Property Hub - Investment Insights & Inspiration - Realty Talk: Buy Now Pay Later Deposits + Video Transforms Rentals

Episode Date: March 18, 2022

Property author and industry leader Nicola McDougall have been announced as the new Chair of the Property Investment Professionals of Australia (PIPA).  Nicola joins Bushy to discuss PIPA’s continuing growth vision to protect property investors. Upfront deposits of up to $300k are a major hurdle that is preventing many Aussies from getting on the property ladder, but industry disruptor Ownhome has created a buy now pay later deposit model backed by the Commonwealth Bank that uses rent to own to get you into your home now. Cofounder James Bowe joins us to discuss the details. Since the onset of Covid, remote virtual video technology is now being used by top property managers to help both landlords advertise the property as well as tenants explore them. Jamie Billerwell from Code Property Group discusses the innovations and the benefits in this area.   RealtyTalk is your trusted voice in property investment and Australia’s most popular online property show.  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, a company that helps 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. Greetings and welcome to Realty Talk, Australia's longest running property show. I'm Bushy Martin from KnowHow Property Finance and we've got another great show packed full of Property Innovations to share with you this week. To kick things off, the Property Investment Professionals of Australia, or PIPA, has just announced a new industry-leading chair,

Nicola McDougall. So Nicola joins us to discuss their continuing growth vision to further protect all property investors. Following recent property value hikes, upfront deposits of up to $300,000 are proving to be a major hurdle that's preventing many hard saving Aussies from getting on the property ladder. But new industry disruptor OwnHome has recently created a buy now pay later deposit model backed by the Commonwealth Bank that uses rent to own to get you into your own home now. Co-founder James Bow joins us to discuss the details. And to round out the show, Jamie Billiwell from the Code Property Group joins us to reveal how video walkthrough remote technology innovations are now being used by top property

managers to help landlords display property as well as tenants inspect and lease them faster and easier. And before we share these great insights, make sure you don't miss an episode of Realty Talk by signing up on the realty.com.au homepage so that you can get every show in your inbox every week. And I'll even give you a free copy of my award-winning book, Get Invested, for making the effort. We've got a lot of property innovations to reveal, so let's get on with the show. Hi, welcome. Now, unfortunately, property investment advice remains unregulated across Australia, and there are still many slippery-shoes salespeople, unfortunately,

flogging substandard properties to uneducated buyers that give the industry a bad name. So who do you turn to to get true independent professional advice? Well, your only safe go-to place is the Property Investment Professionals of Australia, or PIPA, of which I'm personally a proud member and a very strong supporter. And all PIPA members must adhere to a very strict code of conduct, which offers you the best assurance that you're dealing with a trusted professional. and as the reach influence and awareness of PIPA continues to grow and evolve PIPA has just announced the appointment of another industry leader as the new chair Nicola McDougall to continue and expand the vision of the previous incumbent the property professor Peter Kalesos and she's graciously agreed to join us on the show today so congratulations and welcome

back to the show Nicola. Thanks Bushy it's wonderful to be here good to see you and really great to see you taking the chair with PIPA. PIPA's always been a great organisation, but with your reach and your network, I'm really excited about where you're likely to take it. So sort of to dive into that a little bit, under your guidance, what does PIPA have planned for 2022? Thanks, Bushy. So I've been on the PIPA board since 2014 now, and we're all volunteers on the board, including the chair position as well. And I'm very grateful to Peter Kalisos and before him, Ben Kingsley you know two great mentors for me at PIPA over the years and since we know over the last certainly the last five years let's say the PIPA has grown exponentially to be much more

well known our membership is growing double digits every year we are having a lot more students go through our qualified property investment advisor course so PIPA from a grass a fairly grassroots industry association you know a decade or so ago it's now got some real clout out there as well which is is wonderful to get to that to that point this year we at the end of last year actually we had started a number of I guess initiatives that we were keen to progress in 2022 a key part of that is a couple of public awareness campaigns which you know as a small non-profit we hadn't actually had didn't actually have the revenue to finance that prior to now so we have a public awareness campaign that had been running for consumers as well as for professionals.

Also, we are looking at upgrading the website, which is a big thing for a small non-profit association. And we also are doing some wonderful things with our QPIA course as well. And at the moment, I think it actually might be finished now, actually. We've spent the last several months upgrading the QPIA course as well. Well, let's dive into that because I'd be interested in what what are the changes that are underway for the qualified property investment advisor or QPIA course, if you can break that down for us? Well, I think, you know, with any type of training material, it needs to be current and modern. So the QPIA itself is always updated regularly so that we are, you know, providing the very, the most up-to-date training educational

material for students. And what's been great actually over the last couple of years is the volume of students going through the QPIA course as well. So what that means is, you know, the people that are involved in the industry are seeing the QPIA as a training program that they need to do if they want to be seen as, you know, having sort of the benchmark for education out there. One big thing that is actually happening this year, which we're just starting in the process of doing um is we are um the qpia course um is being transitioned into a certificate for uh educational standard so that was a big thing from a board level that we had a discussion um a big board meeting in um june or july last year about it we felt that um the next level for

for pepper was to actually take the qpia from an you know an industry-based sort of training program to an actual certificate for level uh and uh so that's something underway at the moment and our education committee is spearheading that. It will take quite some time, as you can imagine, but that's a wonderful thing, I guess, for PIPA as well. And I guess it's the next tranche in our evolution that we're going to be able to offer the course as an actual Certificate IV level.

Yeah, brilliant work. Now, this time a few years back, and just before the last federal election, you were actually in Canberra with Peter Klesos fighting for the retention of negative gearing. Are there any concerning policies on the radar this time around, Nicola? Not so far, thankfully. I mean, obviously, you've been around as long as I have, Bushy, you know, longer.

And that, you know, those policies that were on the table from federal labour before the last election were terrible, frightening. And so as an industry body, we certainly went on the front foot. And based on some excellent research that Peter had done, which we presented to the federal government at the time and also you know sent out to the media and giving that to the government as we did at the time next thing we know we get a call up and ask if we can come to Canberra

and we were involved in a round table at the time with the Prime Minister, with the Treasurer and the Housing Minister at the time as well just to discuss the importance of maintaining negative gearing and trying to get across as we always do that you know negative gearing is not an investment strategy uh it's a moment in time for some investors and we're all hoping we all go into it wanting to uh get to a point where where our portfolios financially pay for themselves and provide us cash flow and capital growth in the

future um look at this stage it's looking like clear air in regards to housing policies never say never um often they do they are put on the table just because they're seen as populist policies one way or the other depending on what side of the political fence you're on um but at this stage we're certainly hoping uh from a federal point of view uh that uh the property sector might be left alone this time well you obviously did such a good job last time around that you've scared them off hopefully nicola because i've certainly got my fingers crossed that they don't go dabbling in that you know what though yeah that's right at the time you know honestly that was that policy is what lost labor the election let's be honest and totally the whole industry we all got together

and we we worked really hard on the campaign um and it really didn't make a massive difference to the results so we're also probably um basking in the bit of the limelight from that but it just goes to show you know when an industry actually when we all work together for a common goal um and to protect the rights of property owners and investors what we can achieve right exactly right it's uh certainly motivated the industry and uh you know pepper and and the picker the uh Property Investment Council of Australia are also pretty active, which I was involved with at the time, and we certainly banged the drum on making sure that people are aware

of the massive impacts that that change was likely to have. So awesome work. Now, just to give the audience a bit of a takeaway, what would be your one piece of advice to anyone considering investing in property this year? I think, obviously, as you preference at the start of the show, bushy um working with qualified professionals is number one you always you always must do that you know check to to see whether your advisor is a member of PIPA check to see that they do have

the correct qualifications and licenses including the QPIA what has been very interesting over the last couple of years and and while interstate investment um has been a you know a strategy for for many years and certainly you know a lot more people have been doing it over the last couple of years and unfortunately they have probably been buying into locations interstate that they don't really understand and they haven't been working with qualified professionals who should have been able to guide them and as sitting talking to you here from the Sunshine Coast I have a you know I worry about those people interstate over the last couple of years who may have purchased in Brisbane on the Sunshine Coast or anywhere in the southeast really without understanding the

you know the impact of floods and which areas are flood prone and which are not um so i think that would be while it's a you know i guess it's not a great comparison to make i would have said that as a key takeaway anyway uh it's just that if you are going to be buying into a location that you really don't understand make sure you're working with a professional who can help guide you um because alas there are i'm sure there are going to be some people who have got to be very badly financially burnt from the flood situation that we still have going on up here at the moment. Yeah, that's really good advice. And as always, Nicola, we appreciate you sharing these insights. And thanks again for your time on the show today. Anytime. Nicola, well, as you can

see, there are exciting times ahead for PIPA that will continue to increase the professionalism and the standards of the property investment industry. So make sure that your property team are all PIPA members as we are, which you can check out now on their website at pippa.asn.au. That's p-i-p-a.asn.au. Keep watching for more leading property insights here on Realty Talk. 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 Know How 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, getting on the property ladder is a big deal for anyone, but the biggest hurdle for first-time buyers in young Aussies at the moment is the sheer size of the deposit that's required. Now, if you just look at CoreLogic's current national median house value

of $728,000, that means that you need to outweigh between $100,000 and $2,000 using a maximum loan, jumping up to about $190,000 up front if you don't want to pay lenders and mortgage insurers to cover the loan shortfall plus the stamp duty and loan costs. And this jumps up even higher to an upfront deposit of between $154,000 up to nearly $300,000 if you want to live in Sydney where the current minimum house price is over $1.1 million.

Yes, you heard that right. That's an upfront cash deposit of nearly $300,000. dollars. Now you might be saving like crazy but when house prices have been growing up to eight times faster than wages you're left chasing your tail as the housing bus just keeps accelerating further away as you sprint to try and catch up. So you've either got to win the lottery or turn to Australia's other top 10 lender which is the bank of mum and dad to beg, borrow and steal enough to make your home ownership dream come true. However there's a new Australian startup that's helping to solve this problem and give you an earlier pathway to home ownership that has an

innovative business model based on the old rent-to-own or lease-to-own approach. Now rent-to-own isn't new and it's had a bit of a checkered history in Australia but in simple terms rent-to-own is a bit like a buy now pay later approach to home deposits. Now this innovative startup is called Own Home and it's off to a flying start with a recent 31 million dollar funding round from investors, including backing by Australia's biggest home lender, the Commonwealth Bank. James Bow is the co-founder of Own Home and he joins us now on Move to Talk to talk about it. So welcome to the show, James. Great to be here, Bushy. Thanks so much for having me. Yeah, my pleasure. Really looking to dig into this because it's a great innovation

in the industry. So to cut straight to the chase, James, how does Own Home actually work? Yeah, well, own home is a new path to home ownership that allows people to save for their home while they live in it. I think you summed it up really well, Bushy. The traditional path of banks waiting for customers to first save a 10% or 20% deposit has resulted in my generation really seeing the market continuously run away from them faster than they can save and has made access to home ownership extremely unequal. And so what I mean by that is that rely on direct financial support from the bank of

mum and dad. And so on some measure, you know, they're now the fifth largest lender, depending on which measure you use. So are certainly punching increasingly above their weight. And so own home is really focused on supporting those without access to the bank of mum and dad, as well as those who might not want to put their parents in that position. And so in terms of how own home works, there's really four steps. So the first is qualifying for own home. And so here we're asking the same questions that a bank is based on your income and expenses. What can

you afford to spend on a monthly basis? Step two is really going out to the open market and directing own home to purchase your dream home off the open market. And here we're really acting as a buyer's agent effectively on your behalf, doing the diligence, reading the 150-page strata reports, making sure that that is a really sound investment. And then step three, you move into your home, we hand over the keys, but own home retains title at this point. And so you enter into an option and lease agreement. And that gives you the right, but not the obligation to buy that property back from own home at a pre-agreed price. And so step four is buying that property back from own home. And so going back to what is that pre-agreed price, it's very transparently the price that

own home buys that property for on the open market and then growing at 3.8% per annum, which is, as your listeners would know, well below the long run average of Sydney of 7%. And so our customers get a few benefits here. They get to enjoy the upside of any capital appreciation above that pre-agreed growth of 3.8%. and more importantly they get to feel and act like a homeowner before they otherwise would and so what i mean by feeling and acting like a homeowner is you know our customers are already undertaking renovations through their properties because after all this is the home that they have

the exclusive right to purchase and we want them to be able to lean into that experience lover just sort of drilling into a little bit are there any limitations restrictions thresholds or parameters around the maximum or minimum price of the property and the location of the property that own home is able to secure yeah it's a really good question i'd effectively think of own home as focusing on sort of a property profile that falls outside of your typical government support program so i think the the least expensive property we've purchased on behalf of a customer has been around 1.1 million dollars and as we know you know typically there's no stamp duty concessions, or there's no access to, you know, single parent deposit schemes at

that sort of price level. And so we're focused on disproportionately, you know, properties that have historically had a profile that's resulted in really strong capital growth. And so that means that, you know, TIP excluded, you know, large, new high rise developments in the, you know, to take an area in Sydney, you know, Green Square and Mascot are going to be out of scope, because we don't feel comfortable purchasing those homes on behalf of our customers because they haven't performed very well historically. I love it actually so another secondary benefit that I'm seeing here with Home Home is that not only are they effectively allowing you to purchase a property but you're providing the level of due diligence that quite often first-time buyers or new property

owners aren't aware of and don't have the experience all the time to be able to assess whether a property is actually going to be a good performer long term. So I love that extra level of expertise that Own Homes now bring to the table to ensure that those that are buying property are actually buying the property. So James, you've touched on this already, but who does Own Home specifically support yeah well while we wish we could support everyone you know unfortunately simply we can't you know one we've had you know over 6 000 applications to own home in the past month and so it's very clear that there's a lot of pent-up demand for alternative paths to home ownership that help people overcome this deposit hurdle who we are specifically able to support

are individuals, couples and families who are more than capable of making the monthly payments towards a mortgage, but just don't have that few hundred grand saved for that initial deposit. And as we've sort of already visited already, you know, the bank of mum and dad

has become typically that deciding factor in access to home ownership. So we're excited, I guess, to be building what we hope will be ultimately one of many paths to home ownership in Australia. Yeah, I love the niche. And it's certainly going to increase the opportunity

for a lot of part-weaving Aussies. Let's talk about belief systems from around Ironhide. What do you need to believe for Ironhide to be an effective path to ownership there? Yeah, very explicitly, you need to believe that over the long run, property prices will grow. And so that pre-agreed price growth of 3.8%, as we already, you know, talked about is well below the long run average. But if you don't

believe that property will grow at 3.8% or greater over the length of the option that you have with own home, and that's seven years. So one of the longest, I think it is the longest option period globally of any of these rent to own paths to home ownership. If you don't believe that, then own home is not the path for you. And I guess as your listeners would know, you know, if you believe that property is destined to decline over time, then the last thing that you want to be doing is taking out a mortgage or in a 30 year, you know, credit commitment for that property. And so who own home is there to support are those who are,

I guess, concerned and have seen the property market race away from them in the areas that they want to, you know, put down roots and, and tap into their community. Yeah, spot on. And what I'm liking is that seven-year rise is a reasonable one because for those of you that have been here probably a long time, it does peak and plateau and sometimes it comes back 5%, 10% temporarily for a couple of years. And that's probably what will occur in certain regions around the country over the next two or three years given the massive spiking

values that's occurred over the last 12 months or so. But given that seven-year timeline, then there's plenty of time for recovery to make sure that equity growth is there. So I love it. And, mate, this all sounds very interesting and appealing, and I want to thank you, James, for sharing your great home access innovation with us, and thanks again for joining us on the show today. Thanks, Bushy.

Thanks, James. Well, if you're a first-time buyer or a property purchaser that's struggling to save a deposit fast enough and your dream of homeownership just keeps accelerating further away from you, I'd ask you to have a clear and transparent rent-to-buy home deposit option that may help you or your kids to achieve your home ownership goals.

So to find out more, reach out to the team at ownhome.com to find out more. Stay with us for more here on 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 1-300-728-726 today for an obligation free quote.

Hi and welcome. Now, since the advent of COVID isolation, the world of finding and inspecting properties for rent has been turned on its head as the industry has been forced to embrace remote virtual video technology to help both landlords advertise property as well as tenants to explore them. So to discuss the innovations and their benefits in this area, we're joined by Sunshine Coast Property Management Specialist, Jamie Biddlewell from the Code Property Group. So welcome to Realty Talk, Jamie. Thank you for having me along today. Great. We're looking forward to diving into this because there's nothing that we know for sure is that change creates innovation so let's talk specifically about what video content are you currently using

yes of course so during the height of covert we purchased 360 technology so we've got a gimbal we've got the 360 camera purchasing all of the programs in relation to editing so if you're not familiar with 360 video it's essentially the camera we put it in the room and we quickly run out and it takes a picture of the entire place so you you you would have seen them if you've ever looked at a development or off the plan listing where you're zooming into rooms and you can zoom in on areas and zoom out so it gives the clients a lot more of an interactive scope of that specific spot or where they're wanting to go so they can virtually walk themselves through without it being a video it's very independently operated yeah i love it we've been

in our business we actually assist investors to identify properties around the country and being borderless having access to unfortunately there's only a few like yourself that have embraced the technology but for those that have those 3d walkthroughs give you a really good impression of exactly what the spaces feel like, what condition they're in. I find them absolutely exceptional. So it's really changed the world and give us a much better feel for how it's going. So beyond that then, how do you see this helping investors?

I see it helping investors because you're appealing to your entire market and you just said yourself that a lot of property managers are not embracing. And I think it's the age-old question of if you're not moving, you'll die. We've heard it being too bleak. I think it's important to embrace technology and we're a relatively young, hungry team in the leasing department. So we embrace the technology tenfold. And to their credit, our property managers that have been property, career property managers have as well. So we're very blessed in that aspect. I think it gives people the opportunity

to do the 360 or a video walkthrough or a live walkthrough where they can say, can you go back and measure that fridge space or the cupboard space or whatever it may be. I have conversations with tenants constantly about the fact that they have so much difficulty applying for a rental property because they're simply not physically there to view it. Yeah, exactly right. Exactly right. So you've covered some of this already, but who do you see as benefiting from this technology? Well, property managers, firstly, we are renting properties faster with a high calibre of tenant and they're relocating from capital cities like Sydney and Melbourne

and they've got that income as well that cities naturally produce, which is also fantastic. Of course, we still have to vet them and make sure that they're viable candidates, which we do. The other element of it is you are appealing to people who are in isolation, where a lot of people don't think of this. you know, you've got to think that people are in isolation for seven days at a time. They have arguably nothing but time to get those applications correct. They can view the properties

in a more comprehensive manner because they're not swept in and out in amongst a crowd over 15 minutes. They have the time to really go through and nut down whether or not it is a viable option for you. And we try and do floor plans on every single property for that reason as well. Because a lot of our clientele are either coming in from Sydney, Melbourne, stuck where they are, or they're in isolation. So you're appealing to them and the investor gets a high calibre of tenant in a shorter possible timeframe.

Yeah, I love it. It's really enabled the industry, which is so there's benefits all round, really, from that perspective. Look, really appreciate you. Brings us up to speed with these property management improvements, Jamie. And thanks again for joining us on the show today.

You're welcome. Thank you for having me. Thanks, Jamie. Well, it's clear that if you're not embracing the world of remote visual technology in all of its forms by engaging leading edge property managers, then you're limiting your reach, your exposure, and your opportunity, both as an investor and as a landlord. You're watching Realty Talk, your go-to place for all things property.

Well, that's another wrap on this week's show. Another big thanks to our special guests, Nicola McDougall, James Bower, and Jamie Billiwell. And to make sure that you don't miss an episode of Australia's longest running and most popular online property show, subscribe to Realty Talk now. You can get it on Apple Podcasts, Google Podcasts, Spotify, YouTube, or wherever you listen. And make sure you sign up on the realty.com.au homepage to get every episode in your inbox every week. 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. Thanks again to realty.com.au and BMT Tax Appreciation for their ongoing support. I'm Bushy Martin from

KnowHow Property Finance and I look forward to enjoying your company again next week.