Show Notes

Renee Young is a first-time home buyer. After years of saving and research, she bought her first home in 2021 in Brisbane, QLD.

In this episode, Renee takes us through her journey to home ownership, including her struggle to be taken seriously by selling agents as a single young person. She shares how she managed her expectations and compromised to buy a property within her means. She also highlights the importance of ensuring you have the time, money, and energy for renovations and researching your contractors so you don’t have to redo your brand-new bathroom six months later.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to the home, run your guide to buying your first home in Australia on the show, I’ll walk you through the home-buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions you’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet.

Michael 0:39
And I really love helping people buy their first home.

Michael 0:46
Every property journey is unique and we’re once again talking to somebody who was recently in your position and has now bought their first home.

Michael 0:54
Today, we’re chatting with Renee, Young Renee bought her first property by herself in 2021.

Michael 1:00
After years of researching and saving in this episode, Renee will share her journey to home ownership why she bought a property that needed renovations, and what the process felt like she’ll open up about the importance of doing your research and how it could save you from having to renovate your bathroom twice.

Michael 1:16
Let’s jump in, Renee.

Michael 1:21
Welcome to the show.

Renee 1:22
Thank you so much for having me.

Michael 1:24
I’m super excited about this conversation today because unlike our other conversations that we have, we are speaking to somebody who’s recently purchased their first home.

Michael 1:32
So you’ve been through the journey and you have experienced it now from the other side, having done it and, and so to be able to pick your brain, I think is a real advantage for us and to be able to share that with people that are in the situation that you were in some time ago when you started to make that decision to buy a house is gonna be super beneficial.

Michael 1:47
So le congratulations first and foremost on purchasing your own home and let’s set the scene.

Michael 1:52
Where did you buy?

Michael 1:53
And when did you buy?

Renee 1:54
Yeah.

Renee 1:55
So I bought on the south side of Brisbane in November 2021.

Renee 2:00
So we, no, yeah, 2021 we just hit, you just hit two years on the loan and it’s great.

Michael 2:06
I like how you say you hit two years on the loan.

Michael 2:08
So obviously the loan is a is an important part of the process.

Michael 2:12
So I’m sure we’re gonna be touching on that as we get going.

Michael 2:14
But yeah, it’s it’s that you bench that and what kind of property is it?

Michael 2:18
Can you tell us a bit more about the property?

Renee 2:20
It’s a two bedroom townhouse upstairs downstairs.

Michael 2:24
Ok.

Michael 2:24
So obviously when it came to considering the asset type, you opted for a townhouse, was that a strategic thing or is that something you had from the outset or, or how did you get to that particular point of buying the townhouse?

Michael 2:36
And what sort of considerations have come into play with it being in a complex.

Renee 2:40
So I was actively avoiding trying to get a, a body corporate at all.

Renee 2:45
I was really not one to do any body corporate fees, but unfortunately, due to the market when I was buying, it was just before that COVID peak.

Renee 2:56
So everyone had moved to Queensland from interstate and they were then basically like swarming the market every house there was and I looked at a bunch of houses, I put offers in on a bunch of them, but I just couldn’t be competitive.

Renee 3:11
So I decided to then switch focus to a townhouse rather than a unit purely because I wanted to have a bit more space that you get in the townhouse with a little courtyard versus having a balcony.

Renee 3:25
And I went for something that had a really, really low body corporate rate overall.

Renee 3:30
So I didn’t wanna have like any pools or electric fences or gates or anything that can really rise those big fees.

Renee 3:38
And if you have elevators, I was like, no, because they are the first things that break in any shared complex.

Renee 3:44
So that’s where I was limited to where I was looking at buying to.

Michael 3:48
And is it an investment property or do you live in it?

Renee 3:50
I live in it.

Michael 3:52
Ok.

Michael 3:52
And that was always the intention from the outset.

Renee 3:54
Yeah, it was always the intention to buy and live in for at least five years.

Renee 3:59
Just so I had enough time to actually get my finances in order to buy the dream home, so to speak.

Michael 4:07
All right.

Michael 4:07
And we’ll unpack that a little bit more as I guess we get going and it’s a good set of context there.

Michael 4:11
So people now know what you bought when you bought and a few of those considerations that you had.

Michael 4:15
But if we rewind back now to the journey, tell us the journey about buying your home, I guess.

Michael 4:21
Where did the idea form?

Michael 4:22
And how did you get to that point?

Michael 4:24
You know, I guess, and what were those steps along the way?

Renee 4:26
Yeah.

Renee 4:26
So everyone who knows me knows that I have wanted a house since basically 18, I was working towards having a house savings, since I got a full time job and then life got in the way throughout my early twenties and I finally had the opportunity to start saving at 27.

Renee 4:46
So that’s when I decided to save that year.

Renee 4:49
I was very fortunate to live with my parents at the time.

Renee 4:55
So I ended up being able to save that money quite not easily.

Renee 4:59
It was still obviously a lot of struggles but like less stressful than when I was paying rent for, you know, years on end.

Renee 5:07
So I was able to get into the market somewhat quicker than I was hoping.

Renee 5:12
My original goal was to get there by 30 I got there by 28.

Michael 5:15
Yeah.

Michael 5:15
And you started saving at 27.

Michael 5:17
So effectively, once you sort of put your mind to it, it was one year when it came to knowing how much to save.

Michael 5:22
How did you work that out or were you just saving as much as you could?

Renee 5:26
Yeah.

Renee 5:26
So I love numbers.

Renee 5:28
Numbers are my favorite thing ever.

Renee 5:29
So I basically math out how much I wanted to have as like a minimum.

Renee 5:35
And then what I’d like to have as a maximum as like an ideal.

Renee 5:38
Once I had almost all of my minimum amount saved, I then commenced the broker chat and that sort of thing.

Renee 5:47
But my whole thought process was I wanted to try and avoid paying LMI.

Renee 5:53
So I wanted to sort of look at my purchase price was and what my deposit needed to be to avoid that LMI.

Renee 6:00
Which I ended up paying 2% LMI on my property, which is nothing.

Renee 6:06
It was like $2000.

Renee 6:08
It was, it was ridiculously low.

Renee 6:10
But that’s, I basically just made sure I had enough capital to afford furniture renovations, the property, any fees, all those little things.

Renee 6:21
So I wasn’t having to get bill stress.

Michael 6:28
And you do all that before engaging with a broker.

Renee 6:28
Yeah.

Michael 6:29
Well, that’s great.

Michael 6:29
I mean, a lot of times you tend to find people will start that journey at the beginning and get all of that mapped out.

Michael 6:34
But yeah, we had the foresight and, and I guess there was a bit of research there from your end terms of figuring that out.

Michael 6:39
And you purchased an existing property.

Michael 6:40
Is that correct?

Renee 6:41
I did purchase and buy a property that was existing.

Renee 6:44
Yes, it was built in the late eighties.

Michael 6:47
Ok.

Michael 6:48
And was there ever a consideration in terms of not buying pre-existing or was that something that you were adamant about?

Renee 6:54
I wanted to buy new originally, like when I was, you know, younger and you could get a house and land package where I was looking for 2 6300 that was always the goal, have my own brand new home.

Renee 7:08
And then as we all know over the years, it’s what 10 years new house builds have gone from affordable quick turnarounds to being $500,000 for a really small block in a cookie cutter community where you can’t have anything different on the outside.

Renee 7:26
So it wasn’t really feasible like I, I could have had the money if I wanted to, but I decided to not live to pay a mortgage and went for a pre-existing property that was in the price range that had my lifestyle in mine still.

Michael 7:40
And I guess so from what I’m hearing to this point is that you’ve made compromises along the way, obviously, you’ve had a bit of a vision and a thought process from the beginning, whether it be having your own house or a townhouse or buying those fees and all that sort of stuff.

Michael 7:51
But along the journey, you’ve had to pivot, you’ve had to modify, you’ve had to adjust, obviously, with that end goal in mind.

Michael 7:57
So, that’s pretty indicative, I think of what most people experience in this particular journey.

Michael 8:01
So it’s good to hear that that’s what you also experienced.

Michael 8:04
You mentioned earlier that you obviously did you research when it came to figuring out how much to save you obviously were aware of LMI before engaging a broker.

Michael 8:10
So you’ve done some reading, you, you’re aware of the concept for those that don’t know, it’s lenders mortgage insurance, obviously, which is payable when you have less than a 20% deposit on a property and you’d work that all out and you had to pay a little bit of LMI, but nothing too significant.

Michael 8:23
That was going to be detrimental to you, I guess moving forward other than the finance side of things.

Michael 8:28
And the deposit-saving side of things.

Michael 8:30
What other kind of research did you do?

Renee 8:32
I knew that I was buying an older property so I knew that I was going to have to go and do renovations of some kind.

Renee 8:40
I went to over 30 open houses and I saw the quality of the finishes in these places and I like things that look nice and these were not nice kitchens.

Renee 8:51
They were like 30-year-old bathrooms.

Renee 8:54
So I knew from the get-go, I’d have to research what it would cost to do a kitchen, do a bathroom, do flooring, do the renovation things that you don’t think of like a stairway.

Renee 9:05
I never ever thought of what a stairway would cost to renovate.

Renee 9:10
All lights, lights are weirdly expensive, and solar fans did not know that until I started researching it.

Renee 9:15
And that was another thing.

Renee 9:17
So I was like, I need to have the house deposit, but also cash to renovate the things.

Renee 9:24
So when I get the place, I’m not having to live in a property makes me uncomfortable when I’ve just put my life savings on it.

Michael 9:31
And so you, you would count for that in savings.

Michael 9:33
So you make sure you had the deposit saved and the savings required.

Michael 9:35
And so you went out and you basically spoke to different suppliers and got an idea as to what things are gonna cost as to what you like.

Michael 9:41
And then, and that as a budget as well that you’re saving for.

Renee 9:44
Yeah, so I ended up saving I think $30,000 additional in renovation money because I didn’t want to have any extra home loan stuff at the time I just wanted to have the home as a whole.

Michael 9:51
And I definitely want to dive into those renovation conversation a little bit further as well.

Michael 9:57
But before I do that, was this house your first choice?

Michael 10:00
Like was it the first house that you put an offer on?

Michael 10:02
Or how many did you didn’t see?

Michael 10:04
Did you put offers on?

Michael 10:05
and how long did it take you to find the actual property that was right for you?

Renee 10:08
So this house was not my first choice.

Renee 10:11
It wasn’t even my fourth or fifth choice, my best friend and I did a little road trip.

Renee 10:18
I had the Realestate.com app on my phone with all the they want to see on a Saturday.

Renee 10:24
And we did like, I think 12 or 13 houses and properties on that one day, I think in total, I viewed like 40 houses and townhouses across the south to west of Brisbane.

Renee 10:38
And I realised very quickly where I wasn’t going to buy and where I couldn’t buy, I put offers in on four properties.

Renee 10:49
I have a horror story about the first one that I fell in love with.

Renee 10:54
As you always do, you always find that first place?

Renee 10:57
And this is the one that I want this is my dream.

Renee 11:00
You fall in love with it for it.

Renee 11:02
It’s even yours and then you’re heartbroken when the agent is not as clear as you would hope with their sales techniques.

Michael 11:11
Is it OK to expand on that?

Michael 11:13
Like, can you tell us about that story?

Michael 11:14
Because that sounds quite interesting and, and, and I guess there are some lessons out of that too that other people that are listening can get out of it.

Michael 11:19
So yeah, let’s get into that one.

Renee 11:20
So I’ve had this agent, he it was a it was an actual house in a six complex with nobody corporate for 280k which was like middle of price range looking at and it was perfect.

Renee 11:34
It had a fireplace, three bedrooms, a little backyard.

Renee 11:36
It was all secured for my dog.

Renee 11:38
I loved it from the get-go.

Renee 11:40
I it was listed within three days.

Renee 11:42
I had inquired on it and asked to go view it that Saturday that Saturday comes around.

Renee 11:49
No one else has viewed the property yet.

Renee 11:51
Cos I was the first person there to view it and the agent goes to me.

Renee 11:55
We have an offer already on the table.

Renee 11:57
We are taking offers for second offers and second bids on the property.

Renee 12:03
And I was like, what do you mean a bid on the property?

Renee 12:06
Which he basically, he was pitting us against other and people that had obviously the other offer had offered more than I was willing to pay for it.

Renee 12:16
And I did go above the asking price on it.

Renee 12:19
I actually went a bit trigger-happy on the price if I’m being honest.

Renee 12:23
And that’s it.

Renee 12:24
I was never called by him again and I then learned that’s apparently illegal.

Renee 12:28
Yeah.

Renee 12:28
Apparently, I don’t know if that’s actually true.

Renee 12:30
I, again, this is years ago.

Michael 12:32
Oh, yeah.

Michael 12:33
Absolutely.

Michael 12:33
Yeah.

Michael 12:34
And I guess he didn’t act in a manner that was, I guess professional, which you can probably, you probably would have seen professional at work and perhaps people that were less professional.

Michael 12:42
So, how did you manage that?

Michael 12:44
Was that something you could pick up straight away or did you change the way you approached agents after that?

Renee 12:48
Yeah, I really struggled with being accepted and taken seriously by agents because I was younger, single, no man or partner on my shoulder.

Renee 12:58
I did get that discrimination, so to speak from agents who thought that I was less than people that came in with the picture.

Renee 13:07
Perfect standard house nuclear family sort of thing.

Renee 13:11
So I did struggle with getting their actual attention when I was pre-approved when I had the money when I had everything needed.

Renee 13:21
They still didn’t take me seriously.

Renee 13:23
My favorite instance with inspections and with agents was this place in Acacia Ridge.

Renee 13:29
It was horrible.

Renee 13:31
It was a derelict house.

Renee 13:33
I hated it.

Renee 13:33
But the agent when I walked in, I had a mom with me who’s, you know, in her fifties, who’s more the person that would be buying a property.

Renee 13:42
Apparently.

Renee 13:42
And the lady didn’t even like, talk to me.

Renee 13:45
She talked straight to my mother and my mom was like, actually my daughter’s the one buying this property you appreciate and talk to her.

Renee 13:54
And then the agent then looked at me and basically just, they still ripped me off like they just, they just didn’t take me seriously.

Renee 14:03
So out of all the agents I dealt with tens of agents that I’ve dealt with.

Renee 14:09
I only heard about four actually into looked past the young blonde.

Michael 14:15
The profile basically about that, you know.

Renee 14:17
Yeah, I ended up dressing down a lot for the inspections.

Renee 14:21
I’ve been in sales for 13 14 years and, you know, I’ve always presented myself a certain way.

Renee 14:29
I didn’t carry the designer handbag with me.

Renee 14:32
I didn’t wear any brand names.

Renee 14:34
I just wore jeans or like leggings and a shirt because I was sick of them looking at me and going.

Renee 14:41
Hmmm.

Renee 14:42
No.

Renee 14:43
And it’s sort of that feeling where you’re like, what’s the point?

Renee 14:46
The one I ended up buying was the agent actually was nice to me and did follow up with me and did make the times the agent that I bought off.

Renee 14:57
He like, I viewed the property once with my best friend and then the week after with my parents, my best friend saw potential in it, but it was like, this is rough potential.

Renee 15:09
My parents were like, maybe and then we, he called me back a few weeks later.

Renee 15:14
I hadn’t been sold yet, which in COVID times was impossible.

Renee 15:18
They sold within two weeks of being listed.

Renee 15:21
So he called me and was like, are you keen?

Renee 15:24
And I’m like, oh, look, I don’t love the place.

Renee 15:27
Like I, I don’t love it.

Renee 15:28
You know, it needs a lot of work.

Renee 15:29
You’re asking too much money for what it needs.

Renee 15:33
And I just, I’m not going to pay what you’re asking.

Renee 15:36
It’s, it needs $50,000 in renovations.

Renee 15:39
It’s just not feasible.

Renee 15:41
And when I crunched the numbers to him with what it would cost to remove everything.

Renee 15:46
Get new flooring in, get new kitchen, bathroom, paint the walls, every single wall in the house had been repaired and had really dodgy hole marks on it.

Renee 15:55
So it was like you have to then go in and repair it all.

Renee 15:58
And I’m like, it’s just not feasible for me to then spend this extra money that you’ve added onto the house when they’ve had the house for seven years and never done anything with it.

Renee 16:08
So I’m like, I will pay what you guys paid for it plus a few $1000.07 years ago because you’ve done nothing to this property.

Renee 16:15
You’ve let it get even more dilapidated.

Renee 16:17
It’s just not worth it financially.

Renee 16:19
So I did a really lowball offer and went from there,

Michael 16:25
And that was the property that you ended up purchasing.

Renee 16:26
Yeah, my dad was really mad that I bought it without showing him.

Renee 16:30
He was over, like interstate couldn’t get into Queensland because the borders were closed and I sent him photos.

Renee 16:36
He hated it and was like, dad, what a house he’s like, oh, what I’m like, yeah, I bought this one and we call it, it has a name that we call it, but I’ll just call it the den because it was very derelict.

Renee 16:48
It was right.

Renee 16:48
Not good.

Michael 16:49
Well, you obviously saw some potential in it and obviously that also enabled you to buy it probably at a price that was a little bit less than what a house that was at a reasonable level at that particular point in time would have been obviously the renovations played a pretty critical part there and it probably added value, which is a pretty good thing to be doing when you’re purchasing a property.

Michael 17:07
And some people will see that as a negative and other people see that as a positive.

Michael 17:11
Some people want to walk in there and just have the house, but they’re buying it for top dollar.

Michael 17:15
But if you have the ability and the foresight to sort of say, well, this can be what I want it to be.

Michael 17:19
It’s not like that now, but because of that, I can get it a little bit cheaper, invest in it.

Michael 17:23
But then I’m gonna add some more value to it too.

Michael 17:25
And I would imagine if someone comes through your house now, it’s a totally different proposition to what you walked in with it.

Michael 17:30
So, those renovations, what kind of work did it involve?

Michael 17:34
Like, what did you actually do?

Renee 17:37
Everything. So you walk into the place and there was the rental carpet on the floor, that blue rental carpet.

Renee 17:44
Everyone knows it.

Renee 17:45
Everyone’s seen it.

Renee 17:46
It had the eighties red wood trimmed staircases, window sills everything.

Renee 17:53
Every single trim in the house was that gross, orange brown wood trim which I grew up with.

Renee 18:01
And when I was a kid, not an issue in 2021, ugly.

Renee 18:05
So it had that the bathroom had a water leak.

Renee 18:08
It had the old quarter bathtub in there for the shower.

Renee 18:12
It was literally like a step back in time.

Renee 18:14
It had Lino on the floor of the bathroom and then ripped that up and it had the little red tiles that they had when I was a kid on the bathroom floor.

Renee 18:24
So like it had not been touched since 86.

Renee 18:27
They just had patched things up with it to keep it working.

Renee 18:29
Basically, the kitchen was horrible.

Renee 18:32
So I walked in and was like, ok, cool.

Renee 18:34
First thing I’m going to do is get a skip bin.

Renee 18:36
So I then had to call around Brisbane, find a skip bin.

Renee 18:39
I got like a three by three for I think like 300 bucks for a weekend.

Renee 18:44
And I did a working bee.

Renee 18:45
I put a call on Facebook.

Renee 18:47
I was like, if anyone needs to get their frustrations out, bring a hammer, come to my house, rip some stuff out with me.

Renee 18:55
And I ended up having one of my old work colleagues and my parents come over.

Renee 19:00
So my mom and stepdad and we started in the living room, ripped all the carpet, all the lining up.

Renee 19:07
My mum started upstairs ripping the carpet up, we then ripped out all the doors.

Renee 19:11
Everything the house was a shell.

Renee 19:14
By the time we finished, there was nothing fixed anywhere in the house.

Michael 19:18
So you basically gutted it and read everything into the inside.

Michael 19:21
Well, so it was, it’s big duty like you did a lot of work.

Michael 19:24
How did you manage that renovation stage?

Michael 19:26
So you did it all yourself.

Michael 19:26
You didn’t have anyone assist, I guess in that regard and you just found the trades, respective trades, got quotes and I guess got things done.

Renee 19:33
Yeah.

Renee 19:33
So I had friends and family help me a lot.

Renee 19:35
My dad when he came back into the state after lockdown limits were removed.

Renee 19:40
He did almost all of the like big things.

Renee 19:43
So painting all the floor stuff.

Renee 19:45
I had to get trades for the floor installation for the final flooring or the clip clack flooring downstairs and the carpet upstairs.

Renee 19:55
I had no kitchen for seven months.

Renee 19:57
So I didn’t have a sink for seven months in my kitchen.

Renee 20:01
I used the laundry sink the whole time, which I didn’t.

Renee 20:06
That’s the one thing I kept in the house.

Renee 20:07
So I had a trady for the bathroom.

Renee 20:11
That’s the only actual trade I used for the whole house was the bathroom because my said he could not do.

Michael 20:19
Yeah.

Michael 20:19
And I guess you’re pretty fortunate in the fact that you didn’t need to outlay as much cost as you otherwise would have if you had to engage trades across the board.

Michael 20:26
So that made it possible, I imagine.

Renee 20:28
Yeah, I’m really fortunate.

Renee 20:30
And I’ve also grown up with, you know, a lot of handiwork and stuff.

Renee 20:33
So I sort of knew the basics on how to remove, you know, like light switch covers so you don’t destroy them when you’re painting.

Renee 20:40
Like all those little things I sort of knew from my childhood, like how to do basic painting.

Renee 20:46
But like, you know, the things that you don’t know about, like how to rip up something like the carpet, nail, track things without ruining the floorboards, like how to secure floorboards back to the subfloor.

Renee 20:59
Like little things like that.

Renee 21:00
I learned just from trial and error.

Renee 21:03
I learned how to do typing and grouting for flashbacks.

Renee 21:08
It’s like a fun little diy project.

Michael 21:09
Well, that’s it.

Michael 21:10
It sounds like you took it as an opportunity to learn.

Michael 21:12
And I guess on that, what advice would you have for any other first?

Michael 21:15
Time buyers who are looking at a property that needs renovation.

Renee 21:23
I think with renovations, it really comes down to what you can handle. Like, don’t bite off something that, you know, it needs a whole renovation hole, everything done if you don’t know what that actually entails, if you walk in somewhere and you go ok, cool.

Renee 21:37
The kitchen needs replacing.

Renee 21:38
It’s not just going to bunnings and buying a kitchen.

Renee 21:41
It’s having to have everything measured meticulously.

Renee 21:44
Like it’s having to know that detail behind it that you don’t really get taught unless you’ve got experience in the industry.

Renee 21:52
Like I’ve worked Harvey Norman and Good Guys for seven years.

Renee 21:55
So I knew the basics of kitchen stuff and what brands to buy and everything.

Renee 22:00
But I think if you’re looking into like renovating, don’t do what I did do, not do a whole house at once unless you’ve got the money for the trades and have backup money because I actually burned through all of my cash that I had saved up very quickly.

Renee 22:17
And my bathroom broke down.

Renee 22:18
Six months later, I had to both make bank your dad to pay for my cracked floor, my bathroom.

Renee 22:25
So when you’re doing renovations really, really investigate the tradies you’re putting on to your work.

Renee 22:32
I didn’t look into my tradie.

Michael 22:35
That was the one that you mentioned you did get right.

Michael 22:36
It was for the bathroom.

Renee 22:38
Yeah, the one, the one trade I actually, it’s like the floor guys, they were awesome brand because you are not getting paid for it, but like brand but with big so like sparky plumbers, you know, actual builders look into what they actually do, what they outsource.

Renee 22:59
So, like my guy, he did the building.

Renee 23:02
Yeah, sweet.

Renee 23:03
But I did the plumbing, which is fantastic, but he didn’t do the tiling.

Renee 23:07
So he had to then get someone else to do the tiling and then, yeah, and then when they’re getting these quotes done, make sure everything’s itemised.

Renee 23:16
So there’s nothing.

Renee 23:18
So like I’ve got a stand-alone shower screen, like the, you know, the new minimalistic style shower screen that was included on the quote.

Renee 23:27
I have to then, you know, halfway through, find another $1000 for it.

Renee 23:31
Don’t let them tell you what would work best for the space, have an idea and research what you like as a person don’t go for trends.

Renee 23:42
I know that everyone wants to have, you know, these funky kitchens and bathrooms.

Renee 23:47
But if anything breaks down with the tiles that you’ve chosen, they’re very hard to get tiles again.

Renee 23:54
Like I’m lucky that when my subfloor, my bathroom cracked my tiles were still in fashion because they were just normal tiles.

Renee 24:03
They weren’t detailed, I was gonna get little detailed pretty tiles.

Renee 24:07
Thankfully, I didn’t because if that happens, you can’t easily replace things.

Renee 24:12
So I think it’s all about research and make sure that they’re registered.

Renee 24:16
You’ve got licenses that they’re qualified.

Renee 24:19
They’ve got the trade requirements for your state because the last thing you want to do is have to go in, at least in Queensland to CCAT to report and try and get your money back.

Renee 24:31
I didn’t go that route.

Renee 24:32
That was an issue for me.

Michael But it’s definitely something to check out.

Michael 24:35
Yeah.

Michael 24:35
And that’s a good point, especially when it comes to around.

Michael 24:37
It is to make sure your builders are all certified and it probably comes down to insurance too to make sure that if anything goes wrong on the job that they, you know, they’re adequately insured as well to, you know, for whatever may occur.

Michael 24:46
So I think there’s some great tips there and there’s a whole array of them across the board.

Michael 24:51
But those ones in for renovations in particular, I think there’s a heap there that, that I think our listeners will get a lot of value out of.

Michael 24:56
We’re pretty close to up.

Michael 24:57
And I guess we ask two questions generally as we do, the first one that we’d ask is, what would your number one tip for first home buyers be that are trying to get into the market now?

Renee 25:09
Say as much as you can, but live within your lifestyle still.

Renee 25:11
So look at what you can comfortably live on, but do it less.

Renee 25:16
So for me, it was not going out as often, not buying clothes for every single event like I would have previously done and if possible and you can like, look at living somewhere that’s, you know, at a lower rate for rent.

Renee 25:32
I know it’s very hard now with rentals.

Renee 25:35
Like I, I’m very thankful and very fortunate, but I think your biggest thing is just trying to cut down on that spending as much as you can.

Michael 25:45
And you mentioned, you know, I think what you mentioned to me, I took it as delayed gratification.

Michael 25:49
You basically sort of have to, which is hard, I think now with the way we currently live, it’s like we want everything, you know, now, like we get bored very quickly and our attention span is doesn’t last long and whether it’s Flicking through Netflix or whether it’s through Instagram or whatever it may be, it’s like we get that hit straight away.

Michael 26:05
And so to then say, well, hold on.

Michael 26:06
Now you’ve got to not do stuff, don’t buy what you wanna buy.

Michael 26:10
But I guess if I ask you now, looking back on it, are you glad that you did it?

Renee 26:15
I am really glad that I did it because it’s something that like I can, I own it, you know, and we, we did mention briefly about, you know, increase in the property value.

Renee 26:28
I have seen a very dramatic increase in two years on the property and that’s just based on the value on renovation side.

Renee 26:37
So it is worthwhile.

Renee 26:39
I think if everyone has the means to buy to live in.

Renee 26:43
Definitely.

Renee 26:44
You know, I’m not a big person on investment.

Renee 26:47
I’m more about living in.

Renee 26:48
But I think that if you, if you have the opportunity and don’t overlook where you would think is a bad area, like, oh, I wouldn’t live that side of town because it’s bad.

Renee 26:59
Like end of the day property is property.

Renee 27:01
You, everyone starts somewhere, everyone has a million dollars to invest in a property first go.

Renee 27:09
Like, don’t let the idea of this image that everyone portrays of this perfect life with the flashy things become you if that’s not you you can still have the flashy things.

Renee 27:24
Obviously, you can still have the nice inside but your outside of your house hasn’t got to be in the postcode that everyone goes.

Renee 27:31
Oh wow, that’s a nice area.

Renee 27:32
Like just live within your means.

Renee 27:34
Like that’s what I did and I’m able to, you know, have the flashy things that I want still.

Michael 27:39
But also, well, and now you’ve got an asset in your name that’s appreciating in value and will continue to generate wealth for you.

Michael 27:46
in terms of the equity that you got over time.

Michael 27:48
And you know, you mentioned that it was like you saying it was a bit easier to do it then perhaps now because rents are high and everything, but everything’s relative to the moment in time.

Michael 27:55
So it’s hard now than it was five years ago or three years ago or two years ago.

Michael 27:59
But in five years time, we’ll look back now and we’ll say, well, it’s hard now.

Michael 28:02
I should have done it five years ago.

Michael 28:04
So that will all be the case.

Michael 28:06
And I think that couples in with that last point that you mentioned, look outside the areas that perhaps you’re not thinking of initially because the property is property and everything eventually does go up.

Michael 28:15
There are some nuances to that in terms of how much things go up.

Michael 28:18
But overall with property in Australia, you keep it for a period of time, it is going to appreciate in value.

Michael 28:23
So it doesn’t matter where you start as long as you start, I think.

Michael 28:25
And if that’s someone’s ambition and desire, I think those tips are great.

Michael 28:29
Final question was knowing what, you know, now if we could, you know, get a time machine and go back in time to when you started the journey at 27 I guess when you started the savings and what would you tell yourself that?

Michael 28:40
You know, now to that 27 year old Renee?

Renee 28:45
Don’t take everything so seriously, like take everything with a grain of salt. They’re all salespeople, you know, the tactics.

Renee 28:51
So just relax, don’t invest too much into the properties until paper is signed, the settlement is confirmed, and just breathe.

Renee 29:03
Don’t worry yourself about, you know, the little things with it because you’ll end up somewhere completely different anyway.

Michael 29:11
So I think that’s an awesome tip and it’s only really a tip that I think that you can say once you’ve been through it because you say to someone that hasn’t been through it, it’s like, well, they don’t understand that through the other side as well.

Michael 29:23
So that reiterates the fact that as you go, three things you will learn, you will, you will grow and from that you look back and tip like that obviously will totally, you know, resonate with people.

Michael 29:32
So that makes absolute sense to me.

Michael 29:33
Well, thank you so much for your time.

Michael 29:35
Renee, I really appreciate all your input and all the the advice and the tips and the tricks that you utilized.

Michael 29:40
And congratulations once again on purchasing and on the renovations that you’ve done as well because that in itself is probably just as hard as if not harder than buying the house.

Michael 29:48
So, congratulations on all of that and thanks so much.

Renee 29:51
Yeah, thank you again.

Renee 29:52
It’s been really fun.

Renee 29:53
Happy to share my experience.

Michael 29:58
You’ve been listening to the home, run your guide for buying your first home in Australia.

Michael 30:02
This podcast was produced by Lendstreet.

Michael 30:05
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 30:11
We know applying for a loan can be overwhelming and complex so we help guide and support first-home buyers through the process from start to finish to find out more head to our website lendstreet.com.au.

Michael 30:22
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 30:27
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Michael 30:30
And while you’re there, please leave us a five-star review.

Michael 30:33
It really helps others find the show.

Michael 30:36
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post First home buyer story – The importance of knowledge and flexibility in buying your first home appeared first on The Home Run.

Show Notes

Jade Fitzgerald is the Principal and Owner of Ideal Buyer’s Agency. Ideal Buyer’s Agency works with prospective home buyers who are lost in the weeds of the process to help them find their forever home.

In this episode, Jade expresses why she’s passionate about helping first-home buyers, how to make the most of a buyer’s agent’s services, and the best way to buy a property when you can’t look at it yourself. She also opens up about The Forgotten Women project and why it matters.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:16
Hi and welcome to the home, run your guide to buying your first home in Australia on the show, I’ll walk you through the home-buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions.

Michael 0:28
You’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.

Michael 0:45
Today, we’re chatting with Jade Fitzgerald Jade is the principal and owner of Ideal Buyers Agency in Brisbane.

Michael 0:52
Ideal buyer agency is for people lost in the home buying process.

Michael 0:57
Jade works closely with first home buyers to cut through the confusion and help them find their home, whether it’s to live in or as an investment property purchase in this episode, Jade will share why she’s passionate about helping people find their home and what the buying process looks like.

Michael 1:14
When you can’t look at a property yourself.

Michael 1:17
She’ll also breakdown what the forgotten women’s project is and why it’s so important.

Michael 1:22
Let’s jump in Jade.

Michael 1:27
Welcome to the show.

Jade 1:28
Thanks for having me.

Jade 1:29
The first thing I like to do with podcasts like these and our podcast is to get to know you.

Jade 1:34
So, in your own words, can you explain what do you do?

Jade 1:36
I’m a buyer’s agent with my own business in Brisbane, which I started nearly 2.5 years ago.

Jade 1:42
Now on my own, I was working for one of the top buyer’s agents in Brisbane for a while, but decided that I wanted to be out on my own.

Jade 1:51
And so I specialise in helping people buy their forever homes, but also a lot of investment properties and things like that.

Jade 2:00
A lot of people don’t know what a buyer’s agent does or thinks that we’re super expensive.

Jade 2:05
I like to go against mold and help as many people as I can.

Jade 2:08
And mostly my greatest love is first homeowners.

Jade 2:12
So I really specialise in helping first homeowners and that’s my love and that’s what gets me out of bed every day.

Michael 2:20
I know you mentioned first-home buyers.

Michael 2:22
What is it about the first home buyers that makes you so passionate about them?

Jade 2:25
Going from my own experience with the process, I was a late bloomer if you’d like to call it that in the property buying myself.

Jade 2:34
And I realised that even throughout the process myself, that I actually didn’t have a brass Razo as to what’s going on.

Jade 2:44
How does it work?

Jade 2:45
I did it in the middle of COVID.

Jade 2:47
We actually purchased in a separate state and I guess I kind of got to a point where I was like, I don’t know what I’m doing.

Jade 2:55
Why would I assume that I’m gonna spend the most money I’m ever gonna spend in my life and know how to do it or what I’m doing.

Jade 3:05
So I had actually engaged a buyer’s agent myself to buy my first property and I learned a lot throughout the process.

Jade 3:13
I was very lucky to have a great buyer’s agent.

Jade 3:16
But at the same time, I couldn’t believe that everyone was out there doing it on their own, trying to figure out contracting offers, building and pests, like all of these different things.

Jade 3:26
And I guess you go to professionals to get help when you going to the doctors or whatever or get a new car fixed or any of these sorts of things.

Jade 3:36
You don’t just take it to Joe Blow down the street or pop into mom and dad and ask them a question and walk away and think, oh, well, I’ve got the answers to everything.

Jade 3:45
So for me, I think it’s about learning all of those sorts of things along the process.

Jade 3:52
But then now that I’m in the position I’m in, I love sharing the knowledge with everyone.

Jade 3:57
I specialise in helping first homeowners and being very generous with the information that I have.

Jade 4:03
And the time that I have, I think if people have got to a point where they have saved enough money to get a deposit for a house and then if they’ve gone and they’ve educated themselves enough to speak to a broker.

Jade 4:17
Number one, you learn first step above all else.

Jade 4:21
Yeah, there’s lots that needs to be learned like they are, they are absolutely quintessential first steps.

Jade 4:27
But after that, where do you start?

Jade 4:28
What do you look at?

Jade 4:29
Where do you go from there?

Jade 4:31
I think at the moment we’re also seeing sort of a lot within the market where people are not necessarily getting enough of a home loan to live where they are now.

Jade 4:42
And so there needs to be a bit more of a shift and a look at thinking a bit outside the box of where do you buy?

Jade 4:50
What do you buy?

Jade 4:52
And potentially it may not be something that you live in yourself.

Jade 4:56
So I know rent vesting is sort of seems to be a new word that’s being bade around, but it’s quite a good one.

Jade 5:03
And I think self-explanatory really that trying to get people to understand that we’ve got multiple options in front of us.

Jade 5:11
What do they look like, where do you buy?

Jade 5:15
And what does that look like for your future?

Jade 5:17
Those are the sorts of things that I just.

Michael 5:20
And I guess the, the two take homes of the taken from what you’ve just mentioned, there is obviously the journey is the first home buyer.

Michael 5:25
You kind of don’t know what you don’t know at the beginning of it all and, and having experienced it yourself and helping others through it, you’ve seen that road before and you don’t know what you don’t know.

Michael 5:34
And so pairing with somebody or getting the assistance from someone is obviously critical, I believe.

Michael 5:39
And something that I’m passionate about too, obviously, which is, you know, the mechanisms of this podcast, which is trying to educate the first home buyers as much as we possibly can about that because it is a lot, we can take off a little bit more than we can chew potentially in this instance.

Michael 5:53
And having that support is, is critical.

Michael 5:56
So I totally get what you’re doing in that regard.

Michael 5:58
And then as you’ve mentioned towards the end of the rent vesting side of things, and this is a concept which is starting to, I guess, really take form because of reduced borrowing capacities.

Michael 6:07
Over the last 12, 13, 14 months, the amount of times the interest rate has gone up has affected borrowing capacity.

Michael 6:13
So people aren’t able to buy necessarily where they want to buy, but they want to get into the market.

Michael 6:17
And I guess that leaves them in a situation as to buying where they may not live or where they may not normally reside or want to reside.

Michael 6:25
And then, you know, that leads into that particular space there.

Michael 6:28
So which forms a little bit of what we’re gonna talk about in depth today, which is buying a property without seeing it.

Michael 6:34
And that’s something that you’ve had experience with having relocated from New South Wales to Queensland in the pandemic.

Michael 6:40
So it was also throw in that.

Michael 6:41
It’s hard enough to move in your own, right?

Michael 6:43
But you picked a pretty exciting time to do it as well in the crux of COVID.

Michael 6:47
So you did move to a home without being able to say it.

Michael 6:50
Can you explain that experience? What was it like?

Jade 6:52
The whole experience of the pandemic?

Jade 6:56
The side itself was kind of revolting and scary.

Jade 6:59
And I’d been actually living in the Middle East for the seven years prior and went back to Sydney like nine months really before it kind of all kicked off.

Jade 7:08
And I was from Sydney and I’m a bit of a Sydney girl and I have a Moroccan husband that I brought that with me.

Jade 7:15
But when the pandemic hit, we were in a two-bedroom apartment, we’d been already looking in Sydney.

Jade 7:21
And like I, as I say, it was in my head.

Jade 7:24
Yeah, we’ll buy an apartment in Sydney and that’s our life for now.

Jade 7:28
And that kind of thing.

Jade 7:29
And we were living in an apartment where you literally couldn’t see the sky unless you sat on the balcony and just, it was a big block.

Jade 7:36
And, I don’t know, Brisbane is where we have purchased and it was always on our cards, sort of as a long-term vision that this would be sort of like retirement, I guess.

Jade 7:46
But, yeah, it was really, my husband actually who started looking in Brisbane and was, he’d been here for four days in his lifetime, but we sort of knew that this was the lifestyle more and you don’t know what was happening in the future.

Jade 8:01
And I think at the time the pandemic made a lot of people, including us really re-evaluate your life and what’s important to you and what direction you wanna be in and like, where are you now?

Jade 8:15
And how long do you wait till you start living the best life that you want?

Jade 8:20
And then once we started looking, so the property boom really hadn’t taken off here.

Jade 8:26
So we were sort of able to look and jump online, which of course you think is the first step, right?

Jade 8:31
You jump onto realestate.com.

Jade 8:33
Well, actually Domain, if you’re in New South Wales, not that no one in Queensland really uses this domain.

Jade 8:38
We all use realestate.com.

Jade 8:40
But yeah, we were looking at property and like the price difference and what we could get and we were like Well, what are we doing in Sydney?

Jade 8:48
And I had a great job and my husband’s a chef.

Jade 8:51
So we were in and out of work with him as soon as the pandemic kind of hit.

Jade 8:55
And we had a really great connection with a friend who put us in touch with a buyer’s agent.

Jade 9:01
And from there, like, I didn’t even know we needed a mortgage broker.

Jade9:04
To be honest, I’ve got to deposit, get a loan.

Jade 9:07
It was interesting, the whole process, we had to go through hotel quarantine the whole lot.

Jade 9:13
It was, we had cats, we dripped, it was pretty crazy but engaging someone who could act on our behalf and literally, it was invaluable, sort of having him being able to take us through everything and was very kind and generous in knowledge sharing there as well.

Jade 9:32
I mean, it is definitely a service that you pay for.

Jade 9:36
It is a premium service, particularly when you’re buying a permanent place of residence or as we like to call them.

Jade 9:44
It is a lot more involved potentially than an investment property.

Jade 9:47
And I know that myself, but yeah, it was very full on.

Jade 9:51
I’m still very proud of my husband and I being so brave luckily where we did purchase and what it looks like.

Jade 9:59
Now we have done very well from a investment in our own property.

Jade 10:04
Not that that’s why we bought it.

Jade 10:06
We fell in love with the property itself, but, but in saying that every single time I buy for a family who it is their forever home.

Jade 10:15
And I am the only person that’s seen it and they either get off an airplane or even sometimes they’re just living in Melbourne and Sydney and they don’t even fly up and see it and they just take my recommendation or, you know, I’m all about the vibe of the problem in the space.

Jade 10:32
I still, it still blows my mind that it.

Michael 10:35
Yeah, and even mine to be fair like to, to think that people will consider buying something without looking at it.

Michael 10:41
I guess that definitely highlights the need of having a professional on your side when you’re doing something like that.

Michael 10:46
It just wouldn’t be possible if you didn’t have somebody on the ground in that particular area to at least guide you and advise you as to what it was that you were getting yourself into.

Jade 10:54
I think people really forget more than anything that the selling agent are selling agents.

Jade 11:02
They represent the vendor and the seller.

Jade 11:04
And I think they do a great job when you’re selling, you want a really great pitfall on your side.

Jade 11:11
But I think when people are looking at buying in there, particularly if they’re not boots on the ground themselves and aren’t able to see the property themselves.

Jade 11:20
Relying on just the sales side of it is fraught with danger.

Michael 11:27
What advice do you have for some people who are looking to purchase a property in a location they don’t live in or can easily visit.

Jade 11:35
I guess the most important thing is with that is make sure that you’ve got a team on the ground that’s gonna be able to support you.

Jade 11:42
And for me, I find the most important people in the Craven Post is the property managers.

Jade 11:49
But if you can start engaging people from the outset, they’re running a business obviously themselves and they want your after you’ve purchased the property.

Jade 12:00
So you’ve gone through and if we’re assuming that you’ve got your whole team behind you, you’ve got your mortgage broker, you’re potentially engaged buyers.

Jade 12:09
They, they will have done most of it for you.

Jade 12:12
But if you’re not easy, sorry, a buyer’s agent and you’re doing it on your own.

Jade 12:15
Remember that the selling agents are there to sell you the property and what you need is to start building the team on the ground that will start managing and looking after the property for you.

Jade 12:27
Once you pay, they will do things nine times out of hand, like go and have a look at the property for you before you purchase.

Jade 12:35
They will do a preset inspection, which is a really important step in the process as you maneuver through the purchasing process as well.

Jade 12:45
And they’ll also start giving you things like your rental appraisals, which are really important to get on letterhead from agents that are on the ground in the area as well.

Jade 12:58
That would be my number one sort of steps, I guess, sort of getting to that point.

Jade 13:03
I think you can use all of the data.

Jade 13:05
And they’re brilliant tools.

Jade 13:07
Don’t get me wrong.

Jade 13:08
And we’ve got more and more of them hitting the market, but they’re still only as good as the data that’s inputted into them.

Jade 13:15
And you cannot, and I know AI is this wonderful thing that’s hit the world and all of this new technology is great but cannot beat people with boots on the ground who are in the trenches daily and are going to be representing you as the owner.

Jade 13:31
And now also a landlord.

Jade 13:34
If you go down that path, if you are buying for yourself, it’s a different conversation and you’re going to live in it yourself.

Jade 13:41
I think there’s some different things to do.

Jade 13:43
But if you are not gonna live in it, that would be my number one steps.

Michael 13:47
The one thing that I took over from what you said was you gotta run it like a business if rent investing as a first home buyer, obviously, this is then the rent investing scenario.

Michael 13:54
But you know, so you’re gonna buy a property, you’re not gonna live in it, you’re gonna rent it out, you’re going to be effectively starting another business and that’s how you need to treat it.

Michael 14:01
And like with any good business, you need good people and people that know what they’re doing.

Michael 14:05
So, I, yeah, totally resonated with that comment and can see how that would make sense, especially if you’re not seeing the property.

Michael 14:11
So, can you share a story of someone that you’ve helped to buy a property without seeing it?

Michael 14:16
What did it look like?

Michael 14:17
What should it look like?

Michael 14:18
And how did it go?

Michael 14:18
And a bit of a case study if you will.

Jade 14:23
I guess I’ll stick with first homeowners. To be honest, when we’re staying on this sort of rent vesting kind of path, I mean, even apparently I’ve got a couple of clients that I’m working with and I think people think that you need to have this huge investment, especially if you’re in Sydney and Melbourne, that whole thought of buying property is actually so overwhelming because of the price points that are within those areas of the state.

Jade 14:46
But I have some amazingly smart, brave humans at the moment who I am helping.

Jade 14:53
And they’ve got a pre-approval anywhere between that 355 500 mark, which is really attainable and doable for people gave to the right people to help you in that process.

Jade 15:07
Talk to a mortgage broker.

Jade 15:09
Can’t be more clear about it.

Jade 15:10
Talk to a mortgage broker start today because once you start figuring that out and then you go.

Jade 15:16
Oh, ok, dad.

Jade 15:17
Well, I’ve got a, let’s say you’ve got a pre-approval for 400,000.

Jade 15:21
I’m immediately going great.

Jade 15:24
You live in Sydney or you live in Melbourne, you live in Tasmania, forget about it.

Jade 15:30
You know, like it’s not just the whole Sydney and Melbourne situation, but even in Brisbane, to be honest, are you gonna be able to find something to give in for yourself?

Jade 15:39
If that’s where your home base is potentially low?

Jade 15:43
Can we look at buying you something that is in a growth area which is a whole other conversation happy to have.

Jade 15:50
But somewhere like Rockhampton Bundaberg, those sorts of places at the moment.

Jade 15:56
Hot fit for those that are listening.

Jade 15:58
Yes, you can buy a great sometimes, you know, three bedroom, one bathroom, sometimes I can even find a four bedroom, two bathroom and they will rent out beautifully.

Jade 16:09
We’ve got good infrastructure going into these places.

Jade 16:12
If you look at things like new schools, hospitals, roads, transport and then yeah, are you personally gonna go and leave that?

Jade 16:22
No kind of challenging to some people in a lot of ways to think about the whole thing that they’re never going to see the property themselves.

Jade 16:31
So I spend a lot of time holding the hand of my beautiful clients through that process because it is really full on.

Jade 16:41
You’re like, well, wait, you gotta buy a place and I may never see it.

Jade 16:45
I’m like, you may never even do a drive-by, but you are now a rentvestor.

Jade 16:50
You are going to own an investment property.

Jade 16:53
If you’re gonna hold your hand the whole way through the process, it’s gonna sit there earning and building growth and hopefully it’s got a really good yield for you.

Jade 17:04
Which yield is another thing that gets fancied around and people don’t really understand what is yield, net yield, net growth of all that sort of stuff, yield growth and growth.

Jade 17:15
Sorry.

Jade 17:16
So it’s a really interesting kind of path to go down and there’s a lot of education that needs to go behind it.

Jade 17:23
Lots of people still, they can buy a property like that rented out and there’ll be no costs for them.

Jade 17:29
That is the greatest myth on the face of the planet.

Jade 17:33
Every property has costs behind it.

Jade 17:36
You need to pay someone to manage it for you, you pay for and make sure that you have some money, you need to get some maintenance.

Jade 17:44
There will generally always be a small slight gap between what the rental yield is.

Jade 17:50
So the rental amount is that you’re going to make and what your mortgage repayments are.

Jade 17:56
And at the moment, as we all know, we’re seeing fluctuations within our interest rates.

Jade 18:01
So sometimes you might need to have even a little buffer there for you.

Jade 18:04
The whole idea is to make sure that that amount of money that you’re paying on top of is manageable with you, but the property is gonna seek growth into the future and it will, it will see you on the property ladder before you know, it and then you’ve got equity in the property and you can start thinking about other, I guess one of my guessing is I really love helping women, especially sorry, fellas.

Jade 18:31
I know you’re old too.

Jade 18:32
But for me, women do not speak about finances or purchasing or any of these things enough.

Jade 18:40
So, most terrifying statistic that we have in Australia is women over the age of 55.

Jade 18:47
Our fastest growing homeless population and I do a lot where I am there to try and help and educate on that level as well, I think except with property in general is it’s really expensive and you can’t afford it and options aren’t explored.

Jade 19:06
And I think there’s a whole wealth of people like yourself who are out there trying to share the information.

Jade 19:13
Yeah, it’s on the ground.

Jade 19:15
Real-life information.

Jade 19:16
Not from your mom and dad, not from your auntie’s cousin’s brother’s sister who bought, you know, even five years ago.

Michael 19:24
I mean, unless your, your mother or father happened to be a buyer’s agent, in which case, maybe that you, you can tick both boxes in that instance.

Michael 19:31
But in essence, it’s, it’s the professional aspect and the professional approach to the purchase process, especially when you’re not seeing it, something you’ve mentioned and I was going to touch on and we’re definitely, you know, a bit of a shift from, I guess the not inspecting the property you’re not seeing and something we’ve spoken to some people about recently is this alarming statistic about Australian women retiring into poverty.

Michael 19:48
If you’ve mentioned it already, you’re involved with the Forgotten Women project, which aims to provide safe affordable housing to 40,000 women over the age of 55 in Queensland, you know, who are currently facing homelessness.

Michael 20:00
How did you get involved with that?

Michael 20:01
And can you tell us a little bit more about the organization?

Jade 20:03
Oh, look, it’s just so amazing.

Jade 20:05
And I honestly, if it’s the smallest thing I can do then, yeah, amazing organization that is actually based and run out of the suburb that I live in which I didn’t even know at the time.

Jade 20:18
So I had watched a program on ABC and it was called The Forgotten.

Jade 20:24
And it made me upset thinking about it.

Jade 20:27
The amount of stories of women who we know at the end of the day we earn less money, take time off work on top of that to raise Children.

Jade 20:37
And you need to, the statistics in regards to separation, divorce, all of those sorts of things are not good in our favor either.

Jade 20:49
So you end up with this snowballing rapid descent into, oh, I no longer have a family.

Jade 20:56
I ever did have one in the first to now also being in the fact that you’re in your fifties and it’s like even getting a rental becomes tricky, but particularly getting a mortgage can become very know, I think there’s a lot of government schemes out there as well.

Jade 21:15
And I am not even going to try and touch on these, but that’s where people like you are vital in the equation of looking at what’s available for people.

Jade 21:25
If you’ve got dependent Children, if you’re of an a certain age bracket, there are different kind of schemes that you can be involved in.

Jade 21:34
Also, even the first homeowners, I think people don’t really realise that you can, you don’t have to live in them all the time.

Jade 21:42
Like there are different ways of getting into the market.

Jade 21:46
And I think the most important thing at the moment is that these women are not old, they’re not retired.

Jade 21:52
They have nowhere to live.

Jade 21:54
And for me, I am one of those, I was one job away from potentially not having somewhere to live.

Jade 22:04
I met my partner, whether I had that joint income.

Jade 22:08
I am from Sydney.

Jade 22:10
It’s a lot of single women in Sydney.

Jade 22:13
I think the rating is still 5 to 1.

Jade 22:16
I’ve got an amazing bunch of super professional, amazing women in my life who have not got on the property ladder are hitting their mid-forties.

Jade 22:28
It’s starting to get p and we still don’t want to have these conversations with their brother more than, and I think that’s something that’s just super important.

Jade 22:38
We’ve gotta talk about it.

Jade 22:40
Where are you financially?

Jade 22:42
And maybe you need that new handbag or do we need to open you a fund trying to think about your future.

Jade 22:49
And I mean, my whole thing is at the moment is if it all goes kicked up and you buy yourself a red vestment property and you’ve lost your job and all that kind of stuff.

Jade 22:58
Can you then sit there and go.

Jade 23:02
I’ve actually still got somewhere I can.

Michael 23:05
But it gives you an option.

Jade23:05
Right.

Jade 23:06
Absolutely.

Jade 23:06
The amount of people that I’m seeing at the moment saying things like, oh, well, I’m just gonna buy a caravan.

Jade 23:12
I went and slept in my car for one night with the forgotten women.

Jade 23:17
They run a charity event every year where you sleep in your car and you raise money for, for obviously the charity one night.

Jade 23:26
And I cannot tell you how, we with a whole bunch of other people all doing it at the same time, the thought of driving around that street trying to find somewhere to take you live Australian mate.

Jade 23:40
I think there’s a whole lot there to unpack and yes, it is.

Jade 23:43
Something I’m super passionate about.

Jade 23:45
Nothing to talk about for hours.

Michael 23:48
What other things do you think can be done to help with this issue? I guess, from your experience.

Jade 23:51
Education, more than anything education and exactly kind of what you’re doing now, more than anything free accessible advice that can point people in the right direction as to where and how they can progress onto a property ladder.

Jade 24:09
I think we need to get people to really start thinking outside the box of what a traditional practice of a property looks like because we’re all living in the, and it changes daily.

Jade 24:22
Like, what does the future look like for us all?

Jade 24:25
You know, we’re heading into overpopulated cities.

Jade 24:28
It’s gonna be interesting to see how that goes and it’s all over the media at the moment which does get beaten up a lot.

Jade 24:34
I won’t go there, but we have a shortage of houses as it news, but we need to start thinking a little bit outside the box.

Jade 24:44
So what does that look like for you?

Jade 24:47
Doesn’t mean that?

Jade 24:47
Yeah, you’re not having your first home isn’t gonna be a four-bedroom pool in the backyard and room to swing a cat.

Jade 24:54
It could be a one-bedroom in a suburb that you have to travel a little bit further for work or in a whole other area that you’re not even gonna live in.

Jade 25:02
But you’re at least got somewhere on the earth.

Jade 25:06
That’s yours.

Jade 25:07
It is all about education and being brave and I even find people are scared to even pick up the phone to people like you and start talking about finances.

Jade 25:17
People seem to think, oh, it’ll, it will affect my credit rate.

Jade 25:21
Where did they get that information from?

Michael 25:23
Well, misinformation, I guess more than anything.

Michael 25:25
So, yeah, and it’s something that we obviously get asked all the time.

Michael 25:28
There seems to be a fear of the credit, which is good that they’ve got knowledge about it.

Michael 25:32
But I guess how is it directly affecting you or not?

Michael 25:34
And what does that mean for you going forward with presenting some options to you?

Michael 25:37
You tend to find the people that are a bit worried about it are probably worried about it for a particular reason which is not a wrong thing or a right thing.

Michael 25:43
But yeah, obviously when you speak to a broker and anything that a broker does a can never touch your credit file, they basically get a snapshot to look at it for the purposes of the home loan and they do that, not because they want to find out anything.

Michael 25:55
It’s just that if they do, then it might determine which lender we might place the deal with.

Michael 26:00
And it’s done more as an assistance more than trying to pick up or dig out something that that’s gonna be hidden because the bank will find it eventually, or the lender will find it eventually.

Michael 26:07
So if we’re proactive about it and we can mitigate it, then it just increases our chances of an approval.

Michael 26:12
So that’s an interesting point there that you’ve mentioned.

Jade 26:14
Well, until that sort of stage has got to, you know, everything I’m talking about or any indication I like buying somewhere recently or what have you.

Jade 26:23
It’s sort of a moot forming field.

Jade 26:25
I don’t know, I’ve never been one myself that with my five exes do you not get me wron.

Michael 26:32
You the majority of people there.

Jade 26:34
But I just think there’s this fear around it that needs to be busted the whole way through as well and ask questions, don’t say.

Jade 26:43
And I keep harping on about, don’t listen to your moms and dads back in the day, they would have gone to a bank.

Jade 26:49
There was no one, the bank manager they would when I walk in the door and go, you know, Bob, how are you going?

Jade 26:54
Blah, blah, blah.

Jade 26:55
Those days are so well and truly over.

Jade 26:58
I mean, I don’t even remember the last time I went into a bank days of that are just so over.

Jade 27:03
And I think really, it’s that education piece about learning where you’re at financially now and then even if you’re not there right now and it might, you know, be 12 or 24 month plan, but the plan has to start and it has to start from somewhere.

Jade 27:20
There’s lots of people that are sitting in the waiting room and they’re waiting for the mom and dad or they’re waiting for the grandparents to pop off and there comes their inheritance or family home or whatever that they can get access to.

Jade 27:33
But I don’t know what’s gonna happen between now and then.

Michael 27:36
Yeah.

Michael 27:38
Your own plan.

Michael 27:39
Yeah, I like that.

Michael 27:40
I, I guess it comes back down to the fact that knowledge is power ultimately.

Michael 27:43
And that’s the education piece as Well, so, and obviously with that education, it, it does empower you, which is, I think for women as well.

Michael 27:49
And, and for men, it’s, it’s, you’ve got to empower yourself, no-one’s gonna do it for you.

Michael 27:53
And it’s about sort of knowing what’s possible and how to achieve, you know, what your goals are, but you’ve got to find out what they are for yourself and then obviously embark on that journey with the right people that can help you get there.

Michael 28:01
We always wrap up by asking two questions.

Michael 28:03
The first of those two questions is what is your number one tip for a first home buyer who’s trying to get into the market?

Jade 28:09
Honestly, my number one tip for everybody.

Jade 28:12
Dr M I saw that that person as well is about this as you are building a team of support behind you.

Jade 28:24
There is many people and many touch points that you will need throughout the buying process.

Jade 28:29
And there are things like conveyancers.

Jade 28:32
There are mortgage brokers, there are building and pest inspectors.

Jade 28:37
There are all of these different people, potentially, hopefully a buyers that.

Michael 28:43
Yeah, some tax agents too.

Michael 28:43
If you’re doing some rest, some tax advice.

Jade 28:47
There are multiple people. So my thing is is to figure out what are all the people that you’re gonna need more practice and then start interviewing people.

Jade 28:57
Don’t wait for the last minute until you’ve actually already kind of, you’ve got the house and then you’re like, oh, crap.

Jade 29:03
I need a building and pest inspector and stuff.

Jade 29:06
Who do I use?

Jade 29:07
Where do I go first?

Jade 29:08
You know, start looking at all of those things, get out there and start looking around and get into homes.

Jade 29:17
I think it’s really interesting when I watch people going in and out of homes for infection, I look at every home really differently.

Jade 29:24
Obviously I am looking for.

Jade 29:28
Yes, wear and tear doesn’t really say great stuff.

Jade 29:32
I like to call it prosthetics like makeup on a property, you know, paint can be paid.

Jade 29:38
But when you’re in a place and you’re looking at it, look at the great, where is it?

Jade 29:42
What does it sound like?

Jade 29:44
What kind of cars are there?

Jade 29:46
What are the neighbors gardens?

Jade 29:48
Like all of those sorts of things?

Jade 29:51
You’ve got to figure out what it is that you’re buying for and how you want to leave yourself if it’s the rent vest, don’t even worry about those things.

Michael 30:00
Makes sense and, and that they’re also there’s a heap of gold in that.

Michael 30:04
So in terms of little things like that, looking at, identifying the neighbour’s gardens, like it’s not something I would think about the first instance, but it totally makes sense as to why that could give you some insights as well.

Michael30:12
So I, I think definitely lots of gold in that.

Jade 30:15
Sport being active.

Michael 30:16
Yeah.

Jade 30:17
Oh yeah, you can look from the satellite view.

Jade 30:21
It is good to scope out the look right as far as you can, you can, I mean, I literally just almost bought a property for a gorgeous client.

Jade 30:32
And then I went back and I, I go back multiple times and I’m looking and I was like this, this property behind me that where we were buying, it was full with crap.

Jade 30:42
And I was like, that has a order and I, you know, rang a couple and I went and did a drive by for me.

Jade 30:48
Sure enough.

Jade 30:49
And I, I pulled this out straight away.

Jade 30:51
No one wants to live with the order of.

Michael 30:54
Yeah.

Michael 30:54
Yeah.

Jade 30:55
No, no really important, you know.

Michael 30:58
All right.

Michael 30:58
And the second question that I’ve got is if you could go back with the knowledge that you have now before you made your first home purchase, what do you wish you could tell yourself at that particular point based on what, you know, now before you bought your first home.

Jade 31:13
I know now that I would have a lot more than I currently have.

Jade 31:17
I would have, I would have been more aware that I was, I was in a position to be able to purchase and that my first time didn’t be with me to be the one that I was gonna be really entered my brain thought and my purchasing parameters, I guess.

Jade 31:37
And yeah, mine would be to be brave, start talking to people straight away and figure out where you’re at.

Jade 31:44
And what you need to be able to get in.

Jade 31:47
Because once you get that first one, the equity that’s in there and the growth that you’ll see it, it will now then take your and I think also as well, like when you say first homeowners, people tend to think that it’s all you young people.

Jade 32:01
We’re in our late thirties, early forties.

Jade 32:03
I think the people that I’m helping at the moment, which sometimes really can drive me up the wall.

Jade 32:09
They’re in their early twenties, 100%.

Jade 32:12
They are living at home with mom and dad still, they are getting that whole gift and they are buying and they are rent investing and they are the people that are buying these crazy little, not crazy pounds, but there’s still got to be growth and, and value there.

Jade 32:27
But you know, like they’re being brave, they’re thinking outside the box, they are building generational wealth for themselves by starting small with a new.

Michael 32:39
And being consistent and thinking of, of the long-term game I think.

Michael 32:42
And that’s sort of part of that strategy, the component that you’ve got to begin with and starting sooner I think is something that a lot of people will probably always say, I wish I did this earlier.

Michael 32:49
So that’s a great tip.

Michael 32:51
Yeah, I think, and that will resonate with a lot of people and, and I guess for the younger listeners, if you have that opportunity, find out what you can do and, and get a move on, I think because, long term, you definitely won’t regret it, especially if it’s property.

Michael 33:01
Well, thanks so much for your time today, Jade.

Michael 33:04
I really appreciate it.

Michael 33:05
If anyone wants to get in touch with you, either yourself or if they want to get in touch with the forgotten Women project.

Michael 33:10
How do they do that?

Jade 33:11
Idealbuyersagency.com.

Jade 33:14
I am always available and happy to have a chat as well.

Jade 33:17
You’ll find my phone number and email on there as well.

Jade 33:20
Don’t be afraid to pick up the phone and have a free no obligations chat.

Jade 33:25
I love talking property and all things property and I just can’t tell I’m, I’m always on for a chat and always happy to help out wherever as well.

Jade 33:35
I also have a special rate for first homeowners that I charge and obviously happy to offer a discount from anyone that’s heard from the home run today, a further 5% off my fee that’s there as well.

Jade 33:49
But I think at the moment I’ve literally just finished purchasing an apartment for a gorgeous young client.

Jade 33:55
She was literally having a pre-approval was gonna run out in three weeks was like you need to talk to Jade like you need to talk to her right now and she’d already bought the house actually.

Jade 34:09
And the building and pest inspector had gone through and said, don’t buy this.

Jade 34:14
It, it’s bad so she was in full freak out.

Jade 34:16
I guess.

Jade 34:17
My average turnaround time is about 21 days for purchasing and it’s because I’m a professional buyer.

Jade 34:22
It’s what I do every day.

Jade 34:24
You have a finger on the pulse.

Jade 34:26
And yeah, so I’m, as I say, happy to have a chat at Yeah, I think it’s a stupid question.

Jade 34:32
There are no stupid questions.

Jade 34:33
Only stupid be absolutely.

Michael 34:35
And I agree with that totally.

Michael 34:36
And we’ll have details of that information in our show notes too and details of that offer as well.

Michael 34:41
So that’s awesome.

Michael 34:42
And if anyone’s listening, I’d definitely encourage them to give Jade a call and take up that offer because that sounds fantastic.

Michael 34:48
So, but once again, thanks Jade for coming onto the show.

Michael 34:51
I appreciate all your insights and your tips.

Jade 34:53
It’s been great having you on be a black up.

Michael 34:58
You’ve been listening to the home, run your guide for buying your first home in Australia.

Michael 35:02
This podcast was produced by Lendstreet.

Michael 35:04
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 35:10
We know applying for a loan can be overwhelming and complex.

Michael 35:13
So we help guide and support first home buyers through the process from start to finish to find out more.

Michael 35:18
Head to our website Lendstreet.com.au.

Michael 35:21
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 35:26
Be sure to subscribe to or follow the show in your podcast app.

Michael 35:30
And while you’re there, please leave us a five-star review.

Michael 35:33
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Michael 35:36
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post The key to buying your first property is a strong team appeared first on The Home Run.

Show Notes

Fletcher Austin is a first-time home buyer. Not long ago, Fletcher was in the same position as you: preparing to buy his first home. In late 2020, he purchased a block of land in Darwin, NT and built his house.

In this episode, Fletcher will explain why he chose to build his own home instead of buying a pre-existing home and the benefits of that choice. He’ll also get into the best reasons to live in a regional area and how he used timely government incentives to speed up his timeline.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:16
Hi and welcome to the home, run your guide to buying your first home in Australia on the show, I’ll walk you through the home-buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions.

Michael 0:28
You’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:34
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.

Michael 0:45
We’re doing something a little bit different today, we talked to a lot of experts in the property world, but in this episode, we’ll hear from somebody who has recently been in your position preparing to buy their first home.

Michael 0:57
Today.

Michael 0:58
We’re chatting with Fletcher.

Michael 0:59
Austin Fletcher bought his home in Darwin in late 2020 instead of buying a pre-existing home.

Michael 1:04
He brought a block of land and built his own.

Michael 1:07
In this episode, Fletcher will take you along his property journey.

Michael 1:11
He’ll explain the benefits of building your own home, how timely government incentives sped up his timeline, and why more people should consider living in regional areas.

Michael 1:21
Let’s jump in first and foremost.

Michael 1:26
Welcome to the show Fletcher.

Fletcher 1:27
Thank you for having me.

Michael 1:28
We appreciate you being on and I guess secondly, congratulations on buying your first home.

Michael 1:33
Yeah, and you’re here to share that story.

Michael 1:35
So let’s get into it.

Michael 1:36
When and where did you buy your home?

Fletcher 1:38
So, I purchased my first home and built my first home in Darwin in the northern territory in, I would say I started the build in late 2020 during the midst of COVID and finished it mid-2021.

Michael 1:54
What kind of property is it?

Fletcher 1:56
So, I have a semi-rural property.

Fletcher 1:59
It’s in the rural area, but it’s a I A what we you would say is an urban block.

Fletcher 2:04
It’s a smaller block of land, 980 square meters with a four-bedroom, two-bathroom house and a double garage.

Michael 2:12
And are you living in the property or is it, was it built as an investment property?

Fletcher 2:16
I built it for me to live in during COVID times and just because I love the territory so much.

Michael 2:22
And have you always been in the northern territory?

Michael 2:24
I mean, there’s an accent there, I sense.

Michael 2:26
So how did you end up in the northern territory?

Fletcher 2:28
I’m actually born and raised in the northern territory.

Fletcher 2:31
Born and raised in Darwin, spent little bits of time all over, but, Darwin has been home forever.

Michael 2:38
So that was an easy choice, I guess.

Michael 2:39
And when it came to figuring out where you were gonna set up, that’s where you’ve always been.

Fletcher 2:43
I think COVID definitely influenced me building or buying in Darwin just a security point of view with the world being in the midst of COVID and, you know, things opening and closing and relocating and jobs and things like that.

Fletcher 3:01
It was really around the security.

Fletcher 3:04
I had all my relationships here and connections to the territory, relocating or, or building somewhere else met the I didn’t have access potentially to it because, you know, even the check on progression of bills, if it was an investment home in another state, I could go and check on it and then not get home.

Fletcher 3:20
And apparently, I need to have a job in order to to fund these very expensive houses.

Michael 3:25
That’s a pretty important point.

Michael 3:27
So, awesomely for you, but this is, you know, you’re only 23 so you bought your house at 23.

Michael 3:32
It’s quite young.

Michael 3:32
How did you achieve it?

Michael 3:33
Was it something that you, I guess were systematic about from an earlier age or did it just happen by chance or, I mean, generally it doesn’t.

Michael 3:41
So, I would assume if that was, I’d be surprised if that was the case, but tell us about how you got to owning your own home at such a young age.

Fletcher 3:47
Yeah, it was actually sort of a little bit by chance and a little bit planned.

Fletcher 3:52
So, I had started to, I’ll say, settle down at the sprightly age of 20 you know, start putting away a little bit of money towards a deposit to buy an existing home.

Fletcher 4:04
And we, you know, slow a chip in a way at that had a little bit of a deposit there.

Fletcher 4:09
And then when COVID happened, there was a lot of government stimulus that became available from the northern territory government and from the commonwealth government for people, first-home owners that were looking to build, which meant that my deposit meant that I actually could afford to build.

Michael 4:26
And what advice did you get on this journey?

Michael 4:28
Like, did you have someone that you were able to at least guide you or, and if there was and who was it? And how did they advise or guide you?

Fletcher 4:32
Outside of my family and close friends that, you know, had purchased homes and stuff in the past, I went to a mortgage broker and just said, hey, what are my options?

Fletcher 4:44
What’s my borrowing capacity?

Fletcher 4:47
So, I can actually look because there’s no point in looking at a, you know, $3.9 million house when you can’t afford it.

Fletcher 4:52
One can dream.

Fletcher 4:53
But if you don’t even know what your budget is, it’s a bit hard to look.

Fletcher 4:57
So from there, they were able to sort of say what my capacity was.

Fletcher 5:01
And then when COVID came up and the stimulus packages became available, I said, well, these are available.

Fletcher 5:07
Am I eligible?

Fletcher 5:08
Does that change my situation?

Fletcher 5:11
And it did for the the positive.

Michael 5:13
So would it be fair to say that the beginning of it all?

Michael 5:16
You didn’t have an intention to buy a property but not what type of property it was?

Michael 5:19
The fact that you’ve gone to build a or to buy a house, you know, block of land and, and develop a house on it.

Michael 5:24
Was that the intention from the beginning or was it more when you conferred with the mortgage broker?

Michael 5:28
And they basically as part of the process advised you to your borrowing capacity, then subsidies came in due to COVID and then it did it make the house and land package, I guess a a more appealing one than say buying something existing or did you always have it in your mind that you were gonna find a block of land and build a house?

Fletcher 5:44
So it was actually just because of the limitations of the stimulus packages, they were definitely around boosting up the construction industry and making sure that we were able to maintain people and jobs.

Fletcher 5:55
So yeah, it was, it was just around the fact that, you know, like there was the northern territory government, one was a build bonus.

Fletcher 6:02
You laid your slab, then you got given money from them.

Fletcher 6:06
And then the same from the commonwealth government is they, it was around building to keep people in jobs as opposed to just everyone selling and buying.

Fletcher 6:14
So, I was originally just looking at buying an existing home.

Michael 6:17
And I think what’s key about that is the fact that you’ve basically pivoted the strategy to meet your needs in one way, but also to then avail the incentives that will assist you in getting something a little bit more than you otherwise would have and what you ended up with compared to what you might have ended up with if you didn’t take up those incentives.

Michael 6:33
So I think that’s that dynamic thinking and that dynamic way of approaching it, I think enables yourself and potentially other people that are in a similar situation to make the most of whatever it is that’s on offer at the time.

Fletcher 6:44
And that’s exactly it.

Fletcher 6:45
And the advice that I got from friends and family as well as you know, because of when I was looking to purchase and then ended up building was this is not necessarily my forever home.

Fletcher 6:56
This is a steppingstone to potentially something greater or, you know, down the line, being able to move and things like that.

Fletcher 7:03
So, I, I love the area that I’m in and it’s really turned out as a positive.

Fletcher 7:07
But there is also that opportunity that because I was dynamic that I can, this is where I started, and I could end up somewhere else.

Michael 7:14
Did you buy it all?

Michael 7:15
Is it house and land package or did you find the block of land and then find a builder after the fact?

Fletcher 7:19
Well, it was actually a little bit sneaky.

Fletcher 7:22
I was looking at a certain house that I really wanted through one builder and said I really want this house.

Fletcher 7:30
I really like it.

Fletcher 7:31
And then can you find the land to put it on?

Fletcher 7:34
We had a few developments.

Fletcher 7:36
I would call, you know, the urban developments, a lot smaller property sizes, they ended up being able to find me the larger block.

Fletcher 7:44
But due to their schedule for building, I kind of went well, I want to build my house sooner rather than later.

Fletcher 7:51
It also had to do with some of that funding being available from the government.

Fletcher 7:55
So, I found another builder that and then another beautiful house and I was able to contact the developer directly to source the land and then put the house on it.

Fletcher 8:06
So, it kind of worked out on health but no one, no one was too upset about it.

Michael 8:11
You found a property that you actually liked?

Michael 8:13
Was it on the market or was it in a displays area or where was that house?

Michael 8:17
And you contacted the builder and then you found the developer that way.

Michael 8:20
And then they found the block for you, did I get that right?

Fletcher 8:23
I was talking to the builder and they found the block because I said I would like a larger block if possible.

Fletcher 8:29
They found the block.

Fletcher 8:30
But due to their own scheduling, I wasn’t able to build in the time that I needed to.

Fletcher 8:36
So, it was open market.

Fletcher 8:37
They just found it for me.

Fletcher 8:39
So, then I was able to contact the developer that had the block for sale and then put the house that I’ve got on it now through a different builder on it. I guess.

Michael 8:46
I guess now having done that process, what do you see as the benefits of building your property?

Michael 8:50
And on top of that, did you make some special additions to the building that was built?

Fletcher 8:55
I think the biggest benefit to building and if people have the opportunity to build their own home is the fact that they can make small changes or have at least some influence on what the house might look like.

Fletcher 9:08
Like you, you’re choosing from a plan and you go, I really like this layout.

Fletcher 9:12
I don’t like this layout or the finishings and stuff like that.

Fletcher 9:15
So, for myself, the structure of my house, I, I went, oh, I really like symmetry.

Fletcher 9:20
I want these two rooms on this side of the house to be the same size.

Fletcher 9:24
And so, they moved the, what would have been two equal rooms together and made the smaller room, which is was on one side of the house to the other side of the house, which then ultimately made the master bedroom larger with that small change where I still ended up with the same amount of space, but it’s just worked in my favor.

Fletcher 9:42
Some of the other things is, you know, like I’m quite tall, I’m 6 ft four and I was able to be like, hey, I want my benches to be a little bit taller than normal.

Fletcher 9:52
It’s probably one of my biggest talking points in my house when people come over, like even the, the people that are a little bit shorter than me go.

Fletcher 9:59
Oh, it’s great because it’s at level.

Fletcher 10:01
But by doing that as well, it, it, it actually increased the amount of storage I have under my benches.

Michael 10:06
Yeah, I, I guess that that ability to make those little customizations can definitely be a benefit so that, you know, it’s a little bit more customised to you and your needs, you know, as opposed to just buying something that’s already built and you obviously can accept it as it is for most of the time or do renovations at that particular point.

Michael 10:21
So I can totally see that on the flip side, I’m sure that there were a couple of challenges that you faced during the build process.

Michael 10:28
Generally, it’s not all roses and perfume.

Michael 10:31
So what challenges did you face and how did you overcome them if you can pick a few out for us.

Fletcher 10:36
Some of the challenges for me was around the stipulations within the funding around when things had to be done, how the money was released was one of the biggest ones and just fighting seasonal changes.

Fletcher 10:50
So, in the northern territory where I am, we basically have two seasons.

Fletcher 10:54
We have the wet season; we have rain slots, and we have the dry season where it doesn’t rain at all.

Fletcher 10:58
And I started the process to build at the start of the wet season.

Fletcher 11:04
So, you know, allowing to dry and cure and you know, concreting and stuff like that.

Fletcher 11:10
Plus, you know, supply issues where the roads get flooded, like our main highways and, and things like that and just accessibility and also, you know, going into things like Christmas and New Year, I had limitations.

Fletcher 11:23
But for me, ultimately, the build is as much as I had ideas on extras I wanted or things I wanted to do.

Fletcher 11:31
I did have to, to pull myself back down to earth a couple of times and be like, look, you know what, that’s something I can do later.

Fletcher 11:37
Maybe we don’t need to do that and really went back to, well, what do I want if I had to live in this for the next two years and not do any renovations or upgrades or anything?

Fletcher 11:47
What do I really, really want?

Fletcher 11:48
And what do I not need right now?

Fletcher 11:52
And, yeah, so it was balancing out that as well.

Michael 11:57
And I guess if you were to go back now to the beginning of it all, would there be anything that you’d change in terms of, about that construction phase?

Michael 12:03
And that process would be there anything that you do different?

Fletcher 12:05
I definitely, well, I, I love every aspect of my house.

Fletcher 12:10
If it was one brick wider and one brick deeper and in my garage, one brick wider, one brick deeper and one brick taller, it’d be really, really ideal just people really misunderstand how big a brick actually is like, I’m like, well, that’s like, that’s a huge amount of space when you start to think about it during the construction phase is just, yeah, I was fortunate that I lived nearby as well at the time and was able to come and check on the property a lot.

Fletcher 12:38
So every couple of days I was able to do a drive-by.

Fletcher 12:41
So I was fairly well in contact with my builders the whole time.

Fletcher 12:44
So there’s not a whole lot to change.

Fletcher 12:46
I said to them, I hope I’m not annoying you, I’ll give you a ring every couple of weeks and just see if there’s anything that needs, you need help with, which is also something some builders appreciate.

Fletcher 12:56
You know, I was able to assist with, you know, instead of them spending a day or two clearing the lot.

Fletcher 13:01
I was like, oh, I can do that and I just did it myself so you can save bits of money and stuff like that.

Fletcher 13:06
And some builders are willing and some are, are not willing.

Michael 13:10
And again, not to go too far down the path there.

Michael 13:12
But it depends on the flexibility of the builder and perhaps, I don’t know, maybe like a appearances and things like that you’d need to be mindful of as well.

Michael 13:19
So, I mean, like, I know, so we’re, we’re Sydney based and I could imagine that if we were to try and propose that to a builder here, they might be like, well, hold on if something happens to you who’s gonna be liable and things like that.

Michael 13:29
So I guess things like that definitely have to be discussed and negotiated with the builder before it’s done.

Michael 13:34
But there are two things that you pointed out there along that your explanation which I wanted to, to highlight with was especially when you’re building, like figuring out what’s important because ultimately, when you’re building effectively, it’s like a blank canvas.

Michael 13:45
So you can really spend as much as you want to.

Michael 13:49
Obviously, the budget is really critical and important.

Michael 13:51
And so knowing what’s important and what you really want is something that someone would have to keep in mind when they’re building, I believe because, and that could be like with the cost of the finishes or the materials and the like, so and it can skyrocket super quickly and I’m sure you saw that happening as you were building.

Michael 14:08
And then that other point of that extra brick, I’d probably suggest that if you got that extra brick, you probably would still be saying the same thing perhaps.

Michael 14:16
Yeah.

Michael 14:16
So it’s kind of one of those things that and it comes back down to like, how much do you really want?

Michael 14:22
Obviously, it’s always gonna be nicer to be bigger and wider and all the like.

Michael 14:25
But at the end of the day when you’re building, you have to be content with the fact that that’s what is, and there’s always gonna be things that can be done better or can be done differently.

Michael 14:34
But ultimately, you know, as long as it’s fitting your needs, I think that’s the main thing there.

Michael 14:38
So, but again, two probably big points that will come about when, you know, if someone thinking about building their first home and those mindsets that will probably those things that will occur during the build you always feel at the end regardless of.

Michael 14:52
So you’ve mentioned as to why you’ve built in Darwin, obviously, and I guess from an Australian point of view, Darwin is seen as a regional area.

Michael 14:58
So other than that, why did you choose to settle in a regional area as opposed other than all the, the main facts of family and friends and connections there?

Michael 15:07
Would you consider other regions or was it always just gonna be Darwin?

Fletcher 15:11
I think Darwin is at the time.

Fletcher 15:13
Definitely was something that I considered, as I said earlier, secure, you know, all of those reasons which you just said, but like I had quite a good job, I had a secure job as well working for the government.

Fletcher 15:25
And, you know, COVID was such a turbulent time for so many people and so many people were moving around the likelihood of things happening and the potential for lockdowns or things like that in other states, if I was to build at the same time or, or relocate at that same time.

Fletcher 15:42
But for me, one of the biggest benefits of living where I am like I’m 25 30 kilometers from my work and it takes me 25 to 30 minutes to get to work and that’s in rush minute.

Fletcher 15:56
We don’t have rush hour here.

Fletcher 15:57
We have rush minute and that’s when everyone knocks off work and when everyone’s going to work for one minute, the traffic is a little bit denser.

Fletcher 16:03
It’s not a gridlock or anything.

Fletcher 16:05
So I think that was definitely one of the the starting points and an opportunity for me to just establish my career here.

Michael 16:12
What would you say are the benefits of living in a regional area?

Michael 16:14
You’ve mentioned one there with traffic and having a, a rush minute as opposed to a rush hour.

Michael 16:18
But what, what are the other benefits that you know, you recognise or associate with living in a regional area.

Fletcher 16:23
It’s the community like where I am where my house is having a little bit more space.

Fletcher 16:27
I’ve got two gorgeous pups.

Fletcher 16:29
I’ve really built the house for them.

Fletcher 16:31
My dog.

Fletcher 16:32
So I’ve got a, an Australian Red Kelpie who is a qualified search and rescue dog.

Fletcher 16:37
And then I’ve recently gotten a golden retriever who is being trained up to be a therapy dog.

Fletcher 16:43
So, you know, having those opportunities to have space for them and to give them a good life because I ended up with my Red Kelpie Zuko during COVID unexpectedly, I sort, sort of thought, you know, oh, in a couple of years I’ll get a dog and then someone says, oh, I’ve got this dog.

Fletcher 16:58
Do you want?

Fletcher 16:59
It’s a puppy.

Fletcher 16:59
It’s six weeks old and I went, oh, yes, I will have that.

Michael 17:03
Now, we’re towards the end of our conversation, but we wrap up with two questions.

Michael 17:07
Generally the first of those, what’s your number one tip for a first home buyer trying to get into the market?

Michael 17:12
Based on your experience?

Fletcher 17:14
I think the biggest piece of advice that I could give for first home owners trying to get in or first home buyers would be to really evaluate all of the expenses, looking at everything that you do spend your money on because you’d be surprised on how much little subscriptions to streaming services and stuff like that can sting you or, you know, like going out for coffee every morning by the end of the week, if you go every day and it’s $5 a day by the end of the fortnight, you know, you’re spending good coin there, which can go towards a deposit.

Fletcher 17:50
So it’s looking at that, that, that would probably be my biggest advice.

Michael 17:54
The second question is, is it, I guess a little bit based on a question that I asked earlier with regards to going back to the beginning of the construction phase, what you’d do differently.

Michael 18:02
But I guess if we were to take it back to the beginning of the whole process, what’s one thing you could have told yourself at the beginning of the whole process that would be knowledge for you then throughout that particular process.

Michael 18:13
So if you would go back and tell yourself something that, you know, now that you didn’t know, then what would it be?

Fletcher 18:17
I think it’s probably just to slow down and think a little bit more because ultimately, it can, by thinking through all of the steps logically opposed to rushing to answers and replying emails and stuff like that when I had to backpedal on things like, oh, I wanted everything under the sun.

Fletcher 18:35
It was time that was spent sourcing all of that quote and whatnot.

Fletcher 18:39
And then I went, oh, actually I can’t afford it.

Fletcher 18:41
Don’t worry.

Fletcher 18:42
So, just actually take it slow.

Fletcher 18:44
You don’t need to answer really quick.

Fletcher 18:46
You don’t need to rush into things.

Fletcher 18:47
You don’t need to reply within 35 seconds of an email coming in.

Fletcher 18:51
They’ll, they’ll get back to you when they can and you’ll get back to them when you can as the building stage.

Michael 18:57
And I guess that that comes with now the confidence of having done that the first time.

Michael 19:02
And so, yeah, that’s a really good point.

Michael 19:03
I reckon in terms of taking your time, not feeling rushed because you probably are gonna have and you did have external people putting pressure on you for one reason or another and knowing maybe then you would have rushed a little thing, you could sort of say, well, hold on.

Michael 19:16
What’s an extra 24 hours gonna be that allowed me to sit there and think about it and come back with, you know, with a decision that I will hopefully not regret later on.

Fletcher 19:23
Yeah, exactly Fletcher.

Michael 19:25
Thank you so much for your time and for your insights for first time buyers.

Michael 19:28
I think it’s great and I think there’s a lot of gold there for our listeners to go through and understand.

Michael 19:32
So thank you so much for joining us on the show.

Michael 19:34
I hope you had a great time.

Fletcher 19:35
Yeah.

Fletcher 19:35
Thank you for that, Michael.

Fletcher 19:36
Have a good one.

Michael 19:39
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 19:43
This podcast was produced by Lendstreet. Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 19:52
We know applying for a loan can be overwhelming and complex so we help guide and support first-home buyers through the process from start to finish to find out more.

Michael 20:00
Head to our website Lendstreet.com.au.

Michael 20:03
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 20:08
Be sure to subscribe to or follow the show in your podcast app.

Michael 20:12
And while you’re there, please leave us a five-star review.

Michael 20:15
It really helps others find the show.

Michael 20:18
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post First home buyer story: How government incentives can get you into your new home faster appeared first on The Home Run.

Show Notes

To get you through the dog days of summer, we have more excellent advice from our property wizards!

In this episode, Molly Benjamin will talk through the power of mindset when buying property and building your wealth. Kent Lardner shares his feelings about the current fixation on the dollar value of property and how research shows we need to invest in more social housing. Dr Nicola Powell explains what she does as the Chief of Economics and Research at Domain and what trends she’s been seeing.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to the home run your guide to buying your first home in Australia on the show, I’ll walk you through the home buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions you’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.

Jack 0:45
Hey, there listeners.

Jack 0:46
My name’s Jack Trainer and I’m one of the producers here at the home run.

Jack 0:49
I’m just filling in for Michael today because with the New Year upon us, Michael and the team here at the home Run wanted to do something special for the next few episodes.

Jack 0:57
So welcome to our new year.

Jack 0:59
New Home series.

Jack 1:01
We’ve gathered the best tips and stories from the past year of episodes so you can refresh your memory while you gear up for the housing market in 2024.

Jack 1:09
So let’s get into it now to kick off part two of this series.

Jack 1:12
First, you’ll hear from Molly Benjamin, the founder of the Ladies Finance Club.

Jack 1:17
The LFC is an exclusive finance club that empowers women to take control of their financial futures.

Jack 1:23
When Michael and Molly caught up, they focused on some outside-the-box ideas that could help you save for your deposit.

Jack 1:29
And Michael started out by asking Molly all about mindset.

Molly 1:36
Your actions are your beliefs, your beliefs are your actions.

Molly 1:38
So if you really believe that you’re never gonna be able to buy a property, what’s your action?

Molly 1:43
You don’t take an action?

Molly 1:44
What happens?

Molly 1:45
The result is you have no property.

Molly 1:47
If you believe you can get on the property ladder, you start taking action.

Molly1:51
You go.

Molly 1:51
Ok.

Molly 1:51
Well, I’m just gonna chat to a mortgage broker and see.

Molly 1:54
Where am I currently at?

Molly 1:55
Where do I wanna get to?

Molly 1:57
Ok.

Molly 1:57
I’m gonna start looking around, I’m gonna look at what other options are there?

Molly 2:00
Oh, cool.

Molly 2:01
There’s some government schemes.

Molly 2:02
Ok, great.

Molly 2:02
I could rentvest.

Molly 2:04
Oh, great.

Molly 2:04
I could get my parents to be my guarantors.

Molly 2:06
You start taking action and I’m a big believer of mantras goal setting and actually changing the messages in your head to say no I will be a property owner.

Molly 2:16
I will get on the property ladder and actually believing it, I remember speaking to, a lady in London and she was in hr earning a pretty good wage and we walked past the house together and she’s like, I’ll never be able to afford a property.

Molly 2:30
And I was like, why is that?

Molly 2:32
And she’s like, oh, you know, I just don’t earn enough.

Molly 2:34
I’m like, how much do you earn?

Molly 2:35
And she told me, and I’m like, you earn plenty enough to get on the property ladder.

Molly 2:39
Maybe you can’t start with your dream house, like, you know, with the beautiful, you know, white fence and this, but you can definitely become a property owner and build your way up to that dream home.

Molly 2:51
So, yeah, there’s always a way if you want it.

Michael 2:53
Absolutely.

Michael 2:54
And it’s about finding it out and it’s that education because once and it’s something ideal with a lot is that people don’t know what’s possible because they don’t know what exists to make it possible.

Michael 3:02
So if you can outline the path for them, then it’s like, well, hold on now that I know what I need to do.

Michael 3:07
Do you still want to do it?

Michael 3:08
I guess at the first instance and if that’s generally yes, then, well, let’s start on that path.

Michael 3:12
So, totally, see, how, you know, outlying that journey can at least make it more empowering for the individual to then go on that journey and realise their ultimate dreams.

Molly 3:20
Yes.

Molly 3:21
And it’s so funny, I think when people make that decision and then you see this belief that they, they’re like, oh, my gosh, I’m gonna buy a property and then all of a sudden they’re a bit of a financial hot mess.

Molly 3:30
And then it’s like, overnight they’ve like, got their tax sorted, they’ve got their pre-approval done.

Molly 3:35
They’re looking and it happens quickly.

Michael 3:37
It’s like tunnel vision effectively.

Michael 3:39
It’s like now that I, I’ve got that in place, I know that I can do it.

Michael 3:42
This is the strategy and then all of a sudden everything else falls into place.

Molly 3:45
And I think that’s where mortgage brokers play a big role in that education part as well.

Molly 3:49
And I know a lot of the mortgage brokers we work with as well.

Molly 3:52
I think they just spend like 90% of the time just educating people on that process, which is why we’ve started running webinars on what is the process to buy?

Michael 3:59
So, for anyone on the journey to buying their first home, what, what are some of the ways that they can improve their mindsets?

Molly 4:05
So I think there’s a couple of things you can do the mantras or the affirmations like I am gonna be a property owner.

Molly 4:13
I know it sounds a bit woo woo, but like literally changing the messages you’re telling your brain and then challenging those messages when the negative messages come up, you’ll never be able to afford it.

Molly 4:25
You won’t be able to do this by yourself and actually challenging those and going, is that true?

Molly 4:29
Has there been any single people this year that have bought property?

Molly 4:33
Absolutely.

Molly 4:33
There have, you can totally do this.

Molly 4:35
So, really believing that again, I ain’t gonna sound weird to some of the people on the podcast but manifesting telling the universe that this is what you want and getting really clear and focused, talking to a mortgage broker.

Molly 4:46
I think that’s great for the mindset because it actually makes you go, ok?

Molly 4:50
I’m actually getting serious about this and I’m gonna, even if I’m not ready to buy right now, I’m gonna find out what I have to do and I’m gonna look at do I need to start doing some credit repair on my, credit score even writing a letter.

Molly 5:04
I don’t again, sounds weird writing a letter to yourself about when you bought the property.

Molly 5:08
So it’s such and such.

Molly 5:10
I bought the property.

Molly 5:11
This is how it makes me feel.

Molly 5:12
This is why I wanted to buy it and really thinking about why do you want to buy a home?

Molly 5:17
What is it in you?

Molly 5:18
Is it?

Molly 5:18
So you’ve got this security and comfort, is it?

Molly 5:21
So that’s something that’s yours and no one can take away from you.

Molly 5:25
Is it because you want to start a family? There might be numerous reasons.

Michael 5:28
I think recognising that why if you speak to buyers agents or you know, when it comes to purchasing, generally, the first question to ask is why do you want to buy?

Michael 5:37
And so being able to recognize what that y is can be very powerful.

Michael 5:40
But I think the things that you mentioned there were woo, I mean, perhaps maybe 10 years ago, perhaps people thought like that, but I think more and more that type of thinking and that type of being is really becoming more common and people are recognising that it’s totally OK to be like that.

Michael 5:52
And the changes that it can make are are immense and I feel.

Molly 5:55
I know the mindset is incredible when you really believe.

Michael 5:57
Totally on the same page with you with that.

Michael 6:00
And, and I think, you know, some of our listeners, if they’re thinking that it is I I I challenge them to give it a go because, and I think the key is doing it consistently.

Michael 6:06
You can’t do it for one day.

Michael 6:07
It’s just got to be something that you’ve got to ingrain in your process, right?

Molly 6:10
So, yeah, like if I look at my phone right now, I’ve got my vision board on my phone and it’s got the next property I wanna buy.

Molly 6:17
Like I look at that every day, I look at the 12345 different areas of my life that I’m visualizing at the moment and I see that every single day.

Michael 6:25
Yeah, No, I think that’s a great tip as well for people that are thinking about manifesting your reality, I think is very much something that’s a possibility and something that people should embrace as a concept and not think of it as being weird.

Michael 6:35
So hopefully we, if we can challenge one person to break down that mindset, I think we’ve done a good job here.

Michael 6:40
So, the other thing that you’re really big on is the importance of education and we’ve already touched on it a few times here.

Michael 6:45
But I want to understand why is it important for first-home buyers to educate themselves?

Molly6:50
Well, you don’t know what you don’t know.

Molly6:52
And when you educate yourself, you can save huge money.

Molly 6:56
Like even women who come along to our property sessions and they learn about mortgage brokers.

Molly 7:01
If they use the right mortgage broker, that’s gonna save them thousands and thousands of dollars than if they were to just walk into a random bank, you can go, hey, does my square profile fit your square cookie cutter?

Molly 7:13
And I think as well around insurances and cooling off periods, all that information, which we don’t know about it because why would we, we’ve never been taught it.

Molly 7:24
There’s no university subject.

Molly 7:26
We didn’t learn it at school.

Molly 7:28
Like unless you read about it or listen to podcasts like this, you don’t know about these different processes that can save you huge money in the long term.

Michael 7:35
And it can speed up the process as well as and that comes down to money as well, obviously.

Michael 7:39
But if you are unaware of something that can accelerate the time in which you can purchase, well, that’s a bit of a game changer too.

Molly 7:45
So like getting your pre-approval done.

Molly 7:47
Like some people go, oh, if I want to find a house, I start looking on real estate.com, I find a house I want.

Molly 7:54
It’s like, no, no, no, you get your pre-approval.

Molly 7:56
You’ll work out what your lending capacity is.

Molly 7:59
You’ve gotta get it in the right order which I know for many of our women.

Molly 8:03
Like again, why would we know?

Molly 8:04
We don’t know unless you’re speaking to someone and then again, if you’re speaking to the wrong people or you’re listening to your parents or friends of your parents and they didn’t know either, then yeah, you might not be getting the right information.

Jack 8:20
Next.

Jack 8:21
You’ll hear from Kent Lardner, the director of Suburb Trends.

Jack 8:24
Now, Suburb Trends is a property research firm trusted by some of the biggest names in Australian property.

Jack 8:29
During the chat.

Jack 8:30
Kent lamented how people have become a little too fixated on their property values and how he believes we need more social housing.

Jack 8:37
Michael asked Kent to share what he was seeing out there in the data.

Kent 8:43
Sometime in the nineties.

Kent 8:45
I think we all shifted our gaze to Gordon Gecko as our hero and we’ve all for the last 20 years we’ve all sat around the pub or the cafe bragging about how much our house price has gone up, you know, had good on us.

Kent 8:55
And for 30 or 40 years now we’ve neglected social public housing and we’re paying the price for that now and this will spill over.

Kent 9:03
It’s not an isolated cup.

Michael 9:05
Yeah.

Michael 9:06
And I, I’m sure there are some, some big takeaways.

Michael 9:08
And what would you see the biggest takeaway from this index now that we’re starting to monitor that you’re putting out now about the current states of rentals in Australia as a general observation.

Kent 9:14
I think the big take out is that the politicians, even though it may have taken 30 or 40 years to get here, a lot of the leaders now are focused on this.

Kent 9:25
So whether that be Chris Mins in New South Wales Anthony Albanese from a national perspective, this is a big focus now.

Kent 9:33
So supply is the issue, not some half-hearted rental cap.

Kent 9:39
You know, those rental caps are probably going to have the reverse of the intended effect.

Kent 9:44
And I think these politicians are calling that out.

Kent 9:47
They’re not playing cheap politics, they’re not playing short-termism, they’re actually recognizing that the only solution is supply-driven.

Kent 9:56
Rarely do I applaud politicians, but certainly they seem to be focused on the right thing now, but they’re carrying the can for 30 or 40 years of neglect.

Michael :05
Yeah.

Michael 10:05
And I guess that supply issue is definitely an issue and probably the conversation in its own right, because it’s got it’s it’s challenges.

Michael 10:12
But in Sydney, in particular, obviously, we’re seeing a steering away to some extent of that high-density type of housing and style of of a desirable asset class.

Michael 10:21
And where do you see that supply coming from in most of the capital cities?

Kent 10:25
The focus on New South Wales, for example, Chris Mins is highlighting that the infill is an important thing.

Kent 10:31
Density does need to go up.

Kent 10:33
So he’s looking at extra density, extra allowance for number of floors in return for an allocation of affordable housing.

Kent 10:43
So that’s a a trade that’s underway which is healthy.

Kent 10:47
Other things I’m seeing touted, are you a return to that medium-density town home come terrace home design?

Kent 10:56
So there’s a lot of common sense stuff coming out where they are calling out the limitations of the great urban sprawl.

Kent 11:05
And you know, in Sydney, we’ll pick on Sydney, you know, Sydney’s the basin and it’s kind of running out of space and pushing into flood plains as the last resort of a place where you know, places where you can build cheaply.

Kent 11:17
It makes no sense.

Kent 11:18
You’re not building cheaply, you’re just effectively kicking the can down the road until it floods and then when it floods, you can’t get insurance and none of us will get insurance and certainly you’ll pay the price long-term global warming.

Kent 11:30
I don’t, you know, climate change it doesn’t matter who you attribute the cause to or what you attribute the cause to it’s happening, right?

Kent 11:37
So floods will be more frequent, more common, more severe and these areas that we’re building are wrong.

Kent 11:44
And so the politicians are calling that out correctly.

Michael 11:49
And it’s funny you mentioned going back to what we’ve done.

Michael 11:51
I mean, I if you look back in inner Sydney, in particular, there is a lot of terrace houses and there was a lot of, you know, and it’s almost like, well, we did it at one point.

Michael 11:58
So we kind of at that stage knew and we pivoted away and now perhaps it’s more coming back to that type of style of housing that we once had and true.

Kent 12:05
There’s a great story online that talks about the history of why they stopped doing it.

Kent 12:11
And the government of the time they were the places where there were slumps so effectively when there were, whether it be health-related issues, a disease being spread or crime or other things after the depression, they kind of blamed, well, it, it appeared that the, the local government in Sydney, they blamed terrace housing and they never got past it.

Kent 12:34
So the Planning minister that highlighted this at the time was Rob Stokes.

Kent 12:39
There’s a great story online about it that says what happened to the terrace and effectively, we never got back on track.

Kent 12:46
So they were effectively banned and it never climbed back again yet.

Kent 12:50
I think anyone who walks through a Newtown or a Paddington in Sydney loves the vibe of the place.

Michael 12:55
Now, it’s part of the charm of the suburb.

Kent 12:57
It’s part of the charm.

Kent 12:58
So why wouldn’t you do more than that?

Kent 13:00
I just read something from, I think his name’s Matt Endicott and it was just a post that came out locally in Newcastle this morning about an hour ago and highlighting this same point.

Kent 13:11
That’s why it was top of mind.

Kent 13:12
And he was saying we should be focusing on a number of these suburbs should be looking at that style of dwelling.

Kent 13:18
And it’s like hallelujah, because I’ve lived in a terrace before in Newtown and it was on 100 and 27 square meters.

Kent 13:26
So quite a bigger block, but a lot of them are on 70 or 80 square meters yet they feel quite private.

Kent 13:33
But because of the design, you’ve got your own little courtyard out the back and I think they’re a wonderful approach to medium density.

Michael 13:41
Yeah.

Michael 13:41
And it’s just funny.

Kent 13:41
I had that thought cos you’d mentioned it and I was like, well, yeah, we used to do it and what happened, we obviously stopped and, and that’s what happened and you know, a dis whether it be disease or, or you know, whatever it might have been, there was a government hand in stopping it and that effectively put an end to it and, and we never really caught up again,

Michael 13:59
And we’re seeing a lot of duplex, I guess, style of housing now that’s coming up and cropping up in the different subs.

Michael 14:03
And that’s not, I don’t think it’s gonna have the same impact that something like a terrace.

Kent 14:07
It doesn’t have the same impact.

Kent 14:08
You know, we went into all these new sites and these Greenfield sites and just started building 3, 4, 500 square meter lots and imagine if they could have been 75 80 100 square meter lots.

Michael :21
Wow.

Michael 14:21
Yeah.

Michael 14:22
No, no, it’s, it’s, you’re raising a lot of food for thought there.

Michael 14:25
And, and I guess that’s, that’s what politicians I’m assuming today are, are considering and.

Kent 14:30
They’re onto it. They are, they’re not ignoring it.

Kent 14:31
It’s just the problem is you can’t turn this problem around on a dime.

Michael 14:35
No, no cos you’ve got to appeal to the, to the consensus in the community.

Michael 14:39
And I think there is a sentiment in the community about this type of, you know, the dwelling and this high density, I guess type of living, which we, we as a community probably need to start to embrace as well.

Michael 14:49
So I guess that’s the challenge of the politicians.

Kent 14:51
Yeah, I mean, that’s what the city should be anyway.

Kent 14:54
You know, and there’s a lot of airspace above public transport and there has been a lot of nimbyism.

Kent 15:00
So if you talk to a lot of locals in and around these inner city locations, they don’t want high-rise nearby.

Kent 15:07
So that’s the trade-off, that’s the hard decision.

Jack 15:13
And finally to finish up this new year new home series.

Jack 15:16
Let’s go to Doctor Nicola Powell.

Jack 15:18
Nicola is the Chief of Research and Economics for Domain and she has to be one of the smartest people we’ve ever had on the show.

Jack 15:25
Nicola gets to see things from a higher level than you.

Jack 15:28
And I, so to start, Michael asked Nicola to explain what it is.

Jack 15:32
She actually does as the Chief of research and Economics Domain.

Nicola 15:39
So I lead our research and economics team.

Nicola 15:42
So that ultimately means we have the fabulous job of picking apart what’s going on in Australia’s property market, both at a macro level from Australia wide and we go all the way down to suburbs.

Nicola 15:52
So we do various different reports such as rent reports.

Nicola 15:56
So we do do rental markets, vacancy rates, we do other things like pricing.

Nicola 16:01
We do a first-home buyer report.

Nicola 16:03
We actually launched last year, a sustainability and property report and looking at how energy-efficient homes or more energy-efficient homes perform on the market in terms of, do they sell for more?

Nicola 16:14
Do they sell for quicker?

Nicola 16:15
So, yeah, we track obviously the the basic fundamentals of the property market such as auction clearance rates.

Nicola 16:21
I mean, that’s a sport in itself, isn’t it watching the the auction market days on market or anything to do with property stats.

Nicola 16:29
That’s what my team looks after.

Michael 16:31
Ok.

Michael 16:31
And so you get to look at things at a much higher level.

Michael 16:33
And I guess at a more level as well than most of us, I wanted to ask you about some of the trends that you see from your vantage point and what trends are affecting first-home buyers.

Michael 16:42
But in particular, right now.

Nicola 16:44
There are a few and one of the ones that occurred during the pandemic was this record price gap between houses and units.

Nicola 16:52
We started to see it narrow a little bit, but it appears to be widening again, that obviously impacts first home buyers in a couple of ways.

Nicola 16:59
Probably the first one is when they’re on the market and perhaps they purchase a unit is that upsizing that property leap from one property type to another has become harder.

Nicola 17:09
And that’s a consideration when someone’s looking to get into the market in terms of what type of home is their first time.

Nicola 17:14
But the flip side of that, you know, the fact that we have got such a wide gap.

Nicola 17:19
So it’s still very elevated in terms of the price gap and this is largely across most of our capital cities.

Nicola 17:24
It does mean that it either tells us two things about the market houses are overvalued or units are undervalued.

Nicola 17:30
And I think there is this perception of value that units offer first home buyers and the fact that they haven’t, if we capture that COVID price gain as well.

Nicola 17:39
The fact that units didn’t see as much growth during that period of time.

Nicola 17:43
And actually they didn’t pull back in price as much as house prices had.

Nicola 17:46
But I think that value is there in the unit sector relative to what we see in houses.

Nicola 17:52
But I think when you go to that second home and perhaps your family is expanding and you want to have a house, you want to have a garden that upsizing has become harder.

Michael 18:02
You also mentioned the first home buyer report.

Michael 18:05
What’s that about?

Michael 18:06
And what sort of metrics are you analyzing and interpreting there for first home buyers?

Michael 18:09
And what’s the latest in that sort of space that you’ve seen?

Nicola 18:12
So with domain, we’re actually really passionate about affordability and really helping first home buyers understand property market dynamics and understanding the journey they need to go in order to be able to purchase their first home.

Nicola 18:24
So we do an annual report which is called the first home buyer report.

Nicola 18:27
And there’s two main aspects to this report.

Nicola 18:29
Firstly, we look at and calculate how long does it take to save the recommended and I’ll say recommended 20% deposit.

Nicola 18:37
We know many people go with a much lower deposit than 20%.

Nicola 18:41
So we look at the journey time it takes to save for a couple.

Nicola 18:44
We focus it on that first home buyer age, which is the bracket between 25 and 34.

Nicola 18:50
So the average age of a first home buyer is in the early thirties.

Nicola 18:53
We also look at the change over the time.

Nicola 18:56
So have we seen the journey time it takes for an entry-level house or unit change over the past year change over the last five years?

Nicola 19:05
As you can imagine, the journey time it takes to save for a house in Sydney is the longest and this is an entry-level house.

Nicola 19:11
It takes six years and eight months to save for an entry house in Sydney.

Nicola 19:16
We have seen the journey time it takes to save for an entry house improve.

Nicola 19:21
And that’s because obviously the interest rate environment has changed.

Nicola 19:23
And what we do is we calculate savings rates and that compounded rate of saving obviously helped to speed up the time it takes to save the other part of the first home buyer report actually looks at the other side of the spectrum.

Nicola 19:36
Cos there’s always two sides to the affordability conversation.

Nicola 19:40
There’s I need to save X amount to have a deposit and gain access to the market.

Nicola 19:45
Then I need to be able to service an ongoing mortgage.

Nicola 19:49
And what is that cost of holding debt?

Nicola 19:52
What we also calculate is mortgage affordability.

Nicola 19:54
So what is the proportion or the percentage of income needed to cover the mortgage for an entry-priced house?

Nicola 20:01
And what’s been very interesting?

Nicola 20:03
So we do this report annually.

Nicola 20:05
So the last time we did this was early this year.

Nicola 20:08
So it was back in kind of February March time.

Nicola 20:10
What we saw was a change in the affordability conversation.

Nicola 20:15
Largely speaking, we’d seen the journey time it takes to save for an entry price, property decline.

Nicola 20:21
So decrease.

Nicola 20:22
So that’s good news for first home buyers.

Nicola 20:24
But the conversation had really changed and morphed into a mortgage affordability conversation.

Nicola 20:30
You know, this is totally your realm of expertise and we’ve seen that those interest rates have changed so dramatically over the last 12 months or so.

Nicola 20:40
When we look across the combined capital cities, the amount of income required to service a mortgage repayment on an entry-priced house surged to 41%.

Nicola 20:51
That’s increased from 29% in 2018.

Nicola 20:55
Now, 30% is more or less the benchmark and when you go over 30% you’re deemed in mortgage stress.

Nicola 21:04
So across the combined capital cities for an entry-priced house, it’s telling us that largely speaking, people in mortgage stress based upon that kind of aggregated data, but for units, it’s much better.

Nicola 21:15
It’s 27% to cover an entry-price unit across our combined capital cities.

Nicola 21:20
But again, it’s increased but not as dramatically as we’ve seen for houses.

Nicola 21:23
It’s gone from 23% in 2018, up to 27% of your income needed to cover a mortgage repayment financial unit.

Michael 21:33
You mentioned that savings has been decreasing in terms of the time and correct me if I’m wrong here.

Michael 21:38
But the time that it takes for the average first home buyer to save is decreasing in time, is that a result of any incentives that have been in place or you know, there’s a 5% low home deposit scheme?

Michael 21:49
Do you guys look at that as part of the reasons as to why that might be occurring?

Nicola 21:52
No.

Nicola 21:53
So we don’t take into account first home buyer incentives because obviously there are some people might not be eligible for those incentives.

Nicola 22:00
So we really look at almost like a base case scenario.

Nicola 22:03
This is a couple.

Nicola 22:04
So obviously, if you’re a single, your situation is, is much different, but you’re really right, there are lots of incentives and I think it’s really important to remind first-home buyers if I’m ever talking to a first-home buyer, whether it’s a colleague, you know, whether it’s someone I meet in the street or whether it’s a friend.

Nicola 22:20
My advice is always the same when you begin your journey of looking for a home, make sure that you are aware of the types of incentives that are currently in the market.

Nicola 22:28
They change.

Nicola 22:29
New South Wales is a really great example where they had that choice on stamp duty or property tax earlier in the year.

Nicola 22:35
And then, you know, it was canned very, very quickly.

Nicola 22:39
So things change.

Nicola 22:40
And I think it’s important to be across, you know, get some advice from professionals that really like yourself that specialise in this space to help understand what are those either cash incentives or low deposit schemes that I can get access to?

Nicola 22:55
Because as you said, like that low deposit scheme which there are 35,000 places is available this financial year, you can go with as little as a 5% deposit.

Nicola 23:06
What that does is it supercharges your access to market and you’re in the market sooner.

Nicola 23:11
So it’s a great incentive.

Nicola 23:14
But I also think it’s important to do the pros and cons because not everybody’s situation is the same and that’s why it’s always important to talk to the professionals that know what they’re doing.

Jack 23:27
So that’s it for today’s episode.

Jack 23:29
If you wanna listen to the full interview with any of today’s guests, you can find the links to those episodes in the show notes on behalf of Michael Nasser and the entire podcast team.

Jack 23:38
I’m Jack Traynor and thanks for listening to another year of the home run.

Michael 23:44
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 23:49
This podcast was produced by Lendstreet.

Michael23:51
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 23:57
We know applying for a loan can be overwhelming and complex so we help guide and support first-home buyers through the process from start to finish to find out more head to our website lendstreet.com.au.

Michael 24:08
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 24:13
Be sure to subscribe to or follow the show in your podcast app.

Michael 24:17
And while you’re there, please leave us a five-star review.

Michael 24:20
It really helps others find the show.

Michael 24:23
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post New Year, New Home: Bringing the lessons of 2023 into 2024 appeared first on The Home Run.

Show Notes

New year, new home?

To kick off the year, we’re bringing you a very special episode of The Home Run. We’ve rounded up some of the best tips we heard in 2023, to help you gear up for the property market in 2024.

In this episode, you’ll hear from some of our favourites. Jarrod McCabe from Wakelin Property Advisory breaks down the property ladder. Amy Lunardi shares her tips for what you should do first when you’ve decided to buy a new home. And Veronica Morgan drops by to talk about one of our favourite subjects: Auctions.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael0:17
Hi and welcome to the home run your guide to buying your first home in Australia on the show, I’ll walk you through the home buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions you’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.

Jack 0:45
Hey, there listeners.

Jack 0:46
My name’s Jack Trainer and I’m one of the producers here at the home run.

Jack 0:49
I’m just filling in for Michael today because with the New Year upon us, Michael and the team here at the home Run wanted to do something special for the next few episodes.

Jack 0:57
So welcome to our new year.

Jack 0:59
New Home series.

Jack 1:01
We’ve gathered the best tips and stories from the past year of episodes so you can refresh your memory while you gear up for the housing market in 2024.

Jack 1:09
So let’s get into it.

Jack 1:10
First up, you’ll hear from Veronica Morgan.

Jack 1:13
Now, Veronica is a heavyweight in the Australian property landscape.

Jack 1:16
She has a big media presence with two TV shows, multiple podcasts and in May.

Jack 1:21
Michael and Veronica caught up to talk all things auctions, which is one of Veronica’s specialities.

Jack 1:27
So Michael got things started by asking Veronica to share why auctions are a thing that she’s so passionate about.

Veronica 1:35
I find auctions fascinating and, and mainly because I, I find human behavior fascinating.

Veronica 1:41
So therefore, for me, auctions is bringing to a head a whole bunch of stuff because obviously I understand intimately the sales process and the purchasing process.

Veronica 1:52
So I’m sort of watching everything play out.

Veronica 1:53
So either I’m bidding for a client or I’m there as an observer.

Veronica 1:57
Either way, I’m reading things and seeing things that most people aren’t even noticing.

Veronica 2:02
And I just find it fascinating.

Michael 2:04
And what’s one of the biggest things you noticed?

Michael 2:06
I mean, there was just to be one real quick one to start it off with like what’s the biggest observation that you have when you’re at auctions?

Veronica 2:12
Yeah, my biggest observation at auction is really that people when they get there and they think they’re ready, they think they’re prepared.

Veronica 2:21
Some may even know that they’re not but those that think they are and they are so ill equipped and then it’s like under the pressure of an auction, you see what’s really going on.

Veronica 2:32
For example, quite often, I’ll see somebody, , you might have an alpha male there that’s being really confidently.

Veronica 2:38
And you’re thinking, wow, they’re good.

Veronica 2:39
They’ve got poker face, they’re really confident, they know what their limit is.

Veronica 2:43
They’ve done their due diligence.

Veronica 2:44
You know, you could read them in that way and think they know they are just formidable and then as soon as they hit their limit, they’ll give it away, they’ll absolutely give the game away.

Veronica 2:53
I’ll go.

Veronica 2:54
Right.

Veronica 2:54
They hit their limit.

Veronica 2:55
Now, it’s gonna be interesting to see whether they push themselves on their limit or not, whether they, you know what I mean?

Veronica 2:59
Like they just give all the signs away.

Veronica 3:00
So it’s just funny and I’ve seen this happen so often.

Veronica 3:03
That’s why I can talk about it.

Veronica 3:04
It’s not a rare occurrence that these people think they’re prepped and then it’s like, ok, gloves are off.

Veronica 3:10
Now, this is the real show.

Michael 3:12
And you can see it happen in front of your eyes and it seems to happen quite a bit by the sounds of it.

Veronica 3:15
Happens a lot, a lot.

Michael 3:19
The way that, you know, want to structure today’s chat is kind of before the auction day and some final thoughts.

Michael 3:23
So, I guess before the auction a lot of people, , would assume that being successful at auction is all about what happens on the day.

Michael 3:30
But in reality, the things that you do before the auction are probably just as important, if not more important.

Michael 3:34
So let’s go through the things that someone should do before auction day.

Michael 3:38
Can you walk me through?

Michael 3:39
What that prep work needs to look like if it’s an auction that you’re attending as a method of sale for a property?

Veronica3:45
Yeah, absolutely.

Veronica 3:46
And you’re spot on.

Veronica 3:47
I mean, a lot of people do they think, oh, it’s the person with the deepest pockets that wins the day or it’s the person who’s the most confident that wins the day.

Veronica 3:55
And I know people that go and get their mate or their cousin or their uncle or whatever to bid for them because they feel nervous and it’s like everybody’s nervous and some people when they’re nervous come out really bolshy as well.

Veronica 4:07
So it’s like everyone sort of, I guess reveals their nervousness in different ways, but being prepared is the best way to assuage those nerves.

Veronica 4:17
Right?

Veronica 4:18
And when I say being prepared, there’s so much that goes into that first and foremost, what most people think due diligence that they need to do on a property is just the tip of the iceberg.

Veronica 4:29
Most people think say it’s a house.

Veronica 4:31
They go, oh, I’ve had my building pest inspection done.

Veronica 4:33
I went to the mortgage broker and I got my pre-approval and I’ve had the contract looked at.

Veronica 4:37
Now, let me tell you, some people don’t even get the contract looked at.

Veronica 4:40
But anyway, that’s nuts.

Veronica 4:42
But those three things are nowhere near everything that needs to be done.

Michael 4:46
Well, I mean, you’d assume that that would be it.

Michael 4:48
Right.

Michael 4:49
So there’s more to that.

Veronica 4:50
Well, that’s it.

Veronica 4:51
People say I did all the due diligence and I went, tell me what did you do?

Veronica 4:54
And they go, oh, I had my contract reviewed.

Veronica 4:56
I had the building p and I went to the, and my mortgage broker and I went, oh, that’s good that you did that.

Veronica 5:00
So you can tick that one tiny box.

Veronica 5:02
What about what the neighbors are about to do?

Veronica 5:04
Could they build, could they block your view or your light or your privacy or whatever?

Veronica 5:08
Like what have you checked that?

Veronica 5:09
What do you mean?

Veronica 5:10
Well, it’s all discoverable.

Veronica 5:12
You know, it can be found out.

Veronica 5:14
What about if the house has been renovated?

Veronica 5:17
Have you checked whether it’s been approved?

Veronica 5:19
You know that the works that have been done have been approved?

Veronica 5:22
Have you looked into that?

Veronica 5:23
What about if you want to renovate?

Veronica 5:25
Have you looked into whether you can do what you think you’re gonna be able to do?

Veronica 5:28
Have you checked that out?

Veronica 5:30
And we haven’t even got to the price yet.

Veronica 5:32
This is the biggie.

Veronica 5:34
This is the thing where people set their limit in crazy ways and often they don’t properly understand what that property is worth.

Veronica 5:44
And there’s two things here, there’s two aspects to this.

Veronica 5:46
You gotta understand what it’s worth in the general marketplace and you gotta understand what it’s worth to you.

Veronica 5:51
And so what too many people do, they go to auction and they’re deciding what the property is worth based on what other people are doing.

Veronica 5:57
So it could be because of what the agents quoting or it could be what, because of what they see other buyers doing and they’re basing their decisions based on what those people are doing.

Veronica 6:06
And yet you take one second to think about this.

Veronica 6:08
What makes you think they know any more than you do?

Veronica 6:11
Like it probably done a little as prep work as you have, you know, and yet I see it all the time and I will ask people, I love talking to people after auction too if they bid particularly if they didn’t buy it and say, how did you arrive at your limit?

Veronica 6:24
Oh, well, I just added 10% to what the agent was guiding.

Veronica 6:26
And then I looked around and I saw other people were bidding, I thought must be worth it.

Michael 6:30
It’s sort of that like that social proof almost.

Michael 6:32
It’s like there’s no other logic than the fact that if they’re doing it well, then it must be the right thing to do.

Michael 6:36
So, let’s continue.

Veronica 6:37
Yeah.

Veronica 6:38
And you could argue.

Veronica 6:38
Oh, well, that’s what market value is, yes, you could argue that.

Veronica 6:41
But, you know, there are other times when I see people get locked into a competition and they pay way over because they got competitive and totally lost sight of what the property was worth.

Veronica 6:52
They were just focused on winning, you know, and so I think what people fail to do that probably the biggest thing.

Veronica 6:58
So yes, you got to do all that due diligence.

Veronica 6:59
Some of those things I just mentioned a few of them.

Veronica 7:02
If you don’t do that and you go to buy any property, you’re a nut, you know, you’re a total nut, especially at auction because there’s no cooling off, period.

Veronica 7:09
Right.

Veronica 7:10
You’re committed on the fall of the hammer if you’re the highest bidder over reserve, but to set your limit to work out exactly what you should pay for that property.

Veronica 7:18
Too many people go to auction and their limit is what they’d like to pay, what they’d feel good about paying.

Veronica 7:24
Not about they will pay under pressure if they have to.

Veronica 7:28
And the problem is by setting that beforehand, they, they obviously often don’t even just go down that path.

Veronica 7:32
But if they don’t set it beforehand, when they’re in the middle of the auction, when the pressure is on, they will make silly decisions, they’ll either pay too much or they’ll pull out too quickly and they’ll panic and they’ll stop bidding when they should continue to bid.

Veronica 7:47
But they don’t have the backup of that certainty around a, what it’s worth in the marketplace and b what it’s worth for them and it’s so important.

Michael 7:54
Yeah, something I sort of want to pick up on there is, is you mentioned a few times the pressure of the auction.

Michael 7:59
What does that look like?

Michael 8:00
But, I mean, I guess for you it’s different because you’re, I guess maybe you don’t feel the pressure because, yeah, it’s something you do so often.

Michael 8:05
But knowing say what a first home buyer might be going through or someone that is not used to going to auctions, how does that pressure manifest?

Veronica 8:13
It manifests a number of ways for starters you wanna win.

Veronica 8:17
There’s actually a, a behavioral bias called loss, aversion.

Veronica 8:21
The pain of losing or, or that fear of the pain of losing is greater than the anticipation of the pleasure you’ll get from winning.

Veronica 8:28
So that is running through your veins.

Veronica 8:31
When you’re at auction, you don’t wanna lose.

Veronica 8:33
You wanna win.

Veronica 8:34
Your rational mind is not really necessarily running the ship when you’ve got emotions running rampant like that.

Veronica 8:40
Right?

Veronica 8:41
And also that whole auction set up the way an auctioneer runs an auction is about pressure, they raise the hammer, they call it going once, going twice, going three times, even before it hits reserve.

Veronica 8:52
You know, all this is designed to basically get people acting and, and jumping in.

Veronica 8:57
I’ve seen people bidding against themselves when they’re the highest bidder because they’re so panicked.

Veronica 9:03
And also the fact is that if you take your family along, you’ve got a whole cast of thousands there supporting you and egging you on you feel the pressure of performance as well.

Veronica 9:12
So there, that’s just a handful of the pressures that you could be feeling during an auction.

Jack 9:20
Now, one of the most common things you hear people talk about is the property ladder.

Jack 9:24
But what is it?

Jack 9:25
How do you get on it?

Jack 9:26
And do they sell them at bunnings to answer all these questions?

Jack 9:30
And more, Michael was joined by Jared McCabe from Wakeland Property Advisory.

Jack 9:34
Michael got the ball rolling by asking Jared to explain what the property ladder actually is.

Jarrod 9:42
Yeah, we talk quite regularly about the property ladder and not having an expectation that you’re going to jump to the top rung on the first purchase.

Jarrod 9:49
It’s needs to be working your way up that ladder.

Jarrod 9:51
So starting on the bottom rung and that can be starting small and sometimes it might need, you need to purchase something that allows you to take steps up and build equity.

Jarrod 10:00
So it might be that looking at it from an investment lens rather than looking as though it’s just purely lifestyle and buying the first property that you see, that’s your dream home and it needs to have a all the bells and whistles in terms of fit out.

Jarrod 10:11
There might be other opportunities to buy something that perhaps needs a little bit of work.

Jarrod 10:14
It doesn’t need a full-blooded renovation, but it, there’s opportunities to add value in terms of improving the property as well and building equity through that, which then allows you to take steps up the ladder.

Jarrod 10:24
So you’ve built that equity up and you might then buy a slightly bigger property or a property in a location that’s more suitable to the next stage of life.

Jarrod 10:31
Not necessarily getting your ideal style, your ideal, and perhaps size upfront, but then allowing you to take steps up.

Jarrod 10:41
So then the next one is a little bit closer and the next one is a little bit closer.

Jarrod 10:44
Again.

Michael 10:45
One of the big things that the property will talk about is the property ladder.

Michael 10:48
I wanna break this down a little bit and the first important aspect of the property ladder is building equity.

Michael 10:53
Again, something that you’ve just mentioned the first home buyers who haven’t heard this term and don’t know what it means, what is equity.

Jarrod 10:59
So equity is the difference between the value of the property and the debt that you hold against it.

Jarrod 11:04
So if you owe have a property that’s worth $500,000 and you owe your mortgage against that is 400,000, then you’ve got a notional equity of about $100,000 in that property.

Jarrod 11:14
And so you want to try and build that and expand on that.

Jarrod 11:16
And there’s a numerous ways you can do that, you can pay down the debt, which will obviously, if you’ve got a property that holds its value, at least paying down the debt will continue to build your equity.

Jarrod 11:25
But obviously, the other way to do it is to increase the value of the property.

Jarrod 11:28
So if the market’s moving, then that helps.

Jarrod 11:30
But there’s obviously ways in which you can improve the value of a property.

Jarrod 11:33
And so sometimes first-time buyers can get caught up in buying something that’s got everything done and finished at purchase, which then limits the value increase to the only way that you can improve the equity.

Jarrod 11:45
Whereas if you buy something that perhaps needs a little bit of improvement doesn’t necessarily need to be a full-blooded renovation, but it can be paint carpet, window furnishings, adding Pergolas, perhaps if there’s an opportunity with some types of property to add car parking at the rear, there’s ways and means that you can add value to a property and that can help to build equity as well.

Michael 12:05
I’m assuming when you mentioned the example of the first home buyer that you’d help buy the apartment at the beginning of COVID, we’re referring to the equity, I imagine because when she bought it in 2020 it would have been worth X and now it’s worth Y and Y would be much higher than X because the market has shifted.

Michael 12:20
And is that what you were alluding to earlier?

Jarrod 12:21
That’s right.

Jarrod 12:22
And that’s been more about market movement at that stage than anything that she’s actually done to the property at this point in time.

Jarrod 12:27
But there certainly are opportunities for her to be able to improve that property as well down the track, which will further increase the equity over time.

Michael 12:35
Jarrod, you’ve mentioned about this concept of growing equity.

Michael 12:38
Can you explain that in an example perhaps?

Jarrod 12:41
Yeah, sure.

Jarrod 12:42
In terms of building equity in a property, if we look at say a property purchase of around say $500,000 and we’ve had to borrow $400,000 to be able to purchase that property.

Jarrod 12:52
We can build equity in a number of ways in doing that.

Jarrod 12:54
Now, the first one might be that we pay down $100,000 over a couple of years if we’ve good saver and we will perhaps have a bit of a windfall and are able to knock a bit off the debt.

Jarrod 13:03
So that pulls us back to only $300,000 of debt.

Jarrod 13:06
And perhaps we’ve managed to have some growth in the market over that two-year period as well.

Jarrod 13:10
So perhaps the property’s generally increased in value up to say $550,000.

Jarrod 13:15
But we’ve also carried out a bit of work ourselves and been able to increase the value of the property further from that 550 up to say $700,000 because we’ve renovated the bathroom painted it throughout, perhaps done some landscaping.

Jarrod 13:29
And we know that the work that we’ve done has been really beneficial to that property.

Jarrod 13:34
So all of a sudden, we had $100,000 worth of equity at the start, we’ve paid down a bit.

Jarrod 13:39
We’ve increased the value.

Jarrod 13:40
Now, we’ve got $400,000 worth of equity.

Jarrod 13:42
We’ve gone from a debt of 300,000 versus a property that’s worth 700.

Jarrod 13:46
So we’ve now got $400,000 worth of equity, which is how you can then build your process.

Jarrod 13:51
But you can also then take that $400,000.

Jarrod 13:54
And whether or not that means that you want to sell the property and take something higher up the ladder that meets your requirements because you could perhaps borrow a bit more.

Jarrod 14:04
You’re in a stronger financial position yourself.

Jarrod 14:06
You might be able to go out and buy a property that’s worth in excess of a million dollars.

Jarrod 14:10
But you might say, well, I would like to be able to retain this property because I’ve done my homework.

Jarrod 14:14
It would make a really good investment.

Jarrod 14:16
So perhaps I can’t get up over a million dollars, but I might be able to buy something at $900,000 because of the financial position that I’m in.

Jarrod 14:23
And so that’s how we build equity in a number of different ways.

Jarrod 14:26
But we also enable ourselves to take steps up like property ladder.

Michael 14:29
Yeah, the equity is the push that gets you up to the next level.

Jarrod 14:34
100% And that’s how you create wealth through property investment.

Jarrod 14:36
Is that equity?

Michael 14:37
And so now that we’ve defined equity, let’s talk about the property ladder.

Michael 14:40
What does it mean to get onto the property ladder?

Jarrod 14:42
It’s basically your first purchase takes you onto the property ladder.

Jarrod 14:46
Now, the issue that we sometimes have with first home buyers is that the expectation can be to be jumping onto the property ladder three or four rungs up as opposed to just stepping on to the first rung and then working your way up.

Jarrod 14:58
So that’s part of that discussion is what’s going to be the best opportunity for me to get onto that property ladder in the first instance.

Jarrod 15:04
But then how do I take steps up through my property journey and being able to understand that that’s what’s required and then how that can be done and achieved is really important.

15:15
And so it’s un to understand what’s going to build equity for you, what asset selection is going to help you build equity over an extended period of time so that you can step up year after year, you don’t have to buy a new property every year, but helping you to get to where you want to be, and that will change too.

Jarrod 15:30
I guess it’s not a matter of what you may think is your ideal property now, is probably not going to be your ideal property in 5, 10, 15, 20 years time.

Michael 15:41
Yeah.

Michael 15:41
As your circumstances change, obviously, your requirements will change as well.

Michael 15:44
So for people who are on the property ladder, it seems the ideal situation is that you buy a property, then you get another one and then you start to build this portfolio of properties, I guess in, in one way or another, is it always necessary to keep every property that you acquire or a crew over this journey?

Jarrod 15:59
Quite often hear people talk about keeping properties that they’ve purchased and that’s where I, I come back to that asset collection around.

Jarrod 16:05
What was the purpose of that purchase?

Jarrod 16:07
In the first instance?

Jarrod 16:08
Some people.

Jarrod 16:09
Yes, absolutely.

Jarrod 16:10
It’s a great thing to be able to do is to retain certain properties because that’s going to make a good investment going forward as well.

Jarrod 16:17
But for others, it may well be well, that property suited the purpose when I purchased it, but it’s not necessarily going to be the right type of property to retain as an investment property long-term.

Jarrod 16:28
And so it may well be a case of, I’ll step up the property ladder, I’ll sell that one that I’ve had.

Jarrod 16:33
And if I want to have an investment property, I need to go and buy something else that’s going to work well as an investment property.

Jarrod 16:40
So it’s something that needs to be.

Jarrod 16:42
And if possible, you should absolutely consider it.

Jarrod 16:44
And if you’ve got the financial capacity to be able to retain it and it’s the right type of property then.

Jarrod 16:49
Absolutely.

Jarrod 16:49
That’s a great thing to do, but it’s not a blanket rule of.

Jarrod 16:52
Yes.

Jarrod 16:52
Keep every single property that you purchase.

Jack 16:58
We love Amy Leonardi here at the home run and with good reason, she’s a superstar.

Jack 17:04
Amy runs her own buyer agency, Amy Lunardi property.

Jack 17:07
She hosts her own podcast and she’s just launched her own first home buyers.

Jack 17:11
Course, what can’t she do when Amy and Michael caught up, they discussed how to ensure you’re prepared to buy your first home.

Jack 17:18
So let’s go to Amy now.

Amy 17:21
Yeah.

Amy 17:22
So the first step is taking a step back actually and figuring out why you actually wanna buy, making sure that is coming from an internal place rather than external pressures, like feeling like this is just something that you have to do or your parents are telling you to do it or you see all of your friends buying, it doesn’t necessarily mean it’s the right option for you or the right time frame for you as well.

Amy 17:45
So figuring out your why and that will guide the entire rest of your strategy moving forward.

Amy 17:51
And then from there figuring out your when and that’s a combination of your personal situation.

Amy 17:56
So yes, maybe you’ve decided to buy a property.

Amy 17:59
But if you’re thinking about changing jobs or starting a business or traveling right now, might not be the best time for you and that’s in combination with then your finances.

Amy 18:10
So speaking to a mortgage broker and understanding what your capacity is and your limitations and then using those conversations to set some goals in place.

Amy 18:19
It’s all well and good to say, I wanna buy a property, I wanna spend 800 grand and buy this property in this location.

Amy 18:26
If that’s not achievable, then what’s the point when I say achievable?

Amy 18:31
That’s a combination of kind of three things which is, can you afford those mortgage repayments?

Amy 18:37
Can you service that loan?

Amy 18:40
Is the bank even gonna give you enough money and then how much deposit you need?

Amy 18:43
And can you save that up within the right timeframe?

Michael 18:46
We will talk about these steps relatively quickly.

Michael 18:48
But the reality of the length of time between steps can be a long one or it’s an indefinite one potentially.

Michael 18:54
And when you start obviously somewhere and then it’s like, well, hold on, I need to raise this much deposit and this is how much I’ve got.

Michael 19:00
So therefore you might have to do a subst step or it’s like, well, now we’ve got work to that particular strategy or even with your finances, we’ve mentioned about sort of, you know, that pre-approval and being able to borrow those amount of funds, it might be then trying to say, well, hold on.

Michael 19:13
I’m at this particular point, I need to earn this much to get the loan that I need.

Michael 19:17
So I need to work towards a pay rise and knowing what that may be.

Michael 19:20
I think.

Michael 19:20
So, mapping that out makes total sense.

Amy 19:22
And if you can’t, you’ve got to reassess.

Amy 19:25
So if the broker says, ok, well, you’ve got to either save this amount or be earning this amount and that’s not achievable for you, then that’s ok.

Amy 19:34
But you sit back and say, OK, what are my other options?

Amy 19:36
How can I get there or what can I change in the meantime?

Amy 19:39
Or what other, what other ways can I get there?

Amy 19:43
For example, considering first home government benefits.

Amy 19:47
So the first home guarantee which allows you to buy a property with as little as a 5% deposit and you don’t have to pay Linda mortgage insurance.

Amy 19:55
So a broker will be able to help you figure out these options.

Amy 19:58
That’s the great thing.

Amy 19:59
And in some cases help you apply for these things as well.

Michael 20:02
We’ve gone through those considerations.

Michael 20:04
We’ve figured out the why and the how and we’ve spoken to a broker and we’re working on that pre approval and we get the pre-approval.

Michael 20:11
So thumbs up, we’re good to go searching what happens at that particular point.

Michael 20:15
And how do you go about finding a place?

Amy 20:17
Yeah.

Amy 20:17
Well, I would say before you even get the pre approval, that’s the point in time where you need to be doing all of your research.

Amy 20:24
And I think that research is fun when it comes to property and when I use the word research, some people think, oh, that’s a lot of time and effort.

Amy 20:30
But it’s not like combing through graphs and data and statistics or anything.

Amy 20:36
It’s actually just first of all, spending time in the locations that you’re considering and checking out the public transport and the streetscapes and the amenities.

Amy 20:45
But then also using the sold section of real estate.com.au or domain spend hours and hours and hours in there.

Amy 20:52
That is all of the information that you actually need to understand what things are selling for in those locations you’re looking at and can you afford them?

Amy 21:02
And if not, if you can’t see anything that you like, you gotta change something.

Amy 21:06
So figuring out what you want and then importantly, making sure that you can afford it and that sold section will tell you that I’m making it sound easier than it is.

Amy 21:16
But the reality is, is the information is there at your fingertips rather than looking at things that are just for sale, that’s a small snapshot of things and the prices aren’t reflective of what they might necessarily go for.

Michael 21:28
I like the fact that you’re mentioning spend time in the location because you may think that you want to be there or for whatever reason, then you go and spend some time there and whether it’s I’d just say the general vibe of that suburb and see if that is really what you’re after, I think that’s a really massive point that perhaps not a lot of people think about.

Amy 21:45
Yeah, exactly.

Amy 21:46
And during that phase two, it can sometimes make you realise that what you think you want, you want something different.

Amy 21:52
And for example, sometimes I’ll have buyers tell me they have to be walking distance to a train station.

Amy 21:58
So that’s totally fine.

Amy 21:59
No problem.

Amy 22:00
But then once we stress, test it a little bit and they start looking at properties that are say a short drive to the station or they can get a bus in between, but their property itself is much bigger and better and more modern, et cetera.

Amy 22:10
And they realise, well, you know what, that’s probably not as important to me to be close to the station, actually value a bigger house more so that research process and starting to go to inspections and getting a feel for what your money buys, you can help you figure out your priorities that can change over time and that’s ok.

Michael 22:28
Yeah.

Michael 22:28
And I think that flexible mindset from the beginning in terms of what you’re planning to do and throughout the purchasing process potentially is something that you have to be mindful of.

Michael 22:38
And I guess it gets hard because when it comes to these types of purchases, we get quite emotional and so we can get caught up in a particular way of thinking or what we want and being mindful from the outset that I need to be flexible with.

Michael 22:49
This probably assists the process I would imagine.

Amy 22:51
Oh, absolutely.

Amy 22:52
And you are allowed to be emotional when it comes to buying property.

Amy 22:55
As long as that doesn’t override your rational thinking.

Amy 22:59
I think that emotion is important because this is your home that you’re going to live in.

Amy 23:04
If you aren’t emotional about it at all, then is it the right option for you?

Amy 23:08
Is it the right property for you?

Amy 23:10
But yeah, you always need to come back to say when you are approaching, how much you’re going to negotiate or bid at auction.

Amy 23:17
You know, working through the comparable sales analysis and figuring out what the market is doing and setting your limit that way, allowing emotion to come in a little bit, but then not overstretching yourself or paying a huge premium because you haven’t put the consideration into it and you get carried away and your emotions overrule that previous information.

Jack 23:41
So that’s it for today’s episode.

Jack 23:43
If you want to listen to the full interview with any of today’s guests, you can find the links to those episodes in the show notes on behalf of Michael Nasser and the entire podcast team.

Jack 23:52
I’m Jack Traynor and thanks for listening to another year of the home run.

Michael 23:58
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 24:02
This podcast was produced by Lendstreet.

Michael 24:04
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 24:10
We know applying for a loan can be overwhelming and complex.

Michael 24:13
So we help guide and support first home buyers through the process from start to finish to find out more.

Michael 24:19
Head to our website lendstreet.com.au.

Michael 24:22
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 24:27
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Michael 24:30
And while you’re there, please leave us a five-star review.

Michael 24:33
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Michael 24:36
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post New Year, New Home: How to land your first property in 2024 appeared first on The Home Run.

Show Notes

Julie Crockett is the Director of Australian Property Investment Solutions (API). When Julie realised her job as a teacher was leaving her with barely any superannuation, she changed careers and started investing in property. Now, Julie focuses on giving people the tools they need to build wealth by making strategic and well-informed investment property purchases.

In this episode, Julie explains what “rentvesting” is, the benefits of playing the long game in investment, and how to manage your expectations for your best shot at success. She also emphasises the importance of backing yourself to overcome analysis paralysis and start building your portfolio.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to the home, run your guide to buying your first home in Australia.

Michael 0:21
On the show, I’ll walk you through the home-buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions.

Michael 0:28
You’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.

Michael 0:45
Today, we’re chatting with Julie Crockett.

Michael 0:47
Julie is the director of Australian Property Investment Solutions.

Michael 0:51
Api Julie works with everyone from people entering the property market for the first time to experienced investors.

Michael 0:59
Her goal is to help them build wealth by making strategic and well-informed investment property purchases.

Michael 1:05
Julie changed careers when she realized that her job as a teacher was leaving her with barely any super.

Michael 1:11
Now, she’s a passionate advocate for women in property ensuring everyone has the information they need to achieve their property goals.

Michael 1:19
In this episode, Julie will explain what rent vesting is and what you need to know about it and how to manage your expectations for your best shot at success.

Michael 1:29
She’ll also share why it’s never too late to believe in yourself and start building your portfolio.

Michael 1:35
Let’s jump in Julie.

Michael 1:39
Welcome to the show.

Julie 1:41
Thank you, Michael.

Michael 1:43
To start off. Can you tell me a little bit more about your role at API?

Michael 1:45
And what is API and a little bit more about yourself as well?

Julie 1:48
API Solutions is Australian Property Investment Solutions.

Julie 1:52
And this is my company that I set up in 2010 to help investors to buy investment properties and to build their portfolios.

Julie 2:00
And my background is that I come from, I guess, humble beginnings.

Julie 2:05
I was a teacher in another life and worked full time as a teacher and received a superannuation statement in the mail quite a few years ago and I was quite devastated because I had less than $30,000 in super.

Julie 2:18
And I thought, wow, I’m gonna be a very poor old lady.

Julie 2:22
So rather than do that, I made a decision that I would straight away look at investing and what I could do to alleviate that whole pressure on the retirement phase.

Julie 2:34
That was sort of heading in my direction.

Julie 2:36
And yeah, basically I was helping a lot of people to buy investments.

Julie 2:40
I got really addicted to buying investment properties.

Julie 2:43
Back in 2002 when I started, it wasn’t tricky to get finance like it was really easy and I just kept using equity out of my properties and basically built my own portfolio, helped others and then turned it into a business

Michael 2:58
And you seem to be probably one of the smarter ones because I think a lot of people did that and then 2009 rolled around and that sort of changed the, the course of maybe that easy finance or I guess it just sort of paints the picture of how it is today in terms of the complexities that it does involve in that regard.

Michael 3:13
One thing that stood out to me is you’ve mentioned retirement at that point.

Michael 3:17
So you pretty early on had, had recognised property as a vehicle, I guess then for wealth creation, I, I imagine, and thinking about retirement, which was that purchase that you made?

Michael 3:27
Was that your first property purchase back then, or was it a second property purchase or when you, that, how did that go?

Michael 3:32
You got that Superstate?

Michael 3:33
And then did you, did you already own property at that stage?

Julie 3:36
Yeah, I had my own home.

Julie 3:38
So I was divorced, you know,, I had two kids and I thought I’ve got to really make sure that I’m covered here in terms of, of the future.

Julie 3:48
And I looked at a few different options.

Julie 3:50
You know, I did look at shares and I didn’t really understand them.

Julie 3:54
I did understand property and at the time I had my own home and I still had a mortgage on it and people were saying to me, oh, you’re a single woman and you’ve got two kids and you’ve already got a mortgage and what you’re gonna get another mortgage crazy.

Julie 4:09
And I went, well, I’ve got to do something.

Michael 4:11
Yeah.

Julie 4:15
And I’m the kind of person that, you know, I can listen to all of the whatevers, but I make up my own mind what’s gonna work best for me and that’s what I did and I’m glad I did.

Michael 4:21
Well in 2002, I there’s no, I mean, there’s no iPhones, that’s for sure.

Michael 4:26
Mobile phones obviously probably existed, but in terms of the amount of information that was available at your disposal at that point, definitely a brave decision with your life circumstances at that moment in time, even braver a decision.

Michael 4:38
So and obviously time will tell that it’s probably the right one, but I guess bringing it to make something relevant for our listeners, obviously thinking about that first home purchase with the foresight, perhaps of what you can bring to today’s episode, it’ll be like this is not just a home purchase, this is potentially a wealth generation project that you need to consider and we’ll talk today about reinvesting in particular and for that individual that’s looking at buying the first home to be an investment property or even a second home as an investment.

Michael 5:05
This is obviously gonna be an episode that you’re gonna wanna listen to and break down some concepts, rent vesting.

Michael 5:10
So let’s talk about rent vesting.

Michael 5:12
So can you break it down?

Michael 5:13
What are the bare essentials and what is it?

Michael 5:15
How does it work?

Michael 5:15
And how do you understand it?

Julie 5:17
I think it’s a, it’s a really cool vehicle to get into property.

Julie 5:21
So rent vesting is renting where you need to live and then buying a conservatively priced investment property that is going to get you into the market.

Julie 5:34
Now, people who live on the east coast of Australia, they’re very well understanding that property prices are just huge and to be able to afford to buy an investment property in inner city Brisbane these days, very costly Sydney, huge money Melbourne.

Julie 5:52
Likewise.

Julie 5:53
And so what we’re seeing is, you know, a lot of those conservatively priced properties are in other states and people get a bit scared at that point.

Julie 6:02
They go, oh, if I’m going to rent this, then realistically if I can borrow, you know, five or 600,000, then what will I do?

Julie 6:09
And at that point they get stuck and they go, oh, maybe I just keep trying to save and I’ll hopefully in the future get something better in somewhere that I’m I know.

Julie 6:20
But really this is an education piece, you know, this is about how to actually get into the market at a really affordable price point with good cash flow that is going to then set you up for what you want to do in the future at the moment.

Julie 6:35
Trying to save your way to that is just use the word impossible.

Julie 6:39
And I don’t u regularly use that word, but it’s impossible to keep pace with the rate of the property market increasing as well as you trying to save.

Julie 6:49
So the other options are to, yeah, rent where you wanna live or where you need to live.

Julie 6:54
But look at what other options are available to you in terms of those affordable price point properties.

Julie 7:01
A lot of people who work with me, that’s how they get started in the property market.

Julie 7:05
They build up to three, several investment properties at a lower priced lower value price point and then they move into using equity from their properties.

Julie 7:17
Well, they’ve got options, then they can use equity from their properties and then get into their own home if that’s what they want to do or they can just keep taking advantage of all the tax benefits of being a property investor and just keep investing.

Julie 7:30
So at least when you make the start, you’ve got the options.

Michael 7:34
Yeah, and I guess getting a picture announced to how it works.

Michael 7:37
What would you say are the main benefits and you probably touched on a few there.

Michael 7:40
But I guess if we were to draw them out and highlight them, what would you say are the main benefits of doing this or going down this particular path?

Julie 7:47
Number one, it gets you in the market.

Julie 7:48
And I think that’s the most important number one factor because as we just said, trying to save your way to get some into some kind of property on the east coast is gonna be a long, long drawn out process.

Julie 8:00
In fact, the clients that have done this that have invested takes about the same amount of time to build up a property portfolio that’s big enough to then be able to use the equity to buy your own home as if it were to just say for the nine years or so that you’re going to have to get that big deposit for your own home.

Julie 8:19
End result is you’ve got a property portfolio and you may, well, if you’ve got a good accountant and you’ve got some good advice around this, you may well be able to get your own home as well as keep one or two of those properties.

Julie 8:31
So the benefits are fantastic in my opinion because I’m a, I’m a property addict and things don’t be me because I’ve gone and done them.

Julie 8:41
And I think that’s the other thing if you’ve never done it and you’ve got it all rolling around in your head and you don’t understand how it works.

Julie 8:50
Then.

Julie 8:50
Yep.

Julie 8:51
Listen to podcasts, get information, get education and understand how it could work for you because everybody’s different and the cons would be, you know, you’ve got to keep renting somewhere and most people now are really fed up and I really don’t blame you, with the rising cost of rent because in fact, I’ve just had 11 person that I’ve been, she bought her own apartment, her first home in Brisbane and she’s got a corporate job.

Julie 9:19
She’s been saving for a long time.

Julie 9:20
She’s managed to do that rather than rent there.

Julie 9:23
She said, you know what Julie, I’m just over getting the next notice that says rents increased by X amount of dollars and, you know, I can’t paint my wall and I can’t hang my pictures and I can’t do my own thing because it’s not my place.

Julie 9:39
And I get that too.

Julie 9:40
So that’s sort of the downside of, of renting.

Julie 9:43
But everything has a cost, Michael.

Michael 9:45
Yeah, there’s a benefit.

Michael 9:46
There is also a drawback potentially too.

Michael 9:48
And I guess, you know, something you’ve mentioned there is doing it, partnering perhaps with someone that knows what they’re doing, whether it’s listening through podcasts and learning that way or, or engaging in services that are currently in the market that allow you to get into this or to allow you to do this.

Michael 10:01
At least having that conversation reviewing what’s important to you, obviously, what are the benefits, what are the cons and then making that decision in a fashion that’s gonna enable you to make the right decision for you.

Michael 10:12
And then if that is to do it, the path has been walking before it’s, it’s been taken before.

Michael 10:16
It’s set about finding somebody that can guide you along that path.

Julie 10:19
Exactly.

Michael 10:20
So definitely one of the drawbacks that you’ve mentioned there is continuing to pay rent.

Michael 10:23
And I would imagine that another drawback is not getting into the market because that’s obviously the flip side of the benefit that you’d mentioned.

Michael 10:29
Are there any other drawbacks that you would see in this instance?

Julie 10:32
Well, the big one, the big elephant in the room is that, you know, if you were deciding that you would rather just stay put and save and keep renting and that’s fine.

Julie 10:46
But over the last 2.5 years, you probably have missed out on.

Julie 10:53
I mean, I’m just going by what my clients have made in property in the last couple of years, 203 $100,000.

Julie 11:00
So I see that as a, you know, something that you need to factor in, into your decision making, I guess a con to with rent vesting is, it’s a, it’s probably a little bit out of other people or some people’s comfort zones.

Julie 11:16
So it really does mean that we’re looking to look at other states to buy property So at the moment, Adelaide and Perth are probably really good markets.

Julie 11:26
Adelaide’s had a very hot run.

Julie 11:29
Perth is having a very hot run right now and it’s not about, I must say right here that it’s not about any old property because any old property is not necessarily one that you need to be investing in.

Julie 11:43
You’ve got to be really strategic about what you’re doing.

Julie 11:47
It’s like jumping in your car and thinking that you’ll go to this wonderful place and it’s sort of, you know, way out the back of Queensland somewhere and you’ve heard about it and it’s great, but you don’t have a road map, you don’t have a plan to get there.

Julie 12:04
You’re just gonna jump in your car and hit in what you think is the right direction.

Julie 12:08
That’s what a lot of people do with property investing and it just does my heading and then 56 years down the track they go, oh, I shouldn’t have bought that.

Julie 12:17
It wasn’t a good decision and then they’re stuck.

Michael 12:21
So, yeah, that’s the drawback that I probably would think of too is that you buy the wrong property or you, you’ve decided that you wanna do it and then you’ve perhaps gone the wrong way and then you don’t find out the following year or the year after it might not be until a couple of years down the track.

Michael 12:35
And in which case you’ve, you know, there’s an opportunity cost, you’re not in the right place.

Michael 12:39
And obviously, that’s where the experience and expertise and seeking that is vitally important.

Michael 12:43
And you mentioned, people can sometimes be scared about getting down this path because it’s probably not the most common path.

Michael 12:48
We, we grow up and we always think we’re gonna buy a house and you know, get married and all that sort of stuff.

Michael 12:53
And perhaps rent vesting was not something we considered initially, but that element of being scared and not knowing then may lead to something that you’ve referred to the past, which I’ve heard, which is procrastination and analysis, paralysis.

Michael 13:06
And that leads into everything that we’ve kind of just been mentioning now about the knowledge and how to do it and being afraid.

Michael 13:11
I’m assuming that’s a common hurdle that you have with your clients.

Michael 13:13
And how do you challenge that?

Michael 13:15
And how do you get over that with clients?

Julie 13:17
I just say to them, it’s all about making a decision and not making a decision is a decision.

Julie 13:25
And so therefore, if you are going to get stuck in the process, that may well cost you hundreds of thousands of dollars.

Julie 13:34
In fact, it has, I know for a fact it has for a number of people don’t dwell on that, make the decision to keep moving forward.

Julie 13:43
And if you get stuck, get more education, get come to a buyers agent who is able to, you know, we’re in that market all day every day we see what’s happening, we understand the market, we negotiate the skill set to be able to get exactly what is required is very high.

Julie 14:03
So in most cases, I think it’s about yes, making the decision.

Julie 14:08
If you can’t make the decision, then pay someone to make the decision for you with you in that communication loop.

Julie 14:16
Learn from these experienced professionals, how they do it, what they do.

Julie 14:22
I involve my client every step of the way when I’m working with them.

Julie 14:25
Because to me, it’s about empowering them so that they can go on and do more for themselves too.

Julie 14:32
I’m not about withholding information.

Julie 14:35
In fact, if anything, I’ll probably give them way too much.

Julie 14:38
But to me it’s about, you know, making sure that people don’t get stuck in that process and that they can move forward and then if they want to keep building a portfolio, that’s another skill set on top.

Julie 14:51
It’s not about just buying another property.

Julie 14:53
It’s about being strategic with what you’ve already got and how you’re going to build on that to keep building and you as a mortgage broker, Michael, you hold the keys to being able to make sure that the finance is right for people to continue to keep borrowing.

Julie 15:11
And I look at the cash flow, I look at, ok, we’ve got to get the cash flow right to be able to make sure that this person can keep borrowing money because they want to buy another property in the next year or so, how are we going to do that?

Julie 15:26
So, it’s every piece of the property puzzle needs a strategy around it to end up with a great outcome for every individual.

Julie 15:36
So if people think they can do that and they don’t have the skills, I think they might be able to sort of somehow magically find the unicorn way, but I haven’t found many people who can do it.

Michael 15:50
I don’t think that they exist.

Michael 15:52
I mean, I think unicorns, we can category say don’t exist.

Michael 15:55
So in that case, unicorn properties probably don’t exist as well.

Michael 15:58
I’d say one thing I’d written down, I take notes obviously as, as you were saying that I, I wrote the word strategy and, and that’s what it speaks.

Michael 16:04
I mean, in that case, you, you obviously have been able to identify with your clients a bit of a strategy long-term.

Michael 16:09
It’s not just this property.

Michael 16:10
What’s your long-term plan?

Michael 16:12
What’s your goal in your instance?

Michael 16:13
Obviously, it was the retirement element that got you going.

Michael 16:16
And I guess our, our would need to find, well, what is it that I’m seeking here to do?

Michael 16:19
Am I looking to build a portfolio?

Michael 16:21
And if it’s, if that’s the case, what’s my end goal?

Michael 16:24
I think if you start with the end in mind, then you can reverse engineer it and then figure out what needs to be done and it might show you the next steps a little bit easier.

Michael 16:31
And the way I see procrastination and analysis paralysis, I guess is, you know, that this is an important decision and that’s why you’re not taking it lightly.

Michael 16:38
However, you probably don’t have the confidence to take that first step.

Michael 16:41
And I would imagine with your clients, you probably, once they’ve got one or two, then there’s gonna be less procrastination, analysis and, and analysis paralysis because they’ve been down there.

Michael 16:50
They, they, it’s just that really that first one, perhaps there’s a little bit of confidence there.

Michael 16:53
So yeah, partnering with a professional in that regard, obviously is gonna enable you to people to go beyond that.

Julie 17:01
Over the time frame that you’re working with a client. It can be years and years building up portfolios and I had one come back to me yesterday.

Julie 17:05
Lovely lady.

Julie 17:06
They’re about to buy number six, but we set up number five property with a sub dividable block.

Julie 17:13
So her mind’s already thinking because I’ve actually educated her on what the possibilities are.

Julie 17:19
And she called me up.

Julie 17:20
She said, OK, now when you’re ready to do the next step, do we subdivide the block of land and sell it off?

Julie 17:29
Do we subdivide and build on it?

Julie 17:31
Maybe what we do is put a transportable granny flat at the back and get a second income on it.

Julie 17:38
Because I said to her, look at the moment building is tricky really hard and it’s gonna take a long time if you want something that’s instant, maybe consider, yeah, like a transportable granny provided council will allow.

Julie 17:51
Of course.

Julie 17:52
But that’s my point is that they get from procrastination to, oh, you know, they’re really involved in the process and they’re already thinking about what their next steps could be.

Julie 18:03
They run it past me and then if I can add more value to that, I don’t charge for that.

Julie 18:08
Like they’re my clients, I know they’re gonna come back.

Michael 18:10
Yeah, value added is part of the service.

Michael 18:12
And another word that I’m drawn to which you said earlier was empower.

Michael 18:16
It sounds like with this particular individual, you’ve, you’ve empowered them to be able to think outside the box that they probably originally thought in.

Michael 18:22
And now they’re thinking of different ways and they’re so invested because it has such a direct correlation to their, your financial wellness and well-being and the prosperity of them and their family and the financial health of, of all that.

Michael 18:33
So it’s only natural that they’re going to be so invested more than probably most other things that they’re doing.

Michael 18:38
And I love hearing those type of stories too because, you know, I mean, for me, life’s about opportunity ultimately and what you want to try and do is maximise the opportunities that are at your disposal at any given time.

Michael 18:47
And it sounds like in their case, they’ve got some opportunities and they’ve got some options.

Michael 18:51
That’s a really powerful place to be and for them.

Michael 18:53
So that’s, that’s awesome.

Michael 18:55
Something that I get hit with a lot when I speak to my clients is the concept of uncertainty and uncertainty exists obviously in all forms of life.

Michael 19:02
But in particular, with property, there isn’t so much uncertainty and there are so many dynamic factors at play, whether it’s, you know, the RBA cash rate, whether it’s the property market in general or whether it’s inflation or other factors.

Michael 19:13
How do you handle that?

Michael 19:14
And what do you say to your clients when they, you know, they approach you and say, well, what do we do with the uncertain leave the property market?

Michael 19:19
Like I don’t want to do anything or, or whatever that maybe.

Julie 19:20
Great question because life is uncertain, no matter what we do in life, there are gonna be things that will be thrown at us that are completely out of the blue.

Julie 19:30
And my thought on that and coming from a, like a single mother sort of perspective is, and one income is cash is everything.

Julie 19:39
So if you’re going to weather those horrible storms when they come, you’re best to be in a better position.

Julie 19:47
Cash flow wise than not is one of the things that I think about.

Julie 19:51
But also it’s the strategy piece that we’ve put in place in the first instance.

Julie 19:57
And then it’s, I go out of my way to tap into other professionals who could help them So there are things called tax variations.

Julie 20:06
You know, where if people are really heavily negatively geared, they can go to their accountant and ask about is a tax variation.

Julie 20:13
Something that I can put in place where instead of getting my tax refund at the end of the financial year, can I have it back into each pay period so that I can cash flow my portfolio?

Julie 20:24
And when I started investing in 2002, every savvy investor that I knew I didn’t know a lot of them.

Julie 20:30
But the everyone I talked to was saying, oh, we just build our entire portfolios on tax variations.

Julie 20:36
And I went, how cool is that?

Julie 20:39
So if you’re stuck and you’re really suffering at the moment.

Julie 20:44
As I know a lot of people are with their investment properties, don’t make selling your property your first option.

Julie 20:50
Please please ask questions, link with people who can help you to potentially find your way through if there’s no other way, if you’ve exhausted all avenues and then you think, OK, I need to sell, then sell.

Julie 21:07
But this is I run my property portfolio as a business when I speak to my clients and they’ve got property portfolios.

Julie 21:14
I tell them this is a business and if you’re in business and your business is going downhill with cash flow, you go to your account and you find out from whoever you can.

Julie 21:25
What can I do about this?

Julie 21:27
What’s gonna help me here and then you’re asking the right questions instead of panic, I don’t want you to panic.

Julie 21:33
I want, yeah, people just reaching out to professionals who can help them.

Michael 21:37
Yeah, I don’t think any good decisions are made in a state of panic and partnering.

Michael 21:40
Then obviously we’ve mentioned by as agents and how they can assist to some extent or to a lot of the extent.

Michael 21:45
Then yeah, you’ve got to look at your other professionals too that are very much part of that discussion when it comes to setting up these types of portfolios, accountants being one tax advisors and the like.

Michael 21:54
So yeah, that makes total sense.

Michael21:56
Something else I, I see or I experience to some extent is the concept of unrealistic expectations, especially when it comes to investment property outcomes.

Michael 22:05
We mentioned unicorn properties, I guess to some extent earlier on how do you deal with clients who have unrealistic expectations or demands for the investment property outcomes that they’re wanting to see or hoping to see?

Julie 22:16
I’m blessed to have 21 years of property investing under my belt and I’ve seen several cycles and this is a really unusual one we’re in at the moment property cycle, but it’s about providing clarity around what happens when you have an investment property.

Julie 22:34
And I agree, Michael that a lot of people have unrealistic expectations.

Julie 22:37
I’m gonna buy this property, it’s gonna be great.

Julie 22:40
I’m going to make a lot of money out of it and then people sell it.

Julie 22:45
Like anyway, that’s a whole other story, which I, I’m a fine whole girl.

Julie 22:49
I like to buy my property and hold on to it.

Julie 22:52
And you know, that’s where you see long-term wealth.

Julie 22:55
And if you want to see generational wealth in your family, you hold on to your properties, you buy well in the first instance and you hold on to them and I think that whole conversation around nothing stays the same.

Julie 23:08
So if we set this up, and if we have a strong strategy and I run through a strategy with all of my clients before I take them on board as clients.

Julie 23:17
And the strategy is, is quite in-depth.

Julie 23:20
It’s all online, but it’s quite an in-depth thinking strategy.

Julie 23:24
What happens if, what will you do when like there’s lots of questions like that to just provoke thought around.

Julie 23:33
Well, maybe that could happen and then what would I do?

Julie 23:36
And so that then helps to understand what can happen in property cycles and how you would then manage that yourself.

Michael 23:45
Comes back to knowledge, I guess and, and again, equipping yourself with that information and all that knowledge.

Michael 23:49
So you know how to handle it to the best.

Michael 23:51
And again, that’s where partnering with people that know what they’re doing will definitely assist as well.

Michael 23:56
Before we dive into our final questions, I wanted to ask you one thing recently, I’ve heard of statistics about women, retiring into poverty, you changed careers because you didn’t think you had enough super to retire on.

Michael 24:07
And you’ve written about women retiring into poverty.

Michael 24:09
How do you think this can be avoided?

Julie 24:12
As a society we’ve made this big shift and I can see it happening right now where we’ve had women who perhaps even, you know, my mother’s age, women in their late, you know, sixties, seventies, eighties who’ve been married all their lives, who were maybe, sometimes had a part time job, but they were the home bodies and they did a great job and there’s absolutely nothing wrong with that.

Julie 24:35
However, if divorce or the death of a spouse happens later in life and there’s not much in terms of superannuation or funds, we can then see women start to fall into that poverty cycle.

Julie 24:50
But even now I see it, the second wave happening, which is women who are becoming much more savvy with money and they’re understanding a lot better how to invest it and what to do with it, to grow their own wealth, which is great.

Julie 25:04
Then they partner up have a couple of kids and then sometimes 50% end in divorce.

Julie 25:11
And then that second wave of, oh, no.

Julie 25:13
What do I do now?

Julie 25:14
I’m now single.

Julie 25:15
I now have kids.

Julie 25:16
I now have to work.

Julie 25:18
I have to like, do all the things.

Julie 25:21
What do I do now?

Julie 25:22
And they’re the next wave of people that I see coming through that have halved their net worth overnight divorce halves.

Julie 25:30
It being sometimes worse than half, but let’s say it’s half and then they find themselves not being able to afford to buy in Sydney.

Julie 25:37
So a lot of those women are also moving into that rent festing model.

Julie 25:41
And it’s something to consider if you, if that’s your story to have a look at still retaining a property being in the property market to save yourself from a retirement in poverty.

Julie 25:55
So it’s like options, options, options.

Julie 25:59
What can I do now?

Julie 26:01
Ok.

Julie 26:01
It’s not my preferred option.

Julie 26:02
My preferred option would be, I want to live in the hills district with my kids where they go to school and, but I can’t afford that.

Julie 26:09
I just can’t afford to buy there.

Julie 26:11
So that message is as much for first-time homebuyers as it is for women to be in the market.

Julie 26:18
So that even if you’ve got, you know, one or two properties in different states when you hit 6570 or whenever you can’t work anymore, you’ve got assets, you’ve got something that you can draw upon that is going to keep you going in retirement.

Julie 26:35
So to do nothing to me, it’s not an option.

Julie 26:39
Or if you take that option, you may not find that it’s gonna lead you down a, you know, a path that you is gonna be satisfactory.

Julie 26:47
So at least be open to having those conversations with people and understanding what those options could be for you.

Michael 26:55
Yeah, something to be mindful of, I guess going into something like this, if this is the path that you’re gonna go down in terms of, you know, building up a property portfolio starting by rent investing is seeking legal advice about these circumstances and these situations and having, I guess agreements put in place, although it may not be something that we like to talk about.

Michael 27:12
It’s almost like insurance, like, you know, when you take on a mortgage and you’re purchasing your property, you obviously need to and you should review your insurance.

Michael 27:19
You know, your insurance is to make sure you’re adequately covered in the event of something negative happening in life, whether it’s a a disability perhaps or at worst case death and and what happens there.

Michael 27:28
But at the same time, something that statistically happens more than, than others is, is separation.

Michael 27:32
And so what’s happening to the portfolio in that instance?

Michael 27:35
And being smart about that when you start, I would imagine would also help at least the situation after the event when it occurs.

Michael 27:41
It’s already been to some extent planned or organised or we know what’s gonna happen.

Michael 27:45
And I think from what I’m hearing from your end, it’s as much as possible retain the asset because that’s the golden ticket in retirement.

Julie 27:51
Yeah.

Julie 27:51
And if you can’t then start to build your own and if you can’t build your own, get education around it and get help around it because your future is way more important.

Julie 28:00
I feel a bit sad in a way to be talking about it.

Julie 28:03
But again, it’s reality.

Julie 28:04
You know, it’s, it’s, there are great times in life and there are times where you’d rather not go there and being prepared for all of it.

Julie 28:12
And property is the thing, property is the thing that will provide you with those options.

Julie 28:18
Whether life is great and you stay married to that person forever.

Julie 28:22
Fantastic.

Julie 28:24
Or if anything else in between happens, you’re covered because property, you’ve got that asset there that is gonna help big time.

Michael 28:32
What’s the first step for women who haven’t previously had the opportunity to get onto the property ladder?

Michael 28:37
How would they start?

Julie 28:38
I think there’s a lot of groups out there that really help women in the finance space.

Julie 28:44
And I think understanding how you deal with money, first and foremost is really important.

Julie 28:49
If you’ve got a really good handle on money and you’re really good at being able to budget save, achieve your, your financial goals, then maybe not so important.

Julie 28:59
But you know, there are also property investment courses.

Julie 29:02
I run one for first time property investors and that is designed so that people can get the confidence to actually go out and buy their own property.

Michael 29:12
Yeah, exactly.

Michael 29:12
Well, and I was my next question was, what are the supports?

Michael 29:15
Are there that women can turn to you know, in this instance, and obviously you’ve mentioned your service and we’ll have details of that in our show notes too for any listener that wants to find out about that.

Michael 29:23
But are there any other types of support that women can turn to here in, in this instance, to better educate themselves?

Julie 29:28
Anything you can do like books, podcasts, you know, making sure that you’re tapping into a constant source of information and current information, people that you can trust.

Julie 29:40
That’s the hard part, Michael in this, in this space because there’s a lot of people as we know that are into project marketing and you know, they want to sell you something I think avoid those people because often they can sell you something that may or may not work for you.

Julie 29:57
Their focus is the sale when people work with a, a buyers agent and you pay a buyers agent fee, your buyers agent works for you and they have your best interests at heart.

Julie 30:08
They want you to do well and to come back and they want to help you build the portfolio.

Julie 30:14
So they’re vested in you.

Julie 30:16
I think just tapping into as much knowledge as you possibly can and then making the decision to move forward is the most powerful thing you can do.

Michael 30:24
And I think in, in comparison to 2002, when, when you started, I think there’s a lot more support structures and, and networks and groups that, that can assist as well.

Michael 30:32
So that, that’s great.

Michael 30:34
We always wrap up by asking two questions to our guests.

Michael 30:37
The first one is, what’s your number one tip for a first home buyer trying to get into the market today?

Julie 30:42
I’d say take full advantage of your situation.

Julie 30:45
So if you’ve moved back home with your parents or if you’re house sharing or you’re doing some other creative thing to save money, then take full advantage of it.

Julie 30:54
Obviously, knuckle down.

Julie 30:56
Save as much as you, like, throw everything at it to get that deposit together in as fast a, a time as possible.

Julie 31:04
That would be my number one tip.

Julie 31:06
If you can get a side job, do that too.

Julie 31:10
Like you’ve got time and people convince themselves they don’t, you actually do, just get on and look for something that you’d like to do that’s gonna earn you an extra income.

Julie 31:20
I’ve got clients who, I still can’t believe they’re beautiful people.

Julie 31:24
The lady was a, a single lady when I met her.

Julie 31:27
She did my course.

Julie 31:29
She used my service and bought her first investment property in Adelaide about 2.5 years ago.

Julie 31:34
She’s made a couple of $100,000 on that property.

Julie 31:37
She’s now met the love of her life.

Julie 31:40
They have got married, they’re living with her parents while they’re saving money.

Julie 31:44
I called them the other day about their, they’re wanting to do a, a next purchase because they can’t afford to buy their own home in Sydney.

Julie 31:51
So they’re going to use that rent investing model.

Julie 31:54
And what they were doing on a Saturday morning was cleaning houses.

Julie 31:59
So their side job is they work full time, both of them through the week and on weekends they clean houses and, yeah, and I went, you know what, good on them.

Julie 32:11
They are going to go a long way because they’ve got the focus.

Julie 32:15
They’ve got the strategy in mind and they’re putting dollars behind it to make it happen.

Julie 32:22
And they’ve already made the decision that yes, they’re up for number two property.

Julie 32:25
So I kind of go all the boxes are ticked

Michael 32:29
Yeah and you can see it.

Julie 32:30
Absolutely.

Julie 32:31
They will do very well in life.

Julie 32:33
They’ve got it together, always do your numbers and make sure that when you go to buy that property, I’ve got a cash flow calculator on my, on my website that people can go to, Juliecrockett.com.au just access that, run your numbers through.

Julie 32:47
Make sure that the property that you’re looking to purchase is not too negatively geared.

Julie 32:53
If you’re going to go out on your own and always have an emergency fund, always have that backup fund.

Julie 32:59
So that if things happen, you’ve got some cash there in an account that you can draw upon for emergencies only.

Michael 33:05
And just out of interest, what would you put that emergency fund at?

Michael 33:09
Do you have a value or a percentage as to how it should be worked out or is it just anything that you can say, just put in there?

Julie 33:15
I would say, set your own goal if you’ve already got a and I always say to my investors, six months worth of mortgage repayments.

Julie 33:25
Well, hot water service blows up or the toilet breaks or something else happens.

Julie 33:29
You know, you’ve got plenty of funds there to cover it.

Julie 33:32
It just makes sense, doesn’t it?

Julie 33:33
If people can do that?

Michael 33:35
And the final question is, what do you wish you knew before you bought your first home?

Michael 33:39
Knowing what, you know.

Julie 33:40
Now, back in 2002, I teamed up with,, a friend of mine who was another school teacher and we used to do our research together.

Julie 33:47
We, in term time we’d sort of have coffee and chat and look at where it was good to, to buy.

Julie 33:54
And then, in school holiday time we would jump on planes and we would go and look at these places and then got quite competitive at one point.

Julie 34:03
She would say, well, I like the look of this one.

Julie 34:05
Do you like it?

Julie 34:06
And I’d found it and I’d say, yeah.

Julie 34:08
And she’d say, well, if you don’t want it, I’ll buy it and I’d go, no, no, no, I’m buying it.

Julie 34:11
I’m like, oh, yeah, we used to have a lot of fun and we, we jumped on planes.

Julie 34:17
We went to places like Karratha.

Julie 34:20
I don’t put my clients in places like Karratha, but I bought there, I made a lot of money there back in 2005.

Julie 34:27
Wouldn’t go there now.

Julie 34:29
So I guess the thing I would, thing I would say is you can’t do enough research because that’s gonna get you further faster.

Julie 34:37
I wouldn’t have years in between buying properties.

Julie 34:41
That would be my tip.

Julie 34:42
I took three years to, from my first property to my second property.

Julie 34:46
And looking back, I thought, oh, you know, I’ve done it now, I’ve got my property and then after I bought the second one and I made a lot of money on that second one.

Julie 34:55
I then year on year, I just kept buying a property a year and in the middle of the GFC, I actually bought two properties because people were dumping really good properties back onto the market.

Julie 35:07
Fearful panic, didn’t understand the market and all the savvy investors were snapping them up going.

Julie 35:14
This is fantastic.

Julie 35:16
So, don’t leave too much time between purchasing if you want to build a portfolio.

Julie 35:22
Get the strategy right.

Julie 35:23
Get the finances right.

Julie 35:24
Make sure that everything’s working in your favor so that you can keep purchasing properties and then yeah, just do it.

Michael 35:30
I like it.

Michael 35:31
That’s a good way to end it.

Michael 35:32
Just do it.

Michael 35:33
That’s great.

Michael 35:34
Thank you so much for joining us on the show today.

Michael 35:36
Julie, if listeners want to get in touch with you, what’s the best way to find you?

Julie 35:39
Yeah, certainly.

Julie 35:40
Website JulieCrockett.com.au and as I said before, there’s a cash flow calculator on there, there’s information about my courses and yeah, basically, just love for people to be educated in the space if they’re not ready yet to buy, then let’s get the education piece started.

Michael 36:00
Thank you so much, Julie.

Michael 36:01
It was great.

Michael 36:02
A lot of insight stayed a little bit different.

Michael 36:03
I like that where you were focusing more on the big picture stuff here.

Michael 36:06
So I was looking, you know, taking it a step back and not the intricacies of what the purchase needs to look like, but more of that big picture like goal and objectives and I love talking about that.

Michael 36:16
So thank you so much for your time today.

Julie 36:17
Thank you so much for having me on as your guest.

Michael 36:23
You’ve been listening to the home, run your guide for buying your first home in Australia.

Michael 36:27
This podcast was produced by Lendstreet.

Michael 36:29
Lendstreet is a mortgage broker and home loan specialist that helps first home buyers find the right loan to meet their needs.

Michael 36:35
We know applying for a loan can be overwhelming and complex.

Michael 36:38
So we help guide and support first home buyers through the process from start to finish to find out more head to our website Lendstreet.com.au.

Michael 36:47
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 36:52
Be sure to subscribe to or follow the show in your podcast app.

Michael 36:55
And while you’re there, please leave us a five-star review.

Michael 36:58
It really helps others find the show.

Michael 37:01
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post What you need to know about rentvesting appeared first on The Home Run.

Show Notes

Jo Vadillo is the Director of Advocate Property Services and Property Women. She works as a Buyer’s Agent, Investment Strategist, and Property Coach to help everyone achieve their goal of owning property. She started her career buying, renovating, and selling houses and wants to help others do the same.

In this episode, Jo runs us through how renovations can add value to a property, some tips for speeding up the renovation process, and why it’s so important to educate yourself about property. She’ll also answer the big question: “Is house flipping worth it in Australia?”

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to the home, run your guide to buying your first home in Australia.

Michael 0:21
On the show, I’ll walk you through the home buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions.

Michael 0:28
You’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Len Street and I really love helping people buy their first home.

Michael 0:45
Today.

Michael 0:45
I’m chatting with Jo Badillo.

Michael 0:47
Jo is the director of Advocate Property Services where she works as an investment strategist buyers agent and property coach.

Michael 0:54
Her journey started when she attended a seminar hosted by property women which helped her find her passion in real estate.

Michael 1:02
Two decades later, she runs property women and is committed to providing no nonsense advice to anybody looking to get onto the property ladder and take control of their financial future for first home buyers.

Michael 1:14
Renovations are a fact of life in this episode, we’re getting the lowdown on Renaults.

Michael 1:20
Jo will share her advice for first home buyers who have a property that needs some TLC.

Michael 1:25
She’ll expand on the importance of educating herself about property and Jo will answer the big question is house flipping worth it in Australia.

Michael 1:33
Let’s jump in Jo.

Michael 1:37
Welcome to the show.

Jo 1:39
What a pleasure to be here.

Jo 1:40
I really appreciate it.

Jo 1:40
Michael.

Michael 1:41
Tell us a little bit about yourself.

Jo 1:43
I am a buyer’s agent and I have been in the industry now for just over 12 years.

Jo 1:49
So I was very much one of the first buyer’s agents in Australia and probably one of the first five females that were doing it.

Jo 1:55
And the first few years of running our business, people were asking me, what, what’s a buyer’s agent?

Jo 1:59
Why would you need help buying a property?

Jo 2:01
But you know, we use experts to help us sell our properties yet amateurs and first-time buyers and people who really have no idea how to navigate the market buy and sometimes make some sketchy or poor decisions because they’re coming from a place of just being new to the game really.

Jo 2:17
And I love property very much.

Jo 2:18
I’ve been investing now for over 20 years and for me to become a buyer’s agent was like a natural flow and almost an organic flow.

Jo 2:25
I was already doing the work pro bono for friends and family.

Michael 2:28
And how, how did you get into it?

Michael 2:29
Did you always have a passion for property or was it something that just happened naturally or were you looking for it in particular?

Jo 2:35
You know what I think it is.

Jo 2:36
It was when I first bought my, my first property looking at property, understanding the market, looking for how I can add value.

Jo 2:43
And then back then there was a few renovation shows on TV.

Jo 2:46
I think the block might have done its first run and things like that and, and then I was like, wow, like you can buy something ugly, make it pretty and then add extra zeros to the back end.

Jo 2:56
Like it’s to me, it was like an amazing malleable platform for to grow your wealth.

Jo 3:00
And I was working in corporate at the time, I didn’t love my job to make more money.

Jo 3:04
You have to work harder.

Jo 3:05
But property is just one of those things that, you know, you play your cards, right?

Jo 3:08
And you grow your wealth and capital growth does a lot of heavy lifting for you as well.

Michael 3:13
Yeah, I think the important there that you mentioned is play your cards, right?

Michael 3:16
And I think that’s where buyers agents come in in terms of the value that they can bring.

Michael 3:20
It’s assisting people that probably don’t know what they need.

Michael Michael 3:22
To be looking for, to be focusing on those specific items so that they are playing those cards, right, in terms of, something you’ve touched on there.

Michael 3:29
And I guess the theme that what we were gonna be talking about when it comes to renovations and, and the block is probably a good example of a program that a lot of people that are excited or thinking about purchasing their first time or getting into it and potentially creating wealth out of it as well.

Michael 3:42
They’ll look at were those programs the one that sort of put buy agents on the map because now they’re becoming more mainstream.

Jo 3:45
I think for the Australian market, I think maybe possibly that was the platform, you know, when they have the auctions and they’re like, who are these professionals in the room that are bidding on behalf of someone else?

Jo 3:56
So perhaps from a mainstream viewpoint, it did and it made it more of a household terminology and people understood the industry and, but in America, it’s my understanding that it’s been that’s, that is such a commonplace way of buying property.

Jo 4:09
However, I mean, they’re, they’re also charging something like 6% when they sell.

Jo 4:14
And I don’t think you pay your buyer’s agent over there, they actually get 50% of the agent’s commission.

Jo 4:19
So it’s a little bit of a different structure like it’s a fee for service in, in this stock market.

Jo 4:23
But you think about the outlay of you working with a buyer’s agent, they should be not only saving you their fees but saving you from buying lemons, buying properties that are gonna wind up costing you hundreds of thousands of dollars to realize there’s ad approval for a boarding house that’s gonna be built next door.

Jo 4:38
And there’s a lot of things that it’s my zone are genius but it’s not everybody’s, I’ve had clients of mine have been surgeons, that’s their expertise.

Michael 4:46
Yeah, time-poor in particular, as well as obviously the insights that you get by engaging a professional that does this day in day out.

Michael 4:53
And I always say to first home buyers when I’m speaking to them, when you’re going in and speaking to a real estate agent, they’re doing this day in day out, they’re selling properties, you know, week in week out and then you’re going in for the first time and it’s very much a David and Goliath kind of battle there.

Michael 5:06
And to think that you’re gonna go in there and be able to outsmart or to get the best out of the negotiation.

Michael 5:11
And this is only one factor of what a buyer’s agent could do.

Michael 5:14
It’s inevitable that it’s not balanced.

Michael 5:16
And so having a buyer’s agent onside definitely helps level that particular negotiation process as well.

Michael 5:22
One thing that you really sort of specialise in and focus on is the renovation aspect and I guess maybe helping manufacture some wealth for a lot of first-home buyers, their first purchase is not usually their dream home and it means that the properties that they buy will need renovation either at the beginning or some, at some point soon after they move in, you started your own property journey by renovating and selling houses.

Michael 5:42
Why might a property need renovating, in your opinion?

Jo 5:45
Oh, look, I mean, it could be just cosmetic and bringing it up to a standard.

Jo 5:49
That’s the way we live life today.

Jo 5:50
Like at old homes 100 years ago they didn’t have open floor plans.

Jo 5:54
So plumbing’s dated the powers a bit sketchy.

Jo 5:57
There’s a lot of reasons why you, you’d need to renovate a property.

Jo 5:59
And as you mentioned, the first home is often not the dream home for very few people actually do.

Jo 6:05
Now, that one, but when I look for a client for renovations, I take and I interview my clients quite forensically, I want to understand how much money they’ve got over and above because, you know, there’s obviously, you know, a cost that comes with doing renovations, their skill set, their stage of life.

Jo 6:21
You know, if they’ve got two young kids, it’s gonna renovation can be really tricky to do that when they’ve got, you know, depending on what their stage of life is.

Jo 6:28
If it’s an investment property, their proximity to the property.

Jo 6:32
So I take, bought a lot of these factors when we’re looking at renovations and what I try to look for Michael is properties that have got amazing, good bones, you know, like it’s a good structure.

Jo 6:41
They don’t have to do anything too much heavy lifting with the actual structure of the property because that can really take up a lot of your budget.

Jo 6:47
I like houses that, you know, if you just paint everything a certain color, like it’s a uniform color, you change out the, the light fittings and you change out the doorknobs and you can modernise the house very easily.

Jo 6:58
It’s a house that perhaps the facade like I, I’m in the process right now with a client who’s purchased and it’s a 1992 brown brick property in a coastal area.

Jo 7:07
So we’re talking to him about and he’s got quotes to paint the facade, paint the brick white and it’s $12,000 inside and out.

Jo 7:14
So it’s actually quite a good price for him.

Jo 7:16
But it’s going to lift the value of this property like just the curb appeal, phenomenally.

Jo 7:22
It’s an amazing value add for this particular investor.

Michael 7:25
Yeah.

Michael 7:26
What do people need to look for then?

Michael 7:28
And what would a first home buyer need to look for if they’re considering buying a property that needs renovating?

Michael 7:32
So obviously, in this instance, the mindset is we’re gonna try and buy something that we can pick up for a little bit better value.

Michael 7:38
Perhaps there is gonna be some renovations you’ve alluded to the fact that there’s probably different type of renovations that need to be done.

Michael 7:44
There’s obviously a budget and from what I gather, you wanna pick up a property that doesn’t require so much renovations, but doing those renovations like that paint job, inside and outside, which is gonna do a lot more than whatever it may be in terms of a lot more labor intensive or costly.

Michael 7:58
So when someone, a first home buyer is looking at a property, is there certain things they should be looking for or what are the things that they need to consider when they’re doing that inspection or checking the property out other than obviously using a service like yours, which is gonna help them massively.

Michael 8:10
If they’re doing it on their own, what sort of tips could we give them?

Jo 8:12
Yeah, I think have a look at the curb.

Jo 8:14
A pill, the property where it sits on the block.

Jo 8:16
Is it, is it a dark block?

Jo 8:17
Is it if it’s got beautiful natural light?

Jo 8:19
Is that something that you can open the property for?

Jo 8:21
If it’s an older house?

Jo 8:22
Sometimes that light isn’t great.

Jo 8:24
But, you know, it’s so easy to put skylights in as well when you’re looking, depending on what your budget is, perhaps the kitchen is 20 years old.

Jo 8:32
And if you were to just paint the facade of the cupboards for now and then once your budget builds up a little bit more, then you can come back at it with a, a really big gut and redo of the kitchen, kitchens and bathrooms will sell a property straight up like every, every day of the week.

Jo 8:46
But they are expensive to renovate.

Jo 8:48
They really are.

Jo 8:49
So, depending again, on your budget, I think if you can see that it could be lifted by paint, everything white.

Jo 8:55
I know that’s that sort of cliched rule of thumb.

Jo 8:57
But a neutral paint scheme inside, if it’s got dated carpet, you know what’s underneath the carpet, perhaps have a look at it hasn’t got floorboards that haven’t been taken into consideration.

Jo 9:07
It’s amazing when you start to peel back an older home.

Jo 9:10
It’s like, why would they have carpeted hardwood flooring?

Jo 9:12
I love high ceilings.

Jo 9:14
So, you know, if you buy a house with a really low ceiling, you can’t really do much with that, but you can really add a lot of value to properties when you take into consideration.

Jo 9:21
You know, if it’s an older home and it’s got a beautiful ceiling or you can, you can also, retrofit cornices and things like that.

Jo 9:28
So, you know, for a first home buyer really, it is its location always.

Jo 9:32
It’s the natural light of the property.

Jo 9:34
Are you encroached?

Jo 9:35
Because you’ve got a block of units next door, that’s something that’s never gonna change.

Jo 9:39
So you gotta take that into consideration and even just looking at the property from the exterior viewpoint, I’ve bought properties that have been in the same family for 60 years without so much as one tree on the entire land.

Jo 9:49
It’s like, you know, all this lost opportunity.

Jo 9:52
So people forget landscaping just makes such a big difference as well.

Jo 9:56
A lot of homes, they just got a flat backyard, no trees and one little hills like a hills hoist.

Jo 10:01
And there’s cement slabs that walk out to the, the clothes line.

Jo 10:05
It’s a little lax character, but that’s, to me is an opportunity that we, we need a barbecue area here.

Jo 10:10
We need to bring, you know, the inside, outside as well.

Jo 10:13
And that’s if it’s a small house, that’s an amazing way of opening up your living and your lability of being there.

Michael 10:19
And adding that value as well, I think, which is a critical part.

Michael 10:22
Yeah.

Michael 10:22
So let’s assume we’ve identified a property that has these potentials that you’ve mentioned.

Michael 10:27
What are the, some of the first steps to preparing to renovate?

Michael 10:30
I guess, like we’ve identified that we’ve got a property and let’s just say we’re lucky enough to purchase it or even not purchase it.

Michael 10:35
We’re very close to being serious contenders to purchase it, but we need to prep for the renaults.

Michael 10:39
What type of things should we be considering at that point?

Jo 10:42
How functional is the house as it is?

Jo 10:44
And again, how much budget have you got?

Jo 10:46
So some things you can live with for a long time, you can tolerate, you know, a 1935 vintage bathroom for a bit because they’re always made really well, but they’re dated, they’re poky and they’re not necessarily stylish.

Jo 10:58
If you’ve got the budget, you can do a lot of planning during that settlement period.

Jo 11:02
And here’s like a tip.

Jo 11:03
You know, when you negotiate on your property, obviously, your terms and conditions are just as important as the offer on the table.

Jo 11:10
And there’s been a number of times I haven’t been the top offer, but I’ve provided the best terms for the vendor’s needs and it surprises the agent as well.

Jo 11:19
So for example, if you’re buying a property off, an older couple, they’ve been there for 40 years, you know, it’s very emotionally harrowing for them to make this move.

Jo 11:26
They probably raised their family there.

Jo 11:28
You could negotiate a longer settlement offer them eight weeks, offer them 10 weeks, you know, whatever it might need to be to give them a longer settlement window.

Jo 11:35
And then during that settlement window, that’s when you can do a lot of planning.

Jo 11:38
And you can also put your special conditions in the contract requesting that you can come back through a couple of times to get some quotes so that if you know for a fact that you’re gonna have to replace the carpet, the minute you own the property and that therefore you are unable to move in until it’s done.

Jo 11:51
If you settle on the 20th of the month, the 21st, your team comes in, you’re off and running, you’re not, you don’t have the holding costs.

Jo 11:57
You’re not sitting there waiting around and twiddling your thumbs and paying rent while you’re still waiting for the work to be done.

Jo 12:02
So, you know, there’s a couple of easy strategies like that.

Jo 12:04
So if you can, when you can use that settlement window to do all your shopping and price check and marketplace.

Jo 12:10
And you know, there’s a lot you can do and get to really be familiar with looking at Pinterest.

Jo 12:15
And there’s so many other little renovation groups out there and ask questions like I’ve just bought this, how do I make the facade prettier?

Jo 12:22
I hate this front door.

Jo 12:24
What you know, so there’s a lot you can do and I think it’s about really becoming an expert in your own due diligence.

Michael 12:29
One point that I’ve taken out of what you just mentioned is identify what you can live with for a short period of time and needs to be changed from you, I guess a livability point of view for yourself.

Michael 12:38
And if there are some big ticket items and the budget isn’t allowing for it, then obviously just schedule it.

Michael 12:42
I mean to be done at a particular point in time after being able to categorize those sort of, you know, must haves nice to haves can assist in terms of that planning out and definitely making use of that settlement period to get in and get some quotes I think it is definitely something that’s gonna be able to assist buyers when they’re preparing and planning to renovate.

Jo 12:58
And can I just add with when you’re buying to a property to renovate it?

Jo 13:02
Because I have this conversation with some clients that they want to cut corners?

Jo 13:06
They’re like, are we gonna renovate it?

Jo 13:07
So we don’t need to do a pest and building report.

Jo 13:09
Please do a pest and building report.

Jo 13:10
I think it’s really, really important because when you can line up and be there at the same time, it’s done and you can say, look, I’m looking to buy this property.

Jo 13:18
I am a little bit concerned about this room or that part of the roof or I’m thinking of taking that window out and making it to the door, the person, the person, they’re an expert, they could say to you, look, I don’t think that’s gonna hold, I think you need to do Xy and Z.

Jo 13:30
So leverage off this opportunity while they’re out there and just be mindful of the property’s riddled with mold or it’s got really big damp issues that can sink a lot of money trying to rectify that problem.

Jo 13:41
So that’s something to be watching on.

Michael 13:42
What I’d probably add to that as well is you don’t necessarily have to let the agent know that you’re gonna be doing the innovations and if there is some issues on the building and pest, then you can use that I guess as a negotiation strategy with them not knowing that you need to.

Michael 13:54
And I’ve got an example where we had a client that we were helping out with the loan and they were intending to remove the patio and all that sort of stuff.

Michael 14:00
They did a building and pest and they found some issues with the patio, which effectively needed to mean it had to be replaced.

Michael 14:05
Now they were gonna replace it anyway, but they didn’t let the agent know that.

Michael 14:09
And they went in and said, listen, we’re gonna have to replace this and they’ve then used that as a negotiation strategy now, whether it’s e the 100% right ID, ID, it’s not for me to, to say yes or no, but they were able to then use to use that as a little bit of a negotiation tool that assisted them in getting a little bit off the purchase price that they were negotiating.

Michael 14:24
So I guess that maybe can be something that can be utilised as well, potentially a little bit different, I guess, but maybe some relevance there, potentially dealing with people that know and their experience with that will, will allow.

Michael 14:33
And this is where you men and you mentioned earlier where a buyers agent can actually save you money.

Michael 14:37
And they’re the sort of little tips and tricks that can be done that can assist you in that regard.

Michael 14:41
So you’re currently renovating your home with a full knockdown and rebuild, I believe.

Michael 14:45
How’s that process been for you?

Jo 14:46
I have like, I’ve been doing this for over 20 years in terms of an investor and the learning never stops, it never stops.

Jo 14:53
There’s no cookie cutter.

Jo 14:54
There’s a different phases and stages.

Jo 14:56
And this process of our knockdown rebuild in Sydney has been overlapping lockdown, delayed, then gone to council and the council has given me a flame zone rating and then I’ve had to fight that to and when I fought it and I won, I’d saved me $250,000.

Jo 15:13
So that would be quite worth fighting.

Jo 15:15
It’s been a, you know, one of the biggest things is an, an absolute exercise in patience and understanding the industry, the building industry is still recovering.

Jo 15:23
So whilst I understand the delays and all the rest, it, it can be very frustrating, you know, and it’s one of those things for me, it’s like it’s part of the journey, but I am also building a property in Brisbane at the moment as well.

Jo 15:36
An investment property, a dual key.

Michael 15:38
Ok.

Michael 15:38
And how is that managing a, a build when you’re not based in Brisbane?

Michael 15:42
Is that how’s that to manage?

Jo 15:43
Look, I know the builder really well and I, I actually did a property development.

Jo 15:47
I split the A block I already owned, it was 1000 square meters.

Jo 15:51
It’s got a relatively, actually, it needs renovation, the cottage at the front of the block and I split off 600 square meters at the rear and I’m building this three plus two.

Jo 15:59
So it means I’ve got two tenants under the one roof line, dual key.

Jo 16:02
And, and again, that one’s another one that’s been delayed.

Jo 16:06
It was meant to be finished, you know, a month ago, it’s gonna be finished in a month’s time.

Jo 16:10
And for people who are looking to buy property, you’ve got to really make sure you as you approach festive seasons and things like that.

Jo 16:17
I don’t want the, I want to make sure I’ve got a tenant on board.

Jo 16:19
So and I do this for my clients who are investors.

Jo 16:22
If we know when your settlements coming up, we want to start marketing for a tenant.

Jo 16:26
So again, minimising your holding costs and outlays unless you do want to renovate and quickly, you know, tart the property up a little bit more.

Jo 16:32
But that’s something that for me, I don’t want to run into a festive period or summer holidays or something like that without having tenants on board.

Jo 16:40
To me that I don’t like dead air.

Jo 16:41
I want it filled.

Michael 16:43
Yeah.

Michael 16:43
And, and I guess that that full knockdown rebuild is a pretty as you’ve alluded to epic adventure.

Michael 16:48
And the term I, I like to use a lot is every day is a school day.

Michael16:50
So it doesn’t matter, it doesn’t matter how, how, how many times or whatever it may be, every day is a school day and there’s always something to be learned.

Michael 16:56
So, but I guess that that in itself is a massive challenge and probably not something the first-time buyers are gonna be looking to do to begin with, but something that they might be doing and I guess a term that we see and hear a lot is and whether it’s through TV shows like the block and the like that we’ve already mentioned is this term house flipping where a person buys a cheap property, makes minor changes and then sells it for significantly more for a first home buyer.

Michael 17:17
Do you see this concept of house flipping as something that they should seriously consider?

Michael 17:22
Or would you steer people away from that for the first day? You know, as a first home buyer.

Jo 17:27
I’d steer people away from a, from a tax perspective as well.

Jo 17:28
Like the flipping formula is, and especially in a market that not necessarily showing in the immediate future, any, any epic size growth.

Jo 17:36
Unless you really know what you’re doing.

Jo 17:37
You’ve got a team on your hands probably experience because there’s a lot of costs.

Jo 17:41
You know, you do have stamp duty.

Jo 17:43
You’ve got capital gains tax, you’ve got your selling costs, you’ve got your renovation costs, the holding costs.

Jo 17:47
If you don’t time it correctly or do it well, or keep within your budget, you might actually find that you’re not gonna make money at all.

Jo 17:54
So if you go into that, have that exit strategy that perhaps I may need to hold it for longer than planned.

Jo 17:59
And also there is merit in holding a property for more than 12 months from a capital gains tax or minimising your capital gains tax as well.

Jo 18:06
And this is what I say to my clients.

Jo 18:07
I’m not an accountant.

Jo 18:08
I can’t give you financial advice, but you need to check in with your accountant.

Jo 18:11
Can you claim for this, this, this and if you sell then is there GST you know, there’s all these myriad of different things, you need to be checking, you know, making sure along the way that you’re not gonna and there’s land tax, you don’t know what you don’t know until you get a phone call from the ato sometimes.

Jo 18:26
But the flipping formula, what I did wasn’t so much the flip.

Jo 18:29
I actually added value to our property and then we withdrew equity from the property where we held most of the properties.

Jo 18:37
We’ve had to sell along the way because I was selling it to upgrade family home.

Jo 18:43
I was selling it to fund the property to property developments that I did.

Jo 18:46
So I was selling to make more money effectively.

Jo 18:50
But yeah, pulling that equity out of the property is how we build our portfolio.

Michael 18:53
Yeah, and that’s then getting into, I guess the complications or, or the intricacies of it as well.

Michael 18:57
But I guess it’s a concept too.

Michael 18:58
I’d be with you and, and house flipping is not probably something a first home buyer should be considering the majority of the growth that they’re hopefully gonna realise is gonna be in the capital growth over a period of time, time, which is a pretty steady and consistent concept, but is one that takes time.

Michael 19:10
I think the housekeeping concept is probably a dream for most.

Michael 19:14
But unless you know what you’re doing with experience and your first one, you generally don’t have the experience.

Michael 19:18
It’s probably not gonna be something that’s gonna end as well as you probably initially intended it to, you said in the past that you wanna help embolden people to stop playing the small game or a small game when it comes to property.

Michael 19:29
What does that mean?

Jo 19:30
Yeah, I think if it’s in the context of just to get started I think is that’s probably something I’m, I’m a big advocate for because the reasons people this is, I’m talking about my friends here.

Jo 19:41
So I’m gonna throw them in the, in the mix, throw, throw them under the bus.

Jo 19:45
Oh, I’m not gonna invest until I pay off my family home.

Jo 19:48
It’s like, ok, good luck with that.

Jo 19:50
What else is it?

Jo 19:50
Oh, I’m gonna wait till the youngest kid finishes high school.

Jo 19:53
You know, see people make these sort of really not smart business decisions.

Jo 19:58
It’s like that doesn’t make economic sense.

Jo 19:59
10 years ago, I could have bought a lot more with a million dollars than I can today.

Jo 20:03
It’s the whole idea and people get very fearful of leveraging off a bank’s money, but that’s a good debt to have and use it.

Jo 20:09
Like, don’t, I mean, for me, I’m not paying off my family home.

Jo 20:12
I’m pulling equity out of it and growing my portfolio.

Jo 20:15
That’s my end game.

Jo 20:16
I’m just, I’m always building and, and acquiring more properties because I mean, not only is my passion but it’s also, that’s how we decide to focus on our wealth creation as a family unit.

Jo 20:26
So don’t play a small game, get started, just don’t overanalyze things to the point where you actually don’t make a decision at all.

Jo 20:33
I’ve even had this from some of my female friends where they wanted to wait until they had a partner and one I didn’t ii I was dating dating.

Jo 20:41
It sounds so American dating my husband at the time.

Jo 20:44
I bought my first property, but I’m so happy.

Jo 20:47
And in retrospect that I did that for myself, just don’t play a small game.

Jo 20:51
Don’t wait for a, you know, a knight in shining armor to come along and, and help you.

Jo 20:55
You know, if you’re sitting there and you’re thinking and wondering, get on with it.

Michael 20:59
Yeah.

Michael 20:59
And I like that reference.

Michael 21:00
It’s, it’s about the end game and obviously, what’s, that’s clear to you in terms of what your end game is and then you’re able to play the game, I guess in the way that is helping you achieve your end game.

Michael 21:08
And it should be more focusing on the small game.

Michael 21:10
But the end game, that’s something that, that can you can do obviously.

Michael 21:13
And some people that can’t need to then seek maybe advice and some guidance as to how to do that because they, there is a way and it’s about finding people that can help you light that path effectively.

Michael 21:22
So in addition to running your business, you’re also the managing director of Property Women, but it was an important part of your property journey as well before that.

Michael 21:29
What is property women?

Michael 21:30
Can you explain that program and, and what that’s about?

Jo 21:33
Ok, so 2009, I had a baby, I think I might have been pregnant or I had just had a relatively newborn child and I love property, but none of my friends wanted to talk about it.

Jo 21:42
I just wanted to be in that space and I literally googled women in property or some sort of combination of words and long and behold in two days, this event was taking place in Sydney.

Jo 21:51
Ticket.

Jo 21:51
Prices were hugely expensive back in the day where, you know, people actually paid to sit and learn and I took a punt on myself, went into this space.

Jo 22:00
And I mean, honestly, it’s one of those things, it was like $900 or something like that at the time again.

Jo 22:05
It was a big ticket price for 2009.

Jo 22:07
It changed my life.

Jo 22:08
Like, I’ve made millions on the back of that education and who I met in the room that day, who are still friends of mine, the speakers.

Jo 22:15
I remember the accountant was coming up and I thought to myself, oh, this, this would be boring.

Jo 22:18
And it was eye-opening like, oh my gosh, there’s tax benefits.

Jo 22:21
And I didn’t understand how equity worked.

Jo 22:24
And it was just incredible like the, the information I took from that transformed my future.

Jo 22:29
And I stayed in contact with the group when I retrained and became a buyers agent.

Jo 22:33
They, they started to ask for me to speak at their events.

Jo 22:37
And 2015, the sole director remaining director in the group said, look, you know, I’m ready to, to move along.

Jo 22:43
And would you be interested in buying the business?

Jo 22:45
And absolutely was the answer.

Jo 22:48
It’s so it is an educational platform.

Jo 22:50
It’s obviously skewed to women.

Jo 22:51
We do have men in the group as well.

Jo 22:53
And a lot of women have got fantastic partners and, and that are very supportive of their journey as well, but it’s education, it’s connect, it’s like an interview.

Jo 23:00
You know, if you need to work with a professional, like who’s a good accountant, who’s a good solicitor.

Jo 23:04
I need a selling agent in Brisbane.

Jo 23:06
I need a selling agent in Adelaide.

Jo 23:07
I help people connect them with those right?

Jo 23:09
People that can then help them on their journey.

Jo 23:11
And we also have an online course that’s designed for first home buyers.

Jo 23:16
So it’s called the buyer’s advantage.

Jo 23:18
And that’s there because the people who really need a buyer’s agent support are first time buyers or first time investors.

Jo 23:25
And it is a considered expense and sometimes that’s going to erode budgets.

Jo 23:30
And so I’ve created this course as a platform and you get to speak to me, but it isn’t a open forum.

Jo 23:35
It’s not one on one, but it’s coaching services and we do provide that sort of one hour here at hoc.

Jo 23:41
You don’t have to have the full service of a buyer’s agent.

Jo 23:44
You want a buyer’s agent just to attend an auction or just do negotiations, we can do that for you.

Michael 23:49
And we’ll get some more details about that and we’ll have that information in the show notes too if anyone wants to check out the that particular program for first home buyers and, and sort of seek that assistance.

Michael 23:57
One thing I I I got from, you know, property women in terms of what it is, it, it seems to be a group of like minded people.

Michael 24:03
And when you put everyone where you guys can discuss or women can discuss the challenges and see things in a particular way and then, you know, meet certain people and I guess, advance that particular journey that you’re looking to embark on.

Michael 24:15
So and that can be quite powerful in terms of doors that it may open for you and people that you may meet and some of which you currently say that you are still friends with that you met in 2009.

Michael 24:23
So, I mean, other than the obvious, are there any other benefits of engaging in an educational program or a seminar for first home buyers that you’ve seen or you’ve witnessed firsthand?

Jo 24:31
Oh, I think it’s just mitigating risk and, and , and even with clients, it’s like they’ve told me how much money they’ve got.

Jo 24:37
And it’s like you’ve got a lot of money there.

Jo 24:39
You know, you could probably have enough for a deposit for two properties.

Jo 24:42
You know, go and go and speak to your broker and ask the question and get them to do the homework.

Jo 24:46
And then there are things that people want, but they throw all their money in one property.

Jo 24:50
But you could have two machines working for you for that end wealth outcome.

Jo 24:54
You know, it’s, there’s a lot with negotiations.

Jo 24:56
There’s a lot of tactics that you can use.

Jo 24:58
We provide scripts as well when you’re making an offer.

Jo 25:01
Often, I’ll say to my students to say when you make an offer and it has to be in writing, just make it nice.

Jo 25:07
You know, don’t like I’m only gonna offer this much because the pest and Bill report said the gutters are bad.

Jo 25:12
It’s like, no, no, no if you’re buying off an older couple, let’s just say I’ll use that as an example.

Jo 25:16
This is a tactic I did use and this is where I was the third in line in terms of highest number.

Jo 25:21
But we complimented the gentleman.

Jo 25:23
He built the house in the 19 fifties and it’s my client loves the home.

Jo 25:27
It’s so well made.

Jo 25:28
She’d love to renovate it.

Jo 25:29
And he chose our offer over the two developers who probably said, here’s my price.

Jo 25:34
I’m gonna bulldoze it.

Jo 25:35
And a lot of agents will take what your offer is and sit in front of their clients and say, look, we’ve got three offers.

Jo 25:40
It’s this one, this one, this one.

Jo 25:42
But the term and this is where I mentioned earlier if you know how to play the game with terms.

Jo 25:46
But it’s just that, you know, it’s a couple that are perhaps the marriage breakdown.

Jo 25:49
They’re quite keen to have a quick settlement, you know, other people also negotiate to have furniture and things like that thrown into the mix.

Jo 25:55
So there are things that you could do and opportunities you don’t want to miss out on.

Jo 26:00
So that’s the reason that that education platform exists so that we make sure you make a really good buying decision and we do get a lot of off-market deals presented to us as well.

Jo 26:09
So I share that with my database, you know, no, it’s like I don’t have a buyer for it, but look at this cracker of an opportunity here and it’s price to sell and, and I have bought properties like way under what the market value is because of the circumstances of the vendor, you know, under financial constraints or they’ve already bought something else, etcetera, etcetera.

Jo 26:26
So that’s a huge advantage.

Michael 26:28
Absolutely with, with those programs.

Michael 26:30
And, and again, I think it comes back to that group of like minded people in that situation.

Michael 26:34
And so, you know, you’re able to seek that advice.

Michael 26:36
And, and again, I guess, you know, the simple things like just being courteous about how you submit an offer can go a long way and people can often forget those simple things and focus on maybe overly complicated items or ways of doing things.

Michael 26:49
But at the end of the day, it’s just maybe the act of just being nice and complimentary and, and it can go a long way.

Michael 26:53
So I love that example very much.

Michael 26:56
So we always wrap up by asking two questions.

Michael 26:58
The first question is, what’s the number one tip you have for a first home buyer trying to get to the market today?

Jo 27:03
Oh, look, I touched on it earlier.

Jo 27:05
It’s just get started and now get started is as easy and as hard as that is really, but it could be like connecting with yourself, Michael.

Jo 27:13
I had that phone call, have a fact finder and you could sit there and say, look, you can borrow this much as your finances sit today or go away, tidy up your hecs debt, get rid of your credit card, get rid of your car loan, whatever it might need to be, tidy it up, get your taxes up to date and then come back to me in February and we’ll talk again, you know.

Jo 27:29
So you at least know where, what your health check, financial health check is.

Jo 27:33
So you’ve got a starting point and then you’ve got a goal and it’s really important that years are going by faster and faster.

Jo 27:39
The more birthdays you have, you need to just get started and, and not delay.

Jo 27:43
And I think it could be, it just getting yourself financially fit and, you know, better than I would.

Jo 27:48
How scrutinised your spending is with banks as well.

Jo 27:51
So maybe you need to curb back your spending, your retail activity.

Jo 27:55
How many times you might visit Dan Murphy’s or whatever it might need to be.

Michael 28:00
Or the online betting that’s being done.

Michael 28:00
That’s so that’s don’t maybe get off sports bet for a little while.

Michael 28:05
I mean, and, , and find and set the priorities straight perhaps.

Jo 28:08
Yeah.

Jo 28:09
Close the credit cards, you know.

Michael 28:11
Yeah.

Jo 28:11
So basically behave yourself for the next 90 days and let’s revisit those numbers.

Jo 28:15
So that, to me, that’s when I say get started.

Jo 28:19
That is the first port of call.

Jo 28:20
And I’m always telling my clients speak to a broker.

Jo 28:22
You don’t want to go to a bank first up.

Jo 28:24
And they’re like, oh, but I’ve been with Anz, since I was 16.

Jo 28:26
It’s like, no, no, no, no, no, you need a broker.

Michael 28:30
There’s nothing better than as a broker having a conversation with somebody saying, well, I’ve only dealt with my bank before.

Michael 28:34
It’s like, ah, wonderful.

Michael 28:36
That’s, that, that’s a good thing.

Michael 28:38
That’s a, for us, that’s, that’s the ultimate phrase that someone can open up with because it’s like, well, we’re about to introduce you to 60 now.

Michael 28:43
So, let’s see.

Michael 28:44
Let’s see how that goes.

Michael 28:45
And obviously invariably there’s always a better option for them out there.

Michael 28:48
Now, the second question that we have is, , and it’s a new question.

Michael 28:51
It’s not a question I’ve asked before.

Jo 28:52
So I’m scared.

Michael 28:54
Yeah.

Michael 28:54
No, no, it’s, it’s, it’s pretty, actually, I like it.

Michael 28:56
So I think you will too.

Michael 28:57
What do you wish you knew before you bought your first home?

Jo 29:00
I wish I had started earlier.

Michael 29:02
Yeah.

Jo 29:02
Well, there’s always fear.

Jo 29:04
You don’t know.

Jo 29:04
And I just, now that I know what I know, I really wish I had have started earlier and you don’t have to buy where you want to live.

Jo 29:11
You know, I know there’s a lot of other government grants out there that are incentivising you to live in it and all the rest, it’s a false economy if your budget’s only 600,000.

Jo 29:20
But you want to live, you know, near the beaches in Sydney, perhaps invest that money where you’re gonna get a really good rental return and good capital growth and then stay in the area you want to live in.

Jo 29:29
And it’s, I just, yeah, I wish I had a started earlier.

Michael 29:32
Yeah, I, I think that’s a, that’s a great point that you, that you’ve raised.

Michael 29:35
It’s, it’s like, don’t get sidetracked by the government incentives because it may not necessarily be the best option for you.

Michael 29:40
Potentially look a little bit deeper than that.

Michael 29:42
Obviously, for some, it is a good thing and if you need to buy your own occupier or you want to, then that’s fine.

Michael 29:46
But pivot from that initial thought that, oh, I’ve got to go and a lot of first-time buyers will do that.

Michael 29:50
So what grants I get and that’s the first and foremost thing that they’re focused on.

Michael 29:54
It’s like, well, hold on, maybe that’s not the right option.

Michael 29:56
So having that flexible mindset initially, I think can be quite powerful.

Jo 29:59
Yeah, absolutely.

Michael 30:00
Thank you for that.

Michael 30:01
If people want to find you, where’s the best place that they can?

Jo 30:04
Well, at propertywomen.com.au if you come and visit me there and you can reach out on that platform as well.

Jo 30:09
And our advocate property services is the name of the buyers agency that I head up as well.

Jo 30:14
So all online and I’d love to be able to offer that.

Jo 30:17
Just a fact-finding session to see if it’s a service that will fit you if it’s right within your budget.

Jo 30:22
And perhaps the answer isn’t the full buyer’s agent service, but perhaps some negotiation there and we can talk to you about your own personal circumstancess.

Michael 30:29
Absolutely.

Michael 30:30
And we’ll put those details in our show notes.

Michael 30:32
So if anyone wants to check that out, feel free to jump on your podcast Bureau of Choice and see those show notes there with.

Michael 30:37
So, thank you so much, Jo for joining us on the show today.

Michael 30:40
And thank you so much for the wonderful insights that you’ve provided.

Michael 30:43
I think it’s been awesome and now listeners are gonna get a lot of value out of it.

Michael 30:46
So, thank you so much for your time.

Jo 30:47
Absolute pleasure.

Jo 30:48
Thanks, Michael.

Michael 30:51
You’ve been listening to the Home Run your guide for buying your first home in Australia.

Michael 30:55
This podcast was produced by Lendstreet.

Michael 30:57
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 31:03
We know applying for a loan can be overwhelming and complex.

Michael 31:06
So we help guide and support first home buyers through the process from start to finish to find out more.

Michael 31:11
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Michael 31:15
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Michael 31:20
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Michael 31:23
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Michael 31:23
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Michael 31:26
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Michael 31:29
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post Why renovating might be your best move for your first home appeared first on The Home Run.

Show Notes

George Morison is the General Manager for AB Morison Conveyancing. AB Morison Conveyancing is one of the largest conveyancing firms in Victoria and their goal is to make the property buying process as seamless as possible for everyone involved.

In this episode, George explains what a conveyancer is, why you need one, and why you should look at hiring a conveyancer much earlier in the home-buying process than you think. He also breaks down why cheaper isn’t always better when it comes to conveyancers and how spending more on their services could save you money in the long run.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to the home, run your guide to buying your first home in Australia on the show, I’ll walk you through the home buying process from every angle.

Michael 0:24
We cover steps to take the pitfalls to avoid and the answers to all your questions you’ve been dying to ask no matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home.

Michael 0:45
George Morrison is the general manager of AB Morrison, a conveyancing firm based in Victoria, which he runs with his wife Mandy.

Michael 0:53
Since starting the business in 2001.

Michael 0:55
George and his team have been passionate about high-quality personalised service for all of their clients.

Michael 1:01
In this episode, George breaks down the process of settlement and explains the role of a conveyancer.

Michael 1:07
During this time, he shares his tips on when to begin engaging with a conveyancer and how to find the right conveyancer for you.

Michael 1:15
He also explores the biggest mistakes he’s seen first-home buyers make in the settlement process and shares what you can do to avoid them.

Michael 1:23
Let’s jump in. George, thanks for joining me on the show today.

George 1:30
Thank you, Michael. Good to be here.

Michael 1:30
Just to start off.

Michael 1:32
Are you able to share some information about who you are, where you work and what your role is?

George 1:36
My name’s George Morrison and I’m the general manager of A B Morrison conveyancing.

George 1:41
We be, if not Victoria’s largest, I’m one of Victoria’s largest conveyancing firms and we’ve been running since the year 2000.

Michael 1:48
It’s an easy one to work out.

Michael 1:50
How long you’ve been around for 23 years.

Michael 1:52
How did you get into conveyancing?

George 1:54
Well, as you can tell by the name, it’s a family business, a partner and I got started in the year 2000.

George 2:00
And really the business has really grown with the property market.

George 2:02
So over that time, since the year 2000, the property market has seen extraordinary growth.

George 2:09
And so it was a good time really to start in this industry.

George 2:13
Over that time, we’ve had significant changes with the mining boom and then there was the China boom and there’s been significant ups and downs with the GFC and, and COVID but really over that period of time, it’s been a remarkable period in the property market and the business has really grown with that.

George 2:30
So it has developed into a large operation that caters for all aspects really of property conveyance and for first home buyers that we’ll be talking about today, property developers and investors related party transfers.

George 2:45
We call them where mums and dads are taking names on and off title.

George 2:49
So it’s really grown into a large operation that caters for all sorts of needs within the conveyance space.

Michael 2:55
Definitely big appetite in this country for property.

Michael 2:58
It seems to be one of the cornerstone principles of I guess wealth generation and as you’ve mentioned, and as our listeners know, and we very much focus on people at the beginning part of that journey and you know, looking to purchase their first home, whether it is as an investment or as an owner occupier more often than not, it is as the owner occupier.

Michael 3:15
But conveyancing obviously is such a critical part of that and probably not something we speak about very often.

Michael 3:21
We focus more obviously on the asset and the finance side of things, but the conveyancing is a critical component of it all.

Michael 3:26
So I guess today we’re gonna talk about some of the basics of conveyancing and and what people should be thinking about with certain aspects of it.

Michael 3:32
So what’s the role of the conveyancer in the first home buyer process?

Michael 3:37
And if we speak about settlement in particular, what is the settlement process and how does that all work?

George 3:42
Well, conveyancing differs from state to state.

George 3:45
So there are different state legislations that will and I know this is a national podcast.

George 3:49
So depending on which state you’re in you, the answer to this question would vary but broadly, a conveyance’s role is to get a name on or off a title.

George 4:00
And that can sound relatively straightforward, but you’d be amazed at what’s involved in achieving that task, but often particularly first home buyers are unaware what a conveyancer is or that they need a conveyancer until they’re already quite far down the track.

George 4:15
They’ve spoken to the mortgage broker or the banker and they have spoken to the real estate agents and they get to a certain point down the track and they’re asked, who’s your conveyancer?

George 4:25
That’s at that point that they need to find out what a conveyer is and who the cremates it is going to be.

George 4:30
So, it’s a good idea for first home buyers if they can to do some research and look into potentially who they’re gonna use as a conveys before they get to that stage, so they can determine what the price points are gonna be and negotiate how that fee is gonna be charged.

George 4:46
But also the report that they have with them and, and the sort of service standards that they have and all those sorts of things as Well, a conveyancer’s role is acting on your behalf throughout the transaction.

George 4:57
So once you’ve found the property, you’ve got the finance, you’ve signed the contract, the conveyancer is your person in the game dealing with the real estate agent, the bank or the mortgage broker, the vendors and the vendors solicitor and ensuring that there’s a successful transfer of that property from the current owner’s name into your name.

Michael 5:17
And you mentioned there, I guess the time at which first home buyers generally will engage a conveyancer.

Michael 5:22
And it’s probably a little bit further on down the track than maybe when they should.

Michael 5:25
At what point in the home-buying journey would you typically recommend getting a conveyancer on board?

George 5:31
It can vary from state to state.

George 5:32
Different states have different obligations that a vendor has to a prospective purchaser.

George 5:38
In Victoria, for example, in New South Wales is quite similar.

George 5:42
There are disclosure obligations that a vendor has to make to a purchaser.

George 5:46
The level of those disclosures varies, but really what you want to be doing is getting pre-purchase advice before you go in and sign a contract.

George 5:54
Now, that can be tricky to some degree because doing due diligence before signing a contract can involve not only getting a contract review as a conveyancer, but also getting a building inspection or a pest inspection and those things cost money so often where we would come in up, my recommendation would be if you found the property you’re interested in and you’ve made an offer and it looks like the Linda is gonna accept that deal and the price is realistic.

George 6:22
It’s at that point that I would suggest you bring in a conveyancer to give you some prep purchase advice on the contract.

George 6:28
The outcome of that review would typically assist you in showing that you understand everything that the contract contains, they would highlight any concerns that they have with it that you might want to make your offer conditional on having changed or amended or added to the contract.

George 6:43
But also if you’ve built a report with your conveyancer, not only would they give you advice on the property itself, but ideally, they would know a little bit about you and what you’re after and your story so that they can give you context for you in in terms of whether or not you’re looking to apply for any government grants or needing a particular property to be eligible for any kind of thresholds that your particular state government or federal government grants that might apply as well.

Michael 7:08
You’d mentioned building and pest inspections.

Michael 7:11
And I guess if you’re buying in units or apartments, a strata report, is that something that the conveyancer looks after and manages it or is it something that I guess it just varies from conveyancer to conveyancer?

Michael 7:23
And how do you guys treat that?

Michael 7:24
And how would you recommend, you know, a first home buyer treat?

Michael 7:27
That is it, something that they would speak to the conveyance are about to sort out or would they do it on their own and separately to the say that you know, the review of the contract.

George 7:37
Like I said, in different states, there are different disclosure obligations. So I’ve might need to disclose to you as a prospective purchaser in one state might differ to another.

George 7:42
But broadly, you would need to get your own building and pest inspection report before proceeding to make your offer.

George 7:48
And they can be expensive.

George 7:49
You know, they can be 2, 3 $400 and quite often a first home buyer will be out there looking at 456 different properties before they’re successful.

George 7:58
So the trap is that you might find yourself out there thinking you’re doing the right thing and buying these expensive reports when your offer is not being accepted.

George 8:07
So I guess that harks back to that point I was making before about you really want to get a good sense that you’re, you’re in the hunt and that your offer is likely to be accepted before you start incurring those costs with strata properties.

George 8:19
Typically, there’d be a you know, we call them owner, owners, corporations in Victoria, but typically there’d be a certificate provided in that disclosure document and that certificate should be a good indication of what’s going on in that building.

George 8:31
You know, have they got building defects if it’s within the timeframe?

George 8:35
Are they making claims on their builders’ warranty insurance.

George 8:38
A special levy is being struck or is it evident that it’s likely that special levies are gonna be struck in the near future?

George 8:45
So you think you’re budgeting around a certain owners’, corporation fee or body corporate fee and then discover shortly after that there’s a, a special levy raised to fix the roof or fix the lift or what have you.

George 8:56
So it’s those sorts of things that a comb is looking out for and they’re giving you prep purchase advice on that contract so that you’re conscious of not just what’s happening now, but what might be evident around the corner with the property.

Michael 9:09
When it comes to first home buyers and more often than not as a first home buyer, it’s the first time you’re engaging with a conveyancer.

Michael 9:14
Are there any tips that you have for first-home buyers who are looking for a conveyancer or a good conveyancer?

Michael 9:21
What sort of pointers could we be giving or guiding first-time buyers to make sure that they can find a good conveyancer?

Michael 9:26
I know you’ve mentioned obviously state operations that can dictate where you can select this conveyancer from.

Michael 9:31
But what other things should we be looking for?

Michael 9:33
And what questions perhaps should we be asking a conveyancer when we’re seeking their services?

George 9:37
My suggestion would be cheapest is not always best.

George 9:40
A conveyancer is completing a very critical role for you in dealing with your finance and making sure that everything is done correctly for you.

George 9:49
And a quality conveyancer can ensure that you have a much more stress-free and enjoyable process.

George 9:55
So I would be looking at the reviews of the conveyancer to get a sense of what sort of customer satisfaction they have their size.

George 10:03
Do they have resource if you call them?

George 10:04
Are they gonna answer the phone or are you gonna get an answering machine?

George 10:07
Are you gonna be able to get through to people and also being clear on what the costs are going to be at the beginning?

George 10:13
So, you know, you want to get an all-inclusive fee or you want to get a sense of a fairly accurate sense of how much you’re up for at settlement for the conveyancing cost and all costs in the whole property transaction.

George 10:25
One of the key important things for a first home buyer is ensuring they know what their budget is and how much they’re gonna need at the end at settlement.

George 10:34
So not just conveyancing but all property transaction costs.

George 10:37
You want to have a really confident sense of how much you’re gonna be needing at the end of that transaction process.

Michael 10:43
The reference you made there is settlement and I guess for a lot of people that don’t know what does settlement mean.

George 10:49
Yeah.

George 10:49
So settlements the day that you pay the money and become the owner of the property.

George 10:54
So if I go back a step, you found the property you’re interested in.

George 10:57
You’ve had your pre-purchase advice, you’ve gotten your finance approved, if necessary, you’ve got your building your pest inspection report, the contract is signed and in that contract it’s agreed how much you’re paying and when you’re gonna settle and any other terms that you’ve agreed to.

George 11:13
And then from there, we would notify all parties that we’ve been appointed to act and we would begin the conveyance.

George 11:19
We’d provide your lender all the documents and the information they needed from our side to get your finance ready for draw down.

George 11:25
And then we would liaise with all the regulatory bodies that are involved in the transfer.

George 11:29
So the land Titles Office or equivalent of the State and the State Revenue Office and the Australian Taxation Office, there are a range of different bodies that we need to liaise with and ensure that all the appropriate paperwork’s been completed.

George 11:43
And then we need to work out how much you’re gonna pay for the property, which is typically the purchase price you’ve agreed to less the deposit you would have already paid at the beginning.

George 11:53
Plus what we call adjustments, which is a reimbursement to the current owner for bills they will have paid that you’re gonna get the benefit from.

George 12:02
So things like council rates, water rates, owners’ corporation fees, we’d make enquiries to ensure that the current owner has paid all their bills.

George 12:12
But then you’d be chipping in for the portion of those bills that you’ll get the benefit from.

George 12:17
So, depending on the property and when you’re settling in the billing cycle, probably wanna be budgeting maybe 1 to $3000 for adjustments.

George 12:26
But at the end of that, you’ve paid your rates, you’ve paid your water rates, you’ve paid your owners corporation fees for that period.

George 12:32
So we’ll work all that out.

George 12:33
And then at that stage, we’d also work out how much money is available for a drawdown of your new mortgage, which would be the loan amount you’re applying for less stamp duty, if any less land titles, office fees and less any bank charges.

George 12:49
So whatever’s left over from that amount is how much we’d have to pay with at settlement.

George 12:53
And any shortfall would be the amount you’d be chipping in, out of your own savings towards the purchase.

George 12:58
So we’d go through all of that with you a good, you know, 10 days before settlement to make sure that you understand it and you agree with it.

George 13:07
So that on the day of settlement, you know exactly what money’s moving around where and why and then on the day of settlement, that’s the day that all the involved parties.

George 13:15
So the vendor, the vendor, solicitor or conveyancer, the vendors lender discharging bank and then the purchasers conveyancer, purchasers bank would all attend settlement and everyone provides and takes what they need to satisfy their particular needs in that transaction.

George 13:32
And at the end of that, it’s settled and it’s at that point, you’d receive a phone call from your conveyance that you would be free to go to the real estate agent’s office and pick up the keys.

George 13:42
When you purchase a property, there are certain mandatory costs that are gonna be associated with that property.

George 13:48
So council rates are not optional.

George 13:51
If you own a property, you’ve gotta pay council rates, water rates, part or all of water rates are not optional.

George 13:57
You have to pay water rates when you buy a property.

George 13:59
If it’s a strata, then owners’, corporation fees have to be paid.

George 14:03
So depending on when we settle in any one of those different billing cycles, you the vendor and I the purchaser, you may or may not have paid your bills.

George 14:12
So if you’ve paid your bills and we settle, it’s not fair that I’ve owned the property proportion of the billing cycle that you’ve paid the bills for.

George 14:21
So I should pay you back and vice versa.

George 14:23
It’s not fair that you haven’t paid your bills and then I buy the property and then I’m stuck with those bills that you enjoyed the benefit from.

George 14:30
So part of our job is to ring up that different regulatory authority and check as at the date of settlement, has this previous owner paid their bills or not?

George 14:40
And how much are the bills and then work out how many days of that billing cycle you’ve had benefit of the property for how many I’ve had benefit for and then either you or I will pay each other back.

George 14:52
So we’d have to purchase price less the deposit plus a reimbursement to the current owner for the portion of those bills that I’m getting the benefit from.

George 15:02
We wouldn’t know exactly how much the adjustment would be until we get closer to settlement.

George 15:08
Exactly, because we want to check with all those regulatory authorities, but we can pretty accurately work it out at the beginning of the process.

George 15:15
If we’re well beforehand, ie you’re considering different properties and you’re wanting a general budget, then typically for properties that are in the price point for first-home buyers, you’re safe.

George 15:25
If you’re budgeting 1000 to all the way up to say $3000 for adjustments, it can vary widely.

George 15:31
And the key thing that does tend to vary in that is if you’re buying a strata apartment and there’s an owner corporation or a body corporate and it has multiple lifts, they tend to increase the outgoing significantly or a pool pools tend to increase the outgoings for owners, corporation fees as well.

George 15:47
That’s why we sort of indicate a broad range.

George 15:49
But also when you’re settling in the billing cycle, if you’re settling right at the end of a financial year, then, the adjustment would be far less than if you’re settling at the beginning of a new financial year.

Michael 15:59
So obviously that is a pretty long process.

Michael 16:01
There.

Michael 16:01
And I’m sure there’s a lot more particulars that we can deep dive into.

Michael 16:04
However, the one thing that I wanted to pick up on that you had mentioned was the concept of adjustments, you did briefly explain it.

Michael 16:11
But if you could explain exactly what adjustments are and, and how they work and for a first-home buyer that’s never really experienced this before, what are adjustments and, and how they work out.

George 16:20
So if you’re selling and I’m buying and we get to settlement and you’ve paid all the bills, it’s not fair that when I buy the property, I’m gonna get the benefit of those bills without paying you back.

George 16:32
So we call those the adjustments.

Michael 16:35
So that’s the 1 to $3000 allowance will cover most of the general things, but that owner score could potentially be more, this might scare people off potentially.

Michael 16:42
But what’s the highest that you’ve seen?

Michael 16:43
And, and is there if you’re gonna be purchasing in an apartment complex, do you need to budget or factor in more for what potential adjustments could be?

Michael 16:50
Or is there any way of finding that out before you, you make an offer or sign a contract?

George 16:54
So, properties that first home buyers are considering typically wouldn’t be in that category the worst I’ve ever seen.

George 17:00
But there are some apartment blocks out there that have concierges and staggering kites.

George 17:05
But I guess that goes back to the importance of getting pre-purchase advice and getting that disclosure document reviewed so that you’re getting an interpretation of what the outgoings are as part of that review.

George 17:16
So in that review, we would be reading through in Victoria, what we would call the owners’ corporation certificate and having a look at the outgoings and, and making sure the grower they, they’re in line with what you’re expecting, I guess where there’s potential for that to get away from people is when they’re buying off the plan and off the plan differs quite a lot compared to buying an existing title property where it’s not known at that point what the actual owner, corporate fees are.

Michael 17:43
When we talk about settlement and the process that you’ve just explained. And I guess for the context of the listeners and knowing where you’re positioned within Australia being in very heavily Victorian based, we can use Victoria as the example here.

Michael 17:51
But how long is that period of settlement?

Michael 17:54
How long does that last?

Michael 17:55
So from signing that contract to the settlement occurring and, and having the the transaction completed?

Michael 18:00
How long does that typically take?

George 18:02
Well, technically, a settlement can take place very quickly, the mechanics of it can take place very quickly.

George 18:07
But the thing to remember is that when you commit in a contract to a settlement date, you must settle on that settlement date.

George 18:15
If you get to that date, you’re not ready and typically come the next working day, you become in breach of the contract.

George 18:20
And if you become in breach, you become liable for all sorts of unnecessary costs.

George 18:25
Typically the contracts I see penalty interest is calculated at 15% daily.

George 18:31
Plus you’d have to pay the vendor’s conveyance or a solicitor’s costs.

George 18:35
So you wanna do everything you can to make sure you settle on time and therefore you want to allow yourself enough time, enough time for a spelling mistake with the mortgage documents to be repre prepared or whatever it is.

George 18:48
So as a general rule of thumb, we would always recommend nothing shorter than a 45-day settle, you can always bring settlement forward if you and the vendor are ready to settle sooner and are agreeable.

George 18:59
But it’s a lot harder to push it out if you need more time.

George 19:02
So broadly, more time is better than less, but 45 days is a safe quick settlement period for a first-time buyer.

Michael 19:10
And in that settlement phase, I mean, obviously finance needs to be sorted.

Michael 19:14
But I guess from a legal perspective, is there anything else that can be done or any other perspective that your experience has, has taught you?

Michael 19:21
Is there anything else that a first home buyer should be doing in that settlement phase?

Michael 19:24
Or is it a matter of just sitting and waiting for settlement to take place.

George 19:28
Once you’ve signed the contract and paid the deposit from a conveyancing perspective, we’ll take it from there really in the new world of digital conveyancing.

George 19:37
Once you’ve given your conveyance for instructions to act, they have a lot of the answers.

George 19:41
They need to complete a lot of the rest of the process on your behalf.

George 19:44
There is typically one step that you’d physically need to participate in which is called verification of identity or VOI and that’s driven by the, the land titles office of the State.

George 19:54
And typically, they’ve said that, ok, if we’re gonna digitise conveyancing, then we want some assurance that the people we’re dealing with, either coming on or going off title are who they say they are.

George 20:04
So they have to introduce states have introduced this verification of a new process.

George 20:08
It’s like larger points with the bank, but it has to be done by licensed agents.

George 20:12
And typically you’d go to Australia Post or there are different companies that would come to your home or there are apps that can be used.

George 20:18
Typically, when you do that verification of identity, you sign another document called a client authorisation form that authorises your conveyancer to have signed other documents on your behalf based on the instructions you’ve given.

George 20:29
Once you’ve signed the contract, paid the deposit, assuming that there are no other conditions of the contract.

George 20:34
Like you need to get that, you know, building or pest inspection report done or what have you really, your focus should be on the bank.

George 20:39
They’re giving your lender anything they need from your side in terms of pay slips or anything else to get your finance proved and conditioned. in our experience.

Michael 20:47
In our experience that’s obviously something we do with on a day-to-day basis.

Michael 20:49
That’s at least 3 to 4 weeks that you know, need to allow for the valuation to take place for that to come in for the loan docs to be generated for the loan docs to be sent for them to be signed for them to be posted back.

Michael 20:59
And obviously, that all goes well and obviously with e-docs these days as well, that can speed the process up depending on the particular lender.

Michael 21:06
But from our point of view, it’s definitely a four-week timeframe is as minimum as we’d like to see it.

Michael 21:11
Otherwise, it does put a little bit of unneeded stress on the whole situation.

Michael 21:14
Final question.

Michael 21:15
When it comes to the conveyancing process and the settlement process, what’s the biggest mistake that you’ve seen first-home buyers make?

Michael 21:22
And how can our listeners avoid that?

George 21:23
What I just touched on about not allowing enough time for settlement?

George 21:27
So they do it in a rush or they get emotionally attached to the property and get too close to the property itself and then find themselves committed to short settlement periods or other terms that they might not have otherwise agreed to.

George 21:39
So the importance of getting that pre-purchase advice to take a bit of the heat out of it and to have the conveyance between you and the agent to try and cool things down a little bit and slow things down and make sure that the terms that you’re agreeing to are realistic and are achievable for you and for off the plan purchases, there are other things to be conscious of like for example, making sure that the square meter age of the property is too small for what your lender will lend to you for your loan to value ratio threshold.

George 22:10
So that’s another key one for first home buyers who tend to be buying the smaller apartments, making sure that who you’re intending to borrow through is gonna be able to lend for that property and the size that it is.

Michael 22:21
Thank you so much for those tips and those insights into what could be sometimes seen as a not the most prettiest aspect of the property transaction, the the legal side.

Michael 22:29
It’s not one that excites most people, but in saying all of that is, it is one of if not the most important aspect of a property purchase is is the conveyancing process.

Michael 22:38
So thank you for all the tips that you provided today and thanks for joining us on the show.

Michael 22:42
Where can our listeners find you if they want to learn more?

George 22:44
Well, our website www.A for Alpha, B for Bravo Morison with one R and one s.com.au and our contact details are on there and I’d be very happy or any of our team would be very happy to provide anyone with more insights and advice.

Michael 23:00
Absolutely.

Michael 23:01
And those details will be in our show notes as well.

Michael 23:03
Thanks so much for joining me on the show today.

Michael 23:05
George.

Michael 23:05
It’s been an absolute pleasure.

George 23:06
Likewise.

George 23:07
Thanks Michael.

George 23:07
This is terrific.

Michael 23:10
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 23:14
This podcast was produced by Lendstreet.

Michael 23:16
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 23:22
We know applying for a loan can be overwhelming and complex.

Michael 23:25
So we help guide and support first home buyers through the process from start to finish to find out more.

Michael 23:31
Head to our website, Lendstreet.com.au.

Michael 23:34
We’ve also put a link in the show notes to make sure you don’t miss an episode of the Home Run.

Michael 23:39
Be sure to subscribe to or follow the show in your podcast app.

Michael 23:42
And while you’re there, please leave us a five-star review.

Michael 23:45
It really helps others find the show.

Michael 23:48
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post How a good conveyancer can save you money appeared first on The Home Run.

Show Notes

Kim Northwood is an Investor, Entrepreneur, and the Author of ‘Work Less, Make More: The Millennial Guide to Financial Freedom.’ Kim is passionate about educating people on their personal finances and understanding the risks of financial insecurity.

In this episode, Kim is back to break down one of the more complex ways of saving a deposit: investing. Investing can help you save for a deposit more quickly than the traditional method but there are risks. Kim will break down the range of different investment types you might consider, their pros and cons, and the importance of time frames for investment strategies.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation, or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to The Home Run your guide to buying your first home in Australia.

Michael 0:21
On the show.

Michael 0:22
I’ll walk you through the home buying process from every angle we cover, steps to take the pitfalls to avoid, and the answers to all your questions you’ve been dying to ask.

Michael 0:31
No matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser, and I’m a mortgage broker at Lendstreet, and I really love helping people buy their first home.

Michael 0:45
Kim Northwood is a long-term investor, entrepreneur, and author of Workless Make More The Millennial’s Guide to Financial Freedom.

Michael 0:53
He’s also a return guest on the show, having appeared on a recent episode to explore the different ways of saving for a deposit.

Michael 1:00
In this episode, Kim is going to dive deeper into some of the more complex ways of saving money for your deposit.

Michael 1:06
By exploring the world of investing, he’ll share the different kinds of investments you might wanna consider and unpack the pros and cons of each.

Michael 1:13
Plus.

Michael 1:14
Kim will explain how the timeframe that you want to buy within may help dictate which strategy is best for you.

Michael 1:20
Let’s jump in.

Michael 1:25
Kim.

Michael 1:25
Welcome back to the show.

Kim 1:26
Thank you very much.

Kim 1:27
Thanks for having me again.

Kim 1:29
Fantastic to be here.

Michael 1:30
And since it’s your second appearance on the show I, I wanna start out by asking a fun question before we dive in today’s topic.

Michael 1:36
If you could live anywhere else in the world other than Australia, where would you live and why?

Kim 1:42
It’s a good question, as we were just discussing a little bit before.

Kim 1:46
Yeah, I love skiing.

Kim 1:47
And so there’s a place in the world which combines this like amazing combination of snow and food and just like quality of living.

Kim 1:56
And it’s Japan.

Kim 1:57
I mean, up in the north of Japan Hokkaido area.

Kim 2:01
I just got, like, some of the world’s best skiing, and then you combine that with, like, onsen after skiing, and you’ve got some of the best food in the world.

Kim 2:10
The people are super friendly.

Kim 2:12
I mean, I just think they’ve got it.

Kim 2:13
They’ve just got it made and you know what?

Kim 2:14
And then the snow melts and in summer, all they do is play golf.

Michael 2:18
I’ve never been to Japan, but I’ve got a lot of friends that have been and anyone that has gone has always come back raving about it.

Michael 2:24
Even if they’re a bit unsure to begin with, they’ve come back and they said, Wow, like, But we’re definitely going back.

Michael 2:28
So and the skiing is meant to be phenomenal as well.

Kim2:31
Yeah, yeah, yeah, it it’s awesome.

Kim 2:33
But I tell you what, the secret’s out for Aussies like there’s Australians all over, all over.

Michael 2:37
Yeah, no, no, I’ve heard I’ve heard.

Kim 2:40
People know they aren’t doing a good thing today.

Michael 2:41
We’re gonna be breaking down some of the more complex ideas people might want to explore when they’re saving for a deposit.

Michael 2:47
And we’re gonna focus particularly on investing now before we get started.

Michael 2:51
Investing might be uncharted territory for a lot of our listeners.

Michael 2:54
So what do people need to consider before they get into investing?

Kim 2:58
Yeah, Look, there’s a whole number of things that people need to consider.

Kim 3:02
But I, I guess there’s some really basic principles that people kind of need to get their head around before they jump into the world of investing and committing their own money.

Kim 3:11
And most basic of of these is really the concept of risk and reward.

Kim 3:14
So, you know, it basically just means that, like the higher risk or the higher the chance of losing your money.

Kim 3:20
The generally speaking, the higher the chance of a greater return on your money.

Kim 3:24
And conversely, if there’s a low level of risk, then there’s typically a low level of reward.

Kim 3:30
That kind of makes sense, of course, because if there was, if it was low risk but high return, then everyone would just go into that thing.

Kim 3:35
So it’s a kind of natural mechanism that sort of stratifies people’s investments.

Kim 3:40
But people really, really have to kind of grasp that as a basic concept, and then once you’ve got that, you can start to work out where you want to put your own investments and there is risk to investing.

Kim 3:51
But I think it’s also important to note that there are risks to not investing.

Kim 3:56
So you kind of need to wrap your head around this this concept as well, which is, while there are risks that you can put your money in and it and it might go down.

Kim 4:05
The risks of not investing include things such as inflation risk.

Kim 4:08
So that’s where if you just have cash in the bank, there’s a risk that inflation erodes the buying power of your money.

Kim 4:14
And then there’s a risk asset prices go up higher and more quickly than the rate you can save, so that’s kind of another risk to not investing.

Kim 4:22
The third thing I think people need to really think about before they start investing is their own time frame.

Kim 4:28
When do they need access to this money?

Kim 4:30
Typically speaking, if you need access to the money within, sort of a shorter time frame, the level of risk you can take on is probably gonna be a bit lower because things might go down and you won’t have time to ride out the ups and the downs.

Kim 4:43
Whereas if you’ve got a longer time frame, typically speaking, you can take a little bit more risk and you can be a bit more aggressive with your investing because you’ve got time for things to go up and you’ve got time for things to sort of go back down.

Kim 4:55
And you’re betting that, like over the long term, things will have gone up.

Kim 4:58
But you’re not as worried about those short-term fluctuations.

Kim 5:02
I think they’re kind of really the basic things.

Kim 5:04
And using those concepts, people can then put together their own risk profile and work out their own goals.

Kim 5:11
So how much risk are you willing to take and what actually is your goal?

Kim 5:16
And when do you need this money?

Michael 5:17
So a lot of these strategies, as as you’re highlighting, can depend on how soon you’re planning to buy.

Michael 5:22
So can you explain what would be different for somebody looking to buy soon versus somebody who’s looking to buy in, say, five years?

Kim 5:29
If you’re looking to buy soon, you probably don’t want to be putting your money into really high risk things that may drop within a year and then go back up in five years because it’s no use to you, then you need the money within a year.

Kim 5:41
So if you’re really looking to buy within a short time frame, then your mix of investments is probably gonna be a a bit more cautious than someone who’s looking to buy in, say, 567 years where your mix of investments might be a little bit more aggressive and you can you know you’ve got time to ride out the ups and the downs, so that’s really the key thing.

Kim 6:00
And once you understand that, you can work out kind of which investment products you should be putting your money into.

Michael 6:07
We’re using the term investment obviously pretty broadly here.

Michael 6:10
And what we want to try and do today is go through some options that one might want to consider in terms of making that investment to increase their deposit potentially or their contribution to a purchase of a first home.

Michael 6:21
We’ll start with the least risky and probably the lowest return and build up to the highest risk and highest broad options as you’ve mentioned those combinations.

Michael 6:29
So I guess in your opinion, what would be the lowest and what would be something that’s maybe in the middle of the road and what would be, I guess, the highest risk?

Kim 6:37
Let’s kind of go through it just as a an upfront point.

Kim 6:40
People.

Kim 6:41
I think when they think of investing, some people think only of the stock market.

Kim 6:44
But you actually have to think of it a bit more broadly.

Kim 6:46
There’s several asset classes and they all count as investments.

Kim 6:50
There’s cash that can be an investment of itself.

Kim 6:53
There’s what’s called fixed-interest products, and we can get to those. There’s stocks and shares and things like that.

Kim 7:00
And then there’s property.

Kim 7:01
Of course, there’s an investment and asset class.

Kim 7:03
There’s the asset classes of commodities as well, which, tends to be a little bit more complex.

Kim 7:08
So, you know, I think it’s important just to make that point upfront, that there are several types of asset classes when it comes to investing, and they have their own risk and reward and pros and cons.

Kim 7:17
But to go back to your your question, then if you look at it and you you come in and you say, Look what’s kind of on the lower end of the spectrum when it comes to risk.

Kim 7:26
Well, certainly cash in the bank, right?

Kim 7:28
Like cash is sitting there, it’s in the bank, and you you generally have access to it whenever you need.

Kim 7:34
Now you can still make that an investment.

Kim 7:37
If you look at, for example, high-interest savings accounts, that’s an investment, because it’s gonna return some money to that cash that’s sitting in the bank at the moment.

Kim 7:46
Just having a look online kind of.

Kim 7:47
There are products out there returning around 5.5% on the high-interest savings side, so that’s definitely better than what it’s been in the past, when interest rates were much lower.

Kim 7:58
But of course, it’s still probably on the modest end, considering that the inflation rate in Australia is the latest.

Kim 8:04
That I looked up was 6% to the end of June and act and actually dropping just a little bit.

Kim 8:09
But it’s kind of keeping you up with inflation.

Kim 8:12
At the very least, you know it’s relatively secure and in fact, in Australia, deposits at authorised deposit taking institutions, most banks credit unions, you’d have to look it up to be 100% sure that that particular place is protected, but typically they’re protected up to $250,000.

Michael 8:20
And they’re protected by who that’s it’s a government protection isn’t it.

Kim 8:31
It’s a government protection.

Kim8:32
Exactly.

Kim 8:33
Yeah, it’s actually a hangover from the GFC.

Kim 8:35
So it didn’t place a a protection for people’s deposits so that people didn’t so that there wasn’t a run and everyone didn’t just pull their money out, and it’s ended up sort of staying in place.

Kim 8:44
So it means that deposits in these places are are relatively secure and protected by the government.

Kim 8:50
You can get the money whenever you need it.

Kim 8:52
But on the flip side, you know, with these high interest savings accounts, there’s typically a lot of conditions like you have to put in a certain amount every month.

Kim 8:59
The balance might have to increase every month.

Kim 9:01
You might not be able to withdraw more than you put in.

Kim 9:05
You might have to make a certain number of transactions on the account, and if you do any of these things or if you don’t do any of these things, then you don’t get the interest rate on the account.

Kim 9:13
So it’s, you know, the the people have got to be aware of these conditions on on the cash as well, so it’s certainly an option, but it’s definitely at the kind of the lower end.

Michael 9:20
And those those general rules, I find out that they’re monthly, aren’t they?

Michael 9:23
So, like you’ve got to transfer a certain amount of funds into the account monthly and and then if you don’t do it, then you There’s a lower rate of interest that they’ll pay, as opposed to the you know, the high advertised one that you would see when you’re searching online.

Kim 9:36
Exactly, and what people got under have to understand is that these accounts are they’re designed so that people start banking with these banks.

Kim 9:43
That’s what they want.

Kim 9:44
So there’s a bit of a reward there, but they want you to do your everyday transaction with them and bring you into their kind of ecosystem of products.

Michael 9:52
Yeah, but I can totally see how it is low risk and low reward.

Michael 9:56
And I think you’d mentioned 5.5% there as the benchmark and or as one of the higher returns.

Michael 10:01
And as we go through these different options, perhaps using the percentage of return as a bit of a reference as to the higher the risk, probably the higher the reward in terms of a return as a percentage so then the next one I think a lot of people would think of is probably something like a term deposit.

Michael 10:14
And what are they like?

Michael 10:15
And how do they work?

Kim 10:16
Yep, exactly.

Kim 10:17
So this sits into that kind of second category of asset that I mentioned before.

Kim 10:21
This is fixed interest.

Kim 10:22
So what it means is basically you give across a stack of money to the bank, and in return they give you a fixed rate of interest in terms of payment.

Kim 10:31
So typically with a term deposit, you need a higher amount of money so you can’t just put in, you know, $100.

Kim 10:37
It’s usually in the order of like, 5000 could be a bit more, and what it does is it basically locks up your money for a certain period of time and and then at the end of that, they give you your money back and they give you the interest, and it’s on top of that, so it’s almost like a set and forget investment.

Kim 10:52
You put it aside with the bank, and then they give you a fixed rate of interest.

Kim 10:55
Back on that.

Kim 10:56
There’s a couple of downsides.

Kim 10:58
Of course, probe is, it’s secure and it’s stable, the downside being that you don’t have access to the money during the life of the term deposit.

Kim 11:07
If you need the money, there’s usually like a break fee, and it can be quite expensive and the money you locked away so you can’t use it if you if you need it, you get locked in at a fixed rate of interest.

Kim 11:17
So if interest rates are going up, for example, you’re still kind of locked into that rate.

Kim 11:21
And, of course, when you get the interest, you have to pay tax on the interest because it’s an earning as well.

Kim 11:26
So that’s something else that people have to consider as well.

Michael 11:29
And similarly to a deposit and something I hear a little bit about are bonds and government bonds.

Michael 11:34
Do they fall in the same category as term deposits, or are they something a little bit different?

Michael 11:38
And can you tell us a little bit about bonds and how they actually work?

Kim 11:41
Yeah, yeah, they fall in in in the same category as term deposits.

Kim 11:46
They are a fixed interest product.

Kim 11:48
There are kind of typically two types.

Kim 11:50
There’s the government bonds, which you’ve mentioned.

Kim 11:52
And then there’s corporate bonds, and what they are is basically, just as with the bank, they are a way for the government and corporations to raise money from investors.

Kim 12:02
So they they offer it to the market and people buy it.

Kim 12:06
And then the government or the corporation pays a fixed rate of interest back to the bondholder until the bond matures.

Kim 12:13
So it’s exactly the same as conceptually as a term deposit.

Kim 12:16
Now, when you come into bonds, you’ll see corporate bonds.

Kim 12:20
They’re typically not available to kind of individual investors.

Kim 12:24
Usually they’re big amounts of money, so therefore, the kind of they’re sort of big retail institutional investors.

Kim 12:30
They might be, you know, a $500,000 minimum, for example.

Kim 12:34
So they’re kind of less accessible to individuals,

Michael 12:37
And especially to first home buyers.

Michael 12:38
First-home buyers have no chance to get stuff.

Kim 12:40
So, yeah, if you got $500,000 you’re not worried about the deposit saving.

Kim 12:46
That’s what you’re not worried about.

Kim 12:47
The deposit?

Kim 12:48
Yeah, whereas government bonds, the Treasury bonds, these are bought and sold on the A SX on the stock market, just as you can buy and sell shares, and they offer a fixed rate of interest.

Kim 12:59
They might be paid semi-annually or annually, and in effect, they’re the same as the term deposit.

Kim 13:06
In paying that fixed rate of interest, I guess the slight difference is the price can fluctuate a little bit on the A as people consider the bond more or less desirable.

Kim 13:15
But the flipside of that, of course, is that you can sell whenever you need the money, so it’s kind of you’ve got more liquidity.

Michael 13:22
Well, I’d be right to assume that that a bond might be slightly riskier than a term deposit because with a term deposit, you’ll deposit the funds into the lending institution.

Michael 13:31
And it’ll be that amount that you could potentially pull out at the end of that term deposit and then collect the interest, but with a bond, because it’s a little bit more like a share.

Michael 13:39
If it does drop for whatever reason, and you want to withdraw your funds at that point, it could be less than what you would initially put in.

Kim 13:45
That’s right.

Kim 13:46
Yeah, like so the price can fluctuate for the bond.

Kim 13:49
So in that sense, there is a little bit more risk there in some senses, like they’re probably a little bit more complex to get your head around as to what they do and you know who’s involved.

Kim 13:58
Compared to a term deposit where you can kind of get the full outline, you can go speak to your bank and they’ll tell you exactly what the product is.

Kim 14:06
A term deposit is probably a little bit more accessible for kind of those early-stage investors.

Michael 14:12
So would that also mean that Would the rate of return on your investment be slightly higher?

Michael 14:16
Because that risk is slightly higher as well.

Kim 14:20
Really depends on the bond. I mean, you have to remember, while there is that kind of riskiness with the price, there’s also that benefit that you can sell it at any point in time.

Kim 14:27
And so that’s gonna reduce the kind of overall risk and of the asset people really have to do a comparisons.

Kim 14:34
The best term deposits out there at the moment are probably a little higher than the best government bonds, and that kind of does reflect the way that with the term deposit, you know your money’s locked up for that long period of time.

Kim 14:47
as opposed to the bonds, which can be bought and sold.

Michael 14:49
All right, that’s a good understanding of those entry level, more safe options.

Michael 14:53
Let’s go a little bit more into the intermediate, I guess, options and a little bit more complexity as well.

Michael 14:58
And maybe what when we say investing what people generally feel is shares.

Michael 15:02
And what would you say to our listeners that don’t know anything about shares Or, a you know, maybe considering shares as an option.

Michael 15:09
What are they?

Michael 15:09
How do they work and what are the pros and cons of them?

Kim 15:12
So at its most basic, when you buy a share, you’re basically buying a part of that company, and so you become a part owner of the company.

Kim 15:20
What that means is, if the company does well, you kind of share in that rise in fortune for the company.

Kim 15:27
So if the price of the share goes up, then you participate in that.

Kim 15:31
And if the company is making a profit and is releasing dividends, then you get a share of those dividends.

Kim 15:38
It also means that you get voting rights as a shareholder, and you can do that as a very small shareholder.

Kim 15:44
Now your vote might get outvoted quite significantly, but you’re still a shareholder.

Kim 15:48
You’re entitled to go to the annual general meetings.

Kim 15:50
You’re a part owner of the company, and you can buy and sell on the ASX.

Kim 15:55
They’re the ones that are publicly listed.

Kim 15:57
But of course, like if you start your own company, then you’ll get shares in your own company and that’s gonna be a private company.

Kim 16:03
And it’s not traded on the ASX in the same way.

Kim 16:06
So yeah, look that that’s kind of the shares at their at their mobile. basically.

Michael 16:09
I I, I guess that the pro is obviously, that if you’re able to pick a share that does well, then you will obviously reap some rewards.

Michael 16:17
But and I think what happens more often than not, especially to the untrained, they might not pick the best share.

Michael 16:22
And then I guess the downside of it is that they can.

Michael 16:24
People can potentially lose a lot of money, so I mean, I guess understanding how risky could be and and there is that high risk and reward would you suggest to someone that’s interested in in looking at this as a strategy like what kind of professional do they need to speak to and who would they need to be getting more information about?

Kim 16:40
There’s lots of information out there, and and you can certainly go see a financial advisor and they’ll give you a full, proper rundown.

Kim 16:47
And that’s certainly advisable.

Kim 16:48
If you’re starting to get into these sorts of riskier areas and and in general, actually I would say I mean, financial advice are very good just for your specific circumstances.

Kim 16:57
To understand what you’re trying to achieve.

Kim 16:59
That’s one thing.

Kim 17:00
I, I mean with shares.

Kim 17:02
Other investors do this for a living day in, day out, and they read, you know, financial statements, profit and loss balance sheets, cash flow statements.

Kim 17:10
I mean, they know this stuff back to front.

Kim 17:12
So to get to that sort of level where you’re confidently picking winners, it’s incredibly hard.

Kim 17:19
And that’s why you have fund managers to do it for you.

Michael 17:22
Yeah, and that leads into it.

Michael 17:23
In other words, what managed funds and what they are?

Michael 17:25
Because, I guess does that help mitigate the risk by any way or or How did a managed fund work?

Kim 17:30
There’s a couple of really great things out there now, which can help combine investments into kind of a single investment, single fund.

Kim 17:38
And for people who are kind of wondering how they can get involved in the share market without, you know, having to pick the winners and the losers, they they could have a look at what’s called an exchange-traded fund and to think about it like in the abstract.

Kim 17:52
It’s basically like there’s a fund manager who owns a whole bunch of shares, and then you buy a unit of that and they hold it.

Kim 18:01
The underlying shares kind of on trust for you.

Kim 18:03
So when you buy one unit, you actually get a piece of lots of the pie.

Kim 18:09
You get access to many, many companies.

Kim 18:11
So, for example, there are exchange-traded funds which seek to kind of track the performance of the top 200 companies in in Australia.

Kim 18:19
So if you buy a unit of it, then you kind of get access to the performance of that of those 200 companies, and it does to some extent take out the decision-making of like, do I go with that company or that company?

Kim 18:31
You’re kind of just saying I’m gonna buy the top 200 companies in Australia, for example, or the top 300 whatever the case may be.

Kim 18:39
And then you kind of rise and fall with the share market as a whole.

Michael 18:43
And I imagine that they’re doing a lot of the due diligence when it comes to assessing what shares they’re putting in that portfolio.

Michael 18:49
So that takes a little bit of the responsibility.

Michael 18:51
I mean, to some extent of you having to go through the PLS and all the business statements and documents that would that be a right right assumption there?

Kim 18:59
Yeah, so, like if people get into these exchange traded funds and a and a lot of them are passive, which means that all they’re trying to do is match the performance of the stock market as a whole, they just want to.

Kim 19:13
So they’re not trying to do better than the market.

Kim 19:16
They’re just trying to own assets that track what happens in in the stock.

Michael 19:20
They’re happy with the average, almost like it’s like they’re not looking for an outlier.

Kim 19:23
Yep, they’re just looking for the average.

Kim 19:25
They’re just looking for the average to keep up with things And in that sense, ETFs can be a very accessible way to start investing because you’re kind of saying to yourself, Well, I’m just wanting to track the performance of the stock market as a whole.

Kim 19:38
I’m happy to try and beat things at the moment, maybe down the track, when I kind of understand it a bit more and get a bit more into it.

Kim 19:44
But for the moment, I’ll just kind of track it.

Michael 19:46
OK, what a simple way to put it from what I understand and I and I and I’ve got to admit, I’m I’m very far from an expert in this particular area, so probably like a lot of the listeners trying to work out it in my mind.

Michael 19:56
But it’s like these ETFs or these exchange-traded funds.

Michael 20:00
It’s like just buying a part of the share market as a whole kind of thing.

Michael 20:03
So it’s like I wanna invest in shares.

Michael 20:05
I’m actually gonna go and buy the share market kind of thing, you know?

Michael 20:08
So it’s that type of, as opposed to picking a particular company.

Michael 20:11
I just wanna go and invest in shares, and this is the best all rounder for me to basically, you know, to get into where I am hedging my bets to some extent, because I’m not picking one company that’s gonna go up or down.

Michael 20:21
I’m picking multiple as part of a grouping.

Michael 20:24
And then we’re relying on the average of the performance of these companies.

Michael 20:27
A.

Michael 20:27
And we can split that into different categories.

Michael 20:30
So we’ve got you said the top 200 in the ASX.

Kim 20:33
Yeah.

Kim 20:34
So once you start looking into the types of ETF S that are available, there are a lot of types available.

Kim 20:39
So there are ETF S that track the performance of the top 200 companies on the ASX.

Kim 20:45
There’s some that track the performance of the top 300 companies on the ASX.

Kim 20:50
There’s some that track the overall performance of high dividend companies, so they just want to kind of match dividend return.

Kim 20:59
There’s ETFs that track overseas companies so you can get some that kind of track the performance of the 100 you know, 100 largest companies in the world, for example, or you might think that the US stock market is gonna do well so you can get some that track the biggest companies on the US stock exchange, or European or Asian.

Kim 21:19
So there are kind of a lot of different sort of niche products.

Kim 21:22
There are niche ones now that track the performance of specific set, for example.

Kim 21:27
So if you think a particular sector is gonna do well, then you can start investing in that in an ETF that tracks that sector as a whole, as opposed to kind of just picking one company within that sector.

Kim 21:38
And this has happened to me, by the way like this happened earlier on in my investing career.

Kim 21:43
But you can get caught up in the idea that, like you pick the right industry and therefore that every company in that industry is gonna do well.

Kim 21:49
But it’s absolutely not the case like you can pick a winning industry.

Kim 21:53
But the company you pick might have bad management.

Kim 21:55
They might have debt issues.

Kim 21:56
They might have terrible staff, a whole bunch of reasons why they might do it.

Kim 21:59
Not as well, even if you happen to pick, like, what is a winning industry?

Michael 22:03
Yeah, I mean, I’ve got industries in my head, but I know that same you know, friends and colleagues have have done well in.

Michael 22:08
But I’m not gonna mention them because this is definitely not a podcast where we we’re doing any type of advice or direction or anything like that.

Michael 22:14
With you, it’s just more to explain what these particular different systems of investment may be.

Michael 22:20
But yeah, so that’s ETFS.

Michael 22:21
And I can totally see how they can play a part in somebody, especially somebody who’s probably a first home buyer that’s looking to start into it.

Michael 22:28
And it’s probably not a bad area for them to investigate and get some more information on to see.

Michael 22:32
It seems to be a little bit less risky than trying to pick a winner of a company and hedging your bets a little bit more potentially.

Kim 22:38
Yeah, definitely worth.

Kim 22:39
And And let me just make 11 final point on these ETF there.

Kim 22:42
You get to participate in the price rise as a whole if it goes up the AX.

Kim Kim 22:48
But you also get access to dividends from all of those companies as well.

Kim 22:51
So if you’re investing in the top 200 companies every time, all of them pay out a dividend.

Kim 22:56
You also get a share of that and that, for the Australian context, is really quite good, because often those dividends are what they call Frank, which basically means the company’s paid a bit of tax on it already and then, therefore, that flows through to you as well.

Kim 23:12
So there’s kind of these tax advantages to frank dividends as well.

Michael 23:15
OK, so that’s a a concept there that we’d probably need to explore, as well the frank of dividends and how that works.

Michael 23:21
But it’s just a, I guess, a a bit of a tax benefit, potentially that one would want to explore.

Michael 23:25
So getting into maybe some slightly higher risk, high reward territory, and I did mention it before, but I might have been a little bit incorrect in the way II I mentioned it.

Michael 23:32
Managed funds.

Michael 23:33
Now these are different ETFs.

Michael 23:35
Is that correct?

Kim 23:37
They are the overall idea is the same.

Kim 23:40
It’s still a fund.

Kim 23:41
It’s and pooled investment.

Kim 23:43
So lots of people put their money together into a single fund that invests in lots of things.

Kim 23:47
Underlying investment, the sort of the main differences with an ETF that often they’re actively managed.

Kim 23:55
So therefore, manage funds, which means that the fees are gonna be typically a little bit higher.

Kim 24:00
And what that means is, you know, they they’re basically trying to beat the market.

Kim 24:03
If they’re actively managed, they’re saying, pays a little bit extra in fees, and in return, we’re gonna try and do better for you.

Kim 24:10
So that’s kind of where you get that risk-reward ratio coming back.

Kim 24:14
And then, you know, the other major difference is that the managed funds usually are not traded on the ASX.

Kim 24:21
So you don’t buy and sell on the ASX.

Kim 24:24
You kind of invest directly with the fund manager, who then all the money together and invest in things on your behalf.

Kim 24:30
And by the way, I should say almost all of us have a managed fund already working for us, and that’s it’s our super fund.

Kim 24:38
So it’s compulsory.

Kim 24:40
You’ve got money coming out of your pay all the time to go into these funds, and they’re taking your money and investing on your behalf in property and bonds and stocks and commodities and infrastructure, et cetera.

Kim 24:50
And it’s all done on on on your behalf.

Kim 24:52
So most of us are actually already have a managed fund working for us.

Michael 24:56
We’re all already investors without realising I’ll pick up on that point because that’s I think that’s great.

Michael 25:01
And and people that are listening to this and are becoming aware of it or something’s just registered now.

Michael 25:06
Because of that, I would probably challenge you guys to find out who your super fund is and start to become inquisitive as to how they’re investing your money.

Michael 25:14
Because I I know and I learned this myself is and and I’m part of an industry super fund.

Michael 25:18
You can actually log in, and you can actually see how they’re investing your money and you can actually have a have a bit of a say so.

Michael 25:23
And it’s not necessarily very fine in terms of or or you know you can’t get very micro in terms of what they’re investing in.

Michael 25:29
But I think there are broader categories that you can select to have your your money allocated into or your super fund money allocated into and and they’ve got information about that through their websites, and you can see what the average returns have been in certain categories.

Michael 25:41
And if there’s one that’s more less risky than another you might say, Well, I want you to invest 100% of my funds into this type of, share class or it might be another type of class.

Michael 25:50
So would you also recommend that or any thoughts on that?

Kim 25:52
No, I couldn’t agree more.

Kim 25:53
I couldn’t agree more.

Kim 25:54
I think it’s almost insane in some ways how, like we have all this money being taken out of our pay every fortnight monthly, whatever the case may be and it’s invested on our behalf and a lot of people don’t know what’s happening to it.

Kim26:07
I mean, it’s your money, you know?

Kim 26:09
It’s our money and I.

Michael 26:10
I guess it’s probably an age related thing, like I mean, depending on on on the age of the individual.

Michael 26:14
I mean, for first home buyers, it’s probably not something they’re thinking about this super but and I know I was around sort of 2009 and 10 and and and and working at that time.

Michael 26:20
But there are a lot of people that went on to tops who had the the global financial crisis.

Michael 26:24
But anyone that was about to retire at that stage when the share market basically just bottomed out.

Michael 26:29
A lot of their wealth that they had generated over the last 10 or 15 years had basically wiped out.

Michael 26:34
So they were in a situation where they probably couldn’t retire because they went.

Michael 26:37
Now that’s obviously something you probably can’t forecast.

Michael 26:40
But it’s definitely part of that investment risk.

Michael 26:43
I guess that we’re all already and maybe unknowingly subject to.

Kim 26:47
No, that’s exactly right. We’re all we’re all subjected to war.

Michael 26:49
Yeah, I think the super I don’t know what how much I don’t know how many trillions it’s worth now, but I’m not sure if it’s more than property Australian property or if it’s second behind Australian property in terms of value of the, Australian property market against the size of our, you know, superannuation market within Australia.

Kim 27:03
But I know it’s the I think property overall is still more valuable in the supermarket. I think I would have to.

Michael 27:09
Yeah, it’s questionable, right?

Michael 27:12
Like I mean, you can’t definitively say one or the other without researching it, so so I and I and I remember hearing it recently where it’s there or thereabouts and I still think real estate is number one, but in any case, and that leads us into another option that I want to talk about, which is relevant for anyone looking to get onto the property market, which are real estate investment funds.

Michael 27:29
They’re cropping up more and more now.

Michael 27:31
I feel, what is a real estate investment fund and how do they work and what are the pros and cons of them?

Kim 27:36
It’s basically just like a fund, So it’s pooling money together to buy assets on your behalf.

Kim 27:43
But in the case of real estate investment, trust, they they’re just gonna buy property.

Kim 27:47
So property assets and it invests in residential real estate.

Kim 27:52
But they might also invest in commercial real estate.

Kim 27:54
So, you know, these are the types of funds that invest in hospitals and shopping centres and warehouses and corner stores and things like that.

Kim 28:04
So what it does is it allows you kind of to get access to the Australian property market without having to own and manage an entire property.

Kim 28:13
So when you invest in one of these, you’re basically getting kind of a piece of what’s happening in the property market as a whole.

Kim 28:19
Now I mean, there’s a couple of things to note there, I mean, but when people think of property market, they often think of residential property, and they often actually think of Sydney and what’s happening with the crazy Sydney property market.

Kim 28:30
But the fact is, like property across Australia as a whole is often, and it often doesn’t have that same insane kind of rise in prices, and it can be quite stable.

Kim 28:41
In fact, it can even go down.

Kim 28:42
Just look at, for example, Now you know commercial properties.

Kim 28:45
Office rental space in the city is is less less in demand because more people are working from home.

Kim 28:51
So the returns for the property owner, the manager, the commercial property might be a little bit less so.

Kim 28:56
Real estate investment trusts.

Kim 28:58
You know, you get access to property in Australia, but you might not get that kind of crazy sort of price rises that you see Sydney.

Kim 29:04
But still, it’s a really good way.

Kim 29:06
If people want to get into the property market without actually owning and managing an entire property, then there’s certainly a way to do that and particularly if people think that certain commercial properties are gonna do well as well.

Kim 29:18
It’s a far more accessible way for individual investors to get to get involved.

Michael 29:22
Yeah, no, no, I can imagine.

Michael 29:23
And I would assume, because it’s it’s the real estate.

Michael 29:25
It’s the Australian property, you know, real estate sector that you’re investing in.

Michael 29:28
It’s probably there’s a bit of stability there compared to say, you know, investing in shares in a company or something like that.

Michael 29:33
So there is that element of, you know, of stability there again, that’s that back to that risk-reward, scenario, though, but it’s very stable than than the risk of of a big reward, or or the the amount of the reward might be not as high as some other investments categories that we’ve spoken about.

Kim 29:49
Yeah, and then, I mean a couple other points with the REITs.

Kim 29:51
Its is, just as we have a share or company, you get dividend returns, they pay out with the property.

Kim 29:57
You get some rental returns whenever, whenever that money comes in.

Kim 30:00
So you kind of get access to that as well.

Kim 30:03
And these REITs, they’re bought and sold on the ASX just you know, you can buy them just like you can buy ETFs and shares, so they’re bought and sold the same way.

Kim30:13
So of course you can get that fluctuation in the price of the unit as well.

Kim 30:17
Then there are.

Kim 30:19
I mean, if people wanna get into this space a bit more, there’s, those are the listed funds.

Kim 30:24
So they’re listed on the ASX.

Kim 30:26
And there’s unlisted funds, which again kind of the idea that a fund manager will take money from a lot of people and pour it and buy real estate property across the country.

Kim 30:36
And there’s, you know, there’s a lot of good research out there.

Kim 30:39
Core property research does some pretty good research on property funds if people are looking to get into it a little bit further.

Michael 30:47
But definitely something that it’s worth exploring if people are looking at at ways of boosting their their deposit by some savvy and diligent investing, well, thank you for explaining all of those different categories and and from what you’ve mentioned and a bit of a summary, the bonds that we’d mentioned the shares, the ETFS, and that these real estate investment funds the options, they’re accessible via the ASX.

Michael 31:09
If people wanted to look into that and as well as then, obviously the managed private companies that are looking after that as well.

Kim 31:15
Yeah, yeah.

Kim 31:16
So shares on the ASX you can buy shares particular companies.

Kim 31:19
You can buy ETFs.

Kim 31:20
You’ll be able to buy government bonds in the ER.

Kim 31:23
Yes, they they are available to buy and sell on the ASX.

Michael 31:26
Yep, all right.

Michael 31:27
And this is the information for people just to digest.

Michael 31:29
And if they’re interested in pursuing anything further, obviously you need to speak to the relevant professional.

Michael 31:33
And I’d probably say to be a financial advisor of some type that can guide you through and explain you through the best way to perhaps structure this and plan this out.

Michael 31:41
Final two questions to finish up.

Michael 31:43
If it’s OK, the first one is, in your opinion, what should first home buyers prioritise in the process of saving their deposit?

Kim31:50
I think it’s about keeping up with price rises.

Kim 31:53
So in the past it was you could just put money aside diligently and save and build up that money for a deposit.

Kim 32:01
And I think the market has changed a bit now, and house prices keep on going up.

Kim 32:05
So I think it’s important to look at strategies to keep up beyond just saving.

Kim 32:10
That might be, you know, high-interest savings accounts.

Kim 32:13
It could be bonds, deposits.

Kim 32:15
It could be ETFs.

Kim 32:16
It could be shares.

Kim 32:17
It could be IERTs.

Kim 32:18
But I think it’s important that people look at these options and understand them because the rate at which you can save may not be enough to keep up with the price rises and what you need to get deposit.

Michael 32:29
Yeah, and I think to top off on that, I mean, yeah, we traditionally, we always think just save, save, save, put X amount of your money away and just save, save, save to get the house.

Michael 32:37
But it was always a challenge to do that.

Michael 32:39
But now, with the other economic factors that are are affecting us today with cost of living and things, it’s hard to play that you can’t just rely on saving.

Michael 32:46
If you’re looking to build up your deposit, you have to look at these probably there more, which is why we’re talking about it.

Michael 32:50
There’s more complicated methods of investment so that you can save a little bit quicker or at the same rate as everything else going up as as you mentioned a few times, The second one is what’s one thing you wish you knew before you started investing.

Michael 33:04
So if you go back to when you started knowing what you know now, you know what would that be?

Michael 33:08
And what would you act on then?

Michael 33:09
Knowing what you know now.

Kim 33:13
It’s basically just what I’ve said. Like when I was younger and starting out before I’d started sort of my investing journey.

Kim 33:18
I was, you know, quite diligent with savings, putting money aside, making sure that I kept more than I spent.

Kim 33:25
But what I didn’t understand was the difference between saving and investing.

Kim 33:29
And that’s what I wish I’d learned kind of earlier.

Kim 33:31
Savings is putting money aside, but investing is putting that money to work for you.

Kim 33:36
So there’s a difference there and quite a critical difference.

Kim 33:39
And I think if I’d known that earlier, then I certainly would have been investing earlier.

Michael 33: 45
And hopefully this podcast for somebody listening.

Michael 33:47
They can recognise that particular thought.

Michael 33:49
And now, with the content throughout this particular podcast as well, they can start to understand.

Michael 33:54
What are these investments?

Michael 33:55
What do they look like?

Michael 33:56
and hopefully it just sort of lights the fire that might get them to explore these options and assist them in that journey.

Michael 34:02
Thank you so much, Kim, for joining us Day on the show.

Michael34:04
Where can our list to find you if they want to learn more?

Kim 34:06
My website.

Kim 34:07
Kimnorthwood.com And that’s where they can buy a copy of my book, work less, make more The Millennial’s Guide to Financial Freedom and then, secondly, just developing at the moment a new course on investing with founder of Ladies Finance Club Molly Benjamin.

Kim 34:24
And that course will be available shortly so people can sign up and preregister for the course.

Kim 34:32
So we’ll start with a kind of entry level beginners guide to investing.

Kim 34:36
And then and then it kind of gets progressively more more complex.

Kim 34:39
So, yeah, just open for preregistration’s at the moment.

Kim 34:42
If people go onto my my website kimnorthwood.com, there’ll be a tab investing course, and they can, can follow that to sign up.

Michael 34:49
That’s super exciting.

Michael 34:50
Awesome.

Michael 34:50
Well, thank you for sharing that, and yeah, like I said, that’ll be in the show notes for sure.

Michael 34:53
So anyone that wants to check that out.

Michael 34:54
Look in the show notes and the links will be there for that.

Michael 34:56
Thank you so much again for joining me on the show.

Michael 34:58
Kim, It’s been great and fantastic topic today.

Michael 35:00
Really insightful.

Michael 35:01
Really appreciate it.

Kim 35:02
Yeah.

Kim 35:02
Great.

Kim 35:02
No, thank you again for having me.

Kim 35:04
It’s, enjoyable.

Kim 35:05
As always.

Michael 35:08
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 35:12
This podcast was produced by Lendstreet.

Michael 35:14
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 35:20
We know applying for a loan can be overwhelming and complex, so we help guide and support first-home buyers through the process from start to finish.

Michael 35:27
To find out more, head to our website lendstreet.com.au.

Michael 35:31
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 35:36
Be sure to subscribe to or follow the show in your podcast app.

Michael 35:40
And while you’re there, please leave us a five-star review.

Michael 35:43
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Michael 35:46
I’m Michael Nasser and we’ll be back next episode covering another step on the journey to owning your first home.

The post Ways to accelerate the saving of your deposit appeared first on The Home Run.

Show Notes

Molly Benjamin is the Founder of Ladies Finance Club and the Author of “Girls Just Wanna Have Funds”. From a casual idea in Molly’s living room with friends, Ladies Finance Club has changed the lives of women all over the world by building a supportive community of women who are taking control of their finances and having fun doing it. 

In this episode, Molly explains how to make financial literacy more interesting and why it’s so important. She also breaks down how having the right mindset can help you to achieve your dream of home ownership and talks about how using mantras can make a difference in your financial future. Plus, Molly shares the inspiring story of a Ladies Finance Club member’s journey to buying their first home.

Transcript

Michael 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation, or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to The Home Run your guide to buying your first home in Australia.

Michael 0:21
On the show, I’ll walk you through the home buying process from every angle we cover the steps to take the pitfalls to avoid, and the answers to all your questions you’ve been dying to ask.

Michael 0:31
No matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser, and I’m a mortgage broker at Lendstreet, and I really love helping people buy their first home today on the show.

Michael 0:46
I’m joined by Molly Benjamin.

Michael 0:48
Molly is the founder of the Ladies Finance Club, an exclusive women’s finance club that empowers women to take control of their financial futures and get money savvy.

Michael 0:58
Molly is also the author of the excellent book Girls Just Wanna Have Funds.

Michael 1:02
Molly has really impressive journey and in today’s episode, you’ll hear all about it.

Michael 1:07
Molly will share how she founded the Ladies Finance Club.

Michael 1:10
She’ll talk about the importance of having the right mindset for first-home buyers.

Michael 1:14
And she’ll breakdown why she believes that education is so important for first home buyers.

Michael 1:19
Let’s get into it.

Michael 1:24
Molly, thanks for joining me on the show today.

Molly 1:26
Thanks so much for having me excited to be here.

Michael 1:29
So you’re the founder of an organisation called the Ladies Finance Club.

Michael 1:33
And I wanna talk to you about that in a second.

Michael 1:35
But first I wanna talk to you about how did the journey get started for you?

Molly 1:38
OK, so if we’re going back to the start, it is, I think 2017 or something like that.

Molly 1:44
I’m in my apartment in London.

Molly 1:46
It’s a Sunday afternoon.

Molly 1:48
My girlfriends are over.

Molly 1:49
And I’m like, Wow, we’re all complaining about how broke we were after the weekend.

Molly 1:54
Like I’m so broke.

Molly 1:55
No, I’m so broke.

Molly 1:56
And it was almost like a bit of a joke.

Molly 1:58
And I’m like, What is going on?

Molly 2:00
We all have good jobs.

Molly 2:01
We’re earning pretty good money, but we’re living paycheck to paycheck.

Molly 2:05
We have no emergency savings.

Molly 2:07
We’re not investing.

Molly 2:08
Then the next day, I caught up with one of my guy mates and he was buying his second property.

Molly 2:14
He was investing in the share market.

Molly 2:16
And I’m like, What is going on here?

Molly 2:19
And so really, Ladies Finance Club was born in my living room.

Molly 2:22
I was like girls instead of a book club.

Molly 2:24
We’re gonna have a money club because me myself, like massive confession.

Molly 2:27
I was horrendous with money like, yeah, living paycheck to paycheck.

Molly 2:30
I had a great job, but nothing to show for it.

Molly 2:33
I thought money.

Molly 2:34
You earned money so you could spend money not l,ike, keep it and build strong financial foundation.

Molly 2:39
So we get someone in to talk to us about finance.

Molly 2:43
I’d put on pizza wine, get my girlfriends to come along, and we started learning about money, and I was like, Wow, so many of my girlfriends are interested, and people would be texting me being like, Hey, I miss that money thing.

Molly 2:54
Are you doing it again?

Molly 2:55
And so I was working for a bank in the UK at the time, which is like, not embarrassing because a lot of the women I was working with had no clue about money, and and I’m sure it’s the same with the guys.

Molly 3:04
But my focus was women.

Molly 3:06
And so I was like, I’m gonna put on my first event in London and see who wants to come along and it’s sold out.

Molly 3:14
Most of the women worked in financial services, and that’s kind of where it was born.

Molly 3:18
So if you fast forward to where we are now, I moved back to Australia.

Molly 3:23
I set it up in Australia.

Molly 3:24
We’ve had over 35,000 women through our events, courses, masterclasses, programmes.

Molly 3:31
And it’s all about helping make women rich because unfortunately, the gap is just big and we live longer.

Molly 3:39
That’s absolute fact.

Molly 3:40
We live on average five years longer.

Molly 3:42
We earn less.

Molly 3:43
We get paid less for doing the same job as guys, you know, for every dollar.

Molly 3:47
Unfortunately, we’re still earning 87 cents to that dollar.

Molly 3:50
So what this means is over a period of time in retirement, and I’m sure you’re very familiar with this and so are your listeners.

Molly 3:56
But we’re retiring on a lot less than men, and that gives us a lot less control over our lives.

Molly 4:02
And I think one of the big stats which really motivated me to start my business as well, is when I found out that the highest growing demographic of people experiencing homelessness was single women over the age of 55.

Molly 4:13
These women who’d like you know, either given up their lives to raise families to bring up the next generation of Australians, and then they are retiring into poverty.

Molly 4:22
And I just wanted to do something about that.

Molly 4:24
I didn’t want that for any woman.

Molly 4:25
And I was like, OK, let’s start educating ourselves because that is the key.

Molly 4:30
The education piece is the key.

Michael 4:32
Totally, and I think from what you mentioned there, that there’s a bit of a strategy piece there which I guess we’ll talk about, too, because it’s about being mindful of what you doing.

Michael 4:39
As you mentioned at the beginning.

Michael 4:41
You know, you were making money, but you were spending it so that there’s probably a lack of strategy there, and and that’s what you’ve started to pick up on now.

Michael 4:47
But this has inspired you to create the Ladies Finance Club.

Michael 4:50
Tell me about this club and tell me about how it works and and why was it so important for you to start this organisation?

Molly 4:56
When I started learning on my own like my own financial literacy, education, everything and excuse excuses, I just found it very male, pale, stale and blue and freaking boring. And I was like, I do not want to engage with this.

Molly 5:09
I’m social.

Molly 5:10
I love doing stuff with my girlfriends.

Molly 5:13
I was like, Why does this have to be boring?

Molly 5:15
Let’s make this fun.

Molly 5:16
So you know, it started off as events.

Molly 5:18
And then when covid hit, we turned it into an online club.

Molly 5:21
So we do monthly master classes.

Molly 5:23
What I do is I get the best experts.

Molly 5:25
Generally, they are females.

Molly 5:26
Sometimes they’re guys as well.

Molly 5:28
And we break down different topics of finance, from budgeting to investing to superannuation, retirement, getting on the property ladder.

Molly 5:36
We work with amazing mortgage brokers.

Molly 5:38
We work with fantastic property investors and just like creating this really lovely supportive community where I guess each other’s cheerleaders.

Molly 5:46
But we’re educating ourselves on the way, and it’s really cool to see women come in with no financial literacy and then they’re buying property or they’re like I bought my first ETF.

Molly 5:56
I bought my first shares.

Molly 5:57
And you knew three months ago they had no idea what an ETF was.

Molly 6:00
And they’re really setting themselves up.

Molly 6:02
And this information, this education is gonna stay with them for life.

Michael 6:05
It’s empowering.

Michael 6:06
I mean, I, I can just feel that coming through while you’re speaking about it, that you know that passion and and I can totally get it.

Michael 6:11
And having seen you know, your socials and seen your website fun definitely is something that I can I can see comes across.

Michael 6:18
It’s like turning this boring topic, you know, which is, you know, you’re very heavily dominated by males and all that sort of stuff, but making it fun and making it more appealing and attractive to an audience that you obviously resonate with and bring that message to them where they otherwise couldn’t and you mentioned there’s 35,000 people that have gone through it, so it’s obviously hitting a chord, and that’s fantastic.

Michael 6:36
So, congratulations on that.

Michael 6:37
And I think you know, you’re kicking some massive goals there.

Michael 6:39
You’ve written a book as well. I noticed.

Molly 6:40
Yes

Michael 6:41
Tell us a bit about that.

Molly 6:42
Yeah, so it’s called Girls just want to have funds and it’s all about starting from the beginning, with your mindset going through all the different areas of personal finance.

Molly 6:52
But we also touch on, like the basics investing super insurances tax.

Molly 6:57
But then also getting divorced.

Molly 7:00
Separation, teaching your kids about money, how to negotiate your salary.

Molly 7:04
So I’ve interviewed some of my most favourite women in finance all around the world.

Molly 7:09
And, yeah, we we put it into a book.

Molly 7:12
And then we just got out a journal as well with the founder of Kiki K, Christina Carlson’s new company, Dream Life.

Michael 7:18
Well, OK, and we’ll have information about the show notes a bit further on.

Michael 7:21
But that’s congratulations on that as well.

Michael 7:22
Mindset.

Michael 7:23
You’ve mentioned that, and I think it’s a critical thing, and it’s definitely a foundational concept, and I know you talk a lot about the importance of having the right mindset before we talk about why it’s important for anyone who doesn’t know.

Michael 7:34
What does it actually mean to you to have the right mindset?

Molly 7:37
I think it’s around having the right belief but also understanding where your money, like, especially your money mindset has come from, because if you can understand where it’s come from and you do a bit of a foundational work, because a lot of time, our money mindset is made up by the time we’re seven years old.

Molly 7:54
It’s heavily influenced by how our parents behaved with money or didn’t behave with money, or if they were good or bad, or if they thought about it, or how they behaved with it is very much influenced with how we are.

Molly 8:05
So if there are potentially some behaviours there that need changing, which I would say, majority of people I speak to, they don’t have positive relationships with money and positive mindsets around money.

Molly 8:17
So for me, yeah, it’s really about what do you really believe about money, your feelings and thoughts.

Molly 8:23
And as you said, it’s so foundational.

Molly 8:25
So you know you can learn all you want about investing, budgeting.

Molly 8:28
But if the mindset isn’t right, then none of the other stuff matters.

Molly 8:32
So it’s really, about nailing that one first.

Michael 8:35
What would be one of the biggest mindset challenges that you see from, You know, the experience that you’ve had dealing with people on this topic is there one particular challenge that you see more often than not or can it be really diverse?

Michael 8:46
And it just depends on the individual.

Molly 8:48
There’s quite a few different ones.

Molly 8:50
There’s a quite a big scarcity mindset.

Molly 8:53
And also like, I’m just not good with money.

Molly 8:55
That’s a belief.

Molly 8:57
I hear a lot and I’ll kind of challenge that.

Molly 8:59
And I’ll be like, OK, can you remember a time you were good with money?

Molly 9:02
Do you pay your rent every month?

Molly 9:04
Oh, yeah, Absolutely.

Molly 9:05
Do you ever miss any bills?

Molly 9:07
Oh, no.

Molly 9:07
Never miss a bill.

Molly 9:08
OK, so you’re actually not that bad with money.

Molly 9:10
So that’s a common one, I hear.

Molly 9:13
Oh, gosh, there’s a lot.

Molly 9:14
There’s a real lack of kind of confidence with money because I also think this is a big part of it.

Molly 9:20
We’re not socialised as women to talk about money, and, you know, sometimes that might be because women could only open their own bank account in their own name like it wasn’t that long ago in like the seventies, like you couldn’t get a home loan without a male signature.

Molly 9:33
So women haven’t been having these conversations for generations and generations.

Molly 9:36
Men have always been controlling the money.

Molly 9:38
So there’s a lot of different, reasons that in the book, the first chapter is all about mindset and how to reframe some of those negative thoughts as well.

Michael 9:48
Absolutely.

Michael 9:49
And I think it’s a matter of perspective.

Michael 9:50
And you know, you’ve mentioned there how you, you know, you speak to people and they’ll highlight an issue.

Michael 9:54
But then if you spin it and particular perspectives like Hold on, you’re not right in thinking in that way.

Michael 9:58
Try thinking about it this way and all of a sudden that just opens up new doors, I imagine.

Molly 10:01
Yes.

Molly 10:02
And I think especially with home ownership as well.

Molly 10:04
A lot of our women are single women, and they kind of have this belief that I will never be able to get on the property ladder as a single woman.

Molly 10:12
And I’m, like, again challenge that.

Molly 10:14
How come there’s guys buying property all the time by themselves and actually going OK, Well, you’ve just got to look at what other avenues are there.

Molly 10:22
If you can’t get that 20% deposit, OK, what else can you do?

Michael 10:26
And that leads into our next question quite well because when it comes to first home buyers specifically and that’s obviously the market that we speak to here at the home run, why is it important for them to have the right mindset?

Molly 10:35
Your actions are your beliefs.

Molly 10:36
Your beliefs are your actions.

Molly 10:37
So iF you really believe that you’re never gonna be able to buy a property?

Molly 10:41
What’s your action?

Molly 10:42
You don’t take an action.

Molly 10:44
What happens?

Molly 10:44
The result is you have no property.

Molly 10:46
If you believe you can get on the property ladder, you start taking action.

Molly 10:50
You go.

Molly 10:50
OK, well, I’m just gonna chat to a mortgage broker and see.

Molly 10:53
Where am I currently at?

Molly 10:55
Where do I wanna get to?

Molly 10:56
OK, I’m gonna start looking around.

Molly 10:58
I’m gonna look at what other options are there.

Molly 11:00
Oh, cool.

Molly 11:00
There’s some government schemes.

Molly 11:01
OK, great.

Molly 11:02
I could rent vest.

Molly 11:03
Oh, great.

Molly 11:03
I could get my parents to be my guarantors.

Molly 11:05
You start taking action and I’m a big believer of mantras, goal setting and actually changing the messages in your head to say no.

Molly 11:14
I will be a property owner.

Molly 11:15
I will get on the property ladder and actually believing it.

Molly 11:19
I remember speaking to, a lady in London, and she was in HR earning a pretty good wage.

Molly 11:25
And we walked past a house together and she’s like, I’ll never be able to afford a property And I was like, Why is that?

Molly 11:31
And she’s like, Oh, you know, I just don’t earn enough.

Molly 11:33
I’m like, How much do you earn?

Molly 11:34
And she told me, And I’m like, You earn plenty enough to get on the property ladder.

Molly 11:38
Maybe you can’t start with your dream house like, you know, with the beautiful, you know, white fence and this.

Molly 11:45
But you can definitely become a property owner and build your way up to that dream home.

Molly 11:50
So, yeah, there’s always a way if you want it.

Michael 11:53
Absolutely, and it’s about finding it out.

Michael 11:54
And it’s that education, because once and it’s something I deal with a lot is that people don’t know what’s possible because they don’t know what exists to make it possible.

Michael 12:02
So if you can outline the path for them, then it’s like, Well, hold on.

Michael 12:05
Now that I know what I need to do, do you still want to do it?

Michael 12:08
I guess at the first instance, and if that’s generally yes, then Well, let’s start on that path.

Michael 12:11
So totally see, how you know, outlying that journey can at least make it more empowering for the individual to then go on that journey and realise their ultimate dreams.

Molly 12:20
Yes, and it’s so funny.

Molly 12:21
I think, when people make that decision and then you see this belief that they they’re like, Oh, my gosh, I’m gonna buy a property And then all of a sudden, they’re a bit of a financial hot mess, and then it’s like overnight they’ve, like, got their tax sorted.

Molly 12:33
They’ve got their pre-approval done, they’re looking, and it happens quickly.

Michael 12:37
It’s like tunnel vision effectively.

Michael 12:38
It’s like now that I I’ve got that in place.

Michael 12:40
I know that I can do it.

Michael 12:41
This is the strategy. And then all of a sudden, everything else falls into place.

Molly 12:42
And I think that’s where mortgages brokers play a big role in that education part as well.

Molly 12:48
And I know a lot of the mortgage brokers we work with as well.

Molly 12:51
I think they just spend, like, 90% of the time just educating people on that process.

Molly 12:55
Which is why we’ve started running Webinars on what is the process to buy.

Michael 12:59
So for anyone on the journey to buying their first home what what are some of the ways that they can improve their mindsets?

Molly 13:05
So I think there’s a couple of things you can do the mantras or the affirmations like I am gonna be a property owner.

Molly 13:13
I know it sounds a bit Woo Woo, but like literally changing the messages you’re telling your brain and then challenging those messages when the negative messages come up, you’ll never be able to afford it.

Molly 13:24
You won’t be able to do this by yourself and actually challenging those and going Is that true?

Molly 13:29
Has there been any single people this year that have bought property?

Molly 13:32
Absolutely.

Molly 13:33
There Have You can totally do this.

Molly 13:34
So really believing that again.

Molly 13:36
I ain’t gonna sound weird to some of the people on the podcast, but manifesting telling the universe that this is what you want and getting really clear and focused talking to a mortgage broker.

Molly 13:46
I think that’s great for the mindset because it actually makes you go.

Molly 13:49
OK, I’m actually getting serious about this, and I’m gonna even if I’m not ready to buy right now, I’m gonna find out what I have to do and I’m gonna look at Do I need to start doing some credit repair on my credit score?

Molly 14:01
Even writing a letter?

Molly 14:03
I don’t again.

Molly 14:04
Sounds weird writing a letter to yourself about when you bought the property.

Molly 14:08
So it’s such and such I bought the property.

Molly 14:10
This is how it makes me feel.

Molly 14:11
This is why I wanted to buy it.

Molly 14:13
And really thinking about why do you want to buy a home?

Molly 14:16
What is it in you?

Molly 14:17
Is it?

Molly 14:18
So you’ve got this security and comfort, is it?

Molly 14:21
So that’s something that’s yours and no one can take away from you.

Molly 14:24
Is it?

Molly 14:25
Because if you want to start a family, there might be numerous reasons.

Michael 14:29
I think recognising that why.

Michael 14:30
And if you speak to buyer’s agents or, you know, when it comes to purchasing, generally, the first question they ask is, Why do you wanna buy?

Michael 14:36
And so being able to recognise what that why is can be very powerful.

Michael 14:40
But I think the things that you mentioned there were Woo.

Michael 14:41
I mean, perhaps maybe 10 years ago, perhaps people thought like that.

Michael 14:44
But I think more and more that type of thinking and that type of being is really becoming more common, and people are recognise that it’s totally OK to be like that and the changes that it can make are are immense. And I feel.

Molly 14:54
I know the mindset is incredible when you really believe.

Michael 15:01
totally on the same page with you, with that and and I think you know some of our listeners. If they’re thinking that it is II, I challenge them to give it a go because and I think the key is doing it consistently, you can’t do it for one day.

Michael 15:06
It’s just got to be something that you’ve got to ingrain in your process, right?

Molly 15:09
So, yeah, like if I look at my phone right now, I’ve got my vision board on my phone and it’s got the property I want to buy.

Molly 15:16
Like I look at that every day.

Michael Molly 15:18
I look at the 12345 different areas of my life that I’m visualising at the moment and I see that every single day.

Michael 15:25
Yeah, no, I think that’s a great tip as well.

Michael 15:26
For people that are thinking about it.

Michael 15:28
Manifesting your reality, I think, is very much something that’s a possibility and something that people should embrace as a concept and not think of it as being weird.

Michael 15:34
So hopefully we if we can challenge one person to break down that mindset, I think we’ve done a good job here.

Michael 15:39
So the other thing that you’re really big on is the importance of education, and we’ve already touched on it a few times here.

Michael 15:44
But I want to understand why is it important for first home buyers to educate themselves?

Molly 15:49
Well, you don’t know what you don’t know.

Molly 15:51
And when you educate yourself, you can save huge money, like even women who come along to our property sessions, and they learn about mortgage brokers.

Molly 16:00
If they use the right mortgage broker.

Molly 16:03
That’s gonna save them thousands and thousands of dollars than if they were to just walk into a random bank.

Molly 16:08
You can go, Hey, does my square profile fit your square cookie cutter?

Molly 16:13
And I think as well around insurances and cooling off periods, all that information which we don’t know about it, because why would we?

Molly 16:23
We’ve never been taught it.

Molly 16:23
There’s no university subject.

Molly 16:25
We didn’t learn it at school like unless you read about it or listen to podcasts like this.

Molly 16:30
You don’t know about these different processes that can save you huge money in the long term,

Michael 16:34
And it can speed up the process as well as, and that comes down to money as well, obviously.

Michael 16:39
But if you aren’t aware of something that can accelerate the time in which you can purchase, well, that’s a bit of a game changer, too so.

Molly 16:44
Like getting your pre-approval done like some people go.

Molly 16:47
Oh, if I want to find a house, I start looking on realestate.com.

Molly 16:52
I find the house I want.

Molly 16:53
It’s like No, no, no, you get your pre-approval.

Molly 16:56
You’ll work out what your lending capacity is.

Molly 16:58
You’ve gotta get it in the right order, which I know for many of our women, like again, Why would we know?

Molly 17:04
We don’t know unless you’re speaking to someone.

Molly 17:06
And then again, if you’re speaking to the wrong people or you’re listening to your parents or friends of your parents and they didn’t know either, then, yeah, you might not be getting the right information.

Michael 17:16
I think the parents is very much a concept where people can be misguided, and it’s not ill intentioned by any means.

Michael 17:22
But it’s just like you said.

Michael 17:23
They they perhaps don’t know because they’re not first home buyers.

Michael 17:25
And the challenges they faced, although they were probably great in their day, is not the challenges we face today and so.

Molly 17:30
No, very, very different, environment. uNFORTUNATELY.

Michael 17:34
Well, that’s just the way it is, right?

Michael 17:36
And I’m sure in 20 years time when you know our listeners have kids, if if they don’t already have them and it’s gonna be similar to that and things will be different, then that’s just the way of things.

Michael 17:43
They grow and evolve.

Michael 17:44
Obviously, we’ve got our podcast here that people are already listening to, or you’ve obviously got your mechanisms at the Ladies Finance Club.

Michael 17:49
And are there any other places that people can get some information that you’re aware of for first home buyers that you’ve had success with or you’ve known people that you know listened to or anything else in that regard?

Molly 17:59
Yeah, so we we we have a podcast, and there’s some fantastic mortgage brokers, buyers, agents on, like Tiktok and Instagram.

Molly 18:08
There’s podcasts, so I think it’s just about finding because there’s so many.

Molly 18:12
It’s about finding who is your style and who works for you.

Molly 18:16
But again, I know it sounds a bit nerdy, but the government’s money-smart website’s great and there’s also the first home buyers.

Molly 18:23
It’s a government-run site as well.

Molly 18:24
And it just tells you what latest schemes are available as well.

Molly 18:28
And actually looking into what are those schemes?

Molly 18:30
And then, yeah, I guess just being aware that with certain financial websites that you’re gonna get certain biassed information, so just making sure that you are kind of looking at everything with a bit of a lens as well.

Michael 18:44
You raised a good point there, and it’s something I guess you have experienced in creating what you’ve created.

Michael 18:48
There are multiple ways of obtaining this information.

Michael 18:50
It’s definitely available, and it’s becoming more available.

Michael 18:52
But I think the key to it is finding someone that you resonate with finding somebody that you know you can go on the journey with because that’s just as important as the information that they provide.

Michael 19:01
You wanna feel connected to that person that you want them to feel like they understand you and and your challenges and I think that’s a really critical thing.

Michael 19:08
So I guess if anyone’s out there looking for, you know those educational platforms, see what’s around, see what’s there, see what works for you.

Michael 19:14
And I think that’s gonna give you a big, better chance of being successful.

Molly 19:17
Yeah, And I think, you know, there’s not pressure to go with the first person you speak with or or like, even say mortgage breaking.

Molly 19:23
You know, you can date before you get married kind of thing like you can try out, make sure you like them.

Molly 19:29
They align with your values, they be supportive.

Molly 19:32
They’re gonna be that person who maybe helps educate you.

Molly 19:34
If you need to learn a bit more about the process because it is, it’s a big decision and you wanna make sure I yeah, you feel confident and you’ve got the right team behind you.

Michael 19:43
One of the things I know you talk about a lot is salary sacrificing, and it’s a particular concept here that we’ll draw on this term.

Michael 19:49
It does get thrown around a lot, and I know that a lot of people ask me about salary sacrificing as well.

Michael19:54
But what does it actually mean.

Michael 19:56
And if we’re explaining it to a first time, why that hasn’t heard it for the first time.

Michael 19:58
How do we explain it to them?

Molly 20:00
Yeah, so it’s just before.

Molly 20:02
So, for instance, if you work for a company, they’re just taking some of that income before it’s taxed and you’re sacrificing it and you can do it towards your super.

Molly 20:13
And if you’re doing that, that’s where you might look at the Super Seda scheme and you can depending again.

Molly 20:18
It very much depends on the company you work for and if they offer it.

Molly 20:22
But yeah, it’s just putting Pre tax salary away before it’s taxed.

Michael 20:27
And how can this help a first home buyer and how how can they use it to their advantage?

Molly 20:31
I always work with the experts on this one, but yeah, there’s the the first home saver scheme, the super saver scheme, where, you know, instead of being taxed at your normal rate, you’re being taxed at that 15% rate.

Michael 20:44
And the benefit of that is basically, you’re able to build up your deposit a little bit quicker because then you can access it.

Michael 20:48
So yeah, absolutely something that you gotta be in the loop with and and in that instance and understanding how that can help us step where a mortgage broker can assist you with there.

Michael 20:56
All right to close things up.

Michael 20:57
I wanted to ask you, in particular, if you had any success stories with members who have bought their first home with the help of the Ladies Finance Club.

Michael 21:03
And if you have a story like that, if you could share it or even a scenario, perhaps if it wasn’t related to that, how it helped them start the particular path to ultimate success when it comes to purchasing their first property?

Molly 21:14
There’s one who is about to buy, and I love this story because she’s a nanny working in Sydney and she when she first came to Ladies Finances Club.

Molly 21:23
She’s been with the club now for two years, like she just never thought property was ever gonna even be an option for her.

Molly 21:29
But she has been saving.

Molly 21:31
She’s got her property deposit together.

Molly 21:34
She went and saw a broker quite early on to work out where she needed to get to, and I think the nice story about that is like she’s a nanny so she’s getting paid like middle income.

Molly 21:47
But she’s still able to do it because she’s been so focused on it.

Molly 21:50
She started a side hustle to bring in extra income.

Molly 21:53
There was another lady in Tassie.

Molly 21:56
It was a first investment property, but that was She had been divorced.

Molly 22:01
She had credit card debt.

Molly 22:03
She was starting over again.

Molly 22:05
And she’s still had the family home, but again, meeting some of the buyers agents we work with.

Molly 22:10
She bought a place, and that’s done really well.

Molly 22:15
And she’s, looking to buy another one.

Molly 22:17
Likewise, with another couple of our younger male members meeting some of our buyer’s agents, one of them’s built up her third property, which is so exciting, and she’s because that’s for a lot of them.

Molly 22:29
You know, they want that financial freedom, and they want to do that through property and building up that portfolio is a way to do it.

Molly 22:35
So it’s really cool when you hear, because we started the club in Australia back in 2019, the women who were with us from the early journey and the ones who have actually taken action, they really enjoyed that property boom for the that few years, and it’s really served them well so

Michael 22:50
Yeah, and and I guess having that team around them, like is what you provide there.

Michael 22:55
I guess it’s just and I’ve used the word before, empowering in terms of giving them some clear strategies as to how to achieve what they want to achieve and then providing the mechanisms, which I think is just as important so they can achieve their goals SP.

Michael 23:04
Yeah, absolutely.

Molly 23:05
And we always run these just like free sessions that anyone can come to where it’s like we’re just gonna take you through what the process of buying property is.

Molly 23:11
So I always think it’s like a really nice first place to start because it’s like all you’re doing is showing up and learning the process, and we get literally like 1000 women registered to those events.

Molly 23:22
And I’m like, right, women in Australia wanna know how to do this.

Michael 23:26
And it’s important to know we’ve been speaking about property in particular here, but and you’ve mentioned it at the beginning, it’s it’s not just property.

Michael 23:31
You look at all you know, forms of financial.

Michael 23:33
I guess literacy and financial strategies and and whether it’s shares or other types of mechanisms.

Michael 23:38
So it’s important to keep that in mind, too, although we’re obviously very much focused on the property side of things.

Michael 23:43
Well, thank you so much for joining us on the show today.

Michael 23:45
Where can our listeners find you if they want to learn more?

Molly 23:48
Yeah, so we love the gram.

Molly 23:50
So we’re on Instagram at Ladies Finance Club or our Website
Ladiesfinanceclub.com.

Molly 23:56
Check out the book.

Molly 23:57
It’s in Big W, Kmart on book Topia and Amazon.

Michael 24:00
Nice.

Michael 24:01
Well, thank you so much for joining me on the show today.

Michael 24:03
I’ve really appreciated your time and your insights.

Molly 24:05
Great.

Molly 24:05
Thanks so much for having me.

Michael 24:08
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 24:13
This podcast was produced by Lendstreet.

Michael 24:15
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 24:21
We know applying for a loan can be overwhelming and complex, so we help guide and support first-home buyers through the process from start to finish to find out more head to our website lendstreet.com.au.

Michael 24:32
We’ve also put a link in the show notes to make sure you don’t miss an episode of the home run.

Michael 24:37
Be sure to subscribe to or follow the show in your podcast app, and while you’re there, please leave us a five star review.

Michael 24:44
It really helps others find the show.

Michael 24:47
I’m Michael Nasser and we’ll be back next episode, covering another step on the journey to owning your first home.

The post How changing your mindset can help you buy your first property appeared first on The Home Run.