Property Hub - Investment Insights & Inspiration - Realty Talk: What you get for $700K - The quest for property success

Episode Date: September 11, 2021

What property can a lazy $700k buy you around the country in today’s rapidly rising market? Kevin Brogan from Herron Todd White joins us to show you what and where. But there’s no point racing out and buying a property unless you know how it’s going to help you achieve your long-term goals, so to help you get clear on your strategy, we’re joined by Jordan de Jong from Gameplans.   And if you’re struggling to get onto the property ladder, Goose McGrath from Dashdot Buyer’s Agents shares how rentvesting can accelerate your property portfolio. To close out today’s show, Bushy gets you thinking about whether you’re giving your credit report enough credit. 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. Greetings and welcome to Realty Talk, your trusted voice for property investing anywhere at any time. I'm Bushy Martin from KnowHow Property Finance, and we've got some great property insights to share with you again on this week's show. To kick things off, Kevin Brogan from Heron Todd White joins us again this week to share what a lazy $700,000

will buy you across the country, given the rapid rise in property values that we're seeing right across the board this year. But of course, there's no point racing out and buying a property if you don't know how it's going to help you to achieve your long-term goals. So to help you get clear on your strategy, we're joined by Jordan Dejong from Game Plans. And if you're struggling to get onto the property ladder, Goose McGrath from Dash.Buyers Agents shares how rent vesting can accelerate your property portfolio. And to close out today's show, I get you thinking about whether you're giving your credit report enough credit.

We've got a lot of awesome info to share, so let's get into it. Welcome back. Now, property prices have been rising rapidly across the nation over the last 12 months during one of those very rare times when the rising property tide appears to be floating most ships. And to gauge the impact of this, Heron Tobwhite's latest National Property Clock Report presents an extraordinary rundown of what a lazy $700,000 will buy you across the country. So to reveal the outcome and the implications of this, I'm joined by Kevin Brogan, Heron

Tob White's Director of Group Risk and Compliance. Welcome back to the show, Kevin. Thanks very much, Bushy. Good to be here. Now, Kevin, has there been much change in what you can get for $700,000 over the last 12 months? And if so, which locations have been most affected? The first observation, Bushy, is the fact that we've run this segment in our month-in-review report for uh for several years and uh up until this year it's been uh where to invest a lazy 500 000 so i think that in the first instance tells you where this is going um look we we've adjusted it to 700 000 because we we really needed to maintain relevance in all the uh all the

markets including the capital city markets like sydney and melbourne um so look they you know the short answer is this is this is you know towards the more affordable end of the of the market and therefore it's really hotly contested so we've actually seen fairly significant significant change and significant growth and I mean the locations most affected are really those sort of those fringe markets they've kind of the shackles have been taken off because commuting is not the be all an end all now. People are considering purchasing in areas where, you know, if they have to go into the office maybe once or twice a week, it's acceptable. If they had to go every day, it would be more of a challenge. So we've seen many fringe areas really take off. And so

we've got that paradox of, you know, if you've got $700,000 to invest, these are probably some the areas you want to go to but you might need to be fairly quick because the rate of growth is still fairly significant um a couple of examples i mean southwestern sydney the sort of liverpool lga not um specifically taking into account the current lockdown situation but we've certainly seen there um you know that there are properties available um detached properties reasonable accommodation decent uh a decent sort of block um and then the other places that are doing really well of those lifestyle markets. You know, the Adelaide Hills, the Sunshine Coast, Southwest WA, and we've seen them take off. There are still properties in that $700,000 price range,

but all of these markets are characterized by very much reduced time on market. Properties are selling fairly quickly. They're fairly hotly contested. So I suspect the trend will be that that this $700,000 investment is going to take you further and further out unless you want to go down the track of getting a smaller or smaller property, which may not be the sort of hottest area or the hottest market to go for. Yeah, good call.

And the fact that we've shifted from $500,000 to $700,000 in the space of 12 months, and we might be talking $900,000 this time next year, Kevin, and the ripple effect that that's now having so that it's pushing the value of those properties further out and then you know you've probably heard bernard salt's uh analogy to that of of shifting from the from the fried egg to the scrambled egg where we traditionally have uh the the yolks being the cbd with the white spreading out we've now got scrambled eggs where we're now shifting to that decentralized regionalized sort of approach so where it's interesting that your uh research is verifying that tell me uh

Where's the current best value location around the country to secure a quality property for $700,000, in your opinion, from the research that you've done? And why would you think that? Yeah, look, as a property valuer, I look at the data and I try and be objective. And objectively, I'm going to throw Adelaide into the mix. Good to hear.

Not just because that's what I hated. um but i think that there are reasons for that one um is that adelaide is a market where growth has traditionally been steady rather than dramatic but it's also not been terribly volatile so um i think if if you're looking at a market that is fairly um fairly steady uh it actually gives you fairly full range of options so at the seven hundred thousand dollar price point you you can actually go in at sort of right at the top of of the market in some locations sort of in the middle or you can sort of get an entry level in some of the prestige market segments.

And, you know, the recent growth has been very strong and rental vacancy rates have remained low. And I think just on the, you know, to take the analogy of sort of moving further away from the centre, I think Adelaide's one of those places where, you know, we've obviously got the space agency technology hubs and we are, you know, We are finding in Adelaide that we're attracting businesses who are perhaps seeing Adelaide's slight isolation, if I can term it like that, as being a significant attribute in these sort of turbulent times.

So, yeah, Adelaide, I'm going to stick with it. Yeah, I like that. What about on the flip side? What would be the worst location and why? Yeah, look, I thought the question might be a trick question. You said quality property, and I would have thought location sort of comes into that mix. But I think that there are some markets, you know, where the performance of the market is relied, for example, on population growth, student demand for rented property and renters generally.

And I think some of the smaller investor type units, they're a bit too small for owner occupation, you know, there's maybe not enough extra space, storage space, etc. So So they're really focusing on a single market being investors. The owner occupiers probably not that, you know, not that interested in them. But as we see, you know, when you consider that Melbourne's population was growing at a rate of almost, you know, 10,000 people a month,

that's dropped almost to zero. And, of course, the international students aren't coming. So there's a distinct difference between units constructed for owner occupation and units which are constructed for renters. And you can see that in the markets in Melbourne and Canberra as well. Yeah, no, good call. I think what COVID's done is it's been an amplifier. Good qualities continue to form well and better. The average properties are really going to struggle.

it's really emphasised that. So looking to the future now then, what's your read and what's likely to happen with property values at that sort of $700,000 price point over the next one to two years? Yeah, look, I think it's easy to be a bit blasé about the sort of lazy $700,000 because that's a significant sum. But in the scheme of things, it's towards the more affordable end of the market in in a lot of locations um and i think on that basis in in the short term we're certainly going to continue to see the gap widen between the demand and supply so people people are looking to buy properties far more than they're looking to sell in most markets at the moment and that's going to continue to exert upward pressure on prices in in the short term

the main sort of determinant as we've discussed before is is just the the historically low cost of of getting a mortgage um and you know looking at the outlook for interest rates i mean clearly the next move for interest rates is likely to be up um but you know the low interest rate environment is something that in the time horizon of one to two years is likely to persist even if we did see uh an increase um so i think what what's going to happen for you know for the uh for the next year or so we'll probably still see upward pressure on prices that'll that'll continue um and then i think when you know if that does moderate it will moderate i don't um you know i don't necessarily see it uh being a significant market correction within that sort

of time horizon yeah no very good call well uh really appreciate those uh sobering insights kevin and uh thanks again for your time on the show today no problem at all it's been a pleasure thank you thanks kevin now it's clear that there's been a significant shift on how far and where your $700,000 will buy you in property. So to check out the details for every state, grab yourself a free copy of HTW's National Property Clock July 2021 Residential Report. You can find that for free at htw.com.au. You're watching Realty Talk, your go-to place for all things property. 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 guarantee to find double your fee in the first full financial year deductions call bmt on 1-300-728-726 today for an obligation free quote. Now as a property and finance strategist, I'm continuously frustrated with a large number of property investors who just focus on accumulating properties without spending much time, if any, on their property investment strategy, on why they're investing and where they're investing is going to get them to. And it's a proper strategy that separates the best from the rest, creating a magnet to motivate your commitment and a compass

to guide your day-to-day decisions. So to delve into the fundamental importance of this subject, we're joined by a like-minded property strategist, Jordan Dejong from Gameplans, the ultimate property portfolio and money management tracking system. Welcome to the show, Jordan. Thanks, Bushy. Thanks for having me on, man. I'm very excited to be here. Likewise, mate. We both share the same passion for the importance of property strategy, and this is a great opportunity for us to get the word out there. Tell me to kick it off, why is a detailed property investment strategy so important? Yeah, it's a great question.

And I think, you know, I can really sort of just look back on my own portfolio and building that out. I think the biggest thing looking back now in hindsight is I wish I had a plan or a strategy. I mean, I was never really the type of guy that would want, you know, sort of 10 properties in 10 years. That was never really my shtick.

But, you know, when you do that, you can only really achieve that numbers game by dropping other things, right? Such as a purchase price. And if you start dropping numbers game and you start dropping that purchase price, normally something has to give and maturity of that time that's the quality of asset so if I have could have gone back and told myself well you know I could really realistically achieve

my goals within two to five properties then I might have not been so rushed building the acquisition of my portfolio I think when you're rushed you make those irrational decisions you know you're under pressure you're frustrated whatever might be going on in the market at that point in time now if I could have just told myself that I could have waited another year or two gotten into a much better asset and then I would have been much better off in the long term anyway, then I might have just sat back, taken my time, really assess what I wanted in my portfolio rather than be a lot more aggressive. And that's what a sort of a 10 to 20 to 30 year strategy can really show you and demonstrate that to you. And it's not until you sort of visualize that out in

a big picture before you really grasp the impact of things. Yeah, and a really good call there, mate. So for those who are interested, what does a good investment strategy look like? yeah i think it's good to the best thing to do is to start with the end goal in mind and then reverse engineer it from there so what is your time horizon you know do we have 30 years to just sit and hold on a good asset you know if the time frame shorter do we need to be a little bit more aggressive today to be able to achieve those goals and then that's where our sort of risk profile time ties into things so you know can we actually achieve those short-term goals with your current risk profile and that's why it's so critical to sort of be honest with you be with be honest with

yourself um be realistic you know in my modeling i sort of use some really rational numbers you know i use a five percent growth rate and a three percent rental yield don't go out and forecast these things on an eight percent compound growth rate and a six percent rental yield yes these things may be achievable in some areas but only in a snapshot of time you know there are market cycles and things that in play but you know get to get involved with a strategy there's a lending levers that can be played with APRA could step in again like we saw in 2017 and so no one can really predict the future so you know if you can achieve with your goal your goals on those sort of more realistic assumptions anything better than those realistic assumptions is just going to be

an added value and so on the note of not being able to predict into the future it's so critical that you do revisit your strategy at least every purchase at least or not sort of every year to sort of update those interest rates and inflation rates and assumptions to be able to impact the calculations and see how you're tracking on your journey. Yeah, no, really good call. So how can property investors develop a good integrated property strategy, Jordan? Well, if you don't know it already, the game of property is really about the game of finance. So if you can't borrow to leverage into these things, then how can you buy them in the first place? I think first and foremost, it's just about getting the right people in your team. You know, an investment savvy

mortgage broker has been essential to building out my portfolio alongside of that you need a property strategist to put this plan together for you and then it really comes down to your time commitment and how much you love property if you love researching and doing all that sort of stuff then you may be able to go at it on your own or you can look at getting a buyer's agent or something like that but just note that one really bad purchase could be pretty crucial for your portfolio long term especially if it's the first purchase so um really just having a good team around you. Totally agree. And it's worth building it all on paper first and the whole journey so you're clear on how that's going to operate. And it gives you a roadmap then to know how you're

tracking over time. So a really timely reminder there. Thanks, Jordan. And thanks for your time on the show today. No worries. I'll speak to you soon, Bushy. Thanks, mate. Now, if you don't have a detailed property investment strategy and a roadmap on how your properties are going to achieve your life's old goals, do yourself a favour and reach out to an independent property strategist like Jordan at Game Plans and make sure that you're enjoying the peace of mind of knowing where you're heading and how to get there because that's priceless in the long-term scheme of things. Keep watching Realty Talk, your trusted voice for property. Property depreciation is the natural wear and tear of a building and its assets.

property investors can claim depreciation as a tax deduction each financial year. Depreciation is a non-cash deduction. This means you don't need to spend any money in order to claim it. On average, BMT tax depreciation find residential investors almost $9,000 in first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. welcome now are you looking to climb the property ladder but just can't afford to buy in the area that you want to live well ever increasing property prices around the country have had many new investors weighing up the issue of lifestyle versus property ownership and if this is you then rent vesting could be your answer to entering the property market as it certainly was

for me personally when i started investing over 20 years ago but how does it work what are the pros and cons and is it actually the right option for you? We'll discuss this. We're joined by Goose McGrath from Dash.buyersagents to answer all of your questions on rent vesting. Welcome back to the show, Goose. Awesome to be here. Thanks for having me. Always, mate. So for those that aren't familiar with it, what is rent vesting? Yeah, it's a good question and it's probably good to just break it apart a little bit and break it down into really simple terms, right? So rent vesting is quite simply renting where you want to live and investing where you can get the best returns and make your money work for you it's really that simple right and it's just smashing those two

things together yep um so um and it's it's it's it's a very i think it's a really smart way for people to get ahead and to be able to even move faster towards their goals and i don't think it's just for people who are just starting out i think it's a great acceleration strategy as well yep absolutely great and it's certainly been the case for for me personally mate as i said i yeah my good wife and i rent vested for quite some period and i think it's also a useful strategy at the other end of the journey too just quietly but that might be a discussion for another day but uh love you to run through what you see as the pros and cons of rent vesting then yeah okay cool why don't we why don't we break it apart a little bit and make it and just kind of

get a little bit more granular on what this actually looks like because a lot of people kind of think renting why would i want to rent you know like i'm going to end up living in some shack somewhere and this idea that renting is necessarily a bad thing and i just really don't see it so i'll talk about my personal situation so um me and my partner gabby we currently live in north bondi now we rent an apartment um for roughly four or five hundred bucks a week right now this apartment is worth about a million bucks and so if we were to if we were to buy this apartment and live in the same place with the same lifestyle and the same all that kind of stuff and it cost us about 850 bucks a week in in mortgage repayments okay so straight out of the

gate by renting here instead of buying here where we are you know we're making got an upside of you know 350 to 450 every single week right which is just phenomenal right when you start thinking about that now the benefit that we get is we get to live close to the beach we live in a cool area we're really happy with lifestyle versus living where we can afford now um there's a couple of pieces to sort of unpack around here it's like why would you do it um who does it suit all of that kind of stuff so some of the reasons that you might rent this is if you wanted to get your money to work harder for you somewhere else i mean if we were to buy a house in north bondi um not only would it be a few million bucks um but the yield would actually be 1.8 percent that's

that's the yield in north bondi on a house 1.8 percent now if we want to put our money to work for us that additional savings that we've got and potentially additional borrowing capacity because we don't have non-income producing debt we can then go buy buy properties in areas which we wouldn't want to live not because they're bad areas full of crime and drug dealers but just because they're not where we want to live you know they could be some other part of the country where we can buy a more affordable property that actually has a higher yield and could be could produce positive cash flow not negative cash flow and therefore we can build our wealth sustainably whilst also living the life we want now.

And I see that as frugal hedonism, you know? It's this idea that you actually can have it all as long as you're not being excessive. Now, we could rent an apartment that's twice as expensive, right? But that would be what I'd consider to be excessive because we meet our needs and satisfy our lifestyle desires

whilst also saving more money, right? So the benefit of doing that is you can get every dollar that you've got today to work harder for you. And there's a couple of parts to it. So we've talked about saving additional cash that you're not spending on your mortgage. We've talked about being able to then reposition that cash

into different markets where your money can work better for you. There's another piece there as well, and it comes down to debt management, right? So when you own your own home, you have non-income producing debt, right? And so if you do that, you're going to limit your borrowing capacity

much more significantly than if you were to have the same quantum of debt that was actually producing an income, right? So the way that I see this though is that if you can understand all these concepts and lay them on top of each other, you can actually accelerate your point to get to the point where you can buy your dream home,

but you can do it twice as quick. And if you look at the average savings rate, like it's probably, if you wanted to say the average savings rate is about 1500 bucks a month. And if you needed to save up $200,000 for a 20% deposit on a $1 million property, it's going to take you about 133 months.

So a little over 10 years, 11 years, something like that. Yep. and if you go that far down the line that two million dollar property is probably worth four million dollars okay so how do you take the money that you've got today how do you get to where you want to go faster whilst also living the life you want now because quite frankly life's for living you don't know how long you've got you don't want to i don't believe that people need to live this pious life where they extol all all things that are good and worthy and they just they live on baked beans and you know and and and the smell of an oily i don't believe it because i believe that

life should be lived full now and i really think that people get a little smarter about this they can layer up the strategy to achieve all of that 100 agree and it's the the real guts of the exercise there is to uh do as exactly as you say is to uh live in the place where you like to enjoy it at a fraction of the cost it would if you had a massive mortgage around your neck and but but use the uh the investment property you put it into make sure it's positive cash flow structure it well and therefore it's looking out for itself while you're doing other things so i love that mate um all right well uh just to close off on this then uh who do you believe this is best suited for well yeah it's a good point i mean i think it's best suited for pretty much everyone but

it's probably worth it's probably worth exploring when and why it might not be suitable right because it's very easy to build a financial argument around why this might be a good idea. And you can live where you want and you can do it cheaper and have the same quality of life and put your money to work elsewhere and all of that kind of stuff.

But anyone who says that investing shouldn't be emotional or isn't emotional is absolutely dreaming, right? I have never met a single person who wants to invest that doesn't have an emotional reason. They want to live a better life, more time with their family, have more impact, et cetera.

It's all driven by emotion. So we just need to own the fact that we as humans are emotional creatures. We're driven by emotion and we want emotional outcomes. And so it is absolutely, totally, awesomely cool if your emotional needs dictate that you want to own your own home and nest. And I would hate for anyone to have some existential guilt

where they just say, oh my God, am I failing because I want to own my own home? No, it's totally fine. And it's totally cool to do that. the point is that you want to do it with eyes wide open you want to say okay i'm going to make this choice that we're going to we're going to choose this to nest to own a principal place of residence and to not rent vest in favor of the benefits of rent vesting because this satisfies our personal emotional and psychological needs more and again that is totally okay to do that

because not everything's about money it's about quality of life okay so that's a situation that you might choose to not rent vest in favor of something else now another argument could be made that if your dream location that you wanted to live was somewhere where the cost of the mortgage was less than the cost of renting, right? You could argue that on a cashflow basis that you might be better off to own a property. So for example, to put that in very simple terms,

if you were to buy a house somewhere and you could be in a regional location or somewhere up the coast or whatever, where you could buy it, the mortgage repayments might be 250 a week, but to rent the same property in the same area might be 300 bucks a week. Well, by buying, you could be $50 a week better off.

Now, the catch to that, of course, is still going to have non income producing debt. So it will still have an impact on your on your borrowing capacity. But there's an argument to say that that might make more sense in that circumstance. So really, but even for so some people think that, oh, well, just because I've got a family, I couldn't possibly, I couldn't possibly rent this because I've got a family. And again, going back to the point that if it's important for you to have a nest and everything, totally cool. But I would also challenge you on that to question, okay, what is more important? Is it okay for me and my family to rent a home? is that is there anything intrinsically wrong with renting and if you do believe that there is then what where does that belief system come from and all of that kind of stuff and and just analyze whether the short-term discomfort is is actually better and i say short-term discomfort off the back of having saying i think you can have it all but i think that there's just a slight emotional discomfort where you can still live where you want to live but achieve that outcome if you can delay that that piece of gratification and you can potentially end up at a better outcome as well yeah beautifully said and really putting some balance around the

discussion there, mate. So some great food from thought there again, as usual, and really appreciate your time on the show today, Goose. It's an absolute pleasure. Good to see you again. Absolutely. So there you have it. If you're looking to accelerate your entry into building a property portfolio, rent vesting is definitely worth considering. Stay with us for more here on Realty Talk. Welcome. Are you giving your credit report enough credit? In recent times, our finance breaking team has been surprised by the number of home and investment loan borrowers who have got great incomes and plenty of equity, see their loans declined by the banks due to poor credit conduct, particularly for those borrowing over 80% of their property value where lender's

mortgage insurance is required. So today we're going to do a deep dive on the importance of managing your credit report given how critical it is to your ongoing financial future. So let me start by asking you a couple of questions. When was the last time you checked your credit report and what's your credit score? Chances are your answers are going to be never and I don't know. But now more than ever, your credit report is going to be absolutely crucial to your ability to obtain credit or to get a loan in the future, because your credit report is a bit like oxygen. It's invisible, but absolutely critical to your ongoing financial survival. Now, in recent times, since the introduction of what's called open banking, in conjunction with

the comprehensive credit reporting measures, we've shifted from what used to be called static credit reporting to live credit reporting. Now, historically, a static credit file would tally up all of your credit inquiries and would score you accordingly. So the more credit inquiries that you've made, the lower your score. And credit inquiries aren't limited to home loans or investment property loans. They apply to all financial products, including credit cards, interest-free store cards, car loans, personal loans, as well as telephone companies and utilities like electricity companies, etc. So if you apply for a credit card, the bank or credit card provider lists a record on your credit file confirming who you apply to, the credit limit, and the date.

but it doesn't record the outcome of whether you were approved or declined. And this is where many are making the mistake of applying for multiple credit cards or home loans without realising that every time they make an application, the inquiry is actually recorded on their credit report and the number of credit inquiries impacts on your credit score and the lender's view of whether you're credit worthy or not. Now static credit reports also list credit defaults for late payments or over-limited activity where payments of more than $150 that are at least 60 days overdue and for which you're supposed to have served at least two notices requesting payment are automatically listed on your report for all to see and they stay on your report for up to five

to seven years. And this is one of the areas that's catching many unsuspecting borrowers out as late or over-limited payment activity on things like long-forgotten interest-free store cards can actually catch you unawares and become an absolute knockout punch when you're looking to borrow money. Since live credit reporting was fully embraced and implemented by the major banks a little over 18 months ago, more positive information is now included in your credit file, including whether you have a mortgage your mortgage repayment history going back two years your credit card limit and repayment history and your repayment history on things like car loans and personal loans. The good news here is that the number of inquiries on your credit file won't have

quite the same impact as it used to because all of your liabilities both closed and open will be reported on and will extend as far back as two years. But this also means it's never been more important to pay your bills on time and in full. However, the biggest problem with live credit scoring is that even when you close down your credit card or your personal loan or any debt, in fact, your previous repayment history lives on,

taking up to two years to clear off your credit file. So what do you need to do to manage your credit file and ensure that it's not going to bite you in the backside when you go to apply for a home loan or an investment property loan? Well, the easiest thing to do is to make sure that you pay all of your bills on time and make all of your credit payments on time

with no late or over-limit activity. Of course, the easiest way to do this is to set up all of your repayments on direct debit so you just don't have to remember them. And be very careful that when you first set up your loans and repayment dates, because it's not uncommon to think that if your repayments happen on the same day or soon after you get paid then you're going to be

all right because it often takes a couple of days for your income on your wages to clear and then defaults can occur without you realizing it and it's only when you go to apply for a loan elsewhere that this comes a lot and then it's too late because the damage has already been done. Now there are a number of services that will text you on your mobile whenever a company makes an inquiry on your credit file so that at least you're aware that that's happening. Now the next thing you need to do is get a copy of your credit report which you're able to get for free through some providers and make sure you dispute any inaccuracies on your file. Unfortunately it's not uncommon to have information listed on your credit file that isn't actually yours, particularly

if you've got a common name. So if this is the case then you can get this rectified straight away and if you find a late payment default that's been resolved but hasn't been removed from your credit report then there are a number of credit cleansing companies that are able to rectify this on your behalf. The next thing to do is limit the number of credit inquiries. Again an overactive credit report sends a subliminal message to lenders that you're not good at managing your money so avoid this at all costs and be careful with how some banks trigger their inquiries. One of the major banks, who remain nameless, has a history of triggering a new credit report inquiry every time you make an adjustment to a home loan application. As a result, we've seen

some borrowers end up with five credit inquiries on their credit report for just the same home loan. So you need to ensure that you don't make too many credit inquiries in a short period of time. As a rough rule of thumb, try to limit your credit inquiries or loan applications to a maximum of about five a year. And remember that this includes any applications to telephone companies and utilities. Again, a trap that we see some borrowers fall into is to make multiple applications to a number of credit card companies chasing zero rate transfers, only to find out that every inquiry has appeared on their credit report that prevents them from then getting a home loan. The next thing to keep in mind in optimising your credit file is to try and avoid changing your job or your

address too frequently. This is actually a little known fact with lender credit scoring that can have a very substantial impact on your ability to borrow. In simple terms, the more you move, the higher chance of a lower credit score. This creates issues because a credit provider may not be able to contact you if you're late or you've missed a payment, and you may not even be aware that this is the case. So what does this all mean to you? Well, the bottom line is that credit reporting is rapidly changing with quite mixed implications. And the banks are likely to use this to their advantage, but you can too. And the better your credit score, the better potential loan rates in terms that you can negotiate, and unfortunately, vice versa. With the old static

credit reports, if you missed a credit card or a personal loan payment, all you had to do was to pay it out and close it down and the problem pretty much disappeared. But with live and open reporting, there's now nowhere to hide and no escape as your transaction history will remain on your credit report for up to two years. And this is giving banks and lenders an opportunity to take quite a black and white approach to your chances of securing a loan. So you need to get on the front foot and proactively gain the system by managing your credit report to your advantage. and the best place to start is to get a free copy of your credit file

by downloading it from www.mycreditfile.com.au that's www.mycreditfile.com.au and of course reach out to a savvy finance broker if you want to find out what this all means that's more food for thought I'm Bushy Martin from Know How Property Finance stay tuned for more well that's another wrap for this week's show a special thanks to our guests kevin brogan

jordan de jong and goose mcgrath and a reminder that you can see all of our shows at realty.com.au along with one of australia's most extensive range of properties for sale from over 7 000 agencies nationally thanks again to realty.com.au and bmt tax depreciation for their ongoing support. I'm Bushy Martin from the Get Invested podcast and I'll 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.