Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - Mike Mortlock on the mistake costing property investors $2.8B a year!

Starting point is 00:00:00 There is a co-insurance clause where the insurance companies will basically say, look, if you have underinsured your property, you've elected to expose yourselves to some risk. So the way that that works in practice, let's say you have a property and you insure it for, let's say, $790,000, but the actual insurance value should be a million dollars. Well, they'll say, well, you've actually underinsured that by more than 20%. So we're only going to give you 80% of your insured amount because you didn't talk to us and we didn't want to be a partner in under insurance. You made that decision yourself. Welcome to Get Invested on the Property Hub podcast channel, the leading weekly show for

Starting point is 00:00:41 Australians who want to learn how to unlock their full self, health and wealth potential. I'm your host, Bushy Martin, and each week I go deep with the best investors, experts, leaders, and founders to find out what it takes to break free from the grind, discover freedom, and to live by design. Subscribe now and join me and get invested in the life that you really want. Let's get started. Hi, Friday Fighters. Welcome back to our continuing conversation with property sage, Mike Mortlock from MCG Corner Surveys, also a PIPA and the ever popular Give for Growth podcast. So, Mike, let's now turn to some of the less talked about

Starting point is 00:01:22 but equally important topics that are close to both of our hearts, starting with what I see as the equal importance of risk protection instead of just focusing on the rewards, and in particular the wonderful, exciting world of insurance, which many investors and property owners tend to treat, I think, as a barely tolerated necessary, much like an unused gym membership instead of taking it on as a financial seatbelt. So why do you think it's just as important to protect your assets as maximising our deductions?

Starting point is 00:01:54 And what do investors still get wrong with insurance in the context of what your research is telling you on that? It's pretty rough, isn't it? It's like, first, I'm going to talk about tax legislation, but don't worry, we'll lighten it up in the back end with insurance. I mean, honestly, this episode isn't going to soar off the page as an advertising piece, but we have fun. um look um we we've sort of tweaked our internal sort of catchphrase um where we talk about maximize and protect now uh and it's interesting so like maximizing we're talking about tax depreciation you know maximize the deductions you can claim and we we did plenty of work on that but if you're going to go to the effort to maximize and build a portfolio you've got to really consider

Starting point is 00:02:39 or am I actually putting this at risk? And for the average person, the answer is probably yes. Now, why have I come to that conclusion? Well, we do lots of insurance replacement cost estimates reports. Now, I'm not trying to flog our stuff, but we do it vast majority for commercial properties. And the reason why we do that is because a commercial property owner is far more likely to have an insurance broker that they're working with. So as individual, as you say, mom and dad property investors, we're used to having mortgage broker, but never an insurance broker. Most people won't have an insurance broker. And if they do, it's because they probably have a bigger business and that broker is just helping them with some of their personal stuff. So what do we typically do?

Starting point is 00:03:29 Well, we know we want to insure it. So we will go and do that and we'll go to a website or we'll call up you know i'm not going to say a name but then they'll sort of say well you know how much do you want to show it for or our calculator says xyz now we've undertaken some research on calculators on projects where we did all of the construction estimating from the beginning from feasibility all the way through to an estimate which we give to a bank to progress claims throughout the development so we knew the exact number of bricks on this particular development And we put that in the calculators, and we saw over 100% variance in cost. Now, the Insurance Council of Australia said that 84%, I think it was, of property owners

Starting point is 00:04:19 are underinsured. Now, that stat came out pre-pandemic, and we were talking before about basically 30%, 40% increase in construction costs during the pandemic. So if you were one of those people, already you're in trouble. Even if you had an updated, accurate, properly costed insurance replacement estimate done pre-pandemic, it's already out of date, right? We actually say these things should be updated yearly. But the reality is that residential property owners don't really do it. We, of course, this is a product that we do, but put it this way.

Starting point is 00:04:56 I'll pitch you two different things. One's a tax depreciation schedule, one's an insurance replacement cost support. Okay, Bushy, this tax depreciation schedule, it's going to cost you $600 or $700, but after tax, you'll get maybe $2,000 or $3,000 back in your pocket. And you're like, oh, that sounds good. What's the other one? Oh, it's going to cost you about $600 or $700. And what's going to happen?

Starting point is 00:05:18 Well, your insurance premium is probably going to go up and it's going to cost you more year on year. I mean, one has a much stronger sales pitch to people. But what we're talking about here is you're actually mitigating and closing down that risk. And we've conducted our own research across both commercial and residential property with our own data. So what I mean by that is that when we actually do a replacement cost estimate, and we do do some in the residential space, we ask the owner, okay, well, what is your sum insured at the moment? And when we get that data, we can contrast it what it actually should be. And the last time we crunched the numbers on residential, it was actually 18% underinsured.

Starting point is 00:06:02 Now, if you're talking about a $650,000 replacement value and you're 18% out, it means that you're going to have that tap on the shoulder to chip in $117,000 on that case. And the reason why I think that number is possibly even worse is that these are the people that came through to us. You have to have some level of sophistication to even know that there's value in a quantity surveyor coming up with the cost to actually reinstate this building. So I think the numbers are way worse. Yeah, totally agree. And I think just to add emphasis to the importance of looking at risk as well as reward, we have this conversation all the time with investors that we assist. And I'll say, I want you to remember this conversation because I'm pretty confident that you're going to under-insure what you're going to do because it's not a matter of if you're going to have an issue.

Starting point is 00:07:05 If you're holding a property for 15 or 20 years, which we encourage people to do, it's a matter of when that issue is going to occur. And with what we're seeing with floods, fire, climate change, and seeing insurance companies now, from the investment perspective, Mike, we'll go into areas. And the first thing we do, if a buyer's agent's recommended an area on behalf of the investor, we'll ring the specialist insurer and say, will you actually insure this property? Because there are areas in Queensland in particular, particularly mid to far north, because of the extreme weather risk, they won't insure at all. So there's a growing risk. It's not a static risk. This is a growing risk that's occurring. And then the other mistake that I see a lot of people make is not only underinsuring, but they'll buy the off-the-shelf budget Woolies brand insurance policies, and then the true measure of an insurance policy is what happens when you put in a claim.

Starting point is 00:08:10 Because those cheap and nasty ones, quite often, they'll be looking for excuses not to pay you out, so they'll drag it out for as long as they possibly can. It doesn't take into account all the additional flow-on costs outside of the physical replacement of that asset, like rehousing and everything else that goes with it. That's not covered generally by that exercise. So I think it's a much bigger problem than what people are realising. And we really spend some time talking about it and making sure, particularly, and let's take landlord insurance as an example. there are you know two or three specialist landlord insurance insurers whose policies and their payout process is head and shoulders above the rest and yet and we'll have that conversation with the investors and there wouldn't be a quarter that goes past where i don't have an

Starting point is 00:09:00 investor ring me and say hey we've got an issue on the property and said did you get that special insurance oh well no uh you get what you get what you deserve so i i think it's a it's a if we're serious about protecting our wealth, then really making sure you've got the right amount of insurance with the right policy, it's a no-brainer as far as I'm concerned. Again, my outlook has always been expect the worst and then manage for the best. If you take that approach, the few dollars that you're spending on insurance is just going to take that potential headache away when of the curse. And my wife used to run a very successful property management business. Time and time again, there would be claims that would occur. And time and time again, the

Starting point is 00:09:50 cheap and nasty general insurance provision. And again, a tip of the unwary, sadly, a lot of insurance breakers aren't able to recommend the specialist insurance providers because i don't get paid commission for it so you need to go hunting for it if you want to get that information and really give yourself that financial seat belt that i spoke about earlier yeah and i think there's probably two other things that people don't consider i mean i i i get this but you might be sort of sitting uh at home uh looking around the house and then you see an ad on tv for a new you know xyz homes and you know now building for you know 500 000 you're like that place is way better than mine um i'll just insure my place for that because then like maybe i'll

Starting point is 00:10:39 just sort of get something like that or if that only costs that then if i insure myself for that well then i'm going to be way covered but they don't realize that natural disasters don't leave a perfectly laser leveled block with all the materials gone like we need to consider demolition we need to consider uh cost escalations over the construction period we need to allow time for tendering. The other thing is that there is a co-insurance clause where the insurance companies will basically say, look, if you have underinsured your property, you've elected to expose yourselves to some risks. So the way that that works in practice, let's say you have a property and you insure it for, let's say $790,000, but the actual insurance value should be a million dollars.

Starting point is 00:11:27 well they'll say well you've actually underinsured that by more than 20% so we're only going to give you 80% of your insured amount because you didn't talk to us and we didn't want to be a partner in under insurance you made that decision yourself so we're just going to meet you on that point I don't think people understand that that actually exists and if you think about you and I let's say we want to have a fight and you've got a legal team and I've got a legal team I'm going to run straight to an insurance company to get my legal team to fight yours because i'm imagining that they are the most hardened you know battle battle hardened people because insurance companies they're not i mean they're there to make money they don't want to pay out if they have if they

Starting point is 00:12:10 can find any reason not to do so 100 right so is that the very clear message there and that is if you haven't done it, make sure that you are ensuring your property for the right value and be no better person to assist them in determining what that is than reaching out to you and your team on that score. Mike, so I appreciate you bringing that to our attention because I think it's a very important point and it'll be a more important point as we continue on given the extreme weather conditions that we're going to continue to experience and are probably likely to get worse. So now I want you to put your PIPA hat on for a second, giving you a board member there. And we touched on this in part one, but I'd love for you to take us, give your take really on

Starting point is 00:13:00 what I see as the rise and rise of the property Pied Piper, high profile Insta buyer agents and some of the podcast influencers who are becoming, as I see it, more like share investing equivalents of market movers. And I'm seeing some great stories being perpetrated and burying people in kilos of self-justifying data to flog sight unseen, quite often underperforming assets that will come to be in the years to come across the board. And in many respects, I'm actually starting to see them a bit like some of the property sprecers of old, but just in new clothes. So I'd love your read on that and the impact it's having and what investors need to be doing to protect themselves in that regard. Yeah, well, look, PIPA is really trying to fight the good fight

Starting point is 00:13:51 on behalf of the consumer. And I think people in the inside of the industry like ourselves can sort of sometimes be kind of thinking, oh, look, why would you fall for that? You know, it's obvious that that's marketing spin. But if you think about the consumer that maybe works in a different industry i i kind of want to think with would someone with no knowledge be protected in this environment and and that's where i kind of want to help people out but you know um let me let me answer a question with a question which i've been taught is um appropriate um what do uh buyers agents uh tattoo artists and plumbers have in common i mean you can answer it if you if you like, but I mean, it's so obscure. What they do actually have in common is that they are

Starting point is 00:14:40 regulated by the same industry, the Department of Fair Trading. I actually think that's a problem. Property is so massive that it really requires its own oversight. I don't think the same organisation that's looking after plumbers and tattoo artists should be looking after property. simply because of the value of these transactions. I mean, you get a dodgy tattoo, you're going to look like a bit of a dork for however long and you have to get it burnt off. You know, plumbing can be expensive,

Starting point is 00:15:11 but it's not going to be more expensive than the whole dwelling itself. So that I see as a real problem. And the barriers to entry to become, say, a buyer's agent in Australia are not what they are to become a mortgage broker or a financial planner or an accountant or a quantity surveyor that um that is something that i would love to see change um outside of that pipper is doing its best to say look these are the people that have gone through our accreditation program that are able to use our qualified property in investment uh advisor post nominals um we we are making sure that they are adhering

Starting point is 00:15:53 uh to uh all of the codes of conduct that that PIPA has and if they're not they're getting booted um they're disclosing to us that they have the appropriate insurances and they're also doing ongoing uh training you know industry breakfast you know national congress all those sorts of things and outside of that a lot of people probably don't realize that PIPA is also advocating on behalf of the investors so for example the Queensland land tax legislation that did actually become law, but just hadn't reached that point where it kicked in in time, that was repealed by some of the work that the REIQ and PIPA did in concert together. A lot of these things, PIPA is really the only one that's advocating for the rights of the investor. So, you know,

Starting point is 00:16:38 that's why it's important to me and why I'm so pleased to be on the board. Yeah, and I love your work on that. And I think, you know, a couple of key messages that anyone listening needs to take for more of that. Firstly, I'm not branding all buyers' agents with that brush. There are some very good buyers' agents out there who add very significant value to investors from a purchase perspective. But as you've mentioned, the barriers to entry are very low.

Starting point is 00:17:07 It's a four-day course and you can cut a coupon off a corny's packet almost and be a spray painter yesterday and a buyers' agent today. That's very scary. I mean, the mortgage-breaking industry was very similar when I got involved in that industry many years ago too, by the way, Mike. So it's just, I think, a condition of the – because it's gold rush times in the buyer's agent's business, every man, dog, woman, and child is diving into it because they see it as a get-rich-quick scheme at the expense of it, which is quite often. but with the code of conduct that PIPA rings to the table in conjunction with REBA,

Starting point is 00:17:46 the Real Estate Buyers Agents Association, who have also a very strict code of conduct, I think if anyone's utilising a buyer's agent, then make sure that they prove their worth with PIPA and REBA from that perspective. But I also, I think at times there's also an overreaction to it to the point where there's a lot of buyers, a lot of investors just trying to do it all on their own and reinvent the wheel uh there's some

Starting point is 00:18:15 dangers of that too and and i say that because that's exactly how i started in the game i didn't trust anyone uh and i was making big mistakes and costly mistakes that i didn't even know that i was making because i just didn't know what i didn't know so i think it's making sure you're surrounding yourself with uh independent teams that are good at what they do uh do what they're suggesting you do themselves so that they're walking their own talk, and then educating you along the way is a better outcome than throwing the baby out with the bathwater and not using buyer's agents at all at a point in time. And in certain circumstances, I think they are very valuable additions to the team.

Starting point is 00:19:01 Yeah, I've been a long-term advocate of buyer's agents, so don't get me wrong. I think good ones are worth their weight in gold. I mean, you can actually piecemeal part of what they do and that could be worth their whole fee, like just negotiation. Like I know some people that are so good at negotiation, they would probably be worth the full fee, which excludes sourcing the asset and guiding you through the process. But yeah, just because of the barriers of entry and there being a lot of new ones, unfortunately, I've seen behind the curtain and, you know, there are some forums where new buyers agents are asking

Starting point is 00:19:39 questions that, of course, everyone has to learn. But my argument would be don't go and start your own business and learn with your customers' money. It's too high a stakes. I think in certain states there are requirements to have a certain amount of time under someone's wing. It's not universal across the board. But unfortunately, outside of organizations like PIPA, if you are interested in a buyer's agent and they're not a member of that organization, you've just got to ask the questions. And I think as a society, we've kind of lost our interest in asking those questions. There's an argument to say we put more research into our next television than our buyer's agent that's buying something a squillion times the price, right? I even had a conversation with

Starting point is 00:20:25 um, a physiotherapist a couple of years ago. And I said, before people come in and see you, do they ask the question, have you got experience with this type of ailment or this industry, uh, this injury, you know, what sort of professional development do you do to keep yourself at the cutting edge? You know, compared to your brethren, what sets you apart as the best person to help me with these problems? I said, do you, does anyone ever ask you those questions? And I kind of thought that he would say no I'm glad they don't because that'd be bloody annoying but what he actually said was that no one ever asked me anything and I wish that they would because I have meaningful things to say I have meaningful answers to those questions that some of my

Starting point is 00:21:07 competitors won't actually have so look if if someone doesn't want to answer your questions then think about how willing they are to hold your hand throughout the process anyway so ask the questions ask them their experience ask them whether you'll be working with them or someone in their team or if they you know if it's a big business what sort of oversight will they have you know ask for testimonials ask if you could speak to some of their previous clients i mean it's up to you everyone's welcome to throw away their money but my advice would be this is a big decision and not only can it help you to achieve the financial goals that you're doing it can also ruin that trajectory and put you back years. And most property investors still only get one

Starting point is 00:21:51 property. And I think that's because they get that first one wrong and you don't want to be one of those people. Yeah, beautifully said. Well, while you're talking about it, if anyone is listening, on behalf of some of the investors that we look at, we've prepared 37 questions to ask a buyer's agent. And we get them to do the machine gun dance before they even consider going any further with that i'll leave the link in the show notes for anyone who wants to grab a hold of those because just as you've said mike what's what's it's going to cost you nothing to to ask the question but it's probably going to cost you a lot if you don't so we're awesome i want to sort of pivot again now and and circle back to the uh the good old mainstream media

Starting point is 00:22:33 because uh you know it's sadly the mainstream media is really struggling for revenue given and what's happened with social media platforms and everyone with an iPhone is a journalist and a photographer these days. Would love your thoughts on the growing impact of the media, as I see it, on investor sentiment and how much you think that the media hype is actually affecting property behaviour and or swaying decisions. Any thoughts on that from your perspective?

Starting point is 00:23:05 yeah look i'd love to think that it's not having any impact at all because i i don't believe the media is the right place to go for property investment advice i mean there's some there's some good examples where that's not the true not the truth i've lots of friends that are experts in in the space that are featured in the media but often they really have no control over the end result. They are a soundbite for a predetermined outcome. So someone will say, I'm doing a story about X, not go to this expert saying, what are the real stories? I mean, they would love a question like that. And I think the media would be much more meaningful. I think you can probably see yourself, it's feast and famine, it's boom and bust. And a good example

Starting point is 00:23:52 is that I think it was like the December core logic print where the market dropped by 0.01% or whatever it was straight away the media is saying like end of the housing boom and then January it goes up and then it's like okay what are you going to say now you know like one data point doesn't establish a trend and one core logic print doesn't doesn't really mean anything And again, we're talking about medians. You can't invest in the Adelaide or the Sydney or the Melbourne, right? So in many respects, it's not meaningful. And there are a million different ways where median can be skewed. um for example i um remember speaking to an industry colleague in in victoria a buyers agent and i said to her um victoria's gotten smashed like why is that why have prices dropped so much but there was actually a state um there was a state bonus for first home buyers and it was

Starting point is 00:24:53 capped at a certain value so the sheer volume of property selling under this price point which was below the median made it look like the whole market was going down. I mean, that's just one example where data can be very, very misleading. And there are some really good property journalists, but the majority of them don't understand property whatsoever. So that's my cautionary tale. I don't think it's the right place to go. There'd be a hundred times better served by just listening to your podcast than looking at any of them. But the sad reality is, is that yes, I do believe it has the ability to move markets uh and what i kind of would say to people if they're looking at you know kind of trading the news as it were is that by the time that makes the news the data is out

Starting point is 00:25:41 of date i mean even the core logic data is out of date to some degree because it's not looking at exchanges it's looking more more likely at settlements so by the time a market shows green shoots, let's say it does maybe 20% over its cycle, there might only be 12% left, right? So if that's the way that you're kind of looking for your next investment property, and we all kind of want to invest in a sure thing, right? Like everyone wants to throw money at something that they know is going to boom. So the green shoots are kind of attractive. But by the time you see those green shoots, the competition in that marketplace is crazy. So for example, before we really saw melbourne prices growing um it was already busy we already had people on the ground

Starting point is 00:26:27 the time to buy was six months prior to that happening or maybe even 12 months prior so if all you're interested in is looking for the green shoots and looking for the media you are definitely limiting your upside even if the data is correct absolutely and i think the what goes hand in hand with that is that uh everyone and that's not just the media keeps treating property as a commodity, as if we're comparing an apple with an apple, when the reality is that every property in every street and every precinct in every state and every region is different from every other one of the 11 million odd properties around the country, which means we're comparing an apple with every fruit and vegetable known to man.

Starting point is 00:27:10 And there's the essence of the opportunity with property, because we've got more opportunity to influence and control the outcome at an individual property level that has nothing to do with medians or aggregated data at all. And if we are focusing on scarcity and providing something that everyone wants, it's going to do well. So I really caution people to really not just make decisions on the science of property. There is a lot of intuitive art to property in terms of the intangible benefits that property brings. If you're able to tap into those, which then taps into the emotion of people that are attached to property, you're going to do okay.

Starting point is 00:27:56 And I think this covers a number of areas, but there is becoming far too much historic data focus that are driving decisions that I think a lot of people in property are missing the point there. They've got to go beyond what we can't measure and pick up on the things that have an emotional connection and engagement and do that rinse and repeat, and you'll do well as a consequence of it. So now I just want to, I guess, finish on the old, you know, we've just gone through the Labor landslide, the federal election, which was really interesting. I still haven't got my head around what that all means just yet. But given your read of it and what you're seeing happening, is there anything you think that investors need to be watching closely and all the impacts or otherwise that are going to come out of that? Yeah, I mean, that was an absolute massacre for the Libs

Starting point is 00:28:58 and not unprecedented, but for the Liberal leader to lose his seat and be kicked out of Parliament, I mean, that says everything you need to know about the Liberal campaign and we could probably do a whole episode of mistakes that they made. But I mean, what we've actually got now is a Labor majority. I think it'll take another week to really lock down all the Senate seats and those sorts of things. But the anecdotal kind of reports are that all Labor really needs to legislate anything is the support of the Greens. And the Greens are very happy about their kind of balance of power.

Starting point is 00:29:32 But there's a few kind of disturbing policy things that have been thrown around now. As far as I'm aware, Labor didn't take the tax on unrealized capital gains to the election as a policy, but it has been sort of rattling around. So, I mean, a Labor government, I think, can be problematic for investors. I think a liberal government tends to be a little bit more open to property investors and understanding the value. but politicians of all coloured ties have been really putting the boots into property investors and undermining the value that they create for all the reasons that we talked about it before so I think it'll be very interesting to see what kind of influence the Greens will have in policy and you know I love nature and trees but the economic policies and certainly the policies

Starting point is 00:30:28 around property that the Greens have put in are extremely problematic. And we talked about Max Chandler-Mather and some of his ideas. Thankfully, he's lost his seat because, I mean, it sounds really good in principle if we've got rapidly growing rents to put a cap on rents. And that really saves everyone from their rent going through the roof. But what actually does is that it increases the impost on the people that are providing that accommodation, disincentivises them. And it basically means that they are not able to recoup any of their losses. And the Australian Property Investor Magazine did a survey some years ago, and that was when interest rates were on the increase. And they said that the average property investor

Starting point is 00:31:13 would not increase their rent and risk a good quality tenant. In fact, I think it was about 60% of people said that they wouldn't do that. And it also highlighted that the majority of the extra costs weren't actually passed on to tenants. So there's a bit of misinformation about, okay, well, if interest rates go on, the landlords just pass it on to the tenant. They don't actually do that. And there's an argument to say that they sort of can't at the moment. I actually said from a prediction point of view in 2025, rents wouldn't grow as quick as they would last year. Not because any of the underlying fundamentals have changed. But because I think people will moderate their behaviours, they're approaching a ceiling. So we're probably just going to see more people

Starting point is 00:31:58 bunking up into dwellings. I actually think we'll see an increase in the household formation rate and more people will be cohabitating. So, yeah, look, that's my quick non-political take as I can probably go on for the election. It'll be interesting to see what happens in the next little while. But Labor's got a great opportunity to legislate. They're in a lot stronger position than they were in the last term. 100%. Do you think the old cudgel of winding back CGT discounts and negative gearing might get a run now that there's some confidence in the mandate? Well, you know what? It already did. There's a lot of people saying, oh, they didn't talk

Starting point is 00:32:41 about negative gearing in the election. Well, they actually did way back. It just happened a lot sooner. There was a period of three weeks where journalists asked me to model the after tax position of Anthony Albanese's Dulwich Home investment property that he sold. Then he bought an investment property that he's going to live in, in Copacabana, wherever it is on the central coast. They asked me to figure out what the negatively geared position was. And I think there was another journalist asking for, well, what would the CGT exemption that Albo is saving? So obviously those are very kind of left-leaning guises, but I did that data. But I mean, it's going to come up all the time.

Starting point is 00:33:23 I mean, it's just, it's such an easy thing to go to and investors just don't have that loud voice that other interest groups have. So yeah, look, I think it's going to keep coming up. However, we did see Mr. Shorten go to two elections and he was a fairly popular opposition leader. And I have to say, his opposition government, I think, was the most impressive for bringing at least policies to the table. Admittedly, some horrific policies. But normally in opposition, they just basically say, oh, yeah, what did the government say they're going to do?

Starting point is 00:34:00 Oh, that's rubbish for these reasons. They're not actually saying, well, we actually propose this. And I think that was missing from this last election as well. I think Shorten did that really, really well. But he tried the CGT, tried the negative gearing, franking credits, all that sort of stuff. And I think people will have the long enough memory in politics to realise that that was quashed. Hopefully so. And hopefully there is a mindset change at some point around embracing investors as the big part of the solution to the housing crisis, not the villains for causing it.

Starting point is 00:34:36 I guess you've touched on one of your insights for 2025 a second ago to wrap things up based on everything that you're seeing, getting out your beautiful crystal ball. Mike, what are you seeing for property moving forward? Well, I mean, we still are yet to see a real kind of expansion on the impact of the Trump policies, right? and how that is playing out with the international tariffs and whether that will change because Trump himself said Anthony's a big friend of his.

Starting point is 00:35:13 Interestingly, he didn't know who Peter Dutton was. He's like, I don't know the guy that went against him, but Anthony's a real good friend of mine. That was kind of interesting to see. But I think we're now in a position where interest rate cuts are far more likely. We might sort of see that one relatively soon. And even in the previous interest rate cut,

Starting point is 00:35:33 I mean, 25 basis points doesn't do much to anybody, but it was kind of an announcement effect of the trend. The trend was decreasing interest rates or at least, you know, this idea that they were going to increase is gone. To me, it added disproportionate energy to the property market. So if we get another cut or let's say 50 basis point cut, I think people will be racing into property as best they can. So we could get a reasonable run in the back end of the year. I think there will be some locations that will outperform. I think like Adelaide and Perth really have passed the peak of their cycle and aren't likely to do those crazy double digit numbers that we've seen.

Starting point is 00:36:18 But there might be some dark horses like Darwin on the back of the things that we discussed that do really well. But I think from a national point of view, broadly speaking, we're probably going to see a positive year, but no gold rush type results at the end. I wouldn't be surprised if we're somewhere in that sort of 3% to 6% range. But as you say, it's crystal ball. No one really knows. Yeah, no, exactly. Well, anyone who gives you any guarantees is telling porkies anyway.

Starting point is 00:36:50 and trying to predict what's going to happen with property is like trying to predict the weather. I think, Mike, we know how well we do it at Weather Forecast. But again, I'd rather take your thoughts on it than someone off the street because you've got your finger on the pulse in terms of what's happening at a lot of levels. If we were to sort of wrap up the great conversations

Starting point is 00:37:12 we've had today and in the previous part, what's your key takeaway and must-do action that you think that property investors in particular need to take from them? Yeah, look, I think apart from making sure that the people that are taking your money are fit for purpose and are going to advocate for you, but again, it's tax time, so we want to maximise those deductions. So you certainly want to make sure that you're getting a free assessment on your investment property as to whether it's got worthwhile depreciation deductions. It's not just me, really any quantity surveyor will say, this one will stack, we

Starting point is 00:37:44 don't want to charge you if we're not going to get a benefit for you um and maximize and protect we talked about those those two things in concert i think i hate the idea of people exposing themselves and the and the data is showing that people are exposing themselves to undue risks from an insurance point of view so maybe those three if i'm allowed yes uh if you're an albino like me mate uh exposing yourself is a pretty horrific sight to uh anyone uh who's in our side of that sad fraternity, but... Everybody wins. But I absolutely love what you've shared.

Starting point is 00:38:20 So another great chat and really reinforcing some hidden gems and love your cautionary tales, particularly around the depreciation goal that you've shared with us. And yet again, you've shown us how to boost our cash flow, bulletproof our tax game and avoid some of the traps that come into that process. So if anyone listening is serious about sustainable investing and you want your properties and your money working as hard as you do, take some action now and reach out to Mike and the MCG team. And if you haven't done so already, and you can do that by just clicking

Starting point is 00:38:58 the link in the show notes, and or if you need further help with any of your specific property problems, feel free to reach out to me and our Nihau Property Finance Strategy team by, again, clicking the show note links, and you can book in with me for a one-on-one personal solution session. Before we go, remember, property isn't just about what you buy, it's about what you get to keep. And until next time, get clear and get confident as you get invested in your knowledge. And Mike, let's make sure we keep the conversation going.

Starting point is 00:39:23 So thanks for joining us today. Always a pleasure. Thanks, Bushy. Thanks for tuning in to Get Invested on the Property Hub podcast channel, your home for property investment insights and inspiration. Make sure you subscribe to Property Hub for free. Get your weekly dose of Get Investing inspiration along with every episode of Realty Talk, Australia's top online property show for red-hot property investing news

Starting point is 00:39:47 and insights direct from industry leaders and influencers. And finally, I'll see you next time.

Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - Mike Mortlock on the mistake costing property investors $2.8B a year!

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