What you need to know about rentvesting

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
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Michael 36:52
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Michael 36:55
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Michael 36:58
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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.