Property Hub - Investment Insights & Inspiration - Realty Talk: Hi Vis to Hi Value investment + Long term decisions on short term info

Episode Date: September 18, 2021

YOU might not know Brett Birkill’s clothing brand, but you’ve probably seen his wares — they’re impossible to miss.    Hundreds of thousands of Australians go to work every day wearing Prime Mover Workwear - his high-vis designs. Recently, Brett sold the company he founded on the smell of an oily rag which made him very rich.   Now Brett has turned his attention to the property.  Brett catches up with Bushy today to reveal details about that fascinating journey.   Bushy also catches up with Josh Masters who touches on a subject we should all pay close attention to.   Long-term investment decisions are based on short-term information.  The big question for me was when Bushy asks Josh to identify the tools that you and I can use to check the trends in the data to make sure they’re investing and not just speculating? 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 and welcome to the show. You might not have heard of Brett Burkill or his clothing brand, but you've probably seen his wares. they're impossible to miss. Hundreds of thousands of Australians go to work every single day wearing prime mover workwear. That's his high-vis design. Well recently Brett sold that company, the company that he founded on the smell of an oily rag, his words, which made him very rich. Well now Brett

has turned his attention to property and Brett catches up with Bushy today in the show to reveal details about that fascinating journey and why he chose property. Bushy also catches up with Josh Masters, who touches on a subject that we should all pay very close attention to, that is long-term investment decisions that are based on short-term information. The big question for me was when Bushy asked Josh to identify the tools that you and I can use to check the trends in the data to make sure that we're investing and not just speculating. I know you'll enjoy that interview and that chat. Let's get underway.

Hi and welcome. Now, what I've always loved about property is that it attracts all types of people from diverse backgrounds and there definitely isn't a one-size-fits-all when it comes to property success. And to demonstrate this in a two-part Realty Talk special, today's guest, Brett Burkle from Burkle Developments, is certainly no exception. Transitioning from a successful entrepreneur in his high-vis workwear to an entrepreneur in high-vis property fair. So welcome to Realty Talk, Brett. G'day, Bushy. Thank you. Lovely intro.

Great to have you on board, mate. Now, Brett, as I've already alluded, you haven't always been in property. So let's start by getting you to tell us about what you've been doing over the last decade or so. yeah so my background was in clothing my family for many generations our three generations was in clothing before so we had a very long history in that and I grew up in clothing that's pretty much all I knew and the business that we started and developed was from scratch similar to what we've done with the property and yeah look long story short over it was a 13 year period we built up a significant business running across multiple countries and we ended up packaging that together and selling it to a large workwear brand over in Ireland by KPMG

so that's um that process took a long time and we started with zero customers and pretty much zero money and and built up a significant business that had around 70 employees and and and a significant presence at the time that we that we sold so one of the things that always ran alongside the clothing though was we we had a a great passion when i say we it's my wife and i um we had a great passion for property always so whilst we weren't in property development um we always purchased our distribution centers um we we we had different factories and and then then got involved in a lot of passive property so we had a great um understanding and feeling and passion for property alongside the the clothing business that was our um day-to-day

bread and butter yeah great okay so i mean on the outside uh at first glance there doesn't seem to be a big synergy between being uh clothing and and property so what made you decide to move into property development once you sold the business yeah there was definitely a connection so my wife's from hong kong um and she had great interest in property in in um a very different market to australia um and often over heating and booming property market she bought and sold properties at different times so um there was a passion from her side again she she her background was clothing and and and property as well and so same with me um I purchased my first property at 22 and as soon as we moved as soon as I moved in um which was just a small villa unit in Hawthorne

the first thing I did was pull up the carpets um redo the floorboards and paint the kitchen so there was there was always a desire to be in and around property and if um the overriding factor was where we've always loved business and been in business and one of the key areas that that continued to to rear its head in people's business success was property and properties obviously was at the forefront of you know financial review lists and and and all these sorts of things so I often looked at that and thought well it's something I'm very passionate about and clearly um it's it's it's been proven over decades and centuries as being um a great avenue for wealth growth so putting all those things together um property was always in and

about yeah and it makes complete sense so tell us a bit about Burkhill Developments what are you creating and who are you targeting yeah so we again we started from scratch um when we finished off the clothing business we had 12 months to hand over and basically to the day we walked out and handed the business over 12 months after the transaction we purchased our first development site which was six townhouses I had done a lot of research as much as I could I probably overanalyzed everything down to the to the last cent and to be honest I spoke to everyone I spoke to anyone professionally personally you know my dad's always been a great mentor and i spoke to him and i couldn't come to the decision that it was going to be successful or not um so i i we we

decided at that time to then just um say that look we've done all this research everything looks good on paper but the only way to get into it is to purchase a block and develop it um so that that was that was where we started and what we wanted to do early on was um even though the first the first development site was you know we just had to get going and see how it rolled out we wanted something close to the train line and we wanted something close to infrastructure um we wanted a developing area but something that was already established um and there's there's a lot of areas around melbourne that do have key infrastructure that have been around for a long time not just melbourne all across the country and um so once we ticked off those key criteria um we purchased

the block and yeah uh we're sort of having a look back from that point yeah yeah brilliant mate well look uh you've you've wet our appetite uh looking forward to diving into a bit more detail in in part two of our discussion uh coming up shortly so uh thanks for sharing your experience and your insights with us today brett and we look forward to uh getting you on again soon to complete the story. Okay, great. Thanks Bushy. Thanks mate. Now there's a really good example that we've just listened to of someone who's leveraged their success from their business life into property success. So if you're still sitting on the sidelines because you're too scared to start, it's time to get invested in your knowledge as Brett has just shared with us and then get

invested in property. Stay with us for more here on Realty Talk. Property deductions can save you thousands of dollars each year to make sure you maximise 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 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. Hi and welcome. Now at a time when property markets across Australia have risen dramatically, it's easy to get caught up in the feverish snapshot of what's happening today with high

growth and low vacancies in most parts of the country and then end up making a long-term judgment call on what is actually short-term information. So to put a more balanced perspective on this, I'm joined by Josh Masters of BuySide Buyers Agents, who's just released his latest market essentials report. Welcome back to the show, Josh. Thanks, Bushy. Thanks for having me. I'd always love having you on board. Mate, let's start by getting a quick summary from your latest report on what's happening with property around the country. Yeah, fantastic. So obviously the lockdown saga continues and it's thrown most areas into disarray. Sydney's weathering it reasonably well, although the confidence among sellers

is quite low and listings have not dried up as much as last year but they are certainly below average levels um buyer demand is out in full force though everybody's got uh um loans they need to get you know rolled over into into their purchase so we're seeing uh prices increasing and you know with uh at 1.2 million plus for the median price point for sydney makes it the third least expensive or most expensive city in in the world now Melbourne's probably getting the majority of the hangover from the lockdowns their government took an interesting stance in not allowing one-on-one inspections or even auctions to take place and it really has halted the market there unfortunately but I still think there's some potential moving forward and

especially into the future now obviously places like Canberra Adelaide Hobart Darwin you know even Perth they're all writing double digit figures on the back of lockdown exodus Queensland's probably the prime state where they're capturing a lot of the movement from New South Wales and Victoria people who are moving outside of Sydney looking for the freedoms and the new lifestyle that Queensland offers they didn't have before so I think that you know some of the most interesting figures across the nation are that nearly every capital city is under one percent vacancy rates save for Brisbane which is at 1.3 and then Melbourne and Sydney again taking the headaches for lockdown where people are trying to leave those cities and getting a little bit of respite

they're in the sort of the 2.7 to 3.2s but I think that the the biggest one that we're seeing is that If you look at houses for the last 12 months, every capital city is now showing double digit growth. And I think, you know, as a commentator and as a researcher of the property market, I think that's where the real trap lies, Bushy. Because I think on this show, you'll probably hear, the listeners are probably hearing about all these places that you can invest and that are doing well, especially post-COVID, cultural changes that are moving through and pushing everyone outside of the offices to more work-at-home situations where they want a little bit more room, a little bit more space, they want to be able to go down to the beach if they can. And it's very easy to look at some of these figures and think, well, you know what, I can do no wrong. i can get into these areas and it's going to be i'm going to make money and i think that's the mistake a lot of people are going to make right now if i were to ask you you know how long should we be investing in in the property market as the minimum what would you say i'll

be saying 15 years plus josh there you go look a lot of people say 10 years 15 years is probably a good thing before you see, well, I shouldn't say before you see a good return, but the property markets are a slow moving cycle. And I think the mistake a lot of people could make today is looking at a snapshot of the data of today's performance and looking at growth rates that are 15%, vacancy rates that are under 1%, rental yields that are 4% to 5% plus. And what they really should be looking at is the trend the trend that has happened over the last 10 or even 20 years to say okay has anything materially changed in these areas that will warrant this area continuing well above where it should have been in the past you know i'm looking at some areas where

you know i've heard some people talking about buying into a high growth area because it's got 10 or 15 percent this year alone but it's got an average annual growth rate of two two percent two or three percent and you're thinking well that just doesn't equate you know the same thing goes with uh the rental markets we've seen a lot of properties move into under one percent figures and yet if you looked back over the last 10 years vacancy rates could be anything between four to seven percent now as an investor that makes me worried because if you're not preparing for those sort of figures for the next 10 years then what will happen when things get bumpy and things change because when i think we're writing on a lot of information that is happening within these

lockdowns that will come to an end you know as vaccination rates improve as the major capital cities come out of lockdown and into the new year a lot of these cultural changes may reverse and things may change yeah sorry go on yeah i think that's a really good read so sort of looking beyond the immediate hype and the in the sort of myopic growth that we're seeing in a very short space of time what are the property market fundamentals is actually telling you look i i think that it's important to look at the long-term growth rates here um that's what we need to look at i think a lot of the the fundamentals that we're looking at today the 12-month growth growth rates the vacancy rates um they're inflated quite frankly

and it won't stay that way uh we're well above the long-term averages for many of these areas and i think you know you have to ask yourself am i investing in this area or am i just speculating because the speculators will look at the long-term growth and ignore it and they will be hoping they were pitting their hopes on something that's happening today that they'll hope will continue whereas we need to be looking at you know long-term figures of 10-year growth rates etc vacancy rate trends and i think the word trend is the key you need to be looking at what was the average over this time has anything materially changed you know i've been in this game look i've been investing for probably 25 years now bushy and you know buying professionally for my clients

for the last 10 and over that time i can tell you i've made mistakes and a lot of those times it's because i ignored what the long-term trend was telling me and i pinned my hope on a particular event changing that market for the good for the long term yeah make a very good point yeah I know that you know you'd take quite a scientific approach to looking at the opportunities for properties in certain areas so what what sort of tools can potential investors use to check the trends in the data to make sure that they are investing versus speculating as you say that's a good question and I'm look I'm going to break it down into two components to keep it really simple growth and vacancy rates now obviously growth is is price movement vacancy rates are

a measure of how soft or strong the rental market is in that area right that's all we're concerned about we're concerned about will this property go up in value and will somebody be there to pay the rent right so yeah a great free tool i love sqm research from louis christopher he offers great data you can go on there and look up vacancy rates for any suburb across australia it's free it's free data you can check the chart for the last 10 to 15 years on any suburb you're looking at now i they say a balanced market is around three percent i think that's probably too high i like to see anything under two and a half and you will see whether these suburbs are seasonal you will see whether there's a long-term trend that is too high or too low or whether there's

just been a covid jump and now it's back to normal i think uh you know i i get a lot of my data straight from the source from core logic um they put out some fantastic data so if you're willing to pay for that great uh you can also find some great um uh 10-year growth rate trends on price finder if you're willing to pay but if you want a free uh source you can go to um your investment property magazine site you can type in the suburb and they will give you some of the key data that we get as industry professionals now obviously you want to be looking at your 12 month growth rate and your yields etc but they also print 10 year growth rates now 10 year growth rates are very important if you're looking at an area that's that somebody's telling you is great to invest in

because it's 10 this year but it's a long-term growth rate of one percent that's a red flag for me um i think the other things to mention are just from a top level perspective uh i love looking at pete wargent's blog site he's got some fantastic information he dives into some of the economics around why people um areas are doing what they're doing why the country is doing what it's doing uh personally i love terry rider's hot spotting if you're willing to pay for um some of the the are the reports in there he has great infrastructure um reports on what's happening around the countryside and you know you'd be you'd be crazy not to look at core logic's blog and and rea's blog as well uh for some of the information around the country of what's happening economically

and what's driving uh some of this demand and i think that's the key thing you've got to look at the drivers of growth in these areas and not just the the uh the fads that are happening today you've to be looking at the long-term trends yeah beautifully said and the thing that you haven't said that you probably can't say but i can is that for those that are time poor and most people are if they really want to be able to interpret that data because there's one thing getting the data and the second thing is making sense of it then i highly recommend engaging someone like yourself as an independent buyers agent who can really start to read the tea leaves and make sense of what's going to happen rather than what has happened.

So I really appreciate your timely insights on this, Josh. And thanks for joining us on the show today. Thanks, Bushy. Thanks for having me again. Well, there you have it. If you're looking to invest in property for long haul, get rid of your microscope and pick up a telescope. You're watching Realty Talk, your trusted voice for all things property.

welcome when was the last time that you had to negotiate something important what did you think and how did you feel both before during and after the negotiation was it stressful were you anxious and did you achieve your outcome well as the country's currently in the throes of a once in a generation property boom the quality of your negotiation skills is going to make or break your ability to secure the right property in the right location at the right time, as well as your success in just about every aspect of your life. So to help you with this, over the next few weeks, I'm going to run a special Bush Byte

series that will discuss and unpack the science and the art behind negotiation. So let's kick it off. Because every one of us is negotiating every day. It's just that we mightn't be aware of it. Every interaction where we want to get something involving others is a negotiation. So one of your core skills to achieve sustainable success in any endeavor is to become a good negotiator and to be able to influence others in a positive way to get what you want or to achieve the best possible outcomes. Now there's a lot to share on the art of negotiation so we'll start

this series with a look at some general principles and then given the rare window of opportunity that's available to secure good quality property during the current boom in values across Australia over the next few weeks will gradually drill down into some clever negotiation tactics that will help you secure a property in a high demand market. And the good news is that these negotiation approaches can be utilised in any negotiation situation that you find yourself in. So the first and most important step is to change your outlook on negotiation. As renowned negotiation expert Margaret Neal reveals, one of the biggest challenges that we face in negotiations is that we view negotiations as a battle. And that battle is characterized by I'm going to try and

get stuff from you that you don't want to give me. And I'm going to try to keep you from getting my stuff. If we view negotiations like that as a battle, we've already got a problem. Now, Neil suggests that what's more important is that we look at negotiations as an opportunity for collaborative problem solving and looking for a solution that makes you and them better off. Better off than your alternatives and better off than your status quo. Because there's single control in negotiation, I can't force you to say yes. All I can do is present proposals where you believe it's in your best interest to say yes. and so once I take that perspective on negotiation which highlights the importance of the other party as well as me so many more opportunities and potential win-win solutions start to open up

and this can be for any situation whether it's a new job and you're trying to negotiate your terms of employment whether you're trying to buy something when you're in a meeting or it might be something as simple as deciding with your partner who's going to take the dogs for a walk on a cold dark rainy morning. Now Neil also reiterates that you need to focus on solving the problem not on winning the battle because if you find yourself in a battle and in a power struggle in a negotiation you've already lost. The key is to be being able to solve problems in negotiation is to understand as much as you can about who you're negotiating with, what motivates them and what will influence them to move down that path of agreement with you of their own volition. Remember

that in a negotiation, goals are important and we absolutely need to know what a good deal looks like for us. But we also need to have flexibility in how we achieve that goal. We need to remain open to the opportunities and explore often unexpected pathways to go with the flow and to see where it leads you to your desired outcome. In this regard you need a GPS not a rigid recipe and for me this is a lesson that I continuously learn and relearn because too often I choose a path to my goal because I've chosen it not because it's necessarily the right one. So in summary changing your outlook is a key first step to successful negotiation. Now the next foundation stone to successful negotiation is the importance of building good rapport. In this regard,

retired FBI hostage negotiator Chris Voss provides some innovative negotiation approaches in his great book, Never Split the Difference. Voss sums it up beautifully when he says that negotiation is the art of letting the other side have your way. And how do you do that? Well, we all have two ears and one mouth, and we need to use them in those proportions. So we need to ask questions and then listen. From the outset, you should continuously ask questions and make affirming statements that allow the other party to talk freely. In this way, rapport grows, trust develops, and you gain a much greater understanding of exactly what their needs and preferences are so that you can then create solutions that satisfy them as well as you. It's about building

emotional equity and what Voss calls tactical empathy. In simple terms, people prefer to do business with people they like. So if the other negotiating party gets to know you and like you, they're more likely to trust you and then more likely to negotiate favourably with you. the magic happens when you ask questions and provide reassuring prompts that allow the other party to come up with solutions that they feel are their idea but are really in alignment with what you're trying to achieve in this regard the three main drivers of a negotiation are hopes and dreams uncertainty and trust so let's start with hopes and dreams most negotiations are about helping you and the other party to fulfill your hopes and dreams. It's about how each party

imagines what life is going to be like when they negotiate those things and how their lives and well-being are going to improve. In this respect, most negotiations are emotionally driven and the bigger the perceived value and investment, the bigger the emotional investment and expectation which tends to cloud rational judgment and gets in the way of objective decision making. I've found that the best way to avoid this is to get others to negotiate on my behalf. In the property buying context, this is about getting an independent buyer's agent to act for you, for example. The second key negotiation driver is uncertainty. Successful negotiations are about eliminating or minimising the uncertainty for all parties.

Uncertainty and fear of the unknown generally results in emotionally driven responses and the instinctual fight or flight reactions that can often shipwreck negotiations. So the key is to eliminate uncertainty with good, clear and regular communication on who is doing what, by when and why. This means that in addition to you finding out

as much as you can about the other party, you also share the right information about yourself that's going to be conducive to the outcome of a negotiation. The final key negotiation ingredient evolves around trust. How can you be trusted? How can you trust the other parties? Well, as discussed in my book, The Freedom Formula, and outlined in detail in Charles H. Green's groundbreaking book,

The Trusted Advisor, trust is built on the integrated combination of four key criteria, which are credibility, reliability, intimacy and self-interest. Now breaking these down, credibility is what someone has said and done, reliability is someone repeatedly doing what they say they're going to do, intimacy is feeling comfortable with someone, their openness and honesty and self-interest is the degree of impartial independence versus the level of vested interest of both you and the other parties involved. And this is often the most important ingredient. Now, there are two simple yet proven and powerful tactics that you can use in tandem

to build trust with almost anyone you meet. But you'll have to wait for next week's bush fight to find out what they are. So to summarise our negotiation discussion today, changing your outlook is a key first step and the three key drivers of successful negotiations revolve around hopes and dreams uncertainty and trust and remember great negotiation is actually great collaboration and collaboration requires trust between two people next week we'll be building your negotiation toolkit by discussing mirroring and labeling along with perceived power. That's more food for thought.

I'm Bushy Martin from KnowHow Property Finance. Stay tuned for more. Thanks, Bushy. Wise words as always. And Bushy will have more negotiation tips for you next week and he will catch up with Brett once again for the second part of that fascinating chat. Thanks also to Josh Masters.

I've got to say, I always get so much from any conversation we have with Josh. Thanks, mate. that was brilliant. Well, that's it for another week. I'm Kevin Turner. Look forward to seeing 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.