Property Hub - Investment Insights & Inspiration - Get Invested - Part 2: Ian Ugarte on co-living as everyone’s answer to housing affordability

Episode Date: March 10, 2023

We continue the conversation with property expert Ian Ugarte who reveals how to immediately eliminate the housing affordability problem. Last week we got to delve into and learn some valuable lessons from Ian’s own personal journey to sustainable success, and this week we take it to the next level by revealing a unique and immediately achievable solution that has the power to eliminate housing affordability challenges for investors, tenants and the community at large.   Ian is a leading property expert, educator and change maker, who drives the Australian Housing Initiative and Invida Co-living in his role as Australia’s leading micro-apartment, rooming house, and boarding house specialist. Tune in to part 2 of the discussion now. FREE ebook - Small Is The New Big: Download here for free with the code 'BUSHY' https://ianugarte.com.au/product/small-is-the-new-big-ebook Three easy ways to Get Invested right now: 1. Subscribe to this podcast now, if you haven’t already, and get the inspiration delivered to your podcast feed each week 2. Get a copy of my book, Get Invested, for FREE, and find out what it takes for you to invest in living more, working less. Go to: https://knowhowproperty.com.au/get-invested-free-ebook  3. Join the Get Invested community. Each month Bushy sends a free and exclusive monthly email full of practical ‘Self, Health and Wealth’ wisdom that our current Freedom Fighter subscribers can’t wait to get each month. Just visit bushymartin.com.au, scroll to the bottom of the page and sign up. About Get Invested, a Property Hub show Get Invested is the leading weekly podcast for Australians who want to learn how to unlock their full ‘self, health and wealth’ potential. Hosted by Bushy Martin, an award winning property investor, founder, author and media commentator who is recognised as one of Australia’s most trusted experts in property, investment and lifestyle, Get Invested reveals the secrets of the high performers who invest for success in every aspect of their lives and the world around them. Get Invested is part of the Property Hub podcast channel, your home for property investment insights, inspiration and stories from Australia’s top property experts, investors, leaders and analysts. Subscribe now on Apple Podcasts, Spotifyand Google Podcasts to get every Get Invested episode each week for free, and also get full access to RealtyTalk, Australia’s top online property show for red hot property investing news and insights direct from property industry leaders and influencers. Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, show producer Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media.  For business and partnership enquiries, send an email to: [e-mail] omnystudio.com/listener for privacy information.

So, we started looking at problems and housing is a problem. Affordability is an issue. And what's the answer to affordability in Australia? The government should build more social housing. That's the standard answer. A government that's got trillions and trillions of dollars of debt racking up interest every day does not have the money to spend, especially when they've sold off their assets to cover previous debts, right? So, that's not an answer. So, we started doing some research, we started looking at census data, we started to realize that, you know, there's some issues going on within housing.

The research showed that 12 years ago when I started looking at this, there was 12 million empty bedrooms in Australia every night. Yeah. So, we didn't have a housing affordability issue, we had a housing size issue. So for me, we specialise in co-living to buy existing properties or purpose-build co-living houses where people can live in their own space, but under the same roof. And by doing that, we're fixing a massive problem in Australia. Hi there again, Get In Visitors. Welcome back to part two of our great conversation with Ian Ogatay from Invita.

Last week, we got to delve into and learn some valuable lessons from Ian's own personal journey of continuing success. And this week, we take it to the next level, where he reveals a unique and immediately achievable solution that has the power to eliminate housing affordability challenges for investors, tenants, and the community at large. So sit back and enjoy and make sure you take advantage of this game-changing opportunity. Welcome to Get Invested, the leading weekly podcast to help you unlock your full potential and enjoy your version of sustainable success that lies at the intersection of your three L's,

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You can also connect with me personally and join the Get Invested community of fellow Freedom Fighters at bushymartin.com.au or on knowhowproperty.com.au. Now, let's get invested. I think it's the perfect entree now to dive into the subjects that are really close to your heart and the initiatives that you've created that are having a massive impact and have the, even more importantly, have the massive potential to take things to the next level in terms of all of the housing issues that keep getting talked about, but no one's actually coming up with any

really effective and implementable solutions. So, as a sort of an entree into that though, what I'd love for you to talk about and you touched on the seven mistakes that you reckon you've made all of them. What are the biggest mistakes that you see people making around property investing? I think they want to take the easy road and they're not willing to do the work to become knowledgeable enough to invest or at least find someone that they can trust. Now, that's a difficult thing because trust is not easily kept but can be easily built at times.

And, you know, there's a period in my life where I just couldn't trust anyone because those people close to me disappeared, you know. um you know you talk about um finding finding that you know the the hero's journey which is almost every movie you ever see you know kung fu panda you know that whole hero if you just don't know about the hero's journey just google it um but in the hero's journey there's the testing of friends and allies um and enemies and interestingly enough when you get to that point it's the it's the friends and allies that don't actually trumpet it's usually those people around you that you think are enemies that are there to support you the most. It's an interesting

phase of your journey at that point in time, depending what it is. I think people look for the easy option. They want the get rich quick. They want to be able to put their money somewhere and not worry about it and call it passive income. There is nothing passive about property. zero passive right when you invest in property you're investing in a business and if you don't work on that business you are going to lose that business so if you ever hear someone talk about passive income run right if you hear someone say look we're going to be able to get a positive geared property and we're going to be able to do something with it then that's when you should I've seen it. I've written education programs for stage speakers who throw the... Look at this

subdivision. They spent $600,000 and they sold it for $800,000. Well, yeah, but what about the journey in between where they almost tore each other apart as husband and wife or the joint venture partner that walked out? Tell the full story. There is no silver bullet in anything Because if property was so easy, everyone would be doing it, not just the four odd million Australians that have an investment property, right? So I think the most important thing for people to understand is firstly, get some understanding. You know, you're going to probably ask me about my favourite book or the book worth reading.

I'll say mine. But secondly, money magnet, Steve McKnight, get an understanding of financials. because if you do not understand financials, you're going to get yourself in trouble. You're going to have to rely on other people. You're going to have to pay them money to look after your financials, and no one looks after your money better than you. So, stop putting money in other people's, like, can you give me a, Ian, have you got a financial planner that can set me out and do what I, sorry, the first thing I have to say to you, there are very few financial planners that do financial planning out of the goodness of their own heart,

if they're a financial planner and they're not financially free, I have to start asking some questions because how are they deriving their income? They're selling you something or putting you into something that gives them money. So let's firstly take control of your environment and what you control. By all means, find something you want to invest in and go and get some advice about that investment but don't go to a financial advisor that's going to tell you buy this right um yeah i think that's probably the number one thing they would say take an invested interest into learning what you're going to be doing with your money even if you choose someone else to do

it for you which is how we came about um because we were only teaching people the one thing that i found by teaching people um in property and i taught everything from from subdivision through to co-living i taught everything and wrote programs on everything yeah what i realized is that people's actual um transaction rate of going from education to actual property deal was very low i can tell you the numbers in in my fraternity higher than the rest of them because i've been involved with a lot of them. 90 out of 100% of people that will buy a program, about 8% or 9% will actually do a deal and 3% of them will be successful. In my program, it's a little bit higher. So, if you think about that, the 3% that were successful, I've started to question myself,

well, were they going to be successful anyway? I might have had a little bit of input into them, but they were probably driven they had the right self mind and the ability to be able to look at their health and everything around it in a positive way and probably had already succeeded in some part somewhere else in their life right so that's where we clicked across because i realized that people were joining my program and they're still supported i still help them through everything um years and years down the track like i i made the stupid decision of making it um as long as we're working together um rule that i'm here for you and you're here for me um i should have said it's a 12-month program but i didn't um another brilliant steve um post fact um thing i should

have done but you know if you if you look at them and you say to them okay here's the education here's the information go and do it they either lack the time most of them the time or the willing to devote time um they don't have the experience and they don't have the confidence what if it's the wrong floor plan? What if the numbers don't work? What if it's in the wrong area? What if I buy because, you know, and that's why with all of that information, that's why these marketeers that sell house and land packages are so successful because they do their glossy brochures and answer all of those objections that are in their head. And by the end, they're convinced that they should buy. Now, remember, we're doing house and land packages. We're doing co-living ones,

um which are negative vacancy rate yeah but i can understand how people go i'm too busy so let them make my decisions and then they've got then they've got someone to blame if it goes wrong yeah it's spot on absolutely spot on i love that mate uh you you touched on your book which i'm going to come back to shortly but i i now want to sort of dive into the the meat and potatoes of the issues that you've foreseen and come up with some really workable, actionable solutions to, because as you know, there's a lot of negative talk and lip service given the media about housing affordability, housing supply and the rental crisis. And as we've already talked about, there's a lot of finger pointing and blame, but very little action that's affecting

all property players from buyers, investors and the tenants. What's your read on what's really going on here and what are the causes to start with before we talk about your solutions? Okay, let's firstly start at the top. There was a recent study that came out last week about housing affordability and how governments are writing policy, but they're not really serious about the investor fixing the problem they're doing lip service you know you do the queensland housing summit it was all about making sure that the politicians with the new south wales and south australian joining in on the conversation because that was the right thing to do to be able to get their numbers up for the next election especially new south wales which looks like there'll be a

change of government so you know they're creating this stuff at the top without really thinking about what we call in political terms as a political advisor um unintended consequences you know um as an example recent policy change in queensland because of our input into the housing summit and making these changes um they've created a co-living product which which is policy which is great for queensland and then you go and implement it or you're about to implement it in a council area and the unintended consequences is that now you get hit with a $70,000 infrastructure charge for a house that was five bedrooms or four bedrooms. It's now got a maximum of five people in it. And the council says, well, because we can charge you, we're going to charge you. And you

say, why? There's an increase to infrastructure. I said, that's a four bedroom house that can have five people in it, are you telling me that those five people are going to flush toilets differently to anyone else in a family home? Like, let's be serious here, right? So, the uptake of affordable housing investors fixing the problem isn't happening because there's no link between the private investors and the policymakers, the bureaucrats and the politicians. What usually happens is they get larger building companies um you know larger development companies and all and their say is not really a mum and dad investor say it's a it's a company and my profits say um and i i think you know when you look at the demographic we need to change the way that we

think about housing simple yeah absolutely spot on i think this disconnect between the the political policy environment and what's happening on the ground you know a lot of politics is all about thinking about the next three years and therefore they've got to be perceived to be doing something without actually doing anything and that's why nothing changes here and I know I'd love for you to expand on this Ian because you know I think you've nailed it when when you've said previously that it's not about the housing supply issue it's more an issue about the housing mismatch. Can you expand on that a bit for us so that everyone listening in really gets what the issue is here? Yeah, sure. In the previous episode,

I talked about me getting to the point of suicide before I had to make a change with what... And I'm a brick in the face guy. Something has to drastically hit me in the face before I'll make the change. And that change was pivoting our business away from big block developer to community outcomes so we started to do the research and we sat um we sat out here uh in literally in a caravan coming up with um ways to fix a housing problem and we started to do this research um and so the census data um from 2011 to 2016 was what we had at the time and we started to look at it and, you know, we started to realise that there were some numbers that were popping up that were different to what we expected. And that was that there's 12 million empty bedrooms every

night in Australia because people build four bedroom, two bathroom homes and only 2.38 people live in it, right? So, if you've got parents in one room and a child in another, that means that there's two empty bedrooms, which is either an office and the other one, which is full of crap that you can't fit in the garage. So, if we looked at it from a different aspect and said, well, how many new homes get built in a period and how big is the household that are needing them? So, the census data from 2011 to 2016, we're looking at the amount of new homes that got built in that five-year period versus the amount of new households that got created so new homes pretty simple um basically a new house gets built um it gets put into the census data when it comes

to new households we're talking about my former household as an example six people so my ex-wife and i four children four daughters um one daughter moves out with her boyfriend and one household created. Another daughter moves out and lives on herself, another household created. Christine and I divorce, another household created. So out of one household, four households pop out of the woodwork and there's a daughter that's about to create the next household. So between 2016 to 2021, 82% of all new housing that was built or brought to the market was four or five bedroom houses 82 percent right at the same time 69.5 percent of the new households were singles and couples people that need studios one bedroom or two bedroom homes not apartments homes where the

grass is outside so that was 2016 to 21 data 2011 was less so we're seeing a growing trend that the new housing being built is not fit for purpose for what the people need it for. And if we've got, back in 2012, 12 million empty bedrooms, today, I think it's definitely more than 13 and a half and growing. 13 and a half million empty bedrooms because of this stock coming to market. And we've got this affordability issue because the outcome is when a single or a couple goes out looking for a rental, the only choice they have is a four-bedroom house. If you gave them more choices, they will take it. And it's not a ratio. If a four-bedroom house rents for 400, a three-bedroom house doesn't rent for 300. And that is shown, Department of Health

and Human Services did a study of all rental properties. A four-bedroom house rented for 420 across all rentals in Metro and a two-bedroom house rented for $15, $5 less for two bedrooms less. And that's because there's not enough two-bedders out there. So, if we change the usage of those empty bedrooms, we can make a huge change to the marketplace. And with what we do in co-living, not only can we build purpose-built brand new, but we can quickly and easily convert existing stock using unused and unknown policies across the whole of the country. That just makes no one lose us out of what we do. Absolutely, Brian, because in one single blow, we're taking existing housing stock,

which is underutilised, so we're not adding to the exercise and not expensive thing to create, and it's not having an environmental impact. We're suddenly diversifying the income streams for investors so that instead of getting $500 for a four-bedroom property, then you'll tell us the numbers, but there's substantially more and you're not relying on one tenant, you've effectively got three or four tenants in the same place. And at the same time, from a tenant perspective, all of a sudden you've got an affordable exercise that gives you the accommodation you need at a fraction of the cost and positions them potentially then to be able to save to put together to do their own home at a later point in time. So it's just a beautiful solution. Talk to us about

a little bit about how the actual co-living solution does work what are the opportunities in it and what are what are potential investors or listeners need to know around how to do it because i certainly don't want people going right i'll just go and grab a four four bedroom house for four different people in it because that's not what we're talking about at all can you expand on the the whys and wherefores of around how co-living actually does need to work yeah Yeah, and just on – it's a very good point. That last point you bring up is – I've seen it a lot. We get phone calls and go, hey, council's just called me.

We've got a show cause notice. They're saying that I can't do this, and you said we could. I said, no, I said you need approval, right? You look at flatmates, essentially, share housing. Flatmates has disclaimers all over their website about the fact that if you do this, it's not necessarily going to trump up, right? And they've got their own wording, but this is a full legal application. Now, we only operate in areas where we can do private certification approval.

So that's either I go to my private certifier or a building surveyor and I say, hey, here's the plans that I would normally give to council. Can you sign them off privately and then send it off to council on my behalf? You're more efficient and you're going to turn up to my project and sign it off on time rather than waiting for a council to do it. So that means that it's all of WA, all of Victoria, all of South Australia, now all of Queensland. the new south wales state government um paid for my advice um to create their new co-living product but they didn't take my advice and that's where the bureaucrats had they they had to put a tick box in and that was did we get consultation from an advisor and that was it we are doing a pilot program so i'm hoping that new south wales will come on board is we either purpose build um but

for the discussion of those empty bedrooms you either own an existing investment property or we'll buy one for you. We will get the approval. We start and we turn a four-bedroom, two-bathroom house into either a four-bed, four-bath, a five-bed, five-bath or a six-bed, six-bath depending on the house and the policy and the approval process. We move in on the Monday with my builder's license. By the fourth Friday, it's completed and we're good at what we do. We never go over time we never go over budget the only time you'll get any variation is if we open up a wall and we might find some termite damage or something we need to repair that um we furnish in the two weeks following um and we stage it take the photos put it online you are literally

only out of pocket almost only six weeks so by the time that you're ready to take the rentals up we project we property manage for you as well we already have two or three ready to go into that property because i know it's coming up because i missed out on the last one two weeks earlier so we put a new property to the market every two weeks minimum um in most states so what's happening here is that people are realizing that they can move into our properties and be better off as a tenant or a resident is what they are. So, as an example, let's take four four-bedroom houses and currently they're singles and couples living in those houses. It's the only stock they've got available. There's nothing else or no other choice on the market. You ask a real estate

agent, do couples like four bedrooms? They love four bedrooms. They always rent. It's the only thing for them to rent. What we do is we take one of those houses out of the four, we convert one of those. And then we say to the singles and couples that were living in the other three, plus the one that's living in this one, hey, instead of paying $600 a week, we're going to charge you $300 to $350. We're going to include utilities in your costs. And you only have to look over after a small portion of the house. You've got your own bathroom. You've got your own kitchenette. And you can cook with a pull-out stove. You have your own sitting area and your own bedroom with a walk-in robe, rent this, share the common kitchen if you want to use the oven,

no one ever goes in there, and use the laundry, which you go twice a week, fully furnished. And they come in droves. They save themselves one third to one and a half of their normal weekly rent. They get their utilities included. That means they can start saving some money. Within three to five years, we're getting professional couples moving into these properties and saving a deposit to buy a house so that she can have a baby, hopefully before the age of 40. Then we've got the 55 single female, the biggest growing demographic of homelessness in the country right now.

A woman that's looked after house and home for the last 20 or 30 years who ends up in a divorce with a crappy settlement because the kids are no longer at home. She's got no super and the kicker is she can't get a job because she's got no experience or a qualification because she gave up 30 years and devoted that 30 years to husband, home, and kids. And these are the most qualified people in the country. They handle finances, timetabling, anything that you can imagine they've handled, but they can't get a job. So they see what we provide, they come in. And I didn't know this

existed until we started putting these properties to the market and we would get knocked knock on the front door after front door after front door of and you go and eventually I had to ask the question yeah I just can't find anywhere I'm sleeping in the in the in the van it's my home no you're actually homeless if you're couch surfing or sleeping in a car pretending to be Thelma Louise I'm sorry you're homeless that's what's listed as right so we learned very early on because then we decide, oh, we'll just put five women in a home together. And then they tore each other apart. They wanted to stab each other because they're very fixed in their ways. But they're a fantastic anchor resident to put and build a home around. And then you've got the

single professionals, the tradie, project manager, nurses, doctors, accountants working their way up the rank, right? So now the property that used to rent for $600 a week now has four or five residents in it, paying $300 to $350 a week. So, now you're getting $1,400 plus, $1,500 plus, and some areas you're getting $2,000 depending on how many rooms there are. You've got to take some costs off. Management is more intensive. So, we charge, and I'll be open here, we charge 12% plus GST, where normally you can get as low as 6.6%. But we're very, very good at what we do. And it's a specialised way of being able to get people into the front door and you're paying six point say six percent for a four hundred dollar property you're paying

twenty four dollars a week in commission um which leaves you with 376 even if you could get a thousand dollars for the same property using us you're paying 120 that's um now 700 is that 880 in your pocket less than cost 700 so what do you prefer 376 or 700 after cost your your it's not about percentage it's never about the cost it's always about value i am always yeah And one of the mistakes that I see is that our clients go, oh, I just don't want to pay you 12%. And I go, well, that's what our charges are. They go and find someone at 6.6% that says they can manage it. They can't fill them. They end up with empty rooms. They come back to us. It's important to know that it has to be legal. If it's not legal, you can't get insurance.

If you're getting insurance in a share house right now, it's likely not legal. And your insurance is taking the premiums, but not going to pay out if something drastic happens. And let's hope someone doesn't die in there because then you're left with that one as well um you know we we i'm really strong and passionate about this because with taking three couples out of that example of four houses by taking those three couples out of those houses we are now freeing up three family homes for families yeah and so we're turning one front door into four front doors and freeing up family homes i get hammered on social media you know i can't the way of fixing the housing problem is not to go to the tenants that need the housing it's to go to the people that can provide it

so i have to get on social media and pay for advertising to get people to come to the door to do this and of course we get a lot of social justice warriors absolutely hammering me and i'm telling you bushy i'm i wear my heart on my sleeve i'm very vulnerable i put my thoughts and there's nothing like you know you say to me what is there something out there that the people don't know about ian nothing because i tell everything to everyone and people make their judgments and i'm okay with that but what i can't handle is the negative comments from people that don't understand what we do but more importantly can't change their mind out of a you know you take a hundred comments 30 to 40 of them i can say this is what we do and they'll come back and say sorry i didn't

realize i see what you're doing good on you i get another 30 that'll say you know what you're having a crack good on you i don't agree with you but let's move on and then you get the rest of them that are just so intense on making you feel like the worst person on earth because they've got their agenda. And the amount of times that I get told that I'm destroying the housing market and that property investors agree and that all of this sort of stuff. So it does get to a point where I actually have to say to my team, I'm at that point, or they actually see the signs and they say to me off social media we know what the answers are we'll answer most of the time it's me answering if anyone that sees that it's no bot doing stuff like that it's me actually answering

so they do need to give me a break because it it tears me down you know i imagine that and you know this better than i but uh if you're creating that stronger reaction then you must be doing something right and that's what i've always found it's it's when when you're buried by naysayers you know you're meeting moving the needle in the right direction so yeah easy for someone like me to say that but but it's also become very cheap and easy for people to be keyboard warriors and say things that they would never say to you if they were looking you in the eye it lacks a lot of courage in my my view for people to jump in on something they know very little about and condense someone without understanding what they're talking about

but I again I commend you because if you're getting that sort of reaction and that's telling me straight up that you're doing the right thing mate so keep to it I guess what I'd love to for you to share then two things really what's the best way for the people are listening this going wow this is this is a great solution what's the best way to start to embrace the whole co-living opportunity but but second to that and that's from a personal perspective As a collective, how can we be better at getting decision makers, policy makers and others to embrace the opportunity that's right there before us that everyone's going to benefit from so that we can start to see much wider acceptance of this fantastic solution to what's been an endemic problem? yeah i think firstly we have to we have to get everyone at all levels of bureaucracy and political influence to realize that this is a good thing as soon as one of the levels gets

knocked out we're now done and new south wales is a classic example right um i met with the premier the treasurer the minister for housing the minister for planning the minister for women the minister for indigenous the minister for youth every single one of them and their chief of staff said what's the catch and i said no catch they said it absolutely brilliant let's go let's do this it got to the bureaucratic level at the planning department and they said oh look i just don't think the public backlash on this will be too strong. So let's not make a decision. Now, New South Wales government were trailblazers in 2009 of creating policy that made positive effect on housing. The first granny flat laws in the country that allowed you to rent your granny

flat and get approval through a CDC, private certification approval, and rent it to a second party which was unheard of previous to that because the granny flat was literally for the granny and yet we go you know a bit more 15 years 14 years 13 years down the track and they're so scared to make decisions that in the most vulnerable state of housing problem needs it the most and yet here they are trying to stop it right so really governments work i don't i just don't know the answer to how to influence them in a positive way other than when they get to a point where it's just ridiculous. It's a brick in the face for politicians where housing is costing more and more and more. From June 2020 to June 2022, the Gold Coast rental market increased in price

by 43%. That is not sustainable and it comes down to a supply and demand issue. Now, we have these policies around the country. The influence we need to do is use these policies, but before we convert the property, if they're going to try and slug us with $70,000 or $80,000, we need to go to the politicians and the bureaucrats and probably the Attorney General of every state and say, look what they're doing. These councils are stopping us from implementing the policy that you know works. So, the argument that we don't have enough housing is not true. no we have enough housing it's being misused so if we can take the existing housing stock or purpose build when we want to build new and make it adaptable we're okay and is a rule that's

never been broken okay we've got um you know when you've got demand you've got an outcome some people don't believe that that demand's there well i'm sure the hotel industry didn't think that there was a demand for people to rent out parts of their home and short states via air and b&b mostly took that market and took it and damaged the rest of the market so i'll tell you this in the top 20 most unaffordable cities every year australia has 13 or 14 cities every year for the last 10 years. At one point in time, Hobart was the second most unaffordable city in the world behind Hong Kong. And that was because there was 800 short stay rentals on the marketplace taking away long-term rentals. So when you look at housing costs versus wages,

it was there sydney's generally second um but sydney got topped by hobart for a period of time now if we are continuing with short stay we're damaging the market i'm sorry it's just plain and simple i know that you're doing great cash flow and all the rest of it but why give up the cash flow of co-living to be able to get the same cash flow of airbnb where you've got to make sure the cleaners do this and all the intensity is so big you're damaging your market and you're getting the same or less cash flow than if you did co-living. It's a no-brainer to me. And if we're taking existing housing and converting it and creating more stock for the people that need it the most, then ultimately what's going to happen... Now, here's the thing that people may not like

what I'm about to say. I am covertly working towards a housing outcome that's not going to benefit long-term property investors. It's going to help a property investor that's going to be in their long-term. But if you are a short-term property investor, then I'm going to try and destroy your market. I'm wanting to upset it. Because if I can supply enough of the housing that we put to market, then what will happen is they'll free up houses. There'll be too many free houses. Our vacancy rates will start to increase, which means property rentals don't usually go down, but they stagnate. And if property rental prices stagnate, the commodity of buying an investment to be able to get a return on your investment is now not going to be as attractive.

So are people going to invest in stocks, shares, crypto or property? Where's the return going to be best for me? And if their oversupply happens, then property prices and people not going to properties are going to stagnate. And then maybe wage growth will get to the point where the Great australian dream can be the great australian dream again because i can tell you this current generation they're waiting for you to die to sell your houses so they're all lit maybe they'll probably just sell it and go and put it into crypto for some bizarre reason but really um and you know i always enjoy when i'm speaking in public um you know with a room of 100 200 400 a thousand asking how many people have a 25 year old plus living at home and the show of hands and

No, my standard response is they're not there because they like you. Yeah. So true, mate. So true. What you're talking about here is going to be quite revelational to a lot of people. So how can those that are tuning in and other hardworking Aussies really embrace the co-living opportunity?

What's the best way for them to start? Well, learning is always important. You know, you've got my website. There's a whole bunch of stuff on there and you can get some stuff and start to pull it apart. I've taught other people how to do this, you know. So, if you want the master, have the master. If not, go and have a look at the apprentices around the place

that have successfully implemented this as a strategy and have also decided to fix the housing market as well. Really, when it comes down to it, start doing some simple – the area that your investment property might be or where you want to go to. Have a look at four or five rooms. um have a look at the difference between the standard average rent that they're asking in the area for a four-bedroom house and then have a look at what you're going to be able to get for um so that in when it comes to co-living um there are a number of different strategies

our strategy is every person should have their own bathroom and kitchenette i wouldn't want to share a bathroom with anyone else so why should that that's that's the way we do it now there are other providers that do share bathrooms it increases the complexity of the management when you start to share areas but so for me it's like okay find an unsqueated bedroom in on flat mates and that's really going to be the other way to do it is you can say what does a one bedroom apartment unfurnished in an area rent for that's essentially close to what you're going to get for a co-living um micro apartment um but then you've got to take your costs off so then you know then say well my calculation needs to include 12 plus gst um that's going to come off the rent for

management we then have an increased insurance which is about double of the standard insurance so it's not excessive but it's about double uh we then have um the cost of the utilities so you know work out what you use at home um add a little bit more and divide it by four for every quarter um you know there's ways to be able to manage property so as an example we give everyone an air conditioner and you might think are you crazy like don't just turn it on and go well we use a system that turns the air conditioner off every 45 minutes learning along the way and we're that same system also has an inbuilt proxy so if you're listening to this podcast and you ever rent one of our properties and you turn it down to 16 degrees it's actually operating at 21

degrees and if you turn it up to 28 degrees it's actually operating at 25 degrees um so you know so you've got ways to be able to now the other thing is we put aftermarket readers in we include utilities every quarter but if they go over a certain amount which we've got readers in the switchboard we can then charge them so if you can measure them you can charge them really what i'm talking about is there's information that people need to get to be able to make a decision on whether this is a good move for them forward for me i look at co-living in a way that says am i going to get a return regardless of my capital value and the example i can give you is if i go into the stock market and i buy a share for a hundred dollars and it tanks out to fifty

dollars overnight i haven't realized a lot loss until i've sold it right yeah if that fifty dollar share every year, even if it only is worth $50, is giving me a dividend return because the company is going well, well, what happens is I'm actually still getting a return on my money. And if I'm getting a dividend return, the likeliness of that $50 share remaining at $50 isn't going to stay there. So, with co-living, if you're concerned about the property market, now, I'm an outlier here um you know myself and two other um um property commentators at the beginning of covid said buy if you don't buy now you're going to miss out there's going to be a run that's like crazy i've got this it's it go back through all my youtube stuff and be exactly the same right now

people are saying that the market's going to tank and i'm saying no we are about um you know two to three years away. I'm saying end 25, beginning 26, when we're going to see a GFC type tank. It's not going to be bad. It's the top end that suffers the most always. It's the $4 million properties that dropped to, you know, $2.5 million. That's where the damage gets done. So, if that was to happen tomorrow, if you bought today and you bought a property that was co-living and it was positive cashflow and, you know, rents are increasing, you know, quarterly at the moment, like hugely because we've got a negative vacancy rate um if it tanked and you're getting cash flow then you're okay you're paying your bills you know um the biggest problem people might say

yeah but the value's gone down interestingly enough the properties of the co-living properties very few of them that have sold sell for 100 to 150 000 more than the house next door as a standard because it's a standard rental so you are now um you know a friend of mine uses this word, embiggening your rental portfolio. You're making the value of the portfolio bigger because of the cash flow that comes in, because it's not commercial, it's semi-residential. Now, there are funding components that need to be taken into consideration. So, there is a number of second-tier lenders that come in the market, and I am working with one of the big four, have been for the last two years, to bring a product to market that's actually a

standard residential product. So, currently, we can, through the second-tier lenders, get a standard residential product, which is slightly higher interest rate, an 80% lend to be able to It's tax-deductible. I mean, it's about access, not cost here. And it's creating that door opening. The other thing I'll say to this, and I agree with you, if you're getting a consistent cash flow and providing that cash flow sufficient to at least have a meaningful impact on your lifestyle, then the capital growth equation isn't isn't as important but but i from i'm a very optimistic uh person always have been ian and my view is that what i like about co-living is the opportunity to combine uh capital growth with cash flow because there's always this argument of one or the other

here's the opportunity to actually encapsulate both because if you're if you're identifying a property that has all the growth drivers and this is where quality becomes really important the location and the demographics and everything becomes a key. If there's new infrastructure, it's the old three I's of property growth. If there's new infrastructure coming into an area, if there is diversity of industry and employment and the strong and growing incomes, and then you can combine that with the co-living example, then you're bringing all of those together. And there's always going to be ongoing opportunity as far as that goes. So yes, as a safety net, worst case, if property goes flat or down, you're still getting an income flow,

happy days. If it's better than that and you are smart and careful about what you buy and where you buy it so that you're hedging your bets as far as all those growth drivers are concerned, you've actually ticked all of the boxes. So, at worst case, good. At best case, fantastic. So, I love what you're doing there. And just to reinforce, if you want to start finding out a bit more about co-living, jump on Ian's website. So it's ianogarte.com.au. It's also invida, that's i-n-v-i-d-a.com.au. Jump in there now and start having a look. Before I jump into the ambush round, Ian, I just want to sort of get you to talk briefly about your book, Smaller Than You Big, you know, and talk to us about why did you write it? What are the key messages and who's

that book best suited for that book was written um after the the um the decision to to go down the suicide path and it was that it was the resurgence of who i was as a person and um so the the book is small isn't you big health wealth love and happiness um and notice that health was first. And my promoter that was putting me on the stage at the time says, you put the wealth section first. I go, no, I'm not putting the wealth section first because that's not the most important part of it. So, small isn't you big is about making small incremental changes to have bigger outcomes. You know, you just, how do you eat an elephant? One mouthful at a time. You know, it's all about if you create smaller movements in your life around the place,

then you can get a better outcome. And so health, wealth, love, and happiness was, most people don't know, away from becoming a qualified naturopath. So, you know, I had to do biochemics and herbs or something to become a naturopath. I'm a no bullshit person. And so I decided naturopathy wasn't for me because someone sitting in front of me saying I just eat some toast in the morning

and a little lunch of salad and then at night time a meat and three veg and they're overweight and then they'd leave and go and buy a can of Coke. I couldn't deal with that because I was just too honest with them. So the health part of it's important. The wealth part of it important about, you know, and there's a little bit of co-living in there and talking about the demographics and changes. And then the love part of it is, you know,

it was written with myself and my ex-wife and we still abide by the fact that whilst our marriage didn't succeed, the things that are put in there are true and something to follow. And happiness is about what can you do in your life to make a difference, to give you happiness. And we all know that if you help other people out, that happiness comes as part of that. So, that was put together. It's a little bit old and we're close to, I'm close to another book being released, which is solely about co-living. But, yeah, health, wealth, love and happiness was just about my resurgence into life and making every day count.

I love it. But true wisdom is timeless, Ian, and what you've just talked about there doesn't have a date on it. All of those things are going to be applicable to all of us, and let's face it, we've all made mistakes in life and learned from them. That's the important thing. Like you, I burnt my first marriage because I was an absentee.

I was so career-focused that no great surprise, my wife decided that she didn't want to live that way anyway, and I still regret that as one of the things that I hold near and dear to my heart because of the impact on kids and everything else that goes with that exercise. So I understand what you're talking about in that regard, but it would still be a great read in terms of just getting those because so many people just focus on the property piece,

But as we've already said during this conversation, there's so much more surrounding that that's going to create a sustainable exercise for that. I'll just add one thing there. It is a self-help book. There's some exercises to run through it and do what it did. If you get the e-book, it's no problem. But in the original paper copy, I've got links all the way through

to be able to get to different websites to help you out. Great. Brilliant. Well, that's awesome, mate. I'm really excited about what you've shared with us on all of that, mate. I now do want to jump into, so I'm going to give you a blindfold and cigarette and run you through the ambush fast forward. So the first of those, mate, is what's your favourite quote and why?

It's actually one that's mine and I live by it. Every day, given the opportunity to make a decision, take the uncomfortable option every time because no level of success has ever been achieved without some level of discomfort. Love it. Love it. That's a great motto to live by. We've mentioned a few books.

We've mentioned Steve McKnight's Money Magnet and we've mentioned yours. Are there any other books that you'd recommend we read and why? Oh, you know, there's so many lists and they all come together. I think there's a great book called Grit. You know, it's about getting yourself into a place where you can push through anything. I also like David Goggins. He's got a chip on his shoulder, but, you know, that's a way to just be very careful you don't go out and destroy your body after reading his book or listening to his e-book.

Good point. Very good point. Switching back into the investment arena for a second, what's both the worst and the best piece of investment advice that you've ever received today? A former mentor who's no longer a mentor in 2010, I told her I'm going to buy $1,000 worth of crypto and I'm going to teach people how to do this. And she said, that shit will never take off, and I didn't buy the $1,000 worth. The best is from Steve McKnight. He said to me, Ian, small is the new big, but less is the new more.

That's probably the best advice I've had. I love that. One of the first questions we ask people that we help is, how much is enough for you? Because if you answer that question, everything else is irrelevant. It's not about bigger, better, which people get stuck on and fascinated on and their egos get in the way. But, mate, that's another piece of gold from Steve.

And this one will work beautifully for you because from the little bit that we've shared, this is something that's important to you. What's a personal habit, a rewarding ritual or a daily discipline that you employ that's contributed most to your success today? talked about exercise health and movement so i try to run somewhere between seven to ten k's a day um every day including sundays and people say you should take a break i think um one of the important things in life is to um let people around you close to you as a habit know that they're worthwhile in your life so you know um i constantly and consistently tell holly how

beautiful how amazing how wonderful how intelligent she is um shakina my stepdaughter whenever my daughter i i may let myself down when it comes to my team because my team is such an awesome team they're they're so devoted to what we do they're here because they got sucked into the vortex and they just love being part of everything and um so tell people around you that you appreciate them that's probably a good habit for your success yeah the fulfillment piece that comes from that as well mate it's you know in in giving we receive there's there's no question about that in my my head so and we how often do we take for granted the the gold that's right in front of us it happens all and and the people that are important to that because at the end of the day it's all about family

friends and relationships so we're i really appreciate you sharing that if if we're to sort of sum up our fantastic conversation today mate and we've covered so many topics uh across the board and I still feel like we've only just scratched the surface, Ian, but what would be your sort of key takeaways for aspiring investors from the chat we've had? I think the first thing is know your market, know what you're investing in. We talked about that. That's really important. Putting your money in someone else's hand, hundreds and thousands of dollars without understanding you know what you're doing. Don't ever negative gear. Like, you know, the only time you should be negative gearing is if you're in a development deal and it's

holding phase but to go specifically go out to save yourself some taxes the most ridiculous strategy you would do um invest for the community if your number one target is to get an outcome that's beneficial to the community honestly then and it makes financial sense then do it that way because the the benefits internally for your soul are huge and then um the one thing i always sign my books with is get uncomfortable. Love it. Love it, mate. It's something that's often talked about but very few people

actually do the do. Mate, I've really enjoyed this conversation and looking forward to doing many more. But what's new and next for you? um definitely um pushing the business into helping um investors into house and land packages that are beneficial to community to them and to the people that are going to live in them um you know that the the next the next best thing like i was pioneering an investment strategy in the new generation of co-living 12 years ago i'm now moving into the adaptable home um that is a

home that's built today that can be used in seven different ways. So a first home that buyer can get in their home, live in the section of it, rent out and pay their mortgage down. They can have children and grow into the house as residents are moving out. Then it can be used. So that's one use. Then you've got a co-living property, solely co-living. You can have siblings living together. You can have a multi-generational family. You can have an NDIS property because they're built to be able to handle that um you know you can have uh the what i call uplifers or downsizers so it's that same couple that moved in as a young couple have now gone through their circle of life now retirees living in a component of the house with a caravan in the driveway and

income coming in um and you know age in place is an important part of what we do so effectively if you can build a house we're going to be way ahead as an investor than the person that owns the house next door, which is a four-bedroom, two-bathroom house. That's the next best thing for us. I love it. Absolutely love it, mate. For those that have listened in that have really resonated with your message, how can listeners find out more

and get more involved with you, Ian? Yeah, you can go to invida.com.au or you've got my irigade.com.au, but invida is really what we talk about co-living. Invida, Vida, I'm Australian-born, Spanish migrants. Vida means life, and we're just bringing life back into property for the people that are living in it, for the investors that own it, and for the community that benefit from it as well. Beautiful.

Now, in that spirit of giving, very generously off air, you mentioned a challenge that you've appeared to offer some of the listeners if they take some action. Do you want to put some shape around that for us? Yeah, sure. The challenge that you have is to get the spelling of my surname right, And if you get that right, then you've got a freebie. So if you go to ianugarte.com.au forward slash books,

so that's I-A-N-U-G-A-R-T-E.com.au forward slash books, you go to the e-book. So this is your challenge. Go to the e-book, click on the e-book, go to the checkout and put in the coupon code BUSHY. It's not case sensitive. If you put the code BUSHY in, you will get that e-book for free, which is updated with links that don't take you to porn sites

like the paper copy does. Ian, I'm really very appreciative of the generosity that you showed us today, mate. It's a testimony to who you are and what you're doing to make a positive contribution to the country. I'm really looking forward to continuing the relationship and keeping the conversation going. So I'll be reaching out to you on a regular basis

to get you to share your thoughts and doing everything we can to advance the co-living opportunity that's right there in front of us. So thanks for your time today and, again, let's keep the conversation going. Thanks, Bushy. I appreciate the platform to be able to spread the message. Thanks, Ian.