Property Hub - Investment Insights & Inspiration - Realty Talk: Appreciating Depreciation! + Get Buyer Ready + Future Forecasts

Episode Date: November 4, 2022

In a recent bold move that further reinforces the strength of BMT Tax Depreciation as the market leader in its space, the long-term management team last month bought out the company, and CEO Brad Beer joins us to reveal further industry innovations.   The average property buyer invests more than 90 hours over 7 months to secure a property.  Scott Aggett from Hello Haus outlines strategies to reduce time and stress while improving your results.  This is how to get buyer ready! John Lindeman from Property Power Partners does not beat around the bush and tells it like it is as he joins Bushy Martin to explain what he believes is ahead for property in the foreseeable future. RealtyTalk 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 to get every RealtyTalk episode delivered to you each week for free, and also get full access to Get Invested, the leading podcast for Australians who want to unlock their full ‘self, health, and wealth’ potential and get inspired by the stories of investors, founders, and entrepreneurs. Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media.  Business and partnership enquiries: [e-mail] 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. Hi and welcome to this week's Realty Talk, the flagship of the new and expanded Property Hub, your home for property investment insights, inspiration and stories from Australia's top property experts, investors, leaders and analysts, which is done in collaboration with Piro Marketing and DM Media, Australia's largest independent podcast network. I'm Bushy Martin from KnowHow

Property Finance and we've got another great show for you this week. To get the ball rolling, if you're looking to maximise your claimable deductions on your investment property, you can't do better than BMT tax depreciation and in a recent bold move that further reinforces the strength of this market leader the long-term management team has just bought out the company and CEO Brad Beer joins us to reveal their further industry innovations. Now the average property buyer takes over nine months and spends more than 90 hours securing of property. So to help you to reduce time and stress while improving your results, Australia's number one property negotiator Scott Agate from Hello House reveals how you can better get buy

ready. Now what's really going to happen with property in the foreseeable future? To get a proper read, you need to rely on specialist property market analysts with a proven record of property predictions. So to close the show, John Linderman from Property Power Partners returns to reveal the reality. And before we get into it, make sure you don't miss another episode of Realty Talk by subscribing to Property Hub on your favourite podcast player, where you'll get two powerful episodes of both Realty Talk as well as the Get Invested podcast delivered to you each and every week. And make sure that you also sign up on the realty.com.au homepage, where you'll also get a free copy of my award-winning book, Get Invested, just for

making the effort. We've got a lot of innovations to reveal, so let's get on with the show. Well, in a bold move and one that reflects absolute confidence in the future success of the company. The executive is running Australia's leading provider of tax depreciation schedules, BMT Tax Depreciation, by way of disclosure, a sponsor of this show. Those executives have moved to fully acquire ownership of the company. BMT CEO Brad Beer, who's been with the company for almost 24 years, has steered the buyout. He joins me now. Brad, congratulations to you and the team and so what does this mean to the company overall and how it will continue to operate look what does that mean for the company overall what what it's done is now put the the complete

ownership and control in the hands of the three the three of us and we've worked together for 20 you know they've been with me for 20 and 21 years of my 24 in that business uh and um it's I look looking at the future direction and what we want to do with the business and where we want to take it we've had some private equity investors in there that are in for a period of time and out for a period of time with an agenda and and we've got a you know a very long-term agenda in our business and and it's to to operate it as we've pretty much operated it but at the top as far as our strategic direction in the future is concerned we're pretty excited about being opened up to doing the things we want to do i've noticed that you take a particular industry sorry interest in

in how the industry operates um and we might touch on a couple of those examples in a moment but in your release about the buyout you mentioned that the industry maybe needs a bit of a shake up or there needs to be some revision what are you referring to there well so ever since we've been in this space which is you know 24 years or i have uh like it was something that was not done very well from the start quantity surveyors traditionally are good at counting bricks and measuring and estimating costs of buildings which is why we get involved in depreciation schedules in the first place but our industry concentrates on doing that well and there's another piece that's really required to get depreciation done properly you've really

got to understand tax law and they're not the the the institute and we've done some work with them um uh over time lots over time and a bit more lately uh in the last 12 months on how do we make sure that all quantity surveyors that prepared appreciation schedules really do understand the legislation and give the consumer the experience the best deductions the the things that we we should all expect in services that we buy and uh the regulation around it i don't think is the answer necessarily, but the knowledge of the quantity surveyor who knows how to estimate construction costs and making sure that they know

how to apply all of the correct tax legislation and do it properly to help make sure the clients get the best results in the end. Because you also talk as well about referral fees for agents and accountants. Can we touch on that? It might be a sensitive topic, but how rampant is that and is it a problem?

Look, we probably do about half of the market share of the depreciation schedules in the country. And, you know, there's a lot of smaller cottage, I guess, operating businesses, which is nothing wrong with that. And often the way to, I guess, compete with, I guess, a juggernaut is, well, I'll pay you 50 bucks to reaffirm it. And we've concentrated very heavily on making sure that the accountant doesn't get paid to say we're going to get a good depreciation schedule for you because I think it's not a clean business, it's not a clean transaction, and the consumer should get the best based on it being the best, not the guy that pays you 50 bucks. In the industry and against us, that's what's used by the competitors all the time to say, well, give me some money. But we've held that line hard and we have half the market share. So if that was the answer to this business, we wouldn't win. It's interesting, isn't it?

Because, you know, when you're one of the lower players, you think that the way in is to actually provide that incentive. But at the end of the day, I think good professional operators just want their clients to be dealt with successfully, sorry, you know, give them the best possible service. And that should be payment enough. And look, the fees for what we do are sort of 700 bucks. there's not uh and so we we've we've always concentrated on and we make it clear to clients

if the accountant doesn't get money from us in order to do do this depreciation they want it done right getting the the most deductions and making sure that uh it's legitimate should there be a a um a uh an audit we want it to stack you know we've done 850 000 of these things and plenty of them have been audited and they're still stacking. So that's what's important more than the kickback, I suppose, mentality. Hey, that's going to be a good milestone, isn't it? Your one millionth depreciation schedule, that's got to be coming up. It's probably only a couple of years away, hopefully.

Well, that's something we'll look out for. Hey, just in another tack, let's look back a little bit. the business has been through some, well, pretty challenging times in the last few years. If we look back at the financial crisis of 2008, there was also that depreciation schedule, the changes that were mooted there. I know you got very involved in that, but more particularly the recent pandemic. How do you think those events and events like that shape or have shaped B&T? How have they shaped me is a good question.

So, look, the 2017 legislation change was a big change. I ran a – I was a partner in and for a number of years had run a business that grew every year without fail. Through the GFC, we actually did good growth because people were looking for money and there was education and we worked through that market. But we had four years of slight decline, so i had to go and relearn how to run a declining business um in that change and then we sort of

got back to stability uh and uh you know transactions to investors and then we got a pandemic the pandemic was just very different because it was so uncertain look legislation change was uncertain other than we knew the rules but what would investors do was the uncertainty it was back to that was back to complete education again to say you know what they've changed the rules there's still depreciation you still need to do it it was like stepping back 20 years in my education piece on depreciation basically that the pandemic was was difficult because really an important part of us doing our jobs properly maximizing deductions picking up everything is is visiting the house or the unit uh or the commercial property and identifying

everything we can claim how do we you know we've got to estimate a construction cost and and the best way to get the best deductions is to make sure we we are not scared of the numbers we put on it because we've been there we've got evidence we can back it up and through the pandemic that was obviously extremely difficult we're not an essential service um at one stage we had a thousand job waiting inspections um so we held firm and and a lot of our industry has gone to well we'll just do it without an inspection and take a few photos from somewhere else, realestate.com, Debain, which to me is not really achieving making sure

we get everything that's there at the time to get the most deductions that we can and be happy to put it on there as the quantity surveyor without it. I'll just talk about innovation for a moment because you do mention that, you know, how the new structure is going to allow you to adapt to that. What innovation do you think is on the horizon for the industry

and how is that likely to change the experience for your customers? Look, we've been heavy on making sure we've got an IT team. I've had an IT team for 15 years building and making sure that we can provide, I guess, experience for clients that are as digital as we can. Through the pandemic, we had to look at some of the, I guess, software development and you know reduced that team significantly and we're back in the ability back with the ability now to to grow to to grow that um to look at all the great ideas that we've

had in the past on how we make experiences for clients better through technology or the other thing would be the which is happening across and we're all a lot of us are api able these days where we can you know swap in easily why why would anyone need a hard copy of the depreciation scheduled to put into their tax return each year. Things should talk to each other and we're pushed pretty hard over time to make that happen and that, you know, everybody through pandemics, et cetera, has got other priorities. We're back on the, you know, the interesting recruiting route

in the IT world at the moment and across the business actually, which has been a big challenge in the last six to 12 months especially as we go back to growth. But there's a lot of integration that should happen within the journey of a property investor, I would say, as opposed to the depreciation schedule. But I'd love to have some involvement in it. You mentioned 24 years with the company.

I mean, that's an incredible amount of time to watch what's happened and how the industry changed. Let's look back a little bit. What do you think have been the defining moments, those turning points for BMT in those 24 years? Look, there's different... Firstly, I think the innovation through IT is, you know, sometimes you have a team of guys in IT that are doing things

that it seems like an expensive part of your business and then you have a quantum leap and you get something that just saves a substantial amount of time, makes it easier for us, makes it easier for the client and there's been a, you know, running from the original Excel Word documents I used to do an appreciation schedule on to the full integrated built system that now controls every piece of the, you know, five people might touch a job

from the start to finish in my organisation. And everyone knows, everyone can see every part of that down to the guy on site collecting information on the app we've built that automatically sends the information back in to have the job, you know, efficiently done with less mistakes, et cetera. I mean, defining moments, there's a few of those in the years of IT world, absolutely.

have to say also just you know it the the beauty i've had in my i guess career here has been that um i've been a depreciation specialist going to talk about lots of proper blocks to lots of property investors the the property industry the accounting industry i listen to the rest of the speakers and learn and there is uh different times where i've been introduced to particular books about client experience that um and exceeding the customers expectations that i picked up in a the thing in America once in red, followed by the ultimate question, 2.0 net promoter scores,

the learnings from those things that have come from different speakers over the years that go, you know, the willingness to go, how do we make good business? We've managed to get from a spare room to half the market share of something in a country through little things like that, that we would challenge as multiple partners

in business each other. You know, defining moments are obviously when things happen, like legislation change, they're pretty defining. um uh pandemics uh you know uh things like that gsc even we we went okay through the gsc but we learned things through that as well yeah we we bunkered down on costs and we we still spent on we still spent marketing dollars etc and we actually did well um and so that was a you know that was a good i guess lesson that worked you know legislation went to bunker down while

while there was a subtraction the amount of depreciation schedules available um yeah so pandemic so i don't know it's been a it's been a very interesting journey i've loved it we run a team of you know at our height 230 people we're about 190 now so uh and that's that you know i was at quantity survey starting at muni um getting us a job with my then to be partners um in 1998 out of a spare room it's a it's a great story brad and i want to thank you for giving us the time to tell that story and i know we've got you in a in a hotel room there so you're obviously on your way to another meeting so thank you for giving us the time all the best to you and your partners on the uh on the path ahead of you i know it's going to be very successful yeah we're

very excited uh and thank you kevin it's been great working with you thank you property deductions can save you thousands of dollars each year to make sure you maximize deductions you need to work with the most experienced quantity surveyor in the country. BMT Tax Depreciation 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 guaranteed to find double your fee in the first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. hi and welcome are you struggling to successfully buy your next property is it all taking too long and feeling too hard and too stressful as you ride the emotional roller coaster of finding

properties and then missing out well you're not alone recent stats released by australia's number one property negotiator hello house reveal that the average buyer typically spends 90 plus hours of their precious time spread over seven months and misses out five times before they finally land a property. Does that sound familiar? Well, to assist you and break down why this is the case and how you can avoid it by getting buy ready, we're joined by Hello House's founder and expert negotiator, Scott Agate. So welcome back to the show, Scott. Hi, Bushy. How are you doing? Good, mate. I really want to dive into this one because this has been a perennial headache for people over the years. So to kick things off, mate, your stats don't paint a very positive

picture for Aussie property buyers. So tell us some more about the average buying process and where your numbers actually come from. Yeah, well, you hit the nail on the head so far with the average buyer in 2022. So it's a seven-month buying process, 90 hours, as you say, a very valuable time. The average buyer is looking online or in person at 300 properties on average. mate they're missing five times and on the sixth time we find they're typically overspending or they're compromising on the asset that they're buying out of sheer frustration and 45% of buyers in Australia are reporting to have buyers remorse so it's pretty ugly out there and this is the average buyer you know and this stems on from the mortgage industry as well where only you know the

10-year average I think is 72% of conditionally approved loans that actually settle so a lot of people are just missing out and then eventually giving up, which is very sad. Very sad. So you've mentioned a couple of these already, but what are some of the key reasons that buyers actually do miss out on a property and why? I think they're underprepared. So they're going into it without an education of how the buying process actually works. They're not committing to it in a short enough timeframe. So we find a lot of buyers are looking at it part time and not full time. So I think it's a four to eight week sprint to get your market knowledge up and to really understand the market depth.

And you've got to commit to seeing, I would imagine 50 properties plus to get a really good call on value in that local market where you want. Buyers are looking at too much of a scattergun, you know, too wide an area. They need to laser focus down to one to two suburbs and buyers need to see more stock

than their competitors if they're going to buy. Otherwise, they're going to be in that queue for a long time. So it's about building relationships, strong relationships with good local agents that are going to get those listings and then racing there to see them first because speed is absolutely paramount to success in 2022. Yeah, that's very good advice.

Now, buyers in the media often blame sales agents underquoting as the main reason for missing out on properties. Is there any truth in this? And how can buyers actually avoid underquoting or bait advertising, as it's often called? Yeah, it's interesting, actually. Underquoting is often linked to people overpaying, but it's got no correlation whatsoever, as far as I'm concerned.

under quoting is baiting buyers in to create competition. So they'll lower the price compared to what they told the seller to engage more buyers in that fight. It doesn't mean that you're going to overpay. It's the complete opposite of that. So what making buyers overpay is a lack of market knowledge. And market knowledge can be formed reasonably quickly from an absolute novice. It's about going out and seeing as many properties in your marketplace as you can. It's about tracking properties that are selling and understanding the days on market, the vendor or discounting rate, and the average time it takes for a listing that you like to come again onto the market.

So is it every week, every two weeks, and so on? So you can form an opinion about how hard you should make, you know, a run for a particular property. So market value and market depth in terms of buyer competition are crucial. Yeah, it's doing the research that's the key there, mate. So what can buyers implement at no cost then and straight away to have the biggest impact on their buying journey, do you think? Well, it's easy.

We've spoken about it a lot of times before, but building rapport with agents is really simple and it's no cost. Setting up a diary on realestate.com or domain. I know that you and I have both spoken about this before and to track sales is really simple. Getting out and seeing auctions and speaking to agents and following up

is a really easy thing to do as well. And then I think in terms of getting themselves ready for the buying process, it's go out and get educated or look for professional help. That'd be the number one thing that I would suggest. So if you can't do it, don't start that process. We get a lot of clients that come to us

and they have to unwind the damage that's been done. They've already told the agent their life story or to buy a price and it's going to come to bite them in the backside later when the agent uses that against them in a negotiation. So don't start what you can't finish. Go out and get professional help and definitely get buyer ready

and learn about the buying process from start to finish so you know what's going to come before it actually happens so you can navigate around it to your benefit. Yeah, beautifully said. Look, God, I really want to thank you again for demystifying the buying process and sharing your valuable insights on the show again today, Scott.

Thanks, Bushy. Thanks, Scott. Well, as you can hear, there's a lot more to the buying process than meets the eye. So if you're serious about reducing the time, the cost and the headache of successfully securing your next property purchase, take advantage of Scott's recently released

unique and comprehensive Get Buyer Ready course that you can tap into now at hellohouse.co forward slash getbuyerready. That's H-E-L-L-O-H-A-U-S.co. And make sure you mention Realty Talk for an extra special bonus. And if the negotiation process is still too hard and too stressful, just get Scott and the Hello House team to do it all for you. Keep watching the Property Hub's Realty Talk,

your trusted voice for all things property. Successful property investment is a game of finance. Do you have the right team and the right game plan? Realty Talk is brought to you by KnowHow Property. More than mortgage brokers, Bushy Martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs, tax, risk and stress

while increasing your capacity for growth. KnowHow has helped over 1,900 homeowners and investors secure more than $800 million in property wealth. So get set to live more, work less and live your legacy. Want to know how to invest in your freedom? Visit knowhowproperty.com.au Greetings and welcome. Now the current spate of monthly interest rate rises is providing regular fuel for the mainstream media

to keep us scared but engaged. With a diuretic diet of doom and gloom about looming property crashes, that's creating a self-fulfilling crisis of confidence. But for those of us who've been involved in property for long enough, we know that this is just fear fodder. So to dig below the headlines, to separate the facts from the fiction, and to uncover what the likely performance of the housing market is actually going to be over the next few years, we're joined by a long-term show favourite and leading property market analyst

who's got an enviable record of proven property predictions through his regular reports. We're talking about John Linderman, the CEO of property market research firm Property Power Partners. So welcome back to the show again, John. Thanks very much, Bushy. And hi, everyone. Thanks, John. Now, to kick things off, how big an impact will higher interest rates have, do you think? Well, I think right now, as you mentioned, they're having a shock sort of value impact more than anything else. the market hasn't seen interest rate rises you know in such rapid succession for about 10 years so we we had about four or five rate rises back in 2009-10 this is taking everyone by surprise a

lot of people just didn't realize that this sort of thing can happen and so yeah the market's really sort of gone into shock I think that and we've seen this again with with previous rate rise cycles the market recovers pretty quickly it's very resilient and i my prediction is that by this time next year we'll be in the middle of another housing market boom so there's uh there's a big prediction for you bushy and for the uh the viewers it's it's going to happen i love it love it uh i totally agree with your thoughts there and the mistake i think that uh people make and the media makes is that it's just a one horse pony in terms of interest rates mean everything. But as you and I know, it's a bit more like a Rubik's Cube with more combinations and dynamics

than you can poke a stick at. So to put that in context, what are some of the key growth dynamics of our housing markets, John? Well, there are three, what I call the three P's, and that's people, purchasing power and properties. And if you look at those three, you can see exactly how housing markets perform. The first one, population. If you get more people moving into an area, they need homes, they need somewhere to live. So that means that housing demand is going to go up. The second thing is, of course, purchasing power. So if they can afford to buy a property, if so, the cost of finance is cheap or there's plenty available, then they'll buy. And if they can't buy, they'll rent. Some people prefer to rent. And of course, some people

don't need finance as you said it's a little bit more complex and just simply is there enough finance or not you know people downsizing don't need finance but that's the second p and the third p is well are there enough properties available for the type of demand for example if you're looking in an area where people are downsizing in retirement they're going to look at so you know low maintenance, easy access, easily accessible, single level homes with few steps. If there's not enough of those around, then the price of those types of properties starts to escalate dramatically. So you look at the three Ps, you can work out pretty much what's going to happen to the property market. I love it. That's a great way to summarise the key pieces. The three Ps, I'm going to use

that pretty regularly now, John, thank you. But sort of applying the three Ps into what you're seeing in the market, which areas should investors avoid at all costs then? Well, I think the first thing is what we saw at the Jobs and Schools Summit is that we're increasing the skilled migration intake to nearly 200,000 people. Now, that's the demand for 200,000 homes that wasn't there before so you can see suddenly we're going to find a massive shortage of properties where those people are likely to go and then mostly they'll be renters at least initially so rent demand is going to shoot up and these people most of them will go to the you know the highly urbanized areas of our big capital cities so rent demand and these areas where rental yields have been you

know very low over the last few years so i think that um you know yields and rent demand is going to shoot up in the well-established areas of our capital cities. That's one thing that's going to happen. The other thing is we're also seeing a movement of people out of capital cities and inter-regional areas. Now, it's not something that was caused by the pandemic as much as by the government's initiative in introducing the downsizing into super scheme, which means that people aged 55 and over, if they sell their family home, they can put up to $600,000 as a couple tax-free into their super fund. That guarantees their financial future. So we're seeing a lot of people about to take advantage of this moving from, say, an established suburban area in Sydney,

Melbourne, or Brisbane, or another capital city, and moving into a nearby regional market where they can buy a lot cheaper and put that $600,000 into super. So you see a big movement. And I think this is you know the areas that remain resilient now and will be even more um resilient in future will be those regional markets yeah okay so we we sort of uh you've pointed us in the direction of the areas uh that that do have the growth potential where on the flip side then which ones uh won't do you think and which ones do we need to avoid well i think it's that that's a story that never really changes in terms of which areas you avoid all of the you know the bad luck stories that I've ever heard and I've been around a long time for people who bought house and land packages

or off the planned units there's two reasons for that one is you don't really know what they're worth and so you'd like to pay a lot more than what they could be worth and the other problem is that these are areas that are subject to over development so you suddenly find that there's way too much supply and not enough demand so i always say avoid areas house and land packages off the plan type units always buy established properties because you know what they're worth and buy in areas that haven't got that potential for over development so they're the areas you avoid yeah excellent well that pretty much completes the picture john so i really want to thank you for this proper perspective on what's likely to happen in property moving forward

a big smile on my face for the the ongoing property boom that you're predicting at the end of the next year and I just want to thank you for sharing that with us on the show today it's a pleasure we'll come back next year and and you'll you'll see how much it's gone up by but yes I've made a lot of predictions in the past you know all of them have been spot on and I'm quite confident that we're going to see a property market boom even though people don't expect that to happen right now. Yeah, I have no doubt. And you heard it here first on Realty Talk. So yet again, we'd seen further proof that property is not a one trick pony as housing conditions are driven by a complex and dynamic raft of factors and not just the media's current indicator

of the hour. So if you're looking for the right information to help you make fully informed property decisions, just go to lindemanreports.com.au where you'll find a range of property prediction reports, including the latest Shooting Star Suburbs report. Keep watching Realty Talk, your go-to place for all things property. Now, before I leave you, here's some final thoughts from me, because there's three key takeaways from today's show. Firstly, if you're a property investor, make sure you get a professional quanta surveyor prepared tax depreciation schedule done, if you haven't done already, as a good report can save you thousands of dollars ongoing. Secondly, if you're serious about reducing the time, cost and headache

of successfully securing your next property purchase, make sure you take advantage of Hello House's recently released unique and comprehensive Get Buyer Ready course. It's going to make a world of difference. I've personally done it and even though I've been active in property for over 35 years now, I learned some great new tips. So do yourself a favor and jump on hellohouse.co, that's H-E-L-L-O-H-O-U-S.co forward slash getbuyready. I'm sure you're not going to regret it. And lastly, and I'm starting to sound a bit like a stuck record on this, make sure that you're very selective about where you get your property information. So turn off the TV and throw away your newspaper and turn to proven reliable property

specialists like those we get here on Realty Talk. It'll make a massive difference to the experience and your results of your property journey. That's more food for thought and that's another wrap for this week's show. Another big thanks to our special guests Brad Beer, Scott Agate and John Linderman and to make sure you don't miss another episode of your trusted voice for all things property subscribe to our property hub on your favourite podcast player, where you'll also enjoy the Get Invested podcast delivered to you each and every week. And make sure you sign up on the realty.com.au homepage to get a free copy of my award-winning book, Get Invested. And while you're there, make sure you check out one of Australia's most extensive range of properties for sale

from over 7,000 agents nationally, where you'll even find properties that aren't listed anywhere else. Thanks again to realty.com.au, BMT Tax Appreciation, Apiro Marketing and DM Media for their ongoing support. I'm Bushy Martin from KnowHow Property Finance. Remember to always get invested in your knowledge before you get invested in property. And I look forward to seeing you again next week. 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.