunities and I've been through a few of these dot maps with a few people in the last couple of months and well, for pretty much every capital city and there really becomes some clarity around where there's some pricing pressure and where there could be some opportunity in the price ranges that you're looking at. So obviously you know, you have to be able to afford it. And that's one of the key criteria, buying criteria. So you've come down to say five or six suburbs and you're trying to get now into the more depth. So I would be doing the spreadsheet at this stage and getting some real clarity around that. You know, the vacancies, the predicted growth, the number of sales, the turnover, getting that kind of information, the rental yields, et cetera. And then fitting that back into your buying criteria. Because you might actually then come down to three suburbs, for instance, that fall out that go. Or in actual fact, if I don't have a predicted growth of over 7% and I don't have a rental return of 4.5% and if there isn't a vacancy less than 2%, I'm not really interested in these areas. So you might actually be able to further bring back your criteria and come down to a number of suburbs. Then if you're going to then go and buy those Residex reports for those suburbs, those renovator reports for the suburbs, specific, not the one that I just showed you, which is like the top 100, they're actually going to go through street by street and they're going to tell you if there is disparity. So I think you've got a valid concern. You better go and spend 200 bucks or so on a report that might not show that there's some value there. In actual fact, that's the reason that John came up with a top 100 report. Because he was worried that people would go and buy a suburb report and there's nothing there. I wouldn't be going out and buying the five reports. I would try the one that you think is going to fit your criteria the most. But just get online and see what you can find. We talked about potentially going, you know, 20% above your, the price range that you can afford because you know, you might be able to negotiate down and looking below as well. So for the unrenovated properties and you know, for the 500 mark, you know, start looking at properties if 500 is the median, you know, the renovated kind of median type property, look around the 400 mark and see if there is anything there physically on domain or real estate but or suburbview.com and try to get a feel for that before you made that investment in the reports. Because obviously the pricing disparity is important. And once again these reports are going to give you a generalized number of the differential within the streets of the highest priced and the lowest priced property. But having said that, we've all found properties in areas that everyone said don't buy in and that have potential. So sometimes there's those small little gems and you know, There might be not enough streets within a suburb to justify it to be in the top 100 renovator report. But the reality is there might be a couple of properties within the suburb and within the streets that have the, the renters that you're after that you'd come up with from the census tutorial that would actually give you that.

And the, the top 100 predicted growth report would probably be a bit kinder to you as well, given that it's a 5 to 600.

Yep.

Yeah. So the renovator report tends to favor.

Those more expensive properties.

Yep.

So because, I mean, if you think about it, there's. And we. Even when we were filming last year, we were in some of the better suburbs in Melbourne and we could see unrenovated and renovated properties next door to each other that we were, you know, doing filming in front of. And, you know, most of the street. I would say, what if there was 50 houses on the street, 45 of them are renovated and beautiful, and there's only five that were the dogs, which, you know, I think they had little old ladies and men hiding in, had been there for 40 years and hadn't moved. So, you know, in, in that respect, there probably wasn't a lot of disparity along the street, but there still was some opportunity and one of those little gems come up, you'd be jumping on it.

Yeah, absolutely.

So, and as you say, you know, you bought the top 100 report, it didn't fit your criteria. There wasn't any properties under 500. Don't give up. It was probably just the, the wrong report for, for the area and the price range that, that you had and for people who are flipping, you know, they're, you know, as we've kind of looked at the numbers and seen people do it, and I think you're starting around that 750 mark is, is where people are making more money. It's really hard to make it in the lower price points. People are doing it, but it's hard to do it in the lower purchase price points. And you'll be finding in those top 100 reports, renovated reports, that kind of disparity between renovated and unrenovated that would suit that strategy. So I think for, for the buy and hold and the pricing disparity.

Lots of, lots of other criteria you can use.

Yeah, a lot of other research. But yeah, I wouldn't be wasting my money on getting more of those. So I hope that helps. Angela.

Yep. Tim's been waiting patiently here.

Tim's been very Active on the Facebook renovator network.

Hey, Tim.

Hey, guys. How's it going?

Oh, good. What have you been up to?

Still hunting around. Just giving agents a bit of what for, but it's all good.

I had the pleasure of chatting to Tim last week and you've got a thousand different strategies in your brain, haven't you?

That's the thing of being an add child. It just doesn't turn off.

I think I might have been the same. So do you have a question, Tim?

Yeah.

Basically, one of the areas I'm looking at pretty close to a uni. I was thinking, like, if you were to add a couple of bedrooms on, how do you go about. So basically my idea was to rent out the rooms individually to uni students. So how do you go about collating data that you can sort of present to an agent to make the property more attractive for an investor? Like six rooms or whatever can each be rented out. 100 bucks a week for a uni student. So how do you sort of put that together to package it in to sale? Because the agent sort of not really care. They just want to get it sold and put the sign up. But obviously if I can show that I can get an extra 200 bucks a week rent, that will push that end value, make it that much more attractive for an investor.

So this is a property that you're.

Selling, you're flipping, aren't you?

Yeah, it's just going to be a straight flip. I wouldn't have the patience for a buy and hold that's not going to happen.

I think that the issue that you'd run into there is that. And I've had a look at a lot of properties and been really attracted by the rental Yields back in 2004, I think around Camperdown, and there was one guy who was selling the property pretty much under the marketing remit that you're talking about, which is there's eight rooms in here and they're all being rented out at 100 bucks each. And you've got a really great return for your $600,000 investment, which back then seemed like a fortune in camper town for a terrace. But. And it was quite. It was really. It was really advertised as having been set up to do that and had that proven income. And from a flipping strategy, jumping in there and converting a few bedrooms and trying to sell it without having that proven income yet, because obviously you're not going to rent it out prior to that, then it could be difficult getting. You know, there was a bit of Discussion on the Renovator network this week about someone who had a property that they were trying to rent out or having renovated it. And you know, there was a firm feedback on the actual ad that the real estate agent was running. And it was just, you know, it was all feature driven, there was no benefits driven. You know, it didn't add really any value and attract people in the door. And I would never relinquish writing the ads for my rental properties out to a real estate agent. So I give them a good crack at it and tell them to send it to me first and then I rewrite it.

Yeah, they don't get the same quality of copywriter as the guys that are selling, do they?

No. And I think that, I mean, when we're talking about features, it's like, you know, three bedrooms, two bathrooms with a deck rather than, you know, spacious home where you and your family have a sanctuary from the inner city lifestyle with your own secluded, secluded outdoor living space. So putting people in the position emotionally is really important. So back to your question, Tim. I think the issue that you're going to have is you don't have to convince them. You just write the ad yourself and dangle that opportunity to potential investors that it is a bigger property and you can get a better rental return.

Okay, sure. And just basically just did the common trick of just stealing McGrath or Bell's copy and running that in somehow.

Yeah, yeah, yeah. And I think also the. Just a quick comment on that guy's property that I went and looked at a camperdown. It was a hovel, so he had actually turned these tiny little bedrooms and he hadn't even, didn't even have the. In one room there was a curtain that separated the two beds that he called a two bedroom rental. It was absolutely a fire trap waiting to happen. It was like an absolute walk away. But having said that, I've got a little terrace in Darlington and I have a client who's got quite a few clients who've got properties on the same street actually. But a client who rents out by the room a terrace three doors down and you know, she's definitely getting a fabulous yield from that. And she's purposely done renovations so that there is, you know, some separate entrances and everyone has their own space and there's enough bathrooms, et cetera. And it would very much lend itself to that student's room by room accommodation, you know, marketing employee. So. And it's proven, you know, she can show that the records of the income that's come in the Difficulty in doing that when it's a flip is that you're not going to have a tenant in there when you're doing the renovation and you're not going to have that proven income. You're going to have to just create the possibility of that in the copy and get your investors in.

Got it.

Cool.

No worries. Cheers.

Okay. All the best, Tim. Oh, I can see Stephen standing up again. I don't know if he's trying to talk to us or not.

We'll give him another shot.

He was about to unveil the Austin woman's secret strategy on how she made 80 grand a year. Stephen, no, he's watching TV. Stephen, turn your TV off. He's multitasking again.

Caught him by surprise.

Yeah, we can do that. Okay, Anyone else have a question there? Yep. Stephen, come. Oh, Sting back again? No, no. Okay, let's give Stephen one more turn. Okay. So has anyone else got a question for us? Otherwise might go home early. Yeah, let the babysitter go. She'll be happy. Well, I guess some other things that I am seeing at the moment, there's been some interesting commentary that has been around what's been happening in the market. There was one big bank boss from Anz that came out in the beginning of the week saying that was there was definitely no pricing bubble in housing. And then someone came out yesterday to say that there was. So that little debate is going on again and again, which is interesting. I think that from a client base that I'm speaking to nearly daily who are purchasing property around the country and buyer's agents as well, there's definitely seems to be a lot of activity still happening in Sydney and in Brisbane. There's been a real move to people and investors going to Brisbane and I think a lot of the Sydney and Melbourne investors I haven't really seen a lot of western Australian haven't seen some Northern Territory people buying in Brisbane. But they've been delighted by the rental yield. So it's still possible within 8 to 10ks of CBD to get, you know, 5 1/2% on a standard house in rental yield in, in Brisbane. And so that's been, that's been interesting and I think from the other point of view that there's some real opportunities to still, I guess get some older style properties in those areas and renovate them. So I know a lot of people who are, who are doing renovations at the moment and a lot of opportunities. So all good.

Someone else has got the hand up here. I'm not quite sure of the name is it.

I think it's Helen.

Great.

Hey, Helen, it's me.

Yes, hi.

There you go.

Oh, sorry.

Only happens when you've got a microphone going. Yes.

Because suddenly I sounded excited.

We are too.

My question is your remark about if it's going to cost you 100,000 whatever to do a reno in one suburb and the one next door, it's going to be the same, but that one has higher median price. Surely the issue. Isn't there an issue that you've already got like the postcode MV and you can't get into that other suburb in the first place.

So just to clarify your question, you're talking about the fact. So sorry, I'm a bit slow here. If we're talking about the ripple effect and we're saying, you know, one suburb's got a median price of $500,000 and the one that's a little bit further out has a median price of $450,000. But cosmetic renovation is going to cost around about the same for each of them.

Yeah.

And the problem. What are you saying?

The way I understood the statement, you may as well try and get into the more expensive suburb because the Renne is still going to cost you the same. Do you have an issue in the first place of getting in.

I think I know the line you're talking about in the video. And. And Jay makes the comment of you need to know the surrounding suburbs because the renovation might cost the same, but the pricing disparity in the other suburb might be way different. So you might make 100 grand more in the neighbouring suburb with the same priced renovation. So it's referring to that spread of values between the unrenovated and the renovated properties.

So if you. And it might be. It could well be that the pricing disparity would. Could be in the cheaper suburb rather than the more.

All right, so I should be looking the other way.

Yeah.

Right.

Okay.

I wouldn't. Yeah. My gut feel is that it's the pricing disparity that is and the predicted growth, if it's a buy and hold strategy, is the things that are going to be dictating which suburb you're looking at. So the pricing pressure, like for instance we talk about Brisbane, Kedron really took off last year. It went from 500 to 550. It really became very expensive and people were priced out of that area. But the next suburb, all of a sudden everyone's going, oh, you're not going to believe it, the next suburb has taken off and geebung and Chermside have already moved from 420 up to 460 based on the capital growth and the demand in the area. Now in theory the houses could be very similar types. They could be streets apart, for instance, and they're built in the same time frame etc and of the kind of same standard and to renovate and to do a renovation on one. Although we say, you know, use a guide for cosmetic of 10%. The reality is, you know, if you're doing the painting, the floorboards, you know, the kitchen and the bathroom in properties that are pretty much next door to each other, they're going to cost about the same amount. So for 40 grand in the 550 suburb, you will probably get the same kind of renovation as 40 grand in the 450 suburb that's next door that hasn't, or 460 suburb that's only just moving. But the 460 suburb, the growth potential in Kedron for instance, might be less than the potential in Chermside because or geebung is because people now no longer can afford Kedron. So you know, the pricing demand is coming off and the growth therefore is coming off because the growth is really driven by the demand and the demand is going up in the next suburb. So all of a sudden you've got, you know, the next area that is all of a sudden a $500,000 capital growth. And for 40 grand you've been able to achieve, you know, also a rental increase and obviously, you know, probably jump it up to the525.540 mark of value. Yeah, so it's not looking at the more expensive one and saying no, I.

Was looking the wrong way.

Yeah, yeah, I'd be looking the other way. Turn around, Helen.

Yes, because it sounded great. And I say, oh yeah, that's a good point. And then I thought, but hang on, I can't afford it.

But I can't afford it. Yeah, exactly, exactly. And that's what that dot map is trying to help you is, is look at pricing based on price and based on growth. But looking at the kind of movement, and if we're looking at Brisbane for instance, and I know I looked at someone's map recently and even Sydney, I looked at someone's map last week and down the major infrastructure or down the major roads, you have this great growth all of a sudden happening and around the 5k out CBD and then the 8k out CBD and it's almost like if you thought of a wagon wheel, the hub in the middle has the Growth. And as the prices are going up and people can't afford it, it starts moving out. But actually, the spokes on the wheel, I'm actually seeing more and more that the spokes on the wheel being those major roads that allow people to get into the city quickly and live out a bit further. There's actually some really great growth on those major infrastructure roads. So although you hear a lot of property Experts talk about 5, 10 from the CBD, I'm looking at a lot of these reports across all of Australia. And the eyes do glass over, but I could put them all on top of each other, starting with the cbd and I could tell you I could follow the major roads out and actually see the growth shoot out those. And I think in Melbourne down to Frankston, just the accessibility. And I know that the difference between the 2000, what was it, 2001 and 2006 census data, there's this little area in South Australia called Mount Barker, and it had the hugest growth and the hugest population increase. And it was because all of a sudden there was a road that allowed people to commute there every day rather than being the tree change that they wanted on the weekend. You know, so don't, you know, as I always say, there's rules of thumb and they're meant to be broken. And everyone always wants a rule of thumb. So we try to give you the criteria to create the starting point, but it's really when you get in, you start looking at what the numbers are telling you and start doing that analysis that you get the feeling with the DOT maps, well, if people can't afford this area, then the next area is going to take off, unless it is. And we looked at somewhere recently for someone, John, in Melbourne, it was like, well, this, this suburb has had no growth and all the ones around it has this great opportunity. And I think there was two things. One was the Caulfield Racecourse pretty much dominated the entire suburb.

I think it was Caulfield south. And it was mostly the Caulfield, mostly the race.

It was like, okay, well, you can't really buy the racecourse. And there was another area I was looking in Sydney and I think it was the. Is it Rookwood Cemetery or something? I was like, okay, well, you don't really want to buy your place there either. You know, you got many years to spend there potentially. So. So, you know, it gives you a starting point that allows you then to do the next lot of analysis.

Okay, yeah, good.

So, yeah, don't let, don't let it throw you and I know there's, there's a lot of people that I talk to, you know, their prices point is 250, $300,000 and they think they need to go regionally and buy. And I spoke to a young couple the other day and they're looking at $90,000 properties way out regionally. And we're kind of talking about the fact that they still were talking about 5 to 6% growth and 5 to 6% growth on a $90,000 property is not really going to get them to their dream home in 15 years is what they're trying to achieve. And you know, waiting or till they could afford a bit more or potentially buying, you know, not the house but the unit in, in a, you know, outer, in a west kind of Sydney, Melbourne, Brisbane, you know, I have left out all the other states at this moment I would, I'm not buying in Adelaide and Hobart. You know, Western Australia and Northern Territory has kind of had its run and we know that Western Australia has come off, but there's still opportunity out there. I've got people buying over there at the moment. But you know, the, the fact of the matter is that you might, it might not be a house that you're buying, it might be a unit. And you know, I've done a unit. We spoke to who was it Carl before who's got early access for four weeks to do a renovation on a property before he's even let it. And I, I mean I shared with you guys in the ultimate guide to renovation, a, a 16 day or 10 day renovation that I did that I think cost like 14 grand and you know, added it was a differential of like 100 grand in value. And I spent six weeks planning that and that was all through, you know, getting those quotes and everything ready during that settlement period. So you know, that quick renovation actually had all that planning behind it and you know it's, it's the planning and the research and the work that is going to get you to the end goal. And a lot of this building up the numbers and knowing where to buy and even the diamond members who are going through the your property success course, looking at that course three of where to buy and how to locate a property and doing the work and really kind of targeting the right property in the right area. Sometimes as Angela said, you might have a price guide of 500 to 600. You have some properties with 6 to 7% growth, but there's no pricing disparity or it's in the reports. There might be on the ground. And it might be the fact that you have to get out there, but if we're talking about half a million dollars, thank God you found out now that those suburbs don't have the potential for you before you buy it. Because I'm looking at people's portfolios every day and almost challenging them on some of the properties in their portfolio of why are you holding this? Because it's gobbling up your borrowing capacity and, and gobbling up, you know, and not making you any money. And it's got no growth potential and it's not till you kind of start looking at that you turn around and you go, you know, you can make a lot of money, you know, feedbacking myself, you can often make all the money. So yeah, so I hope that helps Helen. I think. Yeah, so hope that helps Helen.

I don't know what happened.

So anyhow, but yeah, the thing is that you kind of need to get out there and have a look and look at the next suburbs rather than ones that have already moved. So does that sum up your question for you, Helen?

Yes, it does. Thanks very much. It sort of led me on to my other question I was going to have. Where if you then at the end of your borrowing capacity and you can only get a small amount, like you're saying the young couple who couldn't afford something greater, would you, I was thinking, would you then buy something that has a good rental yield and just wait, you know, the 10, 20 years for it to double in value and you've got your cash into your property portfolio because you've covered your rent the whole time or would you do something else? But it sounds like you would go for units.

Yeah, I mean, I'd always be targeting for the best property I could afford for my money. So if that meant that I wasn't buying houses, I was buying units, I definitely wouldn't be. And when I'm talking about buying units, I'm about talking, talking about buying in the older style blocks, you know, preferably without lifts and the large body corporate fees associated with all those extra features. Yeah, and, and trying to add some value there. I mean, you know, I've got two units in my portfolio that you know, perform and, and you know, most of my portfolio is if it wasn't for New South Wales land tax and being positively kid. But, and that's just through renovation and holding those properties and experiencing the growth. And you know, don't, you know, to double your money in 10 years time is, does require, you know, based on the rule of 72A 7% capital growth. And that's, you know, that's not a dime a dozen. That's something you're going to have to search for. And it's around once again, it's around the infrastructure, it's around the supply and demand, it's around, you know, the council's approvals and, and you know, people wanting to live close to where they, they work or play or family, et cetera. So it's around, you know, this whole process of getting intimately involved in understanding where to buy I think is really important. And the other thing is that, you know, I've bought whenever I could afford to. I haven't tried to, to predict the market. I haven't tried to be clever. You know, if, if, if economists can't predict the market, then you know, who am I to try to do it? So when I could afford it, I bought the best property that I could afford at the time in a growth area that I could add value through renovation. And you know, the Trident strategy talks about creating equity in the meantime and you know, that that could be renovation, it could be, you know, creating value through subdividing or developing, you know, it's about creating, creating something that wasn't there before and getting a better return for it. And, and you know, for me I think a lot of, there is a lot of work in finding the right property. And you guys in the Ultimate Guide of Renovation have been through, you know, this first six modules that have really shown you the work that is to be done to find the right property. But once you've nailed it and you've got the right property in the right area that's right for this type of renovation or right for adding value to it, then you can just park and forget it. You know, it will, you will be getting a better rent for, for it and you will be having a high value property in that growth area, going up in value. There is concerns that you are going to hit that magic ceiling of borrowing capacity. Everyone goes through that. And when that happens, there are other opportunities. One is potentially buying a self managed super fund. And in your self managed super fund, if you don't make a decision, then if you don't make additional contributions yourself, then you will find that the lenders actually assess you just on the value of the fund. So there's opportunities to buy there. And I had a really interesting conversation with the financial planner Jane Horn today from Rivet Financial and we were discussing this for a client, mutual client, about whether it was best for them to Buy in the super fund or not. And I posed to her, was it possible to actually, if you were retired and in theory not earning an income because the income that you have from your super is not taxed, then if you then actually sold your property and you had no income, should you be paying capital gains tax? And unfortunately the answer was yes, which was the capital gains tax. If you make, you know, if you make $100,000 capital gains, 50% of that's 50,000 and 50,000 income and you pay tax as at that income. And I thought I'd come up with a sneaky strategy was that the day before you retired, you actually sold that property to your super fund and then sold the property. But apparently the transaction cost of selling super fund actually enacts the capital gains tax.

Planning for a dodgy retirement.

Not dodgy, just this one. When you didn't have to pay for capital gains tax, I was thinking, wouldn't it be great if you could just retire and then, then sell your properties and have no capital gains. But unfortunately, unless it's a commercial property, you can't do that. So there are other opportunities if you do hit your borrowing capacity wall. But I would challenge people sometimes in going back and having a look at the original reasons that you place a property into your portfolio has changed and you maybe even be able to add some value to a current property in a portfolio. I'm looking at doing that for, to a number of mine at the moment rather than buying. So.

Very good. Thank you very much.

Okay, thanks, Ellen.

Takes a long time sometimes, doesn't it, to find the right property too can be. I know you say in the course that some experts say 100 properties that you need to look at.

Dr. Roos says that.

Yeah, yeah. I've found that you can get to the stage where you just feel like you're banging your head against the wall because you've got this criteria and you're trying to. Feels like you're trying to fit a square peg in a round hole kind of thing. But particularly when you just miss out on, you know, one deal after the next kind of thing and prices are.

Going up around you.

Yeah, that's right. But in my experience though, it's, it's nearly always come off just through perseverance. And it just happened recently with the property that we bought that it occurred to me that there is a little bit of luck involved too. But it's, it's luck that comes with the perseverance. So just being in the, in the market all the time Being fresh on the minds of the agents. So you're the first person they think of when it, when it comes and then just, you know, it might be around the circumstances of the person that owns the property and what, what their needs are. And even being said. Yeah.

To act quickly.

Yeah.

Like I spoke to a client today and they have a large cash deposit, unencumbered home and they were talking about the fact they were going to use the cash as deposit and cost and renovation and borrow money to buy properties to flip.

Yeah.

And, and they had the borrowing capacity be able to do these things. And I'm saying, well, strategically if you actually borrowed the money from your home, then you could use that like a great big credit card to buy properties unencumbered and then renovate them with the cash that you have and sell them. And so you could actually walk into a real estate agent tomorrow and say, here's $500,000. I know the market price is 550. There's no finance clause, there's no lenders involved. Do you want the check now? And like Carl didn't get in seven grand off. You know, there's an opportunity to be able to act now and it completely changed the way that they could see, see what they could do. They're not getting the repeated credit hits on their file, their credit score's not going down. The banks aren't going to be wary of them now. They're in the fortunate position of having borrowing capacity, the money from their home and having the cash. But you know, sometimes it's thinking the strategy out and trying to anticipate how you can negotiate the property that might seem unattainable. And you know, and I spoke to another couple today who spent the last four months looking for properties in Sydney and they've seen the market move so much they can't, they're looking on the weekends and you know, they've got kids and you know, they've got a life that they're doing and they're working as well. And they've said we can't do it anymore, we're going to get a buyer's agent. And, and I kind of work with them on what the buying criteria was and was like, well don't go off to them and say we've got 600,000 to buy a unit in Sydney. Go for it. It's, you know, we got 600,000, we want to add some value. If we can change it from a two bedroom to three bedroom, we'd like to do that. We're Looking at an area that has growth potential of 6 to 7% in the next eight years and we want to have a rental return of 4%. So for us it was really about defining that and getting spending $10,000. And as you diamond members know you've got $1,000 discounts off quite a few buyers agents as part of your membership. But spending the the 10 grand of on a buyer's agent and getting them to act now and if the market's moving that quickly, they're going to make their money back for you. But if you can give them the key is giving them that criteria and being specific about them and then going and getting them to work for you. And you know people in the ultimate guide to renovation on the renovated networks there's a lot of people in there who are using buyer's agents so and there is a buyer's agent on there. So you know, you can have a chat and pose those questions. But don't be disillusioned if it does seem too hard. You've actually been through the and those in the diamond your Property Success Course 3, you've been through the criteria and your strategy and worked out your risk profile and that gives you a better position to then get someone else who is an expert possibly to get you the property. So there you go.

Okay. Well, I reckon we're about time.

Well, we are. Let the babysitters go home, people feed their dogs family and get back to seeing who's on the couch. Hey Steven. Well, we'll have to get him to give us a bit of an update on that. I might, I might have to get you online another time. But look, we're out of time and I guess we better wrap it up. Next month is Christmas so don't expect a call on Christmas week. It'll be the week before and you know, everyone will be through the open guided renovation course by then. Next week you're going to get the box at the back, the structural renovation which is just. Yep, I know I John's mastermind this and he has done it himself and he's used commercial techniques to actually create, I don't know, within a couple of weeks, two weeks. You could put a box in the back.

Yeah, it can go up pretty quick. I was talking to one someone today about it that it really goes on quick because it's really only three walls. Walls, you know, two side walls, an end wall and a roof.

And it's the clever stuff is how the roof ties in to the pre. The house.

Yeah, that's The. The problem with most structural renovations is they've got to tie into the house somehow. And if you're tying in roof lines and stuff like that, it can be really expensive. So the idea here is to select the right property and. And just tack the box on the back and you get your big open plan. And it works really well.

Yeah. And you know, the, you know, a couple of weeks, 90 grand, and then I guess on top of that, around 90,000. Top of that, the fit out to the standard, you want another 30, $40,000. You know, a whole big lounge room, butler's pantry, kitchen, dining room.

Yeah. Depending on which market you're in. Because it'll change a bit. But, yeah, you'll probably even get down cheaper than that. But it's. It's. Again, it's something that's pretty. If you got the house that suits it. It's something that's pretty easy to get quotes on from a builder, which you'll need to build a Venus structural renovation or go own a builder.

And the key to the comment you just made is that it's not right for every property in the. Every area.

Yeah.

So quick answer to a quick question from Stacy saying Dubai's agents work in the lower price end. 300, 400, 500,000. Yes. And they usually tier their costs around that as well. So.

And I would assume that there's buyers. Buyers, agents, obviously, we know a couple that specialize in property investment as opposed to.

Absolutely.

Because there's a. Certainly a breed of buyer's agent. And I actually, I chose one accidentally, probably because I didn't do my research enough, but they were used to working with people with really deep pockets that just didn't. Didn't want to do anything. Essentially. Just give me the house. That's it. Yeah. So they were used to securing properties fast by putting in really high bids. And, yeah, it wasn't a good fit for us.

Good fit for maybe the very wealthy homeowner.

Yeah.

Yeah. And I mean, in that diamond membership, guys, there's one buyer's agent in Melbourne and she actually offers kind of a mentored buyer's agency offering where it's cheaper and she'll actually find the properties. But you go and do the inspection and she'll check in on Monday and see kind of how you went. So there's a mentored kind of one. I've never seen anyone do that before, which is great. Dave McMillan, he actually every month posts to us properties that he's found that he hasn't got owners for as yet. And goes through, you know, why investors be interested in them. And they're usually in Melbourne, Sydney and not Newcastle, but Brisbane and then some guys that are ex propel who look after Newcastle, Sydney and Brisbane. And they've only got three to five suburbs in each of those areas that they've really targeted for investors with returns. So you know there's different and you know there's a lot of different things. Obviously you don't usually what the buyer's agents have is, you know, is a price they charge depending on the range of price that you're looking at because they don't want you to think that just because they negotiate a higher price based on a percentage they're going to get more money. So you know, they're pretty fair about this. And, and yeah, we only recommend people that we've well recommended, family members and best friends to. So you know, buyer's agents look after everyone in the market. In actual fact, I know that there's, there's people acting as buyer's agents that are out there running around getting the less than $200,000 properties. And I think if you have a look in Smart Property Investor magazine, those guys are actually, you can read my monthly toolbox. But every single month they are buying properties and renovating or do something to them and they use the right group to do that. Which is where Nathan Birch got his start in actual fact. So when I was speaking to Nathan, Nathan's obviously got some model now I think you pay a monthly fee and maybe you could be the highest bidder on a property, finds a something. So you know, there's a lot of different models out there. But buyer's agents work for you and they're, you know, if you find a good one that's investment focused and giving them the buying criteria that you've worked up, then you should be in good hands. So guys, that's it from me and that's it from you.

It is, yeah.

So till, till next time, I hope everyone has a fabulous month and you know, it's been great having a contribution tonight. As I said, if you can't be on the call live, please send me an email beforehand and we'll throw your message up there. It's great to see, gosh, so many people here and so many quiet people on the call tonight. But so many people on the call tonight and I'm sure a lot of you will listening to this later as well. So all the best have a great month and get your questions ready for Christmas.

So ya, bye.