Property Hub - Investment Insights & Inspiration - Realty Talk: A man is not a plan so here is how to get money savvy

Episode Date: July 24, 2021

Over 400,000 women over the age of 45 are at risk of homelessness in Australia and discover that a man is not a plan!  Money Magazine editor Julia Newbould has tips on getting savvy with your money. Buyers Agent Pete Wargent discloses his 3 key tips on buying in a highly competitive market and South Australian agent Todd Sloan explains how sellers can avoid underselling when the market is growing at such a rapid pace.  RealtyTalk is your trusted voice in property investment and Australia’s most popular online property show.  Founded by Kevin Turner and hosted by property expert Bushy Martin, RealtyTalk brings you exclusive interviews with Australia’s property industry leaders who deliver the latest, red hot property investing news and insights.  Subscribe now to get the latest episodes delivered to your inbox three times a week. RealtyTalk is brought to you by Realty, Australia’s leading search and social property distribution platform that helps investors like you beat the crowd, giving you the earliest access to property opportunities, listings, and insights. Check out Realty. RealtyTalk is hosted by top property investment expert, author, and founder of KnowHow Property, Bushy Martin. Find out how Bushy’s KnowHow team helps investors unlock freedom with finance and property here, and check out Bushy’s podcast Get Invested. RealtyTalk is supported by BMT helping property investors save thousands of dollars each year by maximizing tax deductions from investment properties. Find out more.See omnystudio.com/listener for privacy information.

Welcome to Realty Talk, the show that brings together the country's most authoritative and respected property experts. Follow us on all the socials and subscribe for updates and exclusive offers. Realty Talk is powered by Realty.com.au, connecting buyers, sellers and agents differently. Hello once again and welcome to another week of Realty Talk, where we bring you informed and unbiased property investment advice with the show's host, Bushy Martin from KnowHow Property Finance. You know, according to recent research, over 400,000 women over the age of 45

are at risk of homelessness right here in Australia, and that number is growing. Why? Well, many are discovering that a man is not a plan. Money magazine editor Julia Newbowl says that you need to get sassy with your money. And today with Bushy, Julia is going to set out a great structured framework to become more money smart. You'd have to agree, wouldn't you, that we are currently in a seller's property market. We're getting reports every single day of buyers who are struggling to find a property because of the level of competition.

That's a seller's market. Pete Wardgen from Buyer's Buyers, who is a buyer's agent, he has some really great advice for you if you find that you're in that category. So given that he does it for a living, as I said, he is a buyer's agent, the three key ingredients that he shares with us in the show might just help. And while we're talking about that and staying on the same theme, that is operating, buying and selling in a seller's market. Bushy has a look at it from the other side,

selling in a boom market. So he's joined by South Australian agent Todd Sloan. And Todd understands the seller's anxiety about underselling. It's real. And we tackle that today in the show and lots more too. Let's get underway. Welcome. Now, according to recent research, there's over 500,000 women over the age of 45 that are at risk of being homeless here in Australia as we speak. And a lot of this revolves around a lack of general financial literacy right across the community.

But where do you start to manage your money better? Well, to give you a great money management framework, we're joined by Julie Newbold, the managing editor of Money Magazine and the co-author of the award-winning book, The Joy of Money. Welcome back to the show, Julia. Thanks very much, Bushy. Now, Julia, to become money smart, you've developed this great sassy system that you talk about in the book. What does it mean to be sassy and what does sassy with your money actually mean?

so a couple of things I guess in the first place we call the book the joy of money because we want to bring the idea of joy into people's lives and especially women who often when you talk about money just think of the earth factor you know it's not all in control so we want to make people feel sassy you know bold daring and just a little bit fun and cheeky so it's to engage people with their money a little bit more and creating a bit of a structure so that you can follow it and get the confidence to actually make money a little bit more joyful yeah i love it and it is it's it's it's it's putting a fun on what can otherwise be a very daunting and sometimes boring subject as well actually so uh now i'd love you to sort of break down the acronym sassy for us so that we

understand what it means to our money management moving forward so the first s is for spending so assess your current spending and your cash flow because that's really important you've got to know what your outgoings are and what your income is and a lot of people don't actually you know you don't actually know necessarily what you're earning per week and what you've got to spend and then you know the outgoings is really difficult whenever I'm asked to do a budget I've really got to think about okay you know what am I spending and be careful about it then the A is for the assets and liabilities so you've got to know your position you've got to know what you have and also what you owe and also that allows you to understand what you need to get to so it

gives you a bit of a goal set then to do to do those things and to get to the goals you've got to have the structure so that's the second s so you know for me it's having multiple bank accounts where I can put you know investing money or savings money money that I need to pay tax or you know money for a holiday and I think for a lot of people you know if you can have multiple offset accounts that's ideal to sort of keep it in you know the bucket system you have your long term short term etc goals so that's just an easy way to do it and then you set rules and define triggers so you know for me I'm a bit of a spender so I like to take away the money first and put it in the buckets and into the account so that you know I'm topping up my super with one account I've

got investment money in another account which I sort of build up to a certain amount before I invest in shares or ETFs or whatever it is I want to invest in. And then I have a bit of, you know, short, medium term fund, which might be a holiday or a weekend away or something like that. So you've got to set the rules and say when it gets to this amount, or that I'm going to take it out of my pay first. So that's the second S. And then at the end of each year, whether you make it the end of your financial year or calendar year, have a review, see if it's all going well and start you know to set the system again. Yeah Brian it's a it's a great way to encapsulate all the key aspects that are required to really start managing money and let's face it it starts with

the big things start with what we do today. So you tell me how can being sassy start to reduce the risk of homelessness for women in their middle age years that we're seeing this big risk moving forward about? It's a terrifying statistic at the moment that we are having that growing cohort of homelessness of middle-aged women and I think unfortunately when you get to maybe 50 or 55 there's not a lot you can suddenly do that makes it's a bit of a government intervention type thing then but we want to get women engaged earlier and just being conscious of what you're doing because if you know you know what your goals are and what you need to get to and you've got that bit of independence that's going to set you up better and set help you set

up your daughters even or your granddaughters and whatever to to be financially independent it's just so important and you know in in the sassy framework the importance of the yearly review to see how you're tracking can really give you a boost to either sort of you know step on the accelerator and do things a bit faster and a bit harder or to just have the comfort that you are in a secure position yeah and i brilliantly said some uh very sobering but quite inspiring thoughts there on on some simple things that we can be doing that's all wrapped up and encapsulated with sassy so i think thank you for coming on and sharing that with us today julia my pleasure bushy thank you thanks julia now if you want to get sassy uh i really do recommend that you get

out there and grab yourself a copy of julia's book the joy of money it's available at all good bookstores and online uh it's a great read it's a very enjoyable read and an entertaining read with your big focus around the music references, Julia, which tapped right into my era and my interest. So I love the read. So make sure you get out there and do that. And in the meantime, stay with us and watch more here on Realty Talk. is the leading specialist in the industry.

They've completed over 700,000 tax deduction schedules for residential investment and commercial properties Australia-wide. BMT guarantee to find double your fee in the first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. Welcome.

Now, it's fair to say that we're currently in a seller's market right across Australia with many buyers really struggling to find, get a loan, secure good properties. But successful property investors employ three key ingredients to outwit and outlast the rest. And we refer to them as the three R's. It's research, it's reasons, and it's risk.

So to discuss the details on this, we're joined again by Pete Wargent, the co-founder of buyersbuyers.com.au, which is a new and expanding IT platform and a marketplace that connects homebuyers with buyers' agents right across the country. So thanks for spending the time and welcome back to the show, Pete. Pleasure. Thanks, Bushy. Pete, let's start on the research element.

How do I find the best places to buy the right property for my budget? Yeah, so I think as we've talked about previously, you need to begin with the end in mind and factor in your own goals. So are you buying a property so that potentially you can trade up later on? Are you actually looking at building a property investment portfolio? So firstly, you've got to factor in what you're actually trying to achieve. But in terms of researching the best places to find, most often the best way to go is kind of a top-down approach. So you start with the budget that you have.

You look potentially at the state or the city that's got the potential for a price growth cycle because that's obviously important in terms of fueling your equity growth and then you bring it down from the city level to the suburb level and then ultimately to the location within the suburb and the property type and so there's more than 10 million dwellings in Australia now so it can be quite overwhelming but you'll find if you bring it down from that top down approach with your budget in mind then you can begin to start narrowing down the short list of areas and property types for your budget yeah really well said and i think the key take home there for me is at your budget because if you start with your budget and you're really clear on what your property purchase price

affordability is and then you take a top-down macro to micro approach that's finding the highest growth location at that price point uh then you're off to the the right start versus what i see a lot of people do is they they chase the hot spots and they just try and grab any property in that particular location and then wonder why it doesn't perform well long term so yeah great thoughts there mate and switching to the next area what factors do you believe make for a successful investment property purchase yeah so you already touched on one of the important things there and that's this concept of timing the market versus time in the market and you often hear in real estate well it doesn't really matter too much because over the long run you'll do just fine

and look in some sort of areas proven areas with a good track record and landlocked suburbs that may be true to a certain degree but timing the market can be important too because that can really help to get you off to a strong start you're more likely to stick with the strategy if you get good results early on and it can also help to fund your next property purchase so I think timing is important I think also the time horizon is important because generally speaking residential property tends to work better if you're holding for a long time the transaction costs don't make it particularly attractive for people looking to buy and sell too often some people do make that strategy work if they're flipping or renovating property but for most

investors the time horizon is also important alongside the timing and then the fundamentals Well, yes, it comes down to the location and the drivers and property price growth. So we mentioned looking for areas with a proven track record, potentially landlocked suburbs where the supply is somewhat limited and getting the right property type for that location as well. So there's quite a few different factors that make for a successful purchase. But I think those are some of the main ones. Yeah, some really good ones there, Pete. And I've often said that, you know, property is a long game. if you're holding a property for at least 15 years then the chances are you are going to go

through a full cycle and then to some degree if you're holding for that sort of horizon it takes a little bit of the pressure off the timing side of the equation because you'll go through a full cycle over that sort of duration but as you well say as a as a bit of a heroin hit at particularly in the early stages if you can time it in such a way that you're getting some early growth and that gives you the confidence to then go the distance, then you're much more likely to sustain it over the duration. So I'd note, great thoughts there, mate. Let's turn to risk then, the final of the three R's. How do I best de-risk a property purchase as an investor? Yeah, so the market research is an important part of that function, making sure you're buying the right property at

the right price and in the right location. In terms of the acquisition itself, it's really a due diligence exercise to make sure you're not picking up problems that you don't need to particularly as an investor you know as a home buyer sometimes people have particular reasons for wanting to be in a certain location or buy a certain property but as an investor you really don't need to be taking on headaches like busy roads or major issues in terms of repairs and so on because you're not compelled to buy any specific property in terms of due diligence it's largely about getting a professional team around you so we've mentioned before you might need to have a specialist mortgage broker you may look to use a buyer's agent of course which is what we specialize

in finding buyer's agents across the country and there's lots of things that just need a professional eye so you might want a solicitor or conveyancer to read the contract for example a building inspector or pest inspector before you buy a property and if you're buying a unit or townhouse that's on a on a strata scheme strata report is money well spent just to make sure you're not picking up undue problems so there's basically a list of things that you need to tick off in terms of the due diligence and if you're not somebody who's buying property every day it probably makes sense to to get the right professional team around you because now we can't all be legal experts or building experts and all of those kind of things so make sure you've got a team that can cover off

each aspect of the due diligence and you won't go too far wrong yeah some great thoughts there mate i again really appreciate you coming on to share those insights and uh appreciate you uh spending some time today pete always a pleasure cheers bushing well there you have it uh if you really want to join the ranks of successful property investors focus on research on reasons and on risk. And the best way to do that is via the team at buyersbuyers.com.au. So have a look at them. Pete and the team will definitely look after you in that regard. Stay with us. You're watching Realty Talk. Property depreciation is the natural wear and tear of a building and its assets. Property investors can claim depreciation as a tax deduction each financial

year. Depreciation is a non-cash deduction. This means you don't need to spend any money in order to claim it. On average, BMT tax depreciation find residential investors almost $9,000 in first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. Welcome. Now, with over 97% of regions around Australia experiencing very strong property price growth over the last six months, according to the most recent CoreLogic figures, it's clear appear that we appear to be in a strong seller's market. So it's important to understand what's the best way to sell a property in boom time conditions. So to discuss this, we're joined by Todd Sloan, who's host of the popular Pizza and Property podcast, and a leading agent with

Tim's Real Estate in South Australia. Welcome to Realty Talk, Todd. Thanks for having me, Bushy. We're really looking forward to your insights today, Todd, given the market that we're currently experiencing. To kick it off, what are the options available to sell a property? So if you're talking about like pricing strategy, things like that, like auction, best offer buy, that kind of stuff? Yeah.

Yeah. So, I mean, there's exactly those. There's auctions, there's best offer buys, and you can also just have what's called a private treaty, which is generally a range. And we're finding at the moment, best ways to really do it, it depends on the property. I'm finding we're getting some smashing results more so at the sort of middle to top end of Adelaide's market, which is more around that sort of seven to million mark when it's more of an auction or best offer buy. But when you're trying to implement that

strategy to the more entry levels, it's not really working as well. We find that a stronger strategy is usually a good, strong pricing strategy. I'm saying strong a lot, but it's a good pricing strategy, because those buyers are typically first-time buyers, and they want a little bit more certainty, where people that have been through it a few times before, they're happier without the pricing the same way. Yeah, well said. So the approach that you adopt needs to be driven to a certain degree by the price point that you're looking to offer the property. Yeah, yeah, 100%. Yeah, okay. So given that we are experiencing boom times across most parts of the country at the moment what's what would you be suggesting is the best way to sell

well probably around that that best offer buyer for the top of the market i'm finding that we're getting some good results with auctions but it's because there's so much uncertainty around what's happening with prices and i'm saying to a lot of my vendors at the moment is like here's the logical price here's everything that we need to look at as far as the data of what's happened but here's what's happening and a lot of the time it's a big question mark it's usually a positive happy question mark well not for the buyer so much but for the seller it's a positive one but nonetheless it's still a big question mark so we need to make sure we're not leaving any money on the table and and by taking the price off sometimes sometimes we're getting offers between offer a and

offer b that that might be 50 or 100 grand difference so if you're at an auction well again some auctions are fantastic and we have some amazing results with it but it's it can work really well in your favor with the best offer buying in that sense does that make sense yeah Yeah, it totally does. And I think just to break it down so that everyone's clear on best offer buy, can you just expand on that a little bit? Because there may be some that's a bit confused by that. Yeah, easy. So a best offer buy campaign kind of works like a bit of an expressions of interest, where you've got a usually a two or three week timeframe. And there's no official price that's quoted. Well, most of the time, there's no official price quoted. And people

put in offers based on where they see value. And because we've got such a wider spectrum right now of that sort of value perception, that's why it can be really important for a vendor. So if someone puts in an offer and yeah, $500,000 and someone else puts in an offer of $560,000, again, there's that huge gap that we're talking about. Yeah. And you're really flushing out what the market's prepared to pay rather than restricting it to a somewhat artificial price range in a time in the market where people and buyers in particular seem to be paying whatever they can to get their hands on good quality property. Welcome. There's been a lot of talk in the media of recent times about concerns that loosening lending standards by the banks will increase the risks for you as

borrower. But you may not be aware that since the 1st of January this year protections for borrowers using brokers have actually substantially increased with the introduction of the new best interest duty or bid legislation. Now under this bid legislation brokers now have a legal duty of care to ensure that they must put your interests above everything else and significant fines and penalties apply for those that don't do the right thing. Now, this new legal duty offers you the peace of mind of knowing that a broker must act in your best interests. But what does bid really mean to you as a borrower? Well, brokers must assess both the cost and non-cost features of a loan that they are suggesting. Now, cost factors relate to things

like the interest rate, the ingoing fees, the ongoing fees, the outgoing fees, and the annual fees associated with the loan. And non-cost factors include features like offset accounts and the need for flexibility. For example, the last fixed rate loan without the ability to make extra repayments may not be in your best interest. But it's important to stress that the bid legislation only applies to brokers not to the banks. So that means if you go directly to a bank a bank can still sell you loans that are in their best interests not in your own. It's why over 60% of home loans and investment loans around the country are now facilitated by brokers. So if you really want to protect your best interests and get the loan that's going to satisfy your needs

in the best possible way, do yourself a favour and engage a savvy mortgage broker. They'll give you access to up to 40 different lenders and over 2,000 different loan solutions. That's Fleet of Thought. This is Bushy Martin. Stay tuned for more. Well, that's it. Really good advice once again thanks bushy always enjoy your grabs at the end of each show catch more of bushy at his get invested podcast well that's it for another show a very special thanks to bushy's guests julia newbold pete wargent and todd sloan a reminder too that you can see all of our shows at realty.com.au along with one of australia's most extensive range of properties for sale from over 7,000 agencies nationally.

Thanks to Realty.com.au and BMT Tax Depreciation for their ongoing support. I'm Kevin Turner. I'll see you next time. Miss something in this week's show or want to catch up on past shows? Do it anytime at Realty.com.au where we connect buyers, sellers and agents differently.