On Property Podcast

[youtube id="BUtkZFlh01s" align="left" mode="lazyload" maxwidth="500"] Most of us know about the headaches of the council approval process, but not many people know they can fast track approval through the compliant development code. Ryan: When it comes to renovating or developing property, most often you need to put your designs through council and go through that entire process in order to be able to actually build what you wanna build. However, there is another way to do it through the state environmental planning policy, we're specifically talking about New South Wales here. And this may eventually be expanded to medium housing as well. So there's opportunities to fast track developments for you guys. And so today, I have on the show Luke Durack from durackarchitects.com and he's gonna give us an overview of what exactly this is and so you can understand this opportunity. So hey Luke, thanks for coming on today. Luke: Good day, Ryan, thanks for having me. Ryan: Okay so I think it's best to start where people are probably most familiar which is if we wanna do something to a property, let's say we wanna add a second storey or we wanna add a room at the back or any sort of development or renovation, most people would assume, "Okay, I've gotta put that through council in order to get that approved." But you're saying there's actually for some particular types of renovations or developments, there's another way to go about it. So can we start there? Luke: Yeah, so as you say, at the moment, still the standard way to go through a development pathway is to go, put your documents in place and submit to council a DA. But there is a fast tracked way of getting development and building approval in one hit that allows you to bypass council altogether. So for certain types of development, for example a house, adding a second level to a house, a single storey house or a two storey dwelling, you put together your ... there's certain documents that are required to satisfy the requirements of this compliant development code and submit them to a private certifier and you can have your building approval within 10 to 20 days as opposed to going through council and all the months of headache that that might create. Ryan: Yeah, and then if you do get approved or you don't and it comes back and you've gotta adjust things and you gotta go through the council process again. It can be very difficult for people, I know. Luke: Exactly. So this is a real winner but a lot of people don't know it exists. And you know, it's only for certain types of development. And it's very black and white whereas the current DA process, there's some room for movement, there's some gray areas. With compliant development, you basically have to tick all the boxes. As soon as you don't tick one box, you fall outside, the ability to run down that path and you have to go back to a DA. Ryan: So do granny flats fall under this? 'Cause I know recently in New South Wales it's become much easier to build granny flats? Luke: Yeah, it does. So it includes studios, granny flats. As you probably know, there is I think 450 square meter minimum lots size for granny flats. Ryan: For me to build up to 60 square meters, et cetera. Luke: That's right. Those sorts of ... just the way DA has certain requirements through the DCP and LEPs, the compliant development has a set of controls that revolve around the same sort of things. So [inaudible 00:03:39], landscape, you know, building height, setbacks and that sort of thing. So you have to still comply to a whole lot of different rules but as long as you do that, you can streamline your process, save time and cost. Ryan: So let's say someone who's thinking about doing a development at the moment, whether it be a second storey or a renovation or something like that, how do they know whether they will fall under this or not? How do they find out about it? Luke: You can go and spend the hours that you probably would need to do looking up the state environmental planning policy for example, the compliant development which is really a headache. Ryan: Which probably no one's gonna do. Luke: Or you can come to an architect or a planner and they will basically look at ... work with you on your brief and what you want to accomplish and then set it against the different controls that exist for compliant development or a DA and basically go ... if you basically wanna add a third level to your house, we're not gonna be able to go through compliant development but if you wanna do various other bits and pieces, we can run that through compliant development. Ryan: So why don't more people know about this or do this? Luke: Well, exempt and compliant development's been around for quite a long time now. I think it's first come around in 2001. What most p

[youtube id="6_8_nFr8K9o" align="left" mode="lazyload" maxwidth="500"] What do all the different property types mean? In today's episode we explain the difference between houses, units, townhouses etc. When searching for property, often you'll come across the different property types being house, apartment and unit, townhouse, villa, land, acreage and rural, blocks of unit and retirement living. So what do all of these different property types mean? That's what we're going to go through in today's episode. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. In today's episode, as I said, we're going to look at the different property types. The easiest way to do this is to simply go to realestate.com.au and go ahead and search by property types. The most straightforward one is going to be the house. So, this is generally a freestanding building on its own block of land. I'm not going to go into all the different types of land titles or the different developments, types and things like that, different zoning for areas because that varies from council to council. But, if we go ahead and have a search for houses, we can see a few detached houses here, which means the house is completely freestanding. But then, we also have some semi-detached houses or houses that are attached to each other. Here, we have one in Erskineville in Sydney in New South Wales that is a terrace sort of house. There is joining walls on both sides of these houses. However, we'll see when we go into townhouses and villas that these differ because they don't have common land. So they share common walls and, obviously, you need to work with your neighbour if you're doing anything in the common wall. But they don't have common areas or strata or anything like that that they need to pay for. They just have their own house, their own block of land, etc. If you keep going through, we'll see a lot of detached houses. Let's go back and look at the next one, which is going to be apartments and units. These are very different from houses. Generally, this means a building with multiple units within it. Generally, we can see a big unit at the start here or we can see smaller units as well. These generally have common internal areas, common external areas. Generally, it's one building with lots of different units in it. This one here in Croydon, New South Wales, is a prime example. You've got the entrance and it looks like there's 4 units at the front there. There may even be more at the back. They would all share the front garden. With units, something to consider is strata and body corporate fees. Everyone who owns the units, they all come together as a committee. They form a body corporate and they make decisions on how to spend money. There's extra fees that go into a unit that don't necessarily go into a house because you've got to pay these quarterly strata fees that go towards the maintaining of the common areas or if they want to do renovations to the building or things like that. Next, let's have a look at townhouses. Townhouses and villas are quite similar. Townhouses and villas are generally properties that are attached to other properties. But, they tend to be in complexes as well. It's kind of like a mixture of houses and units. We can see a freestanding townhouse here. We can see a freestanding one here as well. But, what it means is that you've got a property, whether it be fully detached or semi-detached or attached to other properties, but you are in a common complex or a common block of land. So you share that block of land with other people, kind of like a unit. It's like the house version of a unit. Again, you're going to have strata and body corporate fees with this to manage the common areas and things like that. Often, the externals of the property are set by the body corporate in terms of colouring and things like that. But, you do have more room. It tends to be a bigger property. The difference between a townhouse and a villa is quite small. Townhouses tend to be 2-storey properties whereas a villa is always going to be a 1-storey property. If we go ahead and have a look at the villas here, we can see that they're all one-storey. But, villas are similar to townhouses in that they are a part of an overall complex. In which case, you need to pay those strata and body corporate fees to maintain the common areas and things like that. A villa is basically a single-level townhouse and a townhouse is basically a 2-storey villa. They're very similar to each other. Land is pretty self-explanatory. If we go ahead and search on land, then we will see that it's just basically different blocks of land that don't have dwellings on them yet. We can see this is a great aerial picture of this block of land. We can see that th

[youtube id="9eW3aaJFZB4" align="left" mode="lazyload" maxwidth="500"] When buying property off the plan there are some serious risks you need to consider or you might end up with a bad investment. When investing in property, one of the things you'll probably ask yourself at some point is, "Should I buy existing property or should I purchase property off the plan?" It's a question that a lot of people wrestle with. And so, today, I wanted to talk about some things to consider when buying off the plan. Both the benefits of it as well as some of the risks that are associated with it. So, hey, I'm Ryan from onproperty.com.au. I help people find positive cash flow property. And a lot of people do email me asking what do I think about buying off the plan. In fact, I was on a webinar with Ben Everingham last night and someone asked this very question. What do you think about buying off the plan? They were saying, if it's got a decent yield, does that mean it's okay? The fact is, there's a lot of things that you need to consider and thing about so I thought it'd be great to create an episode. At the end of this episode, you'll be more educated and you'll know the things to look for if you are actually considering going down this route. First, let's look at some of the benefits of buying off the plan as well as why people seem to get so excited about this type of investment. Well, I think, one of the most exciting things as a human being full of emotion, which we all are, is buying something brand new is extremely exciting just for the fact that it's brand new. It's all of this really nice fixtures, really nice fittings, brand new everything. And chances are, you've probably never moved into a house and lived in it and been the first person that's lived in there or in a unit. And so, to get something that's brand new versus something that's existing and old and a bit worn down is obviously very exciting. It makes us feel good about ourselves and our place in society. There's also a lot of marketing hype around new build properties. They've got signage. They've got sales people. They've got models of it. They've got walkthroughs. And so, it can very exciting with all the marketing hype and things like that to try and get the best of the best in terms of property. You also have the opportunity to lock in prices. So, you purchase the property and it might be a year or 2 years before that development is finished. But, you signed it a year or 2 years ago and you got a price at that point. So, there's the opportunity to lock in the price. You have a smaller earlier commitment. You do need to put down a deposit. But, obviously, you don't assume a loan for the development until you actually take over that property and own it yourself. You also have the opportunity for depreciation. Because it's a brand new property, you can depreciate a lot of things. So that can help for tax purposes for some people. So, that's kind of the exciting things and why people think about it. But, there are actually a lot of risks when buying off the plan properties that people don't think about. So, I really want to cover them because they'll never talk about these in the marketing flyers that you get or in the consultancy call that you talk to people about this sort of stuff. They're not going to talk about these risks. They're just going to talk about how great the area is, how great this development's going to be, how you're going to lock in your price now. And so, I thought we're going to look at two types of risks. There's risk when actually buying the property. But, the larger risks are actually the ones after you've property, what happens then. I just want to start by saying that there are some good new build properties out there – new build developments and things like that. There are some that are really, really successful. And so, if you can find them, great. But, there's a lot of duds out there as well. I just want to talk about the risks and I'll leave it up to you to assess whichever new build you're looking at and you can assess whether these risks apply or not. Some of the risk when actually purchasing the property is actually inflated prices. One of the draw cards of off the plan property is that you can lock in a price now. If the market goes up, then you're buying a property at less money and, therefore, you're going to make money instantly as soon as you settle. But, the fact of the matter is, in a lot of cases, that they're actually taking in the potential growth of an area into account into the sale price of the property. Let's say, a property development is going to take 2 years. They're likely going to predict; what is this property going to be worth in 2 years'

[youtube id="F8lEVAVuXFo" align="left" mode="lazyload" maxwidth="500"] How can you find a good property mentor who will help you achieve your financial goals? The best golfers have coaches. And some of the best property investors also have mentors to help them along the way. I recently got an email from an On Property listener asking them about what's the best way to find a good mentor? And so, I thought I'd create this quick video to help you find a good mentor if that's something that you're interested in. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. Finding a good mentor out of all of the different candidates out there can be a really challenging task. First, you have to find someone actually willing to take the time out to give you advise. Is it better to pay someone or is better to find someone for free? And also, you don't want to get caught by a property spruiker and you don't want to get a mentor who's actually going to leave you in the direction that they want their life to go, rather than maybe the direction you want your life to go. First, we'll talk about some tips before you start searching for your mentor and then we'll talk specifically about how to find your mentor. First, let's talk about what can you do before actually going out to look for a mentor. Let me tell you, there are so many different ways to make money in property. There's so many different strategies out there that different people will have achieved different things. And most of the time, when someone is a paid property educator or a property mentor or whatever it may be, even if they're just invested in property themselves and had some success, they're likely going to say or have the idea that, "This is the best way to invest in property." And that's not always the case. Look, there's so many different ways to do it. And depending in your goals and who you are, one way may be better than another. So you really need to understand, before you start looking for a mentor; what is it exactly that you want to achieve through investing in property? So, this takes 2 forms. First, it's those goals of financial freedom or whatever your financial goals are mixed with the lifestyle that comes with that. So that's one goal, that's kind of the end goal that you want to achieve. But the other facet of that, the aspect that people don't usually think about is how much work and how much sacrifice are you willing to do to get there? One thing for me, in order to achieve my goals, I don't have huge goals of multi-billion dollars or anything like that. But, there's only certain sacrifices I'm willing to make. I'm not willing to work 20-hour days every single day and not spend time with my kids as they're growing up. So, when I'm looking at investing in property or investing in businesses or whatever it is, I'm looking at, yes, I'll invest some time into it. But, I don't want to have 2 full-time jobs, do you know what I mean? So, think about, "What are my end goals?" and also, "How hard am I willing to work? What sacrifices am I willing to make to get there?" For an example, let's say developing can be a great way to make money through property. But often, it takes a lot of work. Creating the plans, being onsite everyday, dealing with council issues, all of that sort of stuff. You're very active in the investment when you're developing something. Whereas, if you just buy and hold a property and rent it out, then you're not doing much for that property. So it's very sort of passive investment. So, one investment might make you more money, but it also requires more time of you. And if you're someone who doesn't actually want to invest that time, even though development can be a great way to make money, it might not be suited to you because of the heavy time investment. So, it's just these things that you think about before you go out and search for a mentor. Once you've kind of decided what you want to achieve, you want to look for a mentor who is on their way to achieving that or who has potentially achieved it themselves. Now, you don't always have to have a mentor who's achieved it themselves, but that just helps you along because they've already gone through the trials and the difficulties and things that you're likely going to go through and it's much easier for them to guide you through that. However, they don't need to be exactly where you want to be. You know, they could just be a really great property investor and if they can understand your goals and work through that with you, then that's going to be great. But, the problem that I find is when someone has achieved investment goals using a completely different

[youtube id="qYFuIRDJPIc" align="left" mode="lazyload" maxwidth="500"] When investing in property a deposit is paid upon the contract going unconditional. If your money is tied up elsewhere a deposit bond can be used in it's place. Sometimes, when you're purchasing an investment property, you may not have the cash that you need for the deposit right there and then. Often, when you purchase, you're putting 5%, 10% of the deposit down. And for those people who have their cash tied elsewhere or may need their cash for other things, there is something called a "deposit bond" that you can use to put down as, I guess, a replacement for the deposit and you'll then pay it in future. To understand more about this, I have Etienne on with me today from Deposit Assure. He supplies people with deposit bonds. He's the expert in this, so we're going to talk today about what exactly deposit bonds are and what sort of people and situations they're useful in. Ryan: Hey, Etienne, thanks for coming on today. Etienne: Hey, Ryan. Thanks, mate, I'm really stoked to be on here. I'm a big supporter of your podcast, so really looking forward to this one. Ryan: Yeah. Well, we appreciate you coming on and getting your knowledge as well. Do you want to just quickly introduce yourself and then just answer people, what exactly is a deposit bond? Etienne: Sure, okay. My name is Etienne Rizzo. I'm one of the co-founders of Deposit Assure. We're a business that's been set up about a year and half ago now. We're backed by QBE Insurance, which basically means that our deposit bonds are underwritten by QBE, which is effectively the strongest underwriter in our current market in Australia. They're an A+ credit rated agency. To answer your question, Ryan, what is a deposit bond? If your audience goes back to the last time they bought a property, they would have had to provide the real estate agent and their vendor a 10% deposit. So, up to 10% of the purchase price to basically affirm their commitment to their unconditional contract of sale. Sometimes, it can be 5% as well, but effectively, like a cash deposit, what it does is it just basically gives the vendor some assurance that the sale is going to go through. For some people who either don't have ready access to that cash, so you could be basically a first time buyer, for example, who's borrowing 100% of the purchase price and don't have the funds you need of the 10% to secure the property, you could use a deposit bond. Or, a property investor who is buying their first investment property. Now that you've built some equity in your home, your money is working for you and your offset account, you don't want to use it to secure the property. You could apply for a deposit bond in that situation as well. The third, probably, scenario, Ryan, is buying and selling, which we see a lot of. So when somebody's selling their property and the funds from that property is being used to fund the property they're buying, they are waiting for the funds to arrive on settlement. So they don't have access today to that cash to secure the property they're buying. So those are, I guess, the main scenarios we see with deposit bonds. Ryan: Yeah. And we'll talk a little bit more about them. Because I know people are probably familiar with the bridging finance when you buy and sell, but then, they don't often think about, okay, well, I actually have to pay 10% of the deposit 6 weeks or 4 weeks or however long it is before you actually settle and get that property. I need to come up with this large amount of money that not everyone has at that point in time. So deposit bond is one way to get that. What do you mean it's backed by QBE? How exactly do they work? So we put down a deposit bond, which is kind of like, is it an I.O.U.? Is that effectively what it is? Like, you're saying to the real estate agent, "I owe you the 10% deposit?” Etienne: Yeah, that's right. So, to answer your question, when we assess the client's ability to receive a deposit bond, we have to make sure we are comfortable. And when we say, "we", ourselves and our underwriter, QBE, that they will be able to settle on the day. So we don't just give deposit bonds to anyone. There's some strict criteria that we go through. And that's the most important thing. So QBE Insurance, they are obviously, they have a bonds division and, basically, they guarantee the person – the purchaser – for that particular deposit bond. What happens is, it's basically the substitute for the deposit required from signing their contract to settlement. So if there's a claim on the bond within that period, ourselves and our underwriter, QBE, will pay the vendor that cash deposit within 48 hours. From that point in time, we will then retrieve those f

[youtube id="tsx0zj-rjE0" align="left" mode="lazyload" maxwidth="500"] How can you maximise the passive income of a property. In this episode of WWRD we look at how you can increase the income of one reader's property. Hey and welcome to a very special episode of What Would Ryan Do, the series where I answer your questions and give you an idea into what I would do in your specific situation. Hey, I am Ryan from OnProperty.com.au, helping you positive cash flow properties and this is a very special episode because the person who brought this question - Peter, actually allows us to share his property address so we can look into this in a bit more detail, which is really exciting. And he wants to maximize his passive income, which is a topic that I am extremely passionate about. So, this episode is about how to maximize the passive income of a property and as we always do, let us head over to the question: "Hi, Ryan! First of all thank you for posting educational videos on On Property. I have been a subscriber to your YouTube channel for some time now. It has been great listening to you. I really love watching the interviews, my favorite part of the channel." Peter, thank you for being a subscriber for quite a long period of time and I am glad you like the interviews. Definitely, I have more of those in the pipeline. So here is the question guys: "We own a property, one title," - that is important, "two houses; 14,000 square meters. What strategy would you take to generate the most value from the property? And our goal is to generate passive income." Peter, the way that I am going to be approaching this is - because value can be taken in so many different ways, generally in property you are either talking about the income of the property or you are talking about the equity value - the value if you went and sold the property. I am going to leave that aside in terms of the value when you sold the property. I will look at that and touch on that because it is important but I will be more looking at the passive income of the property because I just think you have such a good opportunity here. So, background information is that it was purchased for $847,000 back in 2013 and this is going to be great for everyone watching because i actually just searched for the address of this property and we can actually see that it was sold for $847,000 on the 6th of September 2013. So this sort of information is public knowledge guys, again on OnTheHouse.com.au. If I went to the street address then it should also give us. We can see what it has rented for. Conmparable properties, often that has a sold history as well. I am not going to waste your time trying to find that out at the moment but generally OnTheHouse.com.au also has that. So, it was sold for $847,000 or you purchased it for that. The last value is $1.12 million in 2015. The front house rents for $410 per week, the back house is for $470 per week and the address is 82 McClelland Street, Chester Hill, New South Wales; so if you guys want to follow along, you can go ahead and check that out. Please do not be afraid to Google it, happy if you do use a screenshot, if you make a video out of it. So, thank you Peter for letting us share the address and to go through this. So, a few things that I have looked up: obviously, I have looked up the listing for this property. I was reading through it and it is 14,000 square meters featuring two houses. The front house is 2-bedroom fibro - not brick; and the back home is a solid brick home with 3 large bedrooms. Now, obviously there are no pitches of the back home here so I ended up finding it on OnTheHouse.com.au, a picture of the backhouse here. The backhouse is 3 bedrooms with an en suite and you said it is currently leasing for $470. So we have our baseline and I also went to Google Maps, turned on the satellite imagery and if we zoomed in - I did not want to do that that was a bit weird. Okay, we can see it here guys. Can I zoom in again? Alright, I do not want to go 3D. Anyway, here it is. You can see number 82 and I got a bit confused because I thought maybe it is this little granny, maybe that is granny flat or something on the back but 82a is also yours. So I am guessing you got this whole strip here as well as it looks like there is a driveway down the side there going into 82a. So, we are renting 2 properties at the moment and let us go ahead and go into our calculator. Now this is over at PropertyTools.com.au. This is a tool that I created. If you guys are interested in this. So you purchased it for $847,000 and rental income, which you told us, is $410 plus $470 so it is $880 per week so if we go ahead and put in $880, assuming an interest rate of 5% which you can actually get cheaper at the moment. This goes through and assumes things like deposit of 20%, it has property manager fees and stuff like that. So, in terms of positive cash flow, idea

[youtube id="BeDHnewfWzs" align="left" mode="lazyload" maxwidth="500"] I'm passionate about helping people find and invest in positive cash flow properties. Here's the products I offer to help my customers do just that. Hey guys, Ryan here from onproperty.com.au and I am passionate about helping you find positive cash flow properties. In this episode, I want us to talk about the different products that I have that can help you on your journey to finding and investing in positive cash flow properties and moving towards your goal, which is probably financial freedom. All of the stuff that I do, everything is all based from my website at onproperty.com.au. So I'm going to head over there now and we'll have a look at what I do offer. We'll go through all my products so you can see whether or not these are for you and if it's something that you want to go ahead and get access to. So if we go to onproperty.com.au and we just hit on the Resources tab, that is going to show all of my products. So the most popular of my products is probably the On Property Membership. So if we go ahead and open this in a new window, we've got the sales page here, which talks about everything that you get. It talks about finding positive cash flow properties, etc. But the big difference between this and any other product on the market; firstly, is it's pretty low priced compared to the $1,000 coaching package that are out there. This isn't designed to be mentorship. It's not designed to be coaching. It's designed to serve you and fill one particular need that you have, which is helping you find positive cash flow properties and then go ahead and invest in them. There's 2 options. There's a Complete Package, which is what most people do and there's also the Starter Package. I'll go through and talk about them then we'll go inside the membership site so you can see how it works and you can determine whether or not you think this is going to suit you or not. So, basically, you get access to a few different things. The first thing you get access to is the properties. Every single day, I go out and I find a high rental yield property with a good chance of being positive cash flow. We're talking yields above 7%, above 8%, sometimes above 9% or 10%, up there. However, if they're in dodgy areas, I don't tend to list them. So, every single day, I go out and I find a new high rental yield property that is estimated by my calculator – which we'll go through in a minute – to be positively geared. I want to show you guys that, yes, they do exist. Here they are, you can see the properties themselves. These properties are on the market, available for sale. You can see the suburbs that they're in. You can go through, you can look at these. You can go ahead and call the real estate agent as well. Every single day, we list a new one and we list properties from all over Australia. So, New South Wales, Queensland, Melbourne, Victoria – basically, anywhere you can think of. If we can find positive cash flow properties, we do. Big question that I often get asked around this is, "Do you find properties in capital cities?" The answer is, "Yes." However, not as often as in regional centers and things like that. So I do find positive cash flow properties in Sydney, in Melbourne, in Brisbane, in Adelaide, etc., etc. However, they're kind of spread out, so I might find 1 property in Sydney one month, a property in Melbourne the next month or something like that. So if you're looking specifically for positive cash flow property in just a couple of suburbs or in one particular city, this may not suit you because I spread out the properties all over Australia so everyone can see, okay, here's all the areas where positive cash flow properties exist. I don't focus on one particular area, I show you properties from suburbs and regional towns and cities. Everything all over Australia. You'll also get access to our archive listings. We've been active for over a year and so we have over 500 properties in our archives. You can go back if you want. Some of these may be sold or no longer available for sale. However, you can see what the properties were. You can see the areas that they were listed in so you can get an idea for the suburbs that have positive cash flow properties in them. So, let's go ahead and we'll have a look inside that now. If I go to onproperty.com.au and this is after you've logged in. It'll look like this. We can begin to see some properties here. So here's the fist 2 properties, which I'm probably going to censor out in the video, but basically, we can see the property, we can see the picture, we can see the address. We've got asking price. We've got the estimated rental income, gross rental yield and estimated weekly c

[youtube id="V3Vg_G8cL1w" align="left" mode="lazyload" maxwidth="500"] When purchasing investment property it's important to negotiate to get the best price. Here are some of my tips of how to successfully negotiate. Something a lot of people ask me about is how they can be better at negotiating when it comes to investing in property. Hey, my name is Ryan from OnProperty.com.au and I wanted to make this quick video sitting in my car - we actually have 3 car seats that fit in the back of this little Jazz, and I am actually shopping for a new car. We are looking for a car that is slightly bigger. We are quite happy with this small one. We love how cheap it is to run and everything like that, however, we were umming and oohing about getting a second car and decided to get one when my son broke his arm. My wife had to quickly take him to the hospital; we realized we only had one car so how was I going to take her stuff to the hospital, go and visit, etc. Luckily we had an uncle who lives near us, super helpful. Thanks, uncle Al! He brought us his car and we borrowed that. What we realized in that moment, we need another car. Now, what does this have to do with negotiation? Do not worry, I am getting to it. Now, I am about to go and look at a car. I am about 15 to 20 minutes early so I have time to make this video. I am looking at this car, which is selling for $8,000. It is a Toyota Avensis. I think it has 230,000 Ks or something like that, my wife was telling me. So not super expensive but this is a 7-seater car. After this, about one hour later, I am going to look at another Toyota Avensis that has done about 30,000 Ks less. I think it is just under 200,000Ks and it is on sale for $7,500. Both of them are silver and both of them are basically the same car. I do not know much about cars so I will get them mechanically checked if I am interested in buying them. The reason that I said this is that when it comes to negotiating when it comes to trying to get the best deal from someone, I am obviously going to be doing some negotiating when it comes to these cars. It is so much easier to negotiate and to get a good deal when you have other options on the table. Now, we currently have a car - you can see me, I am in it. So our need to get a second car is not extremely high. We would like to have one but hey, if it takes a few months to get it then that is fine. So in terms of the pressure from my end, there is very low pressure there. I am also looking at 2 cars that are exactly the same, very close in terms of price range. But I could take or leave either. I am not really worried about it. So when I am negotiating with either of these parties, then I am in a position where I can say, "Well, look. I have another car on the table. Here is what I am willing to offer. Here is what I think it is worth," and if they accepted or not, then that is fine because I have another option in the wings that I could go after. And if none will work out then I can wait a few months and continue to look at cars throughout that time. A lot of people think when they are negotiating that there is this one deal and they want to get the absolute best offer on this one deal. But I think given property investing and given what you are doing - you are trying to find a property that is going to move you towards your financial goals. Given that, yet very rarely is it just one property that you need to get this perfect deal on in order for you to live the life that you want or achieve the financial outcomes that you want. We live in a country where there are hundreds of thousands - where there are millions of different properties out there and there is going to be more than one property that is going to be suitable for you and your needs. So, having a disassociation with the result, being okay to let it go if it needs to be let go, that puts you in what I believe is the best position to negotiate. Now, it does not mean that you are always going to win. It does not mean that you always come to terms with things. Even when I bought this car, you can kind of see on the rim here how it is like a light blue color. Let me just open the car and you can see externally that it is like this light blue color right here. Originally we wanted a black car because I think black is really sexy and we were looking at this car that was black; the same sort of car, similar kilometers to this, blah blah. It was all fine, all good. But the only issue was that the guy was asking too much money for what we thought it was worth and what we could get. I think I paid $6,200 for this car and he was asking about $8,000 or something. And when we were negotiating I was willing to spend up to $7,000 but he was only willing to go to like $7,500 or something like that. And for me, it was outside of my budget but for him, he obviously thought it was worth it even if the car has been on the market for months. I do not know wh

[youtube id="8uZHXyTXHnY" align="left" mode="lazyload" maxwidth="500"] Buyer's agents can help you grow your portfolio faster, but how do you choose the right buyer's agent? Utilizing the skills and resources of a buyer's agent can help you move forward and invest in more properties faster, therefore helping you achieve whatever your goals may be faster as well. But how do you go about choosing the right buyer's agent for you? Hey, I am Ryan from OnProperty.com.au, helping you find positive cash flow property and I work really closely with a buyer's agent named Ben Everingham from Pumped On Property and a lot of people do ask me for references for buyer's agents and I am always happy to recommend him. But, whether or not you have thought about him or whether or not he suits you, I thought it would be helpful to talk about how you should think about choosing the correct buyer's agent for you. So, the first thing that I recommend before going to talk to Ben or talk to any buyer's agent is to actually have your own goals set first. This is something that not many people have actually done. I talked to Ben about it and he says not many people have clear-cut goals of exactly what they want. They might say that they want to own 10 properties that they want to be rich but they do not actually know what that means. So first things first, set some goals for yourself. My goal for myself is $60,000 per year in passive income, which will give me and my family enough to get by. It is not a lush, lavish lifestyle but it is enough to get by. We do not have to worry about paying our bills anymore and then I can continue to work and run businesses and continue to grow that into the future. So, set your goals first; work out what is important to you so when you go to a buyer's agent you know what is important to you and you can begin to assess whether or not they can help you achieve your goals. Because if you go to a buyer's agent without a goal already set, they are going to tell you what your goal should be and they are going to tell you goals that line up with their services. And so you can be - tricked is the wrong word, but convinced into using their services and you think you have your goals set but really it is just what they told you. So setting your goals first is definitely a good thing to do and I have a great episode on that if you go to OnProperty.com.au/day1. I talked about finding your financial true north. Actually, I probably need to redo that episode because it has been so popular. So once you have chosen your goals, you want to begin to look for buyer's agents who can help you achieve those goals or who have already achieved those goals themselves, ideally. For example, Ben, who is the buyer's agent that I recommend. He has achieved financial freedom himself through investing in property and now helps other people do it as well. So if financial freedom is your goal, then Ben is a great person to go to. However, if you want to do large scale developments - if you want to build townhouses, then he does not have as much experience in that so I probably will not recommend him. So based on your goals - if it is financial freedom, you can work out who is going to be the best buyer's agent for you. And generally, the best ones are people who have already achieved it and achieved it in a way that is feasible for you as well. The second thing that I would recommend is to choose your own strategy first. So think about how you would like to invest, and again it comes down to 'if you do not have a strategy chosen out for yourself, they would choose the strategy for you and it would be the strategy that makes sense to them and their business.' So I would always like to go to a buyer's agent and say here are my goals, here is the rough strategy that I want to use - I want to invest in residential property that I can renovate and rent out and use the equity to go again. That is a rough strategy that you can go to a buyer's agent with; and you can then work out, "Okay, can you actually help me with that strategy?" So if I have that strategy and I go to a buyer's agent and they say, "Look Ryan, what you should do is buy new build property or what you should do is do developments." You can be like, "Well, no. I do not want to do that. I do not want that pressure. I have chosen this strategy because of the risks, because of the way that I am inclined and I want to follow that strategy or roughly follow that strategy." And they try and push you in a whole different direction, and then you could just flick them off and basically run away and choose a better buyer's agent. And so going with your own strategy first and choose a buyer's agent who is willing to help you achieve your goals using your strategy. Now, let us just add a caveat to this that going with

[youtube id="Ds6o1zMVrAM" align="left" mode="lazyload" maxwidth="500"] In this episode of WWRD we discuss some options if you own a business and want to begin investing, but currently have no deposit. Hey and welcome to What Would Ryan Do, the series where you provide me with some sort of property question and I do my best to tell you what I would do if I was in the situation and to try and give you some unique thoughts on the situation. Sometimes, it can be very difficult to see the forest for the trees. You are in your situation; you can only see what you can see and sometimes it is good to get an outside perspective. We like to have a bit of fun with this. We do not take it too seriously. This is not to be considered financial or mortgage advice. It is just my opinion of what I would do in a situation but you need to assess what you would do because you obviously, know your situation best. The question today, we are talking about someone who runs a business and they want to get into property but they do not have a deposit. So let us go through and we start by reading the question and then we will share some thoughts on it. So, this person says, "I am a 49-year-old single bloke. I have had a restart in 2005 after someone special embezzled from my business." I am very sorry to hear that; that sounds absolutely horrible. "I now have a small super and a business. The business is worth around $1 million to $1.2 million with debt. I do not have a deposit but I want to get into property because I cannot work like I am for the rest of my life. How can I go about doing it? How can I do it?" And so, absolutely great question. I am very sorry to hear that you are starting from scratch again - about 10 years ago you had to start from scratch again. But I think a lot of people find themselves in this situation where they need to start from scratch again. Now, you are in a unique position because you own a business, so you do not have a job and you do not have a deposit. So, this is making things difficult if you want to go ahead and invest in property. So, I am going to give you some thoughts on things that you can do but again, no deposit and a business depending on how long you have been running that business, how much income you generate from it, how much debt you have on the business as well, will really depend on what decisions you make moving forward. So, the first thing that I always advise everyone - and I am going to advise you as well, is to start with the end in mind. Think about 'What is my goal? What am I actually trying to achieve? And what is the best way to achieve that?' So, what sort of income do you want to achieve when you finish? For me, that goal is $60,000 a year in passive income. That goal is enough to live off with me and my family, get by, have a pretty cushy lifestyle, and then I can work from there to try and improve that. But $60,000 a year is the goal. So, my question is what is your goal that you are trying to achieve? You say you cannot work this hard for the rest of your life. But think about 'what is the goal I am trying to achieve? And is property or how can property help me get to that?' Because you run a business, you say your business is worth $1 million to $1.2 million depending on how much debt you have and depending on whether you can actually get the sale of that for your business after paying capital gains and stuff like that; that is a decent amount of money. So, you have to think, "Okay. Maybe my business could be the vehicle to get me to what I want." A lot of people think 'I want to own 10 properties or I want to invest in property,' but they do not actually think 'the reason I am investing in property is to achieve x amount of income so I can live x lifestyle.' So first, sit down and think about that then think about how is the best way that I can achieve it. Robert Kiyosaki, he wrote Rich Dad, Poor Dad; he always talks about how his strategy was to build businesses and then invest in real estate. So he would build a successful business and use the profits from that to then go ahead and invest in real estate. So you have an opportunity because you already run a business to do the same thing. And that is the sort of position that I am in as well. I am building businesses and then I am going to use that to go ahead and invest in real estate. So, you set your goal; think about that your business may be an asset that could actually get you towards that goal. Let us say that your goal is similar to mine in terms of passive income each and every year so you can live the life that you want. “Can you achieve that without property,” would be my first question. Can you take your business, change it in such a way that someone else could run it for you and then you are generating passive income from your business. That is a big thing that I think about in my business. Ther

[youtube id="FmfGUcuzjQo" align="left" mode="lazyload" maxwidth="500"] Some property improvements actually limit the number of potential buyers, thus lowering your chance of getting the best price possible. There are some property improvements that people make that can actually limit the number of potential buyers and thus limit the chance of you getting a higher than average purchase price for your property. That's what I wanted to talk about in today's episode. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. There's a lot of different people out there talking about how to improve your property, how to renovate your property, how to get the best sale price for your property. And so they should because little tweaks that you make here and there can really improve the value of your property and you want to be doing these things. However, there are some things that you may do to your property to try and improve it that actually limit the number of potential buyers. Generally speaking, when you're selling your property, you want the maximum amount of potential buyers so that you can get a fast sale and so that you have people competing for your property and a better chance of getting a higher than average purchase price. So I wanted to go through these things that may limit the number of people that are interested in your property. So you can think about them and then maybe avoid them when you're renovating or improving your property. The first one is pools. If you're thinking of adding a pool because you think it's going to add value to your property, chances are, a pool isn't much – if any – value to your property. And in many cases, it can actually decrease the value of a property. Pools are expensive to put in. They're not cheap and when people go and visit house, if they really, really want a pool, a lot of people would be willing to purchase a house without a pool and put a pool in. But if people go and visit a house and they don't want a pool, then that is something that is going to deter them from purchasing your property because it seems very difficult for people to get rid of a pool. Not many people do it. It's not regularly done. So if people see a pool and they don't actually want a pool, then it's likely to deter them. They also are going to be thinking about the maintenance they have to do, etc., etc. Unless you're in a very hot area where pools are very desirable, then this can be a limiting factor. So consult your local real estate agent around pools and whether or not you should put one in and how it's going to affect the value of your house. I like to think of pools as a personal decision that you make if you want to live in a house with a pool and then you suffer the consequences on that if you then decide to sell. But if you're doing it as an investment, you're deciding to put in a pool, I would definitely think twice about that one. The next thing that can limit the amount of potential buyers is high-maintenance gardens. Not everyone loves to garden. Me, for example, I absolutely hate to garden. I'll mow the lawn, but I probably won't enjoy doing it. And apart from that, I don't really spend my time gardening. So if you put in a high-maintenance garden that needs to be up kept in order to look good, that can turn off potential buyers because they get overwhelmed with the garden, how much it's going to take to up keep. And that can be really difficult. Whereas people who are gardeners can go in, they can see a basic lawn or a basic garden that's really easy to maintain and they can think about things they can add or do to it to improve that garden to their liking. However, if you're not a gardener and you're looking at this high-maintenance garden, that can overwhelm you and deter you from the property. A lot of these things people don't decide consciously. "Oh, that has a high-maintenance garden so I'm not going invest in it." but they just sub-consciously notice these things and it can turn them away. So that's something to be careful of there. Another thing that you need to be really careful of is color choices on your walls and I'm going to add in wallpaper as well. If you want to be really bold, if you want to add the colors that you absolutely love, then that's fine for you. But when it comes to selling your property, that can deter people if it's not on-trend and if it's not neutral colors. Most people – and this is something that I learnt from Ben the buyer's agent because his wife is an interior designer – most people can't walk into a room and imagine what it could be like with their furniture in there. Or imagine what it could be like with different colors on the walls. They walk into a room, they see the room for what it is and

[youtube id="ZPSHbK56NMY" align="left" mode="lazyload" maxwidth="500"] Here are 10 of the top ways to increase the value of your home. Everything from adding a room, to getting a better real estate agent. Let's have a look at the top 10 ways to increase the value of your home. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow properties. Active investors actually go ahead and they try and increase the value of their home or of their investment property above and beyond what the market is doing. So rather than just purchasing a property and hoping that it goes up in value over time, you can do things to your property to increase its value and that's what we're talking about today. Now, I've called this "The Top 10 Ways to Increase the Value of Your Home", but this can apply to investment properties as well and it's not like you should do number 1 then do number 2. You need to assess which of these is best for your situation because given your property, given your circumstances, given your strategy, one maybe better for you than another. So let's go through, have a look at these and hopefully these will give you some ideas. One of the top ways to increase the value of your home is to actually add a room to that home. Now, that could be adding a room within the existing structure just by changing the layout or it could be adding a room by doing some sort of extension on to the property. Adding a room can be a great way to add value to a property. If you can take a 2-bedroom house and make it a 3-bedroom house, then that's likely going to appeal to a broader set of the market and people are going to be willing to pay more for a 3-bedroom house than a 2-bedroom house. Same if you go from 3 to 4 bedrooms. Now, this can change depending on your area. Whether or not you actually want to add a bedroom. Obviously, if you've got a 5-bedroom house and you're adding a 6th bedroom, that could actually not add as much value as you would think because there's less people that would want a 6-bedroom house compared to a 5-bedroom house in a lot of areas.So you need to assess your market and we'll talk through this, but understanding what the market wants and giving them what they want is really important when it comes to increasing the value of your house. So, first thing is adding a room. If you can do that within the existing floor plan, existing structure, then that is great. If not, then look at potentially doing an extension to add a room. Number 2 would be a kitchen renovation. They say the kitchen is the heart of the home. One of the most important places for you to put on a show for anyone looking to purchase or rent your property. If you have a nice kitchen, then that can increase the value of your home. If you have a really bad kitchen, that can decrease the value of your home. So the kitchen is a very important spot and if you've got a poor kitchen, that is something I would definitely look at. Number 3 is bathroom renovation. From what I've heard, this tend to be more expensive and can deliver less of a return on investment than a kitchen renovation, unless you're very smart with it. So, be careful here, but a good bathroom renovation can make a huge difference to a property. I have been to so many properties and they've got these old, pink bathrooms and let's face it; in this day and age, who wants to live in a pink bathroom? That can easily be fixed through a minor renovation. Get some tile paint, paint over those pink tile or change the vanity in there at the same time. You could do a minor bathroom renovation to update it or you could go ahead and spend some more money and do a larger bathroom renovation if you feel that it needs it and you're going to get the return on investment. With all of these sorts of things, talk to your local real estate agents, try to get an idea of, "Okay, if I do this, what kind of value will it increase my property by?" they're going to have eyes on the market. They're going to know what it's going to increase the value by. And also, look at comparable sales. Look at comparable properties in your area. Do they have nice bathrooms, don't they? Because they're the people you'll be competing with when it comes to sell your property. Number 4 of the top 10 ways to increase the value of your home is a fresh paint/carpet. It is amazing what fresh paint and fresh carpet can do to a house. Especially, if you've got a house where the colors aren't neutral. For example, if you've got a pink room or you've got bright blue carpet or you've got things that are just going to turn people away. The majority of the population can't look at your home and imagine how nice it might be if you put floorboards in or tiles or you just had neutral carpet. Or what would it be

[youtube id="04Iq75yZf-s" align="left" mode="lazyload" maxwidth="500"] What is land tax? Land tax is a tax you pay based on the value of your land in a given state. Land tax is a tax that you pay based on the value of your land in any given state. Hey, I'm Ryan from onproperty.com.au and in this episode, I'm going to be talking about what is land tax and how does it affect you as an investor? Land tax is something that you need to be aware of as you accumulate more and more properties. Because it can become quite expensive if you don't prepare yourself for it properly. So land tax, as I mentioned before, it's a tax that you pay based on the value of your land in any given state. Land tax is a tax that's generally a percentage of the value of land that you own that you need to pay every single year. It's charged in all states, except Northern Territory, and each state assesses land tax based on the value of land that you own within that state. So we're going to go through and explain land tax in a bit more detail. We're going to talk about some of the exemptions, how it's going to affect you as an investor, some ways that you can avoid it and then future potential changes to the land tax that are out there. The first thing that you need to be aware of when it comes to land tax is that there's thresholds that you need to hit in any given state before you start getting charged land tax. Now, every state assesses and charges land tax differently. So, for example, in New South Wales, the threshold at the moment as I record this is $482,000. In Queensland, it's $600,000. In South Australia, it's $323,001 is how much the threshold is. So, each state varies in terms of its threshold, so you need to research each state individually or talk to your accountant about this stuff. So what happens is basically, you don't pay land tax until the value of your land reaches that threshold. And once the value of your land reaches that threshold, you are then charged land tax. It's important to know that land tax isn't the value of your property as a whole. It's the value of the land that you own. So, for example, if you are a part of a unit complex, then you will only own a percentage of that land. So, only a percentage of the land’s value will count and the value of the unit itself won't count. If you own a house, it's only the land they're looking at, it's not the land plus the dwelling that's on the land, so that's very important. When it comes to assessing land value, it's done by the government or by parties that the government hire to do it. So, for example, in Queensland, the assessment is done by the Department of Natural Resources and Mines. Basically, from what I can gather, the government does the assessments or pay someone to do the assessments for them. They then tell you how much your land is worth and your land tax calculations are done on top of that. There are ways that you can dispute it and try and get it changed if you need to. So, the assessment, it's not based on what you purchase your property for, what the real estate agent says it's worth, but it's what the government says the land is worth – that's a very important thing to note. Also, there are a lot of different exceptions as well to paying land tax. For example, in most – if not all – cases, your principal place of residence is exempt from the land tax payment and from the threshold, so it doesn't add to the value of the land that accumulates towards paying land taxes. There’s a whole bunch of different other exemptions based on the type of land – whether it's commercial or personal, etcetera, etcetera. So, you need to consult each individual state on what those exemptions are and whether you fit into them. So, for example, there's different thresholds if you're a personal investor versus if it's for commercial use and stuff like that. And there's exemptions for things like caravan parks and all of that sort of stuff. Let's quickly have a look at the thresholds and the charges and how land tax might affect you as an investor. And so, I did some research and looked at just a couple of different states to give you guys an idea. So in New South Wales, the threshold was $482,000 and once you've reached that threshold, you have to pay... Okay, before I say this, basically, in New South Wales, they assess the value of your land – the amount of land that you hold on the 31st of December at midnight each in every year. And so, they assess it at that date, at that time and that's how they calculate how much land you own and the value. So $100 once you reach the threshold, plus 1.6% of every dollar up until $2.947 million. And then after you go over $2.947 million, you're paying $39,540 and then 2% for every dollar over that. So, land ta

[youtube id="LU0o_1gbI70" align="left" mode="lazyload" maxwidth="500"] What property investment strategy would you use if you could purchase property with cash you obtain through inheritance? Hey and welcome back to What Would Ryan Do? The series where you pose a question at me and I tell you what I think about it. What I would potentially do in the situation. Today's episode, we're going to be talking about what strategy is best – or what would I choose – if you're buying properties in cash. Let's read over the question and then we'll go through it. Remember, What Would Ryan Do? It's a bit of fun, it's a way to get someone else's perspective on your situation. I tend to think a bit outside the box, outside what normal people think. So, hopefully, my perspective can help you, but it's definitely not financial or mortgage advise. So always seek professional advise that is my #disclaimer. Alright, here is the question: "I was wondering what strategy you would use if you had the opportunity to buy a property outright with cash. (e.g. received an inheritance)." This is an absolutely great question and what a good position to be in. Obviously, my condolences for whoever has passed away that you've received this inheritance from. That is definitely not fun, but being in a position where you have a lot of cash gives you a lot of different options to choose from. Now, depending on whether you're working or not can depend on whether you want to take that cash, borrow some money as well and spread that as far and wide as you can. Or, maybe, you just want to invest with this cash and you don't want to acquire any debt. Let's talk about those 2 different scenarios and what I would do in each scenario. Remember, we're talking about me. I'm not giving you financial advise, but hopefully, through talking about this, it can give you some ideas for your situation. So. The first thing that I always go to, no matter what the question is, about whatever investment strategy or whatever situation is, is what is your end goal? What are you trying to achieve in the end and how can you get there? So rather than saying, "I have $500,000 cash." or "$1 million cash." or however much cash you have, “Should I buy X property or Y property? Should I use this strategy or that strategy?” Rather than saying that, you need to rephrase the question. This question is probably not the best question to ask. The best question to ask is, "I have this amount of money. I have this goal. What is the best strategy to get me towards this goal?" So, having your own goal is very important. So that might be a passive income of $60,000 a year. Maybe a passive income of $100,000 a year. Maybe $30,000 a year. Maybe you just don't want to lose any money and you want to park that money and keep it safe. It's really up to you. It depends on your situation and what you're trying to achieve. Most people that I speak to would love, love, love, love to replace their income. And I think that is a great goal. A lot of people want to far exceed their income, which is achievable, but just unrealistic for a lot of people. So if you're earning $50,000 a year and your goal is to earn $1 million a year in passive income, you might want to start with a goal of just replacing your initial income first and then work from there. So, step number 1 is work out your goal. So, for me, goal income for me is about $60,000 a year in passive income. I can survive off that. My family can survive off that. We can live a fairly happy life and not have to worry about money. Now, once I got that, I wouldn't stop working and running business and things like that, but that is the goal for me. So I'm going to look at that. If I was buying property in cash, that would be my initial thing. How can I take this cash and as easily as possible, with potentially the least risk as possible, achieve my goal of $60,000 a year in passive income. So, depending on how much cash I had, will depend on the strategy that I would use. But I would be looking for high rental yield properties in stable areas. You can find positive cash flow properties all over Australia. I show people though my member's area. You can check that out if you're interested at onproperty.com.au/membership. If you want to see the positive cash flow properties that I find, but those vary in strategy. So some might be in country areas that can grow really well, but then can decline. Some of them might be in different regions. So, basically, if I had cash, I was buying and I had the opportunity to get a passive income, then I would look to purchase positive cash flow property or high rental yield property in a stable area. Now, if you're purchasing in cash, basically, anything is going to be positive cash flow. So because I want to generate as

[youtube id="lGUH0anJhKU" align="left" mode="lazyload" maxwidth="500"] Today we talk to Ronald Tan about his investment journey. From his early successes, to being swindled by a developer to investing again and doing it right this time around. One of my absolute favourite things to do when running On Property is to talk to my listeners, talk to my readers about their investment journey. To hear about the successes, to hear about the failures that they've been on. Today, I have for you a really exciting investor profile with an investor named Ronald Tan. Ronald has been through so many different things over his investment career, which has spanned I think it was something over 20 years. He's had great success in his early purchases to being swindles by property marketers offering him overseas property. He's had some great successes, some great failures and then come back and had some successes again. So it's really great to hear this story with Ronald and I think it's going to inspire a lot of you. Now, please note that there was a bit of lag between the conversation over Skype so sometimes we do interrupt each other a little bit or if there's longer than average pauses, that's just because of the delay in terms of the signal going through. A really great interview. Thank you so much, Ronald, for coming on and sharing your story and I hope that this inspires you guys. Ryan: Hey Ronald, thanks so much for coming on today. Let's go back to the beginning your investment journey. When did you first invest in property and what made you decide to invest in property in the beginning? Ronald: Okay. I guess this started off probably a few decades ago when I was a lot younger and I noticed a lot of my uncles – I come from Singapore – they were going through a period of exponential property growth. Probably fueled by speculation and I guess in those days when the overall property market sort of increases, it's benefit those people who enter the job market earlier, obviously. In those days, everybody is saying, "Oh, you should buy property because property always makes you money." Ryan: It doesn't sound too different from today, really. Ronald: Yeah, yeah, it is. For the un-initiated, I guess. So that's how I first went into property. The first investment property that I bought apart from my own home was basically with the intention to just rent it out, but at least in those countries, it is still more or less positive cash flow, so it's not too bad. Ryan: So was your investment property in Singapore? Ronald: Yes, it is. Ryan: Okay. And do you still own those properties today or have you sold out and you're now in Australian market? Ronald: No. I sold that out a long time ago. In fact, slightly 2 years after I acquired it. I think I bought it at $325,000 and sold it 2 years later for $520,000 or something like that. Ryan: That's pretty good. Ronald: Yeah, that's pretty good. And then, I made the next mistake after that. Ryan: Okay, so you had a very successful first one. And then, you said you made a mistake on your second one. What happened there? Ronald: Well, I guess, because at that time, my ex is the sort of person that likes to spend money. So if I have the proceeds of the fist property, I thought I better buy something else before it gets spent. At that time, I have intention of probably in the future of migrating so I happened to go to one of those exhibitions where the marketers was presenting foreign properties for sale. And then I bought one of the plan there. Obviously, the price was highly inflated. Ryan: Yeah. Which country was this in? Was this in Singapore still or was this – you said "foreign investment", so was it in another country? Robert: The property was in Perth, actually. So, I was buying it from Singapore. It was just a 4x2 built by a company called [inaudible 4:56], which I think about 15 years ago, they've stopped operating as a builder. I think the price is probably maybe 40% more than what you would have paid if you were to buy locally. Ryan: Oh no. That's horrible. Is this standard? Does this happen overseas? That marketers will go overseas to Singapore, to China, etc. and market these Australian properties at extremely inflated prices? Does that happen a lot? Ronald: Yes. It happens all the time. Obviously, how it works is that this marketers will link up with a local real estate agency. Obviously, they need the local contact to setup all the fancy brochures and the exhibition facilities and things like that. I mean, being marketers, they always promise you a lot of things and they say, "Oh, the freeway is going to come by in 2-3 years." and knowing what Australia is like, you know, 3 years can become 10-15 years. What they never happened in [inaudible 6:19]. Ryan: Oh. Well, that's sad to hear. I'm sorry that you got, basically

[youtube id="uAhYU8wph9Y" align="left" mode="lazyload" maxwidth="500"] Budgetting doesn't come naturally to most of us. For those of you who struggle (like me) here are some tips on budgetting that have helped me. Budgeting your spending can be really hard. It's not something that comes naturally to most of us. And so, I wanted to give you some tips on budgeting your spending. These things have worked for me and they may or may not work for you. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. One of the things that people tell me that consistently holds them back from investing in property is they don't have the ability to save a deposit or they don't have a big enough deposit and they're in that process. Budgeting and saving a deposit can be really hard. So that's why I wanted to create this episode to just give you guys an idea of how we do it, which is far from perfect, but it may suit you. The reason that i wanted to share this is because a lot of people out there will lay out one particular way of budgeting and say that, "this is the best way to do it". Most of the time, it's you set your weekly budget or monthly budget or whatever it is. You section it off into little portions so you've got $20 for entertainment. You've got $10 for coffee. You know, you've got $50 for groceries, whatever it may be. $50 for grocery is not much when you have 3 children, you tell me. Especially one who's gluten and dairy-free and you have to spend $9 on a loaf of bread to buy nice gluten-free bread. Anyway, most of them just teach that and say that that's the way to do it. Me and my wife tried that. We even tried putting cash in separate envelopes for each individual thing, like entertainment, coffee, etcetera, and it was just so painful to deal with. It just didn't suit us at all. So we found something that suits us and I through it'll be helpful to share these with you. First thing I'd like to say is that if you're trying to save a deposit or if you're trying to pay off debt, I do believe that there is great value in doing that first. So when you get paid, whether it be weekly, fortnightly, monthly, whatever it is, take a portion of your money first and put it towards savings or take a portion of your money first and put it towards paying off debt before you start living out the week, before you start spending money. And then, once you've done that – so you've saved or you've paid off debt – it's then your goal and your task to try and live off the rest or to try and make more money so you can afford to live off the rest. So that is an option, to actually try and make more money so that you can afford to live more comfortably even though you're saving. So this is something that we consistently do – is that every week, when we get paid, some money goes aside towards savings and things like that and then we have to live off the rest. So let me just start with that. So, the thing that we have found was helpful for us is basically, the first step we did was to calculate all our regular monthly expenses. So, we've got things that we have to pay every week, like rent for our house. We've got things like our phone bills, internet, insurances, all of that sort of stuff. We pay that stuff monthly. So, basically, we calculated how much we had to pay monthly in terms of those bills. And we then worked out, "Okay, how much do we have left over that we want to spend each week?" So we earn X amount, we've got these monthly expenses, and then it's kind of a balancing act for us between how much do we want to save or use to reduce debt versus how much do we want to put towards our lifestyle and things like that. But once we got the monthly expenses out of the way and they're kind of taken care of out of the pay, then comes the working out how much we have to spend weekly. And we found it really useful to set a fixed weekly amount of money that we have to spend. And so, each week, we get X amount of dollars in order to spend on our life. Now, this is after all the regular bills have been paid. So our phone bill's been paid, our rent's been paid, our internet's been paid, all that sort of stuff has already been paid. And whatever is left over is stuff that we have to spend on things like groceries, coffee, eating out, going on dates, buying furniture or rugs or whatever it may be. And so, we have a set, fixed weekly amount that we have. But rather than do what most people recommend is that we divvy that up, is we are flexible in terms of how we spend that money. And we have found that we need to be flexible because we're not the type of people that can say, "I'm only going to spend $20 eating out this week." because we might have one night where we're just not feeli

[youtube id="jPtlsBvbDCs" align="left" mode="lazyload" maxwidth="500"] What is the best accounting program for the DIY property investor. Let me share the best program, how I use it and some pro tips for managing property finances. What are the best accounting programs for the DIY property investor? Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow properties. One of the really important things that you need to do when you're investing in property, when you own properties is you need to actually manage the finances of those properties. So you need to keep track of income coming in. You need to keep track of expenses going out. And you need to collate those at the end of the year and give them to your accountant so they can go ahead and do your tax return. So what are some of the best accounting programs out there for the DIY investor? Now, I'm going to show you the program that I recommend, which you can all have access to really easily. But before I do, I want to give you a pro tip that I got from Ben the buyer's agent. Ben from Pumped on Property, who recommended – and he does this himself – is that he gets the rental mangers to do a lot of his financial stuff for him. So, obviously, he collect the rents, but he also gets them to pay his insurances, gets them to pay the council rates, the water rates, all of that sort of stuff as well. He works very closely with the real estate agents in order to get them to manage most of his finances for him. I haven't specifically asked him, but I imagine a portion of that would be collating and sharing the receipts and stuff with him so that would be really easy to keep track of that sort of stuff. So, definitely a pro tip, is to go out there and to ask your rental manger if they can go ahead and manage this sort of stuff for you. Ben has said that of all the people that he's asked, no one's ever said "no" to him. So, it's definitely something that you should explore. Now, the first program that I'm going to recommend and I will recommend a couple, is a program that we all know and only a few of us love. And that is called Excel. Here, I'm using Google Sheets, which I think is way better than Excel because it's just simpler, it's free, it exists online so you can access it from any computer and it just works. What I've got here is an example spreadsheet that has every day in the year. Now, this one is a bit old. I think it's from the financial year 2015-16. So I just took my old business one and basically cleared it of its data. Probably should have taken from 2016-17, but regardless, the process is still the same. Actually, I can just go ahead and change this date. Let's make this the 1st of July 2016 and that's going to update all the dates. So now it is correct. Alright. So, basically, what I have here is every single day of the year goes along the spreadsheet. This makes it quite a large spreadsheet, but that's fine because we're just looking at the days. When I have income come in, so let's say I have rent come in on Wednesdays, that's $350. I can go ahead and put that in. On the next Wednesday, I could again go $350 and I can do that for my rents. What I would ideally do, you could call this "Property 1" or you could have one of these sheets for each individual property. So you've got every day of the week, but then you've also got an annual summary here, which is what you're going to provide your accountant – what your accountant is going to be most interested in. So you could do "Property 1", "Property 2". If I was doing it, I'd probably have one of these sheets per property. So let's just call this "Rental Income". You may also have things like "Interest on Savings" or some other form of income, but chances are, you're not going to need this many so we can go ahead and delete those rows. At the top, you put all your income. And then, you go ahead and put all your expenses. So I've got – these are all business expenses of mine so let's go ahead and delete those. For expenses, for example, you've got your "Rental Management Fees". You've got things like "Council Rates". You might have "Strata Fees". You've got "Insurances", all of this sort of stuff. And so, basically, what you do is when you pay one of those things, go ahead and put it in this spreadsheet. So let's say I paid council rates of $2,000 for the year or something like that. I would go ahead and put that down. That will then add to the summary, etcetera. You would also need a separate way to store all of these documents, which I'll talk about in a minute. Basically, you can go through this. I've also got phantom expenses down that bottom here, which, again, are expenses l

[youtube id="DZDqQW2CIZg" align="left" mode="lazyload" maxwidth="500"] Would I buy a positively geared property in New Zealand or a negatively geared property in Brisbane that needed to be subdivided into 3 townhouses to be positive cash flow? WWRD? Hey and welcome to another episode of What Would Ryan Do, the series where you ask me questions and I give you my perspective and what I would do in this situation. This is not to be considered financial or mortgage advice, just so you know. It is just a little bit of fun. So the question today revolves around whether or not I would purchase positive property in New Zealand or negative property in Brisbane but there are some caveats to it. So let us go ahead and have a look at the question today. Would you buy a property in a smaller city in New Zealand with a 10% yield or a negatively geared property in Brisbane that needs to be subdivided into 3 townhouses to be positively geared? The answer to this one for me is very simple. I would actually probably purchase the one in New Zealand. Let me give my reasoning behind it, and I am not saying you should do this because it all depends on the person. Now, if I was to go ahead and purchase a property in Brisbane that needs to be subdivided into 3 townhouses, what I am guessing you are saying is that you are either buying a block of land or you are buying a house that you are going to demolish. You are then going to subdivide and build 3 townhouses. First of all, I have never done a subdivision. I have never done a demolishment. I have never got approved, I have never built 3 townhouses, and I have never even built a house or worked with a builder to build a house. So, all of that just sound too difficult. Would I purchase property in Brisbane that was positively geared or that I could turn into a positively geared property easier than that, yes I would. I do not understand the whole concept around your need to subdivide it into 3 townhouses in order to achieve your positive gearing. Whereas you are talking about a smaller city in New Zealand with a 10% yield, that is looking more attractive to me. Firstly, let me just say I would need to research the New Zealand market, which I have not done at all, not at all, I have not looked into that market. I do not know how it differs from Australia. I do not know what it is like at all. I am not sure what you mean by smaller city. I am guessing you do not mean Oakland or the large hubs - what is there? There is Oakland. There is Queenstown. There is Christchurch. There is one that my cousin lives in that I should know where it is, Wellington. Okay, I’m guessing you are not meaning one of them. You are kind of meaning a smaller regional center. I recently went to New Zealand and I absolutely love the place. And so if I have an excuse to go to New Zealand to research the property market over there and to look into that and purchase it, would I consider it? Absolutely! You also need to take into account when investing in New Zealand, things to do with currency. Or if I am going to be living in Australia, how is the New Zealand currency going to change, how is the Australian currency going to change? Because if I invest in New Zealand and the New Zealand dollar outperforms the Australian dollar, then that is great. I am making money on currency. But my property could do really well but the New Zealand currency is dropping below the Australian currency and then my property is becoming less and less in terms of Australian dollars. So that is also something that you need to take into account. But I do like the idea of having like a global asset based on diversifying things, having some in New Zealand. So if we do have a property bubble or do have a crash in Australia that some people are talking about, then you are diversified and you have something in other countries. Again with New Zealand, I do not know how you get approved for finance and all that sort of stuff so it will be a big jump to do that. But I am not a fan of negatively geared properties. I have never been and I am not a fan at this point and even more so now because of how well the Australian market has done. Because of the potential for a bubble to burst, I would like to be in a situation where I was positive cash flow from day 1 that if the property does go through some hard times at least I am getting that positive cash flow. So for me, positive cash flow is a big thing. For you, it may be something different but look, I would love to invest in New Zealand. I love the place. I am actually thinking about maybe taking time - sometime soon, to actually move to New Zealand for a couple of months or something like that. That could be really cool; take my family over there, do some travel while I work because I work online, so I could do that. So yeah, for me it is New Zealand and I just want to say a big thank you to David for asking this question. So thank you, David, for asking

[youtube id="brX18YrTPTY" align="left" mode="lazyload" maxwidth="500"] In today's episode economist Steve Keen explains why Australia is in a property bubble and what you can do about it. Is there currently an Australian property bubble? Some experts say that there is and that prices in property could fall by as much as 40% or more. While other experts say that we aren't. Today, I have with me an expert in the Australian property bubble, an economist, Steve Keen, who understands this issue like nobody else. I was really excited to get him on and to understand why he believes that we are in a property bubble in Australia, to talk through some of the statistics and to also really get an idea of is this bubble likely to pop in the near future and what can we do about it as investors. I'm really excited to have this interview today on whether or not Australia is experiencing a property bubble and what we can do about it. I do want to apologize ahead of time for the quality of the recording. The internet at my house wasn't performing very well when we did this and we're talking to each other on the opposite sides of the world. Unfortunately, there are some areas where the audio cuts out or it's not too strong and the video can be quite pixelated. So just beware of that, I do apologize for that, but there wasn't much I could do. But this definitely an interview worth watching. Steve: Okay. Let's see if it works with me calling you. Ryan: Okay, cool. Steve: Share screen. Start. Let's see. Ryan: Alright it's just loading. Steve: Yeah. Ryan: Okay. Yup, I can see it. Steve: Okay. That particular graph is what I'm calling a smoking gun of credit. So the red line is GDP. The blue line is GDP plus change in debt, which is basically credit – plus credit. And the black line is credit graphed on the right hand side. Okay. Whenever the blue line's above the red line, credit is adding to demand. When it's below the red line, because people are paying off debt more than they're taking on new debt, credit's reducing demand – credit's negative. Ryan: Which basically never happens on this graph. Steve: Well, it never happened in Australia so let's take a look at the American, just give me a sec to get to the right part of it. Right chart here. This is all charts for a book I'm writing right now on the topic. I've got to change that. That's the UK. Where's the USA? This will give you just as Australian in private debt. This is when I started calling the crisis to understand why. So the dotted line's the exponential fit to the Australian data and the American data in ratio of private debt to GDP. Ryan: Okay. Steve: See the trends? Okay. Ryan: Yes. Steve: So exponential increase ratio of debt to GDP. It's not the actual level. So here's the chart from America. Same when I showed you for Australia a minute ago. Ryan: Okay. Steve: Where you have the GFC maximum boosted demand coming out of credit being positive and then it plunges. And for quite some time, it's negative, so it's taking demand out of the economy. So we side stepped that. Australia's went down to here and bounced up again. And that was because of the impact of the first homeowner's scheme. These people dived in and took on mortgages. Ryan: Yup. I remember that time. Steve: And they fall. The trend for this to go negative. Yeah. And then the second time, around 2012 when, again, we started having a decline in mortgage debt growth. That's when people started borrowing for all the investment projects in mining. So it boost kind of the business side. And then, as debt started to slow down, they were actually rising as a percentage of GDP. That's when investors followed the housing market again. So, consequently, what we have - this is the key one I want to come down to in a moment. The key relationship is – that's the chart you can see right now. And I'll explain the logic when we are actually in the interview. But what actually drives the market is acceleration of mortgage debt. So what I'm graphing here, the blue line is change in house prices in America and the red line is the acceleration, not the change, the acceleration of mortgage debt as a percentage of GDP. Okay, can you see the relationship? Ryan: Yup. It seems to be in line with each other. Steve: Okay. Yeah. One drives the other, so econometrics on this then it's definitely the case. Accelerating mortgage that drives change in house prices. Bryan: Yeah, where the red line preceded the blue line. Steve: Yeah. This is now looking at the – this is real house prices in America versus Australia since 1986. So America had this big bubble and crash and now, some real house prices are still high compared to what they were back in 1986, but not that much higher. Australia's real house prices have doubled, alm

[youtube id="DzADCpyN8Ts" align="left" mode="lazyload" maxwidth="500"] How do you find investment properties that are under market value but are also in a good area? "I would much rather pay full market price, give the vendor what they are asking and so get a foot in the door of a great market rather than get a bargain and then just see that walk out by third of price falls over the next 12 months or whatever." A lot of investors are talking about buying property under market value, but how do you buy property under market value that is also in a good area? Hey! I am Ryan from OnProperty.com.au, helping you find positive cash flow property, and I want to start out this video a little bit different to how I start out every other video which is just an introduction that lead into the answer and to actually help you to question yourself and to say, "Should I actually be looking for properties under market value or should I be taking a different approach to this?" So, I am going to play a short clip for you, of an interview that I did with Jeremy Sheppard from DSRData.com.au. Now, DSRData is an awesome research tool where you can see the demand for an area, and that can help you assess whether or not an area is a good area to invest in. So I will play this clip where we talk about this under--market-value idea, and whether or not people should be approaching it, and then I will come back after a couple of minutes and I will talk about 'Okay, if you still want to go ahead and do it, how can you find properties that are under market value in good areas.' ------ Jeremy: So, I would much rather pay full market price, give the vendor what they are asking; so I have a foot in the door of a great market rather than get a bargain and just see that walk out by third of price falls over the next 12 months or whatever. Ryan: I think that is good for people to get out of their mind that because a lot of people do teach the best way to invest is to buy below market value so you can get instant equity in an area and look, I am sure there are ways to do that. But it just sounds so much easier to identify good markets, markets that are solid, that are likely to grow, get in there at market value, and see the market rise. And if you really want to create equity then you can do things like renovation or create opportunities within that property yourself. Jeremy: Yeah. That whole instant equity thing, if your strategy is entirely based on buying below market value, then why would you hang on to a property once you have boarded? Your strategy has now come to its fruition. You have bought below market value, so why is there not a discount flip? You know, there is a renovation flip; you buy, renovate, sell. There is no such thing as a discount flip because as soon as you have settled on that property, it is new value -- whatever you paid for it, and that is what other buyers are looking at. This is now the new benchmark. So, if you can and if ever you buy in that area, you can get a bargain, the prices are heading down. They are not heading up and I remember seeing one property educator complaining about Sydney prices this last year and they are saying that people are paying too much; too much being above valuation. But unless people buy above valuation, capital growth does not take place. It has to be someone forking out a little bit more money and then you have a new benchmark which becomes the standard, and people continue to buy above market value. That is the only way capital growth happens. So, if you are buying in a location where it runs paying fair market value, you are buying in a stagnant location. You have to pay more to get into these hot markets; that is the unfortunate side effect of getting into the market. ---------- Okay, I thought it was really important to play that video because often when other investors or mentors or coaches talk about buying under market value, you think, "Okay, that is the exact way that I should invest. I need to invest in property that is under market value," and that becomes the most important thing to you and you start to neglect other areas of research like, actually trying to determine whether or not an area is a good area. And this question came to me - I think it was from David, who asked this question. And it is so hard to determine whether or not an area is a good area. Just because you think it is a nice, you think it is a good area, does not necessarily mean it is a good area. So, I really like the approach that Jeremy took to where he said, "Yeah, you can try and buy property under market value but what is the point of doing that if you do not actually do your research and invest in an area that is likely to grow?" Because if you buy under market value in area or a discounting properties anyway, where it is a slow market; and that is it, it is going to stay stagnant or decrease, then you ar

[youtube id="wdtdZgXv1W8" align="left" mode="lazyload" maxwidth="500"] What would Ryan do? How would he get his deposit money back whilst maximising tax deductions? Hey guys and welcome to another episode of WWRD or What Would Ryan Do, the segment of On Property where you send in your questions and I give you my opinion about what I would do if it was me in your situation; and I try and leave you with some thoughts that you can think about yourself. We are not taking ourselves too seriously here, but we are trying to help you guys to assess your situation and get some outside thought on it because sometimes you are so deep in the jungle, you cannot see the forest for the trees because you are just looking at your own situation. It can really help to get an outsider's perspective. We also like to have a little fun here, as you can see by the photo; if you have any questions that you want answered, you can submit them. Just email me, [email protected]. So the question today comes from Vicki who asked, "How do you structure a loan when you want to buy an investment property to maximize tax deductions when you do eventually buy your own first place?" The thought process here is Vicki is going out, she is investing in property while she is renting - so she is rentvesting, as some people like to call it. And basically, she wants to use her money wisely so when she does buy her own place, she gets the maximum tax deductions on her property portfolio. So she is using an example: if I buy an investment property for - let us say $100,000, I would need $10,000 deposit and $5,000 closing cost. How do I get that $15,000 back with tax deductions? The ATO will not let me refinance and take $15,000 out and claim the interest on the $15,000 as a deduction. I have to have an initial loan balance of $105,000 and they have not reduced the balance of the loan at all. How can I do this? Well, let me first say, this is WWRD. This is What Would Ryan do; this is not what a mortgage broker do or what would an accountant do because I am neither of those things, so this is my disclaimer that I cannot give taxation advice or mortgage advice. However, I will talk about this a bit and some things. If it was me in the situation, what are some things that I would consider and what would I do? And so we have a $100,000 property, we are putting in $15,000 of our own money. We are talking small figure, which is probably unrealistic for most people, so let us bump it up a bit to make it more understandable for people. Let us say I am investing in a house, an investment property for $400,000, and I am putting down a 10% deposit of $40,000 plus let us call it a $10,000 closing cost. So I am putting in $50,000 into this $400,000 property. How can I get that $50,000 back and get tax deductions for it as well? Now, this is a big ass because you are actually saying, "How do I get my own money back from my investments and how do I also get tax deductions for my money?" It is kind of the equivalent of saying, "Okay, I have $50,000 in the bank. How can I get tax deductions and tax benefits for having $50,000 in cash and for earning money on that $50,000?" It is just not really the way that tax system works. The tax system is there to like, if you are making a loss, if you have legitimate expenses against your property, you can claim them against the income. It is not there to create these tax deductions from money that you have yourself. So, even though we are not saying, "How do I take my money and get a tax deduction on it," that is effectively what we are trying to say because you are saying, "I am taking this $50,000. I am going to invest it. I want it back. And now I want tax deductions on that $50,000 even though I have it back into my account." And so it is not something that you can really do if you want that $50,000, to be able to spend on personal stuff. Now, when it comes to drawing equity from a property from my understanding - again, I am not an accountant, they will look at what is the purpose of this loan; so they are equity loans, what is the purpose of it? If you are drawing $50,000 in equity to go on a holiday, is that for investment purposes or for income generating purposes? Well, no. I am going on a holiday to have fun with my family. It is a personal thing, so I should not get a tax deduction on that because it is a personal thing. I should not get a tax deduction every time I go to Krispy Kreme's and buy a donut because I am buying a donut, it is not good for me but man, it tastes good. That is not something that the Australian government, that Australia as a whole, need to deduct like, I should start to pay tax on that $3. Just because I spent it on a donut does not mean that I get to cut that out. And so same with any personal expenses, any holidays that you have and things like that. As you guys can see, we are not taking i

[youtube id="uoBshsXFdSM" align="left" mode="lazyload" maxwidth="500"] Selling your property yourself can save you thousands in agent commissions. Here's how to sell your property without a real estate agent. There are a lot of people who sell their properties every single year without the use of a real estate agent and thus saving themselves quite a large commission. Today I have with me Daniel Baxter from YourHotProperty.com.au. He helps people sell their properties without a real estate agent and he is going to talk us through the pros and cons of doing that as well as the process on how to sell your property without a real estate agent. Ryan: So hey Daniel, thanks for coming on today! Daniel: Hey Ryan, thanks for having me. I am really excited to be here today. Ryan: So, let us talk first about why would people consider selling their property without the use of a real estate agent. Most people will sell their properties through a real estate agent, what is the benefit of selling your property without a real estate agent? Daniel: Well, the biggest benefit - I guess the reason why we have, it is not just I guess, managers that have come to us. We have investors, we have developers; I guess what we do and how we can help people can really work with anybody. So, the big one is obviously the commission savings. Agents, the way that they are charging people, obviously, the fees are huge. Property prices are increasing, obviously, so did these fees. And the truth is most of them are doing less than what they did years ago but they are still charging the same or if not more. Ryan: And so what are the general fees that a real estate agent will charge someone to sell their property? Daniel: Well, it definitely varies throughout Australia. I mean the average probably, say in the metro area, is about 2%. But when we start moving out to rural areas and things like that, I have had clients with agents quoting anything up to 4.8% of the property price. Ryan: Okay. So 2% of a $500,000 property is $10,000. Is that right? Daniel: Yes. Ryan: And then a lot of agents as well will charge on top of that for advertising fees so you will be up for hundreds of dollars to list your property online, hundreds of dollars for a sign, hundreds of dollars for professional photos and stuff as well so you are kind of looking at an extra $1,000 or $2,000 or something in a lot of cases for advertising. Is that right? Daniel: Yes, easily. It is probably at least $2,000 to $3,000 most agents will put together for their marketing packages that they will suggest to people. But if you are looking at an auction campaign, a lot of agents love to talk everybody into an auction campaign. Some properties definitely suit that, a lot of them do not, but it tends to pay advertising so agents love it and a marketing campaign that can run anywhere between $4,000 to $10,000, easily. Ryan: Oh wow. I did not realize auctions were so much more expensive than just selling your property regularly. Daniel: Yeah. It is a very aggressive marketing campaign and they like to use a lot of print. As soon as you use print, obviously the marketing costs just skyrocket. Ryan: Yeah, and what is print media these days... Daniel: Well, to be honest I am really not a fan and I am happy to say that. Look, the statistics these days suggest that about 90% of buyers generated for property are coming online, so it does not really make sense to spend what might probably be $10,000 on print media what you might call paper magazines or your domain magazines and things like that, your local papers and things that come out where you choose their offers and things like that. It does not make sense to advertise and spend a fortune when very small percentage of the market is actually going there to search for property. Ryan: Okay. So the biggest incentive for people to sell themselves obviously so they do not have to pay their agent their commission, but before this we were also talking a little bit about are agents actually the right person to get you the best price for your property or not. Daniel: Absolutely, yeah. That is the thing. A lot of people come to us as well because they love the chance to get a little bit more control over when they sell their property. They are involved in the sale. They know what offices are actually being received and if they are not being received as well. It is one of the biggest things we have when people come to us and say that there is just no communication or there is a lack of communication between the agent and themselves. They do not actually have the feel for where the sale currently is at that point in time. Obviously, if you are involved in the sale you have an opportunity; you are up close to the buyers, you know exactly whether you have people excited or keen about the property or you do not. And if you do not, at least you know then, "Well, is my property overpriced? Do I need to look at

[youtube id="SQ4YwtDfdP4" align="left" mode="lazyload" maxwidth="500"] Are you interested in buying property through vendor finance? Here's some tips on how to do it. How do you buy property through vendor finance? Hey! I am Ryan from OnProperty.com.au, helping you find positive cash flow property and one of my readers, Gordon, has asked me to explain how you go about buying property through vendor finance. So I wanted to talk about this a little bit. I have made a whole bunch of offers on properties through vendor finance. Some have been accepted. Most have been declined. I have never actually gone through with it and purchased a property through vendor finance, but I know a little bit about how to go about doing it. Firstly, let me just touch on what vendor finance is if you do not know what we are talking about. So vendor finance is when you purchase a property - so a buyer purchases a property from the seller, but rather than the buyer going out and getting a bank loan and coming back and giving the seller a bulk amount of money for the property, or the bank giving the seller a bulk amount of money for the property; the buyer actually goes to the seller and says, "Hey look, I can give you a deposit for this property and I want you to loan me the rest." So basically, the buyer creates a loan with the seller or vice versa. They create a loan together. And so the buyer then needs to repay the seller just like they would repay a lender, so there are interest repayments on the vendor finance and generally in the future, there could potentially be a lump sum payoff if you can go and get a bank loan from a traditional lender. So that is what vendor financing is. Rather than the buyer going out and getting financing from the bank, the buyer gets the financing from the seller and pays them back over time. This benefits the seller because generally they get a higher than average purchase price for their property or sale price for their property and they can charge a higher-then-average interest rate, meaning it is going to generate positive cash flow for them. It can benefit the buyer because it means you can get into the market where otherwise you may not be able to get a loan from a bank; so you can get into the market earlier. But you are likely going to pay more and need to pay a higher-than-average interest rate. So let us say that despite the cons of purchasing a property with vendor finance being a higher purchase price and a higher-than-average interest rates, you still want to go ahead and you are still in exploring this option of potentially purchasing a property through vendor finance. How do you go about doing this? Well, it is very difficult - I dare say impossible, to find a property online that is selling through vendor finance. I am just going to go online right now and have quick look. The best website to search this stuff from is called MyRealEstate.com.au. So let us go ahead and we are going to go to MyRealEstate.ocm.au. Now this is like the Google of real estate if you will, and you can put in search terms like vendor financing, owner financing, seller finance, all of these sorts of things, to search for property. So let us just start by searching vendor finance. So that is now going to bring up a bunch of different properties here. We can see some land that is available. We can see a house here in Katherine in the Northern Territory. You can see that most of these houses are not spectacular, are not super exciting, and there is no guarantee that any of these will actually offer vendor finance. But if I go into it, I am going to search for vendor - now, this is just saying it has a motivated vendor. Look, this is one strategy you can use and sometimes it does bring up results. Let us try owner finance and see if that gives us any results. This one is coming up again. Some land here, another property here. Generally, most people in Australia do not list their property for sale via vendor finance. Those pages could not be found, so we basically have not have any luck. Here we go: "Owner will finance suitable buyers." So a modern 4-bedroom home, available for outright sale or vendor finance through rent-to-own, whereby you pay a weekly rent amount plus a deposit to eventually qualify for a bank loan. Now, rent-to-own is different from vendor finance, so I will not actually classify that as vendor finance because generally as an investor you want to create the vendor finance loan and then rent out the property. You do not want to live in it yourself, so rent-to-own is slightly different from vendor finance. So you are going to have a lot of difficulty finding these properties online; it may be impossible in order to do it. So what you need to do if you want to find a property that you can purchase through vendor finance is you need to find a traditional property and you need to offer them vendor finance. Now, this is going to be diff

[youtube id="HKMmJNnO7OE" align="left" mode="lazyload" maxwidth="500"] How should first time investors get started? Should they save a deposit, use vendor financing, do a joint venture or something entirely different? How should first-time investors get started in the property market? Should they save their own deposit? Go to the vendor finance route? Go into a joint venture? Or use some other strategy? Hey! I am Ryan from OnProperty.com.au, helping you find positive cash flow property and this question was asked by Gordon. Thank you Gordon for sending in your question. If you want to have your question answered, just email it to [email protected]. So when you are a first-time investor, it could be very difficult to get into the market. It could be extremely expensive to get into the market and you feel like you are trying to save, but it just takes forever to get there and you are not making any progress. So, is there a better way than saving your deposit? Should you look at joint venture? Should you look at vendor finance, etcetera? Or should you just stick with the staple approach of saving your deposit? I cannot answer the question for you, but I can give you some pros and cons and things to think about with each of them. The most common way to get into the market is obviously saving your deposit yourself. This can be difficult. Saving a deposit even if it is 5% plus cost, or maybe 10% of the purchase price; if you are purchasing a $300,000 property, that is $30,000. A $500,000 property, that is $50,000. That is a lot of money to save. In some cases, that might be a year or more worth of your wage, which can be extremely difficult to do. So, the negative with saving your deposit is obviously that it can take a great deal of time. It involves an extreme amount of discipline to not go out there and not buy the latest iPhone, or not buy a car on a loan, or not purchase the latest thing that you want to purchase. It takes an extreme amount of discipline to be able to do that. A large portion of my audience that does have that discipline, but I am sure there are some of you out there who just really struggle with that, and that may be unachievable for you. So, the negative of it is it can take a lot of time to do. The positive of that is you then have full control. You can purchase a property yourself in your own name or in a trust if you decide to go down that route; but you have the deposit. You are investing it for yourself. This gives you full control over your decisions: what suburbs you want to invest in, what type of property, how much money do you want to spend, are you going to do a renovation, what are you going to put the profits towards, etcetera, etcetera. So, when you purchase a property it means you get full control over it. You are the decision-maker. You can make whatever decision you want. That is a huge benefit to it. It can be beneficial going into yourself rather than going in something like a joint venture when it comes to buying property number 2 and 3 and things like that because the banks will look at the entire loan against your income. So, it can negatively affect lending in the future if you do a joint venture. Saving a deposit is probably ideal in most situations if you can actually go about and save the deposit. Hopefully after then you can do something to that property to improve it, to increase the equity on that property, and then maybe in the future you may be able to borrow against the equity to go again because it can be difficult to save a deposit over and over. So, Option number 1 is to save a deposit. Option number 2 is what is called vendor financing. Now, this is quite common in places like the USA; not as common in Australia but still possible, I think, in almost every state. You might need to double check; I know there are some rules about this agreement in South Australia, so definitely check there. But just check with your local state laws whether or not you can do vendor financing. So vendor financing works like this: the person who is selling the property provides you with the property, but rather than you going and getting a loan from the bank and then paying those people in a lump sum, or basically you pay your deposit, the bank pays them the remainder of the sum; what is actually happening is that the person who owns the property is extending a loan to you. So you may still give them a deposit, it may not be as large, it might be just as large, it depends on the agreement you create. You give them a deposit and then they extend a loan to you based on how much you purchased the property for. So let us say a $500,000 property, let us say we give a 5% deposit of $25,000; you then owe that person $475,000. They will then create a loan structure which will be paid off over X number of years at X percent. So vendor finance can be beneficial because if for some reason you cannot get a loan from the bank, vendor financing

[youtube id="HklYgCgDwI8" align="left" mode="lazyload" maxwidth="500"] What would Ryan do? Would he keep properties after a development or would he sell them off for a lump sum? Hey guys! Ryan here from OnProperty.com.au, helping you find positive cash flow property. This is a new segment, new sort of episode, that I am starting, that I am going to run on weekends as I have questions for you guys. I am calling it WWRD or What Would Ryan Do. So if you send in your questions about your situation or your "friend" who has this situation and you want to think of, "Well, if Ryan was in this situation, what would he do," then you can send it in. That is what WWRD is, which I will be doing on weekends. This is going to be, as you can see from the picture you are watching on YouTube, it is just going to be a bit of fun. Do not take this too seriously. This is not going to be personal advice though I will try and help you out. Obviously I will be talking about some things that I would do. I will probably be asking you some questions, giving you some things to think about rather than saying here is exactly what you should do. So we will talk about what would I do for my situation, and then we will talk about some things that you can think about because you are not me. You are not in your 20s with 3 kids, quit a 6 figure job to go and work for himself. I am a very unique fellow. I am also a vegan and homeschool my child. You are probably not the same as me, but we will still find out what will Ryan do, WWRD. If you want to send me some of your questions, you can do that. Just email me on [email protected], that is the easiest way to submit your questions. And just put in the subject line WWRD and I will know that it is for this segment. Today's topic is a question from an audience member, whether they should keep or sell their properties after development. And so the way we are going through this is we are going to read through the email from them, and then I am going to go in and give my thoughts and stuff like that. You may need to bear with me as I do some maths as some of these questions do get quite specific. So, here is our question from Duval, and Duval, thanks for sending this in. I am just going to grab my notepad because I am guessing there is going to be some mass here. "Hey, Ryan! I have a question that you may think it is a question for my accountant or for myself. But I want to know, if you are in the situation, what would you do?" And Duval, just so you know, you inspired WWRD. This segment will not exist if it was not for you, so thank you very much! "I bought my principal place of residence in 2012 for $715,000. Let us go ahead and write that down, including stamp duty, which is a townhouse and probably worth $1 million today. I have also bought a house diagonally opposite for $740,000 with land on it, rent for $450 a week." That seems like terrible rent for something that you are paying $740,000 for, I do not know why the rent is so low on that. Maybe it is in Sydney. I do not know where this is, but that is very low yield for a property. Anyway, rent for $450 a week. They have subdivided it, cut the existing house; built another townhouse at the back which will cost around $280,000 for the whole process including the DA. So it is subdivided and it is built, $280,000 in total. "If I sell a brand new townhouse, so this is the one at the back, the subdivision cost $280,000; then I would get around $750,000 to $800,000 for it." So let us call that $750,000 if you sold it. "I have 4 options now. We are going to go through the options and we are going to think about them. Option 1: I keep all 3 properties, lived or unliving and put the other 2 on for natural cash flow; so in total, it seems like, ignoring our house which we bought ourselves because we all know we are not getting rent for it; just looking at this one investment property that has been subdivided and had another one built on it," so you have spent in total, $740,000 plus $280,000 which is just over a million dollars for this thing. So basically, you could then rent it out. If you are getting $450 a week for the front, maybe - I really do not know about the area and how much you could get for the back, but maybe you could get $550 or something so you will be getting a thousand dollars. You would be getting 5% yield. I would like to think it was higher so it would put you in a positive cash flow position, but I do not know the area and why the yield is so low. So that is option number 1. "Option number 2: I would sell the existing property, so this is the one at the front, for $750,000 to $800,000." Yes. "Put a brand new house on for rent and I will get $12,000 positive cash flow from that." So $12,000, okay, we are assuming - I just have to get all these assumptions right; we purchased a property for $740,000, subdi

[youtube id="epAsfPcrdk4" align="left" mode="lazyload" maxwidth="500"] When buying a property it is important to look at comparable property sales to get an idea of the market value. Here's how to do it. In this video, I'm going to show you how to find comparable property sales for the area. So when you are looking at investing in property, it's very important that you assess the property that you're looking at buying compared to properties that have recently sold in the area. This will give you a good idea and a good indication of what the property is really worth and will help stop you from overpaying for the property. So let's go ahead and find a property to look at. Here I am at myrealestate.com.au, which is my absolute favourite search engine for properties. Let's go ahead and type in a search request, "units in Cronulla under $700k". We'll look for some of those units in Cronulla under $700,000 and we can see that there's a property here, 7/21 Wilbar Avenue for $555,000+. We can see one Croydon Street for $635,000. Let's go ahead, we'll have a look at that one. We can see that it's 5/2 Croydon Street. We can see that this one has actually already sold. So let's go ahead and we'll find a different one. I want to make sure that it's on the market. We can see most of these are $680,000+. They've got really wide guidelines. Sorry about that dog barking in the background. Here we have $565,000 for one in Bando Road. So let's go ahead and have a look at that. We can see the details about this property. Now, this is for $565,000. It is a 1-bedroom, 1-bathroom, 1-car spot property. I can go through, I can have a look at the pictures. Hopefully they've got a floor plan as well. They don't. That would be something that I would probably want to look at or want to get. But we can look at this property. Now, we want to find some more details about recently sold property. So, we can see on the side here, people also viewed these properties so we can go ahead and look at them, but they are ones that are listed for sale at the moment. We want to find ones that have previously sold. To do that, we're going to go at the top and click on this sold icon here in the menu bar. That's going to bring us to the sold page. We then input our suburb, which is "Cronulla". And now, this is important; we want to choose the same property type that we are already looking at. In this case, it's an apartment and unit that has 1 bedroom, okay. I'm just going to leave the min and max price empty for the moment. So we're in the same property type, same number of bedrooms. We can go ahead and click Search. Now, this has brought up 666 total results, but it's going to sort it by most relevant for you and you can see what they sold for. So we can see here that a 1-bedroom, 1-bathroom sold for $476,000. We can see one in Croydon Street was sold for $550,000. We can see one was sold for $587,000. One was sold for $440,000. And you can see the dates that these were sold – 27th of February 2016. We can see one in Burke Road sold for $611,000. That, again, is a 1-bedroom. Another one in Croydon Street. So you can go through and you can look at all of these to see what has been sold in the area. If you want to get really specific, go ahead and click on the map and find your property in the map. We're on Bando Road in Cronulla, which is North Cronulla here, just West of Elouera Road. So we can see it's all around here where it says number 11. So we can zoom in there. There's Elouera Road. Here's Bando Road where we were looking. Okay, we can see that 1-bed, 1-bath was sold for $470,000, we can view those details. We can see that this one was sold for $555,000 and that was 14/21 Bando Road. And we can look at areas around. I know from living here that the Northern part of Cronulla up here tends to have older units. And so, it may not be worth or priced as much. Whereas, when you go South of Cronulla, down this area, it's quieter. More residential. Less renters and these properties can sell for more. Doing the map and looking in your particular area, you can get a great idea of the properties that have sold. You then need to use some speculation, go through the pictures. See, is this one worse? Is it better? Does it have a better aspect? Does it have a balcony? What's the difference? And try and find the most similar properties to yours and then compare them in terms of price in order to get an idea of the property in the area. So that is how you go about finding comparable property sales for your area. If you're one of those people who wants a helping hand, you want someone who knows what they're doing to find you a great area to invest in as well as a great property within that area that is likely underpriced, then you may want to c

[youtube id="I2YeMZytaNA" align="left" mode="lazyload" maxwidth="500"] Lists about suburb hotspots put out by magazines and websites tend to outperform the general market, however there are some problems with suburb hotspot lists that you need to be aware of. A lot of people love the property hotspots that the magazines and the websites put out there each and every year to say, "Here are the hotspots for 2016 that you should invest in." "Here is a list of areas most likely to grow." But there are some problems with these suburb hotspot list that I wanted to talk about and make you aware of. The first problem is that you can only actually invest in one suburb. And so, while this list tend to outperform the general market in Australia, there are going to be suburbs in this list that will under-perform and there'll be some suburbs that will extremely over-perform to make up for the under-performing suburbs. So the problem is, as an investor, you can only invest in one property in one suburb. So even though these lists give you a better chance of achieving success, investing in one of these properties in the list isn't a guarantee of success. So you should never just stop at the hotspot list, you should always do more research so you can hopefully find that suburb within the hotspot list that's going to outperform all the others. So, that is a problem that you can invest in one suburb, not all of them, and so there's no guarantee there. The second problem is that you don't necessarily understand how they chose each area. Often, they use different criteria to choose each area, depending on the report that you are looking at. It will affect what areas they choose and how they choose those areas. If you're going from Residex and choosing one of their reports versus one of the reports in API Magazine versus a report in Your Investment Property Magazine versus a report on dsrdata.com.au. All of these different reports use all different criteria in order to estimate their hotspots. Now, this isn't a bad thing. Often, they'll talk to market experts or they'll get certain data to make these predictions, but if you don't understand how they chose each area, how are you going to have the confidence to choose which suburb to invest in? How are you going to have the confidence to know that, "Yes, this suburb that I'm choosing that is in the hotspot list actually has the criteria required in order to grow." How do you know that? And how can you have the confidence if you don't understand how and why they chose each area? So this is one of the major limitations of hotspots and one of the major limitations of recommending areas for people to invest in in the first place. If you don't explain to those people how you got your prediction, how you got your data, then they will receive the information, but they probably won't do anything with it because they don't have the confidence. So, if you are one of those people looking at hotspots, then try and understand how they chose each area. What information they used and what it means. So when it does go time to invest for you, you can invest with confidence. The third problem with hotspot list is that the areas may not fit your investment goals. It's great news that some suburb in Sydney is a hotspot, but if studio apartments are starting at $1 Million and you've got $60,000 for a deposit, well, that's not really going to be a feasible investment for you. If you can only borrow $300,000 from the bank, you're not going to be able to invest in this hotspot. Or maybe you have goals of passive income, positive cash flow financial freedom, but a lot of these hotspots are negatively-geared with really low rental yields, maybe they’re high-risk as well. You need to actually assess, what are your investment goals? What are you trying to achieve? In what time frame? Are you trying to replace your income and the next 10 years? Are you trying to get $100,000 in capital growth in the next 2 years? What are you actually trying to achieve? You need to understand that first and as you go through this hotspot list, try and find the areas that match up with your investment goals and then do more research into those areas. So, one of the problems is you'll be like, yup, there's all these hotspot areas, but just because they're good investments for some people just because they're likely to grow, doesn't automatically make them good investments for you. Especially if they don't fit in with your investment goals. So, always, always consider your own investment goals. The fourth problem with these suburb hotspot lists is that often, by the time they come out, it's often too late. The suburbs have grown dramatically already. You've missed the majority of the growth. You're investing towards the en

[youtube id="2sfd4C-9JNc" align="left" mode="lazyload" maxwidth="500"] In this episode I will show you exactly how to find the auction clearance rates of an area. In this video, I'm going to show you how to find auction clearance rates for an area. Auction clearance rates can be extremely valuable in understanding how many properties that actually go to auction end up clearing and selling at auction. This can give you a great idea of demand in the area, as well as how you should negotiate. In order to find the auction clearance rates for an area, you need to go to a website called dsrdata.com.au and you can create a free account by clicking on the Join button in the top right-hand corner. Once you've joined, go ahead and login. Once you've logged in, under the suburb analyzer section, which should load automatically, go ahead and enter your suburb. The only thing you need to be aware of is you need to choose either houses or units for the suburb. If you're serious about investing in the suburb and you're not sure whether you want houses or units, just go through and do this task twice so that you can get auction clearance rates for both houses and units. I'm going to go ahead and enter an area. In this case, I'm going to choose Cronulla, which is in Southeast Sydney and I'll choose units because the area is mostly units. If we scroll down, we will see here auction clearance rate (ACR) of 75.5%. We can also go to this context ruler, click on that, and we can see how this compares to the rest of Australia. We can see the median for Australia is 34.8%. The average for Australia is 38.7%. And we can see that it's the 47th percentile out of 18,000 markets. So, 75.5% is in the green there. And we can also go ahead and click on the history and we can see the auction clearance rate history of the area. So we can see how it has trended over time and we can look back 3 years into the past and we can see that auction clearance rates have increased. And so, more and more properties are clearing at auction. Increased to about late 2014 or something and then has been steady above the 75 mark and, in fact, this month that I'm doing this is the first month it's dropped below 75 since mid-2014. So, being able to see this graph is a great idea because you can just see the trend for the area and you can use that to predict what's going to happen in the future. So that is how you find auction clearance rates for the area. DSR data also provides you with a lot of different valuable information, like vacancy rate, average vendor discount for the area. This online search interest. Percentage stock on market. The days on market – how long it takes to sell a property. As well as this demand-to-supply ratio or the DSR, which gives you an idea of how much demand there is for property in an area. So very useful tool. And so, if you are out there looking, what are the auction clearance rates in the area? I've heard them quoting auction clearance rates in magazines or on podcasts or whatever. Now you can go ahead and you can find the auction clearance rates for yourself. You can see how it compares to the rest of Australia and you can even see a trending history for auction clearance rates. I'm Ryan from onproperty.com.au. And if you want to learn how to research an area and the 18 statistics that you should look at to research an area, check out my course on Advanced Suburb Research by going to onproperty.com.au/research. That's it for me today, guys. Until next time, stay positive.

[youtube id="4Sscq7Mq7wA" align="left" mode="lazyload" maxwidth="500"] There are a lot of reasons you should invest in property but it isn't for everyone. Here are 14 reasons you shouldn't invest in property. There are a lot of reasons you should invest in property, like being able to leverage your money, get capital growth, get passive income in the form of positive cash flow. But there's also a lot of reasons you shouldn't invest in property. Here's 14 reasons why you shouldn't invest in property. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. Believe it or not, property isn't for everyone. And there's a lot of reasons why you may or may not want to invest in property. I'm going to go through 14 different reasons you shouldn't invest in property. 5 of which are personal reasons. And then, 11 of which are investment reasons. So let's go through the personal reasons first why you shouldn't invest in property. The first personal reason you shouldn't invest in property is you don't have the money. It's a lot more expensive to go ahead and invest in property than it is to invest in something like shares. Shares, you can potentially start investing for as little as $500 or $1,000 to start your share portfolio. When purchasing a property, you're going to need at least a 5% deposit. Plus, you're going to need to cover a bunch of costs. So, maybe around 10% of the purchase price. If you're looking at a $300,000 property, you're looking at $30,000 as a minimum to get into the market. So, if you don't have a deposit, if you don't have the money to invest in property, it's going to be very difficult and you may not want to invest in property. You might want to pursue something else until you do have enough money. The second reason you should invest in property is that you can't get a loan. Now, if you can't get a loan for a property, it's going to be very hard to purchase one. Properties are extremely expensive. We're talking $300,000, $400,000, $1 Million. A lot of us don't have that sort of money in the sock, under our pillow. We would need to borrow money from the bank in order to get that. Now, if you don't have a steady income, if you're not full time or part time, if you don't have a business where you can show at least the last 2 financial years in terms of what you earn and you earn a decent wage, then it's going to be very difficult to get a loan. If you can't get a loan, you probably can't purchase a property. So I recommend going ahead, speaking to a mortgage broker first to find out whether or not you can invest in property, whether or not you can actually get a loan. Because if you can't get a loan, you’re probably not going to be able to buy a property. The third reason you shouldn't invest in property for personal reasons is you don't know much about property. You just talked about it with your friends over a barbecue or you saw the Melbourne and the Sydney market boom and people make $100,000 or $200,000 seemingly overnight. And you think, "You know what, I want to get myself a little bit of that action. I wouldn't mind $100,000 in 12 months in terms of capital growth on my property. I'm just going to jump in and buy something." But if you don't know much about property, you don't know about the process. You don't know how to research an area. You don't know about mortgages and all of this sort of stuff. Then, you may want to hold for a little bit. Start doing some education. Start reading up on these sorts of things to get an idea of the property market before you go ahead and invest. The best book that I recommend for anyone who wants to educate themselves is Steve McKnight's book, "0 to 130 Properties in 3.5 Years". Now, that book is getting a bit old and so some of the strategies of purchasing that many properties in such a short period of time may not work, but this book goes through all the fundamentals. It goes through cash flow situations. It talks about high level investment strategies as well, so it's a great book for starters. So go to onproperty.com.au/130 and you can purchase that book online. Get it shipped out to you, which I found is the easiest to get it. So, if you're uneducated, you probably shouldn't invest in property. You should get educated first. The next reason that you don't want to invest in property is that you struggle to manage your own finances. So if you're struggling to manage your own cash flow, you're spending more than you earn, which, let's face it, most of us do. And you really struggle to understand a lot of things to do with finances. Things like managing your taxes. Things like credit card interest rates. Things lik

[youtube id="KdSTwWak94E" align="left" mode="lazyload" maxwidth="500"] As an investor should you buy a house with tenants in it or are you better off purchasing a property that is vacant? There are pros and cons to each. Should you buy a house with tenants in it? If you're an investor looking to purchase a property and you find a property that already has tenants in it paying rent, this can sound like a great deal, but should you buy a property with tenants in it or is it better off to buy a property that is vacant and you can then go ahead and choose your own tenant? Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. And in today's episode, I wanted to talk through some of the pros and the cons of purchasing a property has an existing tenant so you can understand; what are the benefits? what are the negatives? What are the risks? What's the rewards? And you can make a decision for yourself. We're going to start by looking at the benefits of having a tenant in your property. The first benefit is that the entire goal of you purchasing property is to have a tenant in there paying your mortgage, providing you with cash flow, offsetting your cost so your property can go up in value if capital gains is what you want. But the entire goal of purchasing that property is to rent it out to someone else and if you're purchasing a property that already has a tenant, then you have effectively achieved that goal a lot easier than if you purchased a vacant property. There's no advertising to get a tenant. There's no waiting to get a tenant in. There's no finding a property manager. The process is just so much easier because the tenant is already there. That is the major benefit of purchasing a property with a tenant. Another major benefit is that you've got instant cash flow in that property. If you were to purchase a vacant property, it may take a couple of weeks to rent out. You may be able to get earlier access to advertise it and to get a tenant in there before you take over the property. But it may take you a couple of weeks to get some money in through the door. In which case, you've got negative cash flow in that time. So, by having a tenant in there and just taking over the property with that tenant paying rent every single week, well, you've got instant cash flow there so you don't need to worry about the issues of getting a new tenant and whether your property is going to lie vacant. So that's a major benefit as well. My favourite benefit, I think, is the predictable cash flow that comes from already having a tenant in there. So if you're looking at a property and you're trying to work out what is the positive cash flow of this property going to be? or how negatively geared is this property going to be? You can do it based on estimates of what you think the market value of the property is. You can talk to the real estate agent. You can get pretty accurate there, but you don't necessarily know the property is going to rent for that much or if you're being taken for a ride. However, if someone's in there renting the property, then you know how much money you're getting and so you can go through, do your cash flow analysis and decide whether or not this is going to be a worthwhile investment for you. If you need help doing that cash flow analysis, go ahead and check out propertytools.com.au, which is a tool that I created where you can just enter the purchase price and rental income and it'll give you some cash flow estimates or you can go through more details to get a more accurate result. So, again, go to propertytools.com.au to check out that tool. That's one of the things I love about having an existing tenant is you can estimate the cash flow ahead of time based on what the tenant is actually paying. So you're going to get a more accurate cash flow estimate. It's just going to be that much easier. And then, the fourth benefit, which is definitely a maybe it's not definitely a benefit, but there is potentially less maintenance that's going to come with the property. Generally, when you get a new tenant in a property, I know this being a tenant and moving into properties, there's going to be a lot of repair requests in the beginning. Because generally, the house isn't maintained as well as a house that someone owns. And so, there'll be a lot of little things that are broken. And so, when a tenant first moves in, there's a lot of things they'll want fixed to bring the house up to standard. However, once you've lived in a property for quite a while, you seem to forget that those things even exist. You may have decided to just live with it. You may go ahead and fix it yourself because it's easier. You may even forget that it's there altogether. And so, there's potentially

[youtube id="XTHwKkHIZss" align="left" mode="lazyload" maxwidth="500"] Is winter a bad time to sell your property? Common knowledge and experts say it is a bad time, but the data tells a completely different story altogether. A lot of experts say that winter is the worst time to sell your property, with spring being the best. But is winter actually a bad time to sell your property? Is this idea based on fact or is it just something that people believe, but isn't actually true? There are a lot of preconceived notions around the best time to sell your property. A lot of people believe that spring is, by far, the best time to sell your property because your garden is going to look nicer, the light in your property is going to be better, it's warmer, it's nesting season. There are a lot of reasons that people give for why spring is the best time to sell your property. They also say that summer can be a good time as well because, obviously, it's very sunny, it's very nice. And they say that winter is a bad time to sell your property because it's darker, it's colder. For some reason, they believe people aren't buying properties in winter. This belief or preconceived notions around winter being a bad time to sell your property. However, I wanted to discover whether it's actually true so I got in contact with Jeremy from dsrdata.com.au who's my go-to guy when it comes to data and research about an area or about the Australian property market. We'll definitely be talking about his website, dsrdata.com.au, which is great for doing research. He sent me this graph, which is the average DSR+ country-wide. So DSR+ is a figure of demand-to-supply ratio that pulls in a lot of different statistics. I think it's over 15 or 20 different statistics, could be even more, to understand what the demand versus the supply for an area is. If we're looking at winter is a bad time to sell your property, for me, a bad time is when there's supply but there's no demand to buy your property so things are going slow. And so, we want to see a dip in winter in terms of demand-to-supply ratio. Now, 50, if you can see the graph, if you're watching the video, if not, I'll describe it to you. 50 is the equilibrium or the theoretical median where demand is actually equal to supply. And so, for the majority of the time since 2010, average demand versus supply has been over 50 and we saw a drop in 50 around 2011, 2012 and then growth in the demand-to-supply in 2013, 2014, 2015. We're looking at this graph and what we would like to see is dips where it says "7" because this is July and so, "7" and then after July or slightly before it, slightly after it, so June, July, August. And so, 2010, there's no dip in winter, it's just flat. If we look at 2011, then it does dip in winter, but it actually ends up at its lowest point in summer. So it's dipping in winter, but also dipping through spring, lowest point in summer. Okay, we're then going to 2012 and we see this massive spike in demand-to-supply ratio in 2012 and then a dip in I think that's August there, but then it kind of levels off across spring. We're then seeing in 2013 a rise. And if we look at winter here, we can see a tiny dip, but then it continues to rise. If we go across to winter 2014, then we can see, just before winter, it has gone up and then kind of stayed steady across winter, dropping in spring and summer. And then, 2015, where it's steady in winter as well. So we're not seeing a drop in winter that we can compare to summer or we can compare to spring and say that this is different. This graph is just all over the place and Jeremy did say when he sent me this that there are going to be some anomalies in the data in terms of census data is only updated every 5 year, as well as some data is delayed by a few months. But given the fact that there's so many different things that affect an area, like there's political things, there's government incentives. If we look back to 2009, in New South Wales, we saw the end of the first homeowner's boost in September. There was a huge growth in winter, leading up to the end of that boost. Because if you purchased after the date that boost ended, then you wouldn't get as much money from the government. So, winter in 2009 for New South Wales was actually quite a great season, given that the boost was ending in September. There's just so many different factors that go into the demand and supply of an area that for someone to go out and say winter is a bad time sell your property is just, frankly, it's false. Jeremy did provide me with some awesome data as well. And this is the average DSR since 2010 for the different seasons. So we got spring, summer, autumn, winter. And these are the months that define spring, define summer, def

[youtube id="pZy7sQYyTb0" align="left" mode="lazyload" maxwidth="500"] After the recent Sydney/Melbourne boom and some concerning articles it's time we talk about the Australian housing bubble. Is it real or an over-exaggeration? Today, I want to talk about the potential housing bubble in Australia, read a couple of articles with you guys that are talking about this. And then, try to come to an understanding of whether or not there is a housing bubble and some of my thoughts on what I would do in this situation. This came to my attention through an article on the financial review. It got highlighted to me by onthehouse.com.au. They sent me an email about this, but basically, it's an article by Anne Hyland on afr.com, which is the Australian Financial Review. I'll link up to it, just go to onproperty.com.au/afrarticle. Yup, let's do that link and you can check it out there. “There's a hedge-fund manager and an economist who pose as a gay couple on a combined income of $125,000 and they tour Sydney's western suburbs viewing housing developments and meeting mortgage brokers for research to determine if there is a housing bubble in Australia and they came to the conclusion that this is worse than they thought.” This was written back in February of 2016. They're saying that the further west they went, the more irrational they felt. Lots of supply and prices that bore no resemblance to construction cost or the incomes of people around there. There was some interesting things in this article; like they discovered repeatedly that mortgage brokers are advising them to actually lie on the loan application documents about the deposit and about their income. This is quite concerning as I read this and they asked if the bank would call our employers and both reputable and disreputable brokers said they rarely verify pay slips. That's concerning to see, that the banks aren't doing that. What else was there? They talked about the residential mortgages as a percentage of total loans and they show Australia where residential mortgages as a percentage of total loans is over 60%. Norway is 40%. Hong Kong is like 15%. The U.S. is like 33%-ish. So, Australia is well above the pack in terms of we got more of our home loans as a percentage of our loans than, basically, any other country out there by the looks of it in this graph. I'm not sure if it's misleading in they're leaving out other countries that have similar to us. But they're also talking about an oversupply of apartments and housing. Talking about that Australian housing apartments are selling for $11,000 a square meter, which is similar to Hong Kong; which is a really expensive area. Manhattan averages around $14,000 a square meter, so they're saying that obviously, very expensive here. Tepper is warning bluntly that Australia has one of the biggest housing bubbles in history. Noting that the country's real estate value to GDP is 3.8 times compared to that with Ireland and Japan, which both were at multiples of 3.5 times before they experienced a housing market crash. We're above the 3.5, which other countries had high real estate value to GDP and then they went and had a crash. Japan's real estate fell by 80% and Ireland's fell by 50%. He is predicting falls in the Australian housing market of up to 50% in Sydney and Melbourne and around 80% in mining towns. It's also showing it has the highest level of household debt to GDP in the entire world. There's a lot of things that are kind of point toward the Australian market potentially being over-inflated. They also go on to talk about the Ponzi scheme way of investing, they're calling it. Which is you invest in a property, you then get it quickly revalued so you can draw out equity so you can purchase the next property, get that quickly revalued and move on to the next. So it's this constant increasing your borrowing so that you can buy more properties, which works great in a market that's going up and up. But as soon as the market starts going backwards, then it all falls apart really quickly. Tepper says in the research both men encountered many investors who are able to get revaluations on their properties to increase their equity for speculative purposes. A lot of people talk about doing this in Australia; which is they revalue their property, pull out some equity and use it to invest again. However, I think their concern is that people are re-drawing equity, getting huge loans to buy properties that they're speculating will go up. There's no fundamental financials behind their property investing apart from hoping that the market is going to go up. They're also talking about how there's opportunities to take out insurance against a deposit, so you pay insurance and I think they're talking about lender's mortgage insurance here, but it

[youtube id="sigo0-VxBk8" align="left" mode="lazyload" maxwidth="500"] What is a quantity surveyor? What do they do and when do you need to hire them? What is a quantity surveyor? What do they do and why is it important to you as you're building your property portfolio? Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow properties. I wanted to teach you today about exactly what a quantity surveyor does and when it's going to be worth you hiring them. A quantity surveyor is someone who's a specialist in the measurement and the estimation of construction cost. Now, this means that they're really good at looking at plans of a property and working out how much concrete? How much steel? How many bricks? What is going to go into this property and how much is it going to cost? They're also a specialist at looking at an existing property that's already been built. Maybe it was built 20 years ago. They can assess it and say they used likely this many bricks, this much wood, this many tiles and how much would that have cost 20 years ago when that property was built. So they can estimate the cost of a property that's going to be built. They can also estimate the cost of a property that has already been built. Now, why is this important to you? It's important to you because when you're investing in property, there's a valuable tool called "depreciation". Depreciation is the lowering in value of an item. The easiest example that I can give is when you purchase a car brand new – let's say you paid $40,000 for a new car. You know that as soon as you drive that off the lot, it has lost value and is now worth 10% less or something like that. That loss in value is called depreciation. Every year, that car is going to get worth less and less and less and less. So a car that you might have paid $40,000 for 10 years ago, isn't going to be worth $40,000 in 10 years’ time. It might be worth something like $10,000. So there's a big difference between what you paid for it and what it's worth now and that difference in value is what's called "depreciation". So a car you bought 10 years ago for $40,000 has depreciated $30,000 and is now worth $10,000 today. The reason this is important when you're investing in property is that the ATO allows you to offset these depreciations and count them as a loss on your property. And with the current negative geared laws, which may change in the future, you can actually offset that against other taxable income that you're earning. This is why it's so valuable. Because if you're a high income earner and you're paying of tax, over 30%, high 30%, maybe even over 40%. If you can claim $10,000 in depreciation, there's the possibility that you could get some of that back from the government or you don't have to pay as much tax. And so, depreciation is very, very valuable because it can improve your cash flow because it lowers your cost – one of your major costs, and that is tax. Because you are claiming the loss in value of these items in the property, it just means that the property, on paper, isn't making as much money because you've had all these depreciation losses. So this can be very valuable in terms of cash flow, in terms of giving you the extra cash that you need to be able to service more loans, buy more properties, pay for that next renovation, etc., etc. So depreciation's not to be overlooked. I know there's a lot of investors out there who invest and don't do depreciation, but this is generally due to the fact that they're uneducated about what depreciation is and why it's valuable to them. A quantity surveyor is important because when it comes to depreciation, you can't just do it yourself because the ATO – the Australian Taxation Office – won't actually accept your opinion as an estimation of the cost of things in your home. For example, let's say that I have these lovely curtains here that we bought from Ikea. I think we paid $5, $10 for a set of these curtains. What if I was to say that this was an investment property that I owned and I put these lovely curtains in and they are worth $1,000. I've lost the receipt so I'm pretty sure they're $1,000. So I'm go to claim depreciation against my $1,000 curtains. Okay, that's an extreme example, but that's something that the ATO obviously wants to avoid. Because if I can claim depreciation on things that aren't actually worth what I'm claiming them for, then I'm going to save a lot of tax, which means they're going to miss out on a lot of tax and that's tax evasion. So we're going to want to avoid that. So quantity surveyors are experts in this and the Australian Taxation Office will take their estimates of what things are worth in your pro

[youtube id="LFL7uANAHFI" align="left" mode="lazyload" maxwidth="500"] Recently I interviewed Steve McKnight and I wanted to share some of the things I learned from that interview. A couple of days ago, I had probably what was one of the most important interviews I've ever done for On Property and that was my interview with Steve McKnight. This is the guy who got me interested in positive cash flow property in the first place. Without him, I would never have started Cash Flow Investor, which became On Property. So I was really excited to interview Steve McKnight. He didn't have a lot of time, so it was a very short interview. But it was great to pick his brain to understand the angle he's coming at things from and to learn a bit from him. I've been mulling over the things that we talked about for the last couple of days. Today, I wanted to share with you my learnings from the interview that I did with Steve McKnight. The biggest learning that I took away from that was the way that Steve talked about the potential that the market has to move. So he talked about a bell curve and – let me just draw a bell curve on this piece of paper for those of you who are watching the video. But basically, you've got your bell curve here and everything under the line are, let's put that as, most likely to happen. That's your 100% of chance of things happening. Something under that line is going to happen and then what Steve talked about is in the middle here is the things most likely to happen. So the very center is the market just remaining stagnant or the market slightly increases or the market slightly decreases. On the sides, on the end, under the bell curve are these your extremes. So this is the market absolutely plummets or the market absolutely grows exponentially and goes absolutely crazy. It was really interesting because a lot of the emails I've been getting from Steve McKnight have talked about the doom and gloom of the Australian market and he did talk a bit about how he feels like there's not a lot stimulating the housing market in Australia. But in saying that, he did talk about this and talk about how the biggest chance you're going to have is that one of these 3 things – the market's going to remain stagnant, it's going to steadily increase or it's going to steadily decrease, but only slightly, not extreme. I think the game that he's playing, whereas a lot of other people are playing a different game, is he's looking at that and saying, "Okay, what's the most likely scenarios that's going to happen?" but also, "How can I protect myself against catastrophic loss?" I think a lot of people don't consider the chance of the way the market is going to move. For example, a lot of people who missed the boom of Sydney and say, "Well, I don't want to invest now because I believe that prices might fall." But they don't think of this graph and say, "Okay, what are the chances that prices might fall?" Because there's a chance for everything, right? So people just assume the price is definitely going to fall, but that might actually be on one extreme side of this bell curve and the chance for that might actually be pretty small. But people lock themselves into this idea that the market is going to move this way so I'm not going to invest. I just love that approach that Steve took that said, "Look, here's the chances of things happening in the market, but I'm going to invest in a way that I can basically make money in any particular market." For the majority of people who invest in property and they only make money in one way – through capital growth. They're only making money when the market goes up. When the market is stagnant or when it's declining, they're losing money because they're not getting capital growth and they're negatively geared. However, there's ways that you can invest, for example, positive cash flow properties, where if the market's stagnant or the market's declining, you can still be making money through positive cash flow. And then, if the market goes up, you get the capital growth as well. I really like that approach to looking at what's the chances of the way the market is going to turn. Because, obviously, it's impossible to predict exactly what the market is going to do. But by using that strategy of saying, "Okay, well, most likely, the market is either going to go up steadily, decrease steadily or stay stagnant." If you're going to invest for something, you want to invest for the thing that has the best chance of happening. But you want to invest in such a way that, across a broad spectrum of circumstances, you can still make money. So I really like that about Steve's approach to investing and thinking about the market

[youtube id="lJGJv95vpLE" align="left" mode="lazyload" maxwidth="500"] Is the Australian property market in a bubble and is due to burst and how should you be investing in today's market? Best selling author Steve McKnight provides us with his insights. Hey guys, Ryan here from onproperty.com.au, helping you find positive cash flow property. Today, I have the absolute privilege of welcoming on the show Steve McKnight who is a very well-known author around property investing in Australia. He's written multiple books, including one that I highly recommend and have listeners and readers of mine have bought hundreds of copies of this book and that's 0 to 130 Properties in 3.5 Years. In this book, Steve talks about how he went from 0 to 130 properties with his business partner in just 3.5 years. Following that up, there's 0 to 270 In 7 Years. So Steve has accumulated a lot of properties over time. In fact, it was Steve McKnight's book that got me interested in positive cash flow property in the first place. I was 16 years old and about to go on a trip to Queensland, to the Great Barrier Reef. I was at the airport and I saw this book in the airport. I ran out, got some money off my dad, purchased the book and then read through that book and got extremely passionate about positive cash flow property. I'm extremely grateful for everything that Steve has done. He, as you find out in the interview, has purchased over 800 properties in his lifetime – in his property investing career. He has a lot of knowledge and stay until the end where we talk about what anyone can do in no matter what market you're in to ensure that you can move forward and achieve the goals that you've set for yourself. So without further ado, I welcome someone that is very important in my life that has had a massive impact on me and that is Steve McKnight. Ryan: Hey guys, Ryan here from On Property and I have with me the one and only Steve McKnight, author of 0 to 130 Properties in 3.5 Years and a bunch of other books. Steve, I wanted to ask you, off the bat, what do you think the landscape of Australia is like at the moment? Because I do receive a lot of your emails and they seem to be a lot of doom and gloom kind of vibe going on there. Do you believe that the Australian market is in a bubble and about to burst or are you more optimistic than that? Steve: Wow, straight to the hard-hitting questions. Ryan: We don't have heaps of time, so I figured just get straight into it. Steve: A mentor of mine once said – a very smart guy who has been investing for 40 or 50 years – said to me, "Steve, when the average person can't buy the average property, then there's a problem." And I think in Australia, there's 2 things that impact a property market. There are factors that stimulate it and there are factors that stifle it. We have been on one of the biggest bull runs in terms of stimulating factors since the GST was introduced and the first home owners grant came in that anyone can really remember. For instance, we had first home owners grant, we've had low interest rates, the mother of all – the mining booms, strong Australian Dollar – although that's come off the boil. And what to me is that Australians have a lot more borrowing ability. They've had a lot more incentives to get into houses and they have borrowed like never before to buy like never before, and that's fine. That's where we find ourselves and that's great for those of us who have been in the market and made money in the market. But then, we look forward and we say, "Well, going ahead, what new stimulus factor might come in?" because the Australian economy is not generating enough tax to run the government. The government needs more tax and if it needs more tax and it needs to tinker with the way negative gearing works or it needs more tax and it needs to tinker with the way that the capital gains tax discount works, then instead of being stimulating factors, these will be stifling factors. And so, you would expect, therefore, that this bull run of great news for the property market may be in its latter days. Now, you ask the question, have you ever seen or heard or watched the game of Musical Chairs? Ryan: Yes. I have. Definitely, as a kid and I've got young ones and they play it quite often at parties. Steve: Good. Same concept. So what we have here is we have 100 property investors running around the room and if everyone sold today, there wouldn't be 100 buyers or 100 chairs for everyone to sit on. So we play this game that so long as everyone doesn't need to sell, you can buy and your strategy can be buy and sell higher. But if an event, God help us, if an event materializes like it did in the United States, like it has in Europe, like it did in New Zealand, like it has everywhere else in the world but Australia, God help us

[youtube id="S1Ru8UIxNXg" align="left" mode="lazyload" maxwidth="500"] There is this belief that negative geared properties grow while positive cashflow properties don't. But does negative gearing guarantee capital growth? There's this belief out there in the world of property that negative geared properties grow in value or provide you with capital gains. Whereas positive cash flow properties don't grow in value and don't provide you with capital gains. So when it comes to investing, you either need to choose negative geared properties or you need to choose positive cash flow properties and you can't have the best of both worlds. So today, in this episode, I want to talk about whether or not negative geared properties are guaranteed to grow in value. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property. I've just moved house, so if you're watching the video, you'll see a bunch of boxes beside me. So, sorry for that, but I didn't have time to unpack and wanted to get straight into it and talk to you guys. This thought comes out of an email conversation I've been having with one of the followers of On Property who's interested in a whole bunch of situations, but seems to have the belief that they can either invest in negative geared properties in order to get capital growth or they can invest in positive cash flow properties, but they'll need to forego the capital growth. I just want to tackle this topic and get you guys thinking about this as well. Do negative geared properties guarantee that you're going to get capital growth? Because a lot of people go to seminars. A lot of people read investment magazines or investment books and they'll come out of it thinking the best way to invest in property is to purchase negative geared property that's going to grow in value. But for some reason, in amongst that, they get the belief that says, "If I buy negative geared property, it's going to grow in value." which isn't exactly true. And the easiest way to debunk this myth is to just say, "Do you know of an example of a negative geared property that hasn't grown in value?" and I could give you a myriad of examples. Everywhere from my friend who purchased a new build property that 5 years later, still worth less than what he paid for it and was negative geared the majority of that time, to a whole bunch of investments that are being sold at the moment off the plan that are negative geared and probably are overpriced and won't grow in value, to my parents who purchased a negative geared unit in Cronulla in Sydney; which is within a capital city and they owned it – I can't remember how many years they owned it, but it didn't grow in value by the time they sold it. I can think of many examples in my life where I've seen that negative geared properties don't grow in value. We also want to look at the other side of the coin, is that the belief that positive cash flow properties don't grow in value. Again, I've seen many examples of positive cash flow properties that have grown in value. I go out, I find a new positive cash flow property every single day. And because I do this so often, sometimes you see the same properties come around or you see the same areas and you see how much they've gone up in value. So, I can say, with certainty, that there are properties out there that have grown in value. Even, I think it was probably like a year or 18 months ago, that I listed a positive cash flow property in Western Sydney that had a granny flat attached to it. And we all know what has happened to the Sydney market in the last 1-2 years and how much that market has grown. So if you have purchased that property, which was positive cash flow at the time, then you would have got the Sydney boom and, obviously, grown in value. So we can see that on both ends of the spectrum that it's not an absolute. Buying a negative geared property isn't going to guarantee you capital growth and buying a positive cash flow property doesn't mean you're going to not get any capital growth. So where exactly does this belief come from? Well, it may come from property marketers – people who are presenting courses to you or trying to sell investment properties can obviously skew things one way or another. Or maybe it's from the results that people have seen in terms of capital cities tending to outperform regional areas and the majority of properties in capital cities are negatively geared. So there's a lot of different ways that people have come about this belief, but I have never seen statistically viable information that has shown me that negative geared properties will always grow in value and positive geared properties don't grow in value. So the fact of the matter is, when you look at the Au

[youtube id="NZMSfWYnvnA" align="left" mode="lazyload" maxwidth="500"] Lender's mortgage insurance is a one time fee the borrow pays to protect the lender against a riskier loan. Lender's Mortgage Insurance explained So let's say you want to invest in property but you don't have the minimum 20% deposit required. Well, you're likely going to have to pay what's called Lender's Mortgage Insurance. But what exactly is Lender's Mortgage Insurance and is it worth the cost? In this episode, I'm going explain Lender's Mortgage Insurance. What exactly it covers and why you would want to get it. Hey, I'm Ryan from onproperty.com.au, helping you find positive cash flow property and I've just moved house. If you're watching the video, you can see a bunch of boxes in the background behind me so I apologize that I don't have the best setup today, but I did want to create some good content for you. And this is a question that a lot of people ask. A lot of people want to see lender's mortgage insurance explained. And I do feel like often times, banks and lenders and sometimes mortgage brokers don't really explain exactly what lender's mortgage insurance is or they don't take enough time explaining it so you actually understand it. So we're going to get down to it, try and understand exactly what it is and why it could benefit us and whether or not it's worth paying for. Lender's mortgage insurance is an insurance fee that helps to cover the lender when they're taking an increased risk on a loan. So, lender's mortgage insurance, some people believe that it's actually to cover you personally as the borrower of the loan, but it's not. It's for the lender to protect them if they're taking an increased risk on a loan. What exactly is an increased risk? Well, for most properties – most residential properties – banks want to see at least a 20% deposit in which case they won't charge you lender's mortgage insurance. They like to see a 20% deposit because if you, for some reason, default on your loan and they need to sell their property, they're quite confident that they're going to get at least 80% of the value that you paid for the property back when they sell the property and this will cover their loan. However, if you're only borrowing 5% of the property's value, then they're a lot less confident that if you default on the loan they're going to get 95% of the value of the property back. So it's a higher risk loan for them. And so, in order to cover this higher risk, they charge an insurance fee to cover that extra risk. Obviously, a lot of people will take out this insurance, not everyone will need it. That's the way that insurance works. So the banks will charge you a one-time fee and everyone else a one-time fee and I guess this insurance covers them against those few circumstances where people do default on a loan and they have more trouble selling the property and getting enough value back. So lender's mortgage insurance, it's a one-time fee that you pay and it goes to protect the lender because they're taking an increased risk on you to get the loan. This sounds like it's not very beneficial to you, right? It's a fee that you have to pay, generally, it's added on to the loan so your loan gets bigger, but you've got to pay it and it protects them as the banks. Well, what's the benefit to you as a borrower? Well, the benefits aren't obvious, but they are there. The benefit of lender's mortgage insurance is that if you don't have the full deposit, then you can still get money from the bank. If lender's mortgage insurance didn't exist, then if you didn't have a 20% deposit, you might not be able to get a loan at all. So, those of you who are going out and wanting to invest with a 5%, 10%, 15% deposit, you would need to keep saving. Or, the flip side of that is if they would still lend out the money, they would need to hike up their interest rates an give you much larger interest rates, so you wouldn't have a great interest rate on your property. You'd be paying a certain amount of points above the standard interest rate because they're taking increased on that. So, even though lender's mortgage insurance is a fee that you need to pay, at least, you can still get a loan and you can still get a loan at a good interest rate. If lender's mortgage insurance didn't exist, then you probably couldn't do that. So, lender's mortgage insurance does have value to borrowers. However, it's just a bit less apparent than the value that it is for the lenders. So how much does lender's mortgage insurance cost? This is an impossible question to answer because there's so many different varying factors.

[youtube id="DKQcTHKyum4" align="left" mode="lazyload" maxwidth="500"] A lot of people have the goal of 10 properties in 10 years. But will this goal actually help you achieve what you want? Do you need to buy 10 properties in 10 years? A lot of people out there have this goal of buying 10 properties in 10 years or they encourage people to have this goal of purchasing 10 properties in 10 years. Today, I want to ask the question, do you actually need to buy 10 properties and do you need to buy them in 10 years? So, let's have a look at that. Let's try and break it down and see do we actually need this to achieve what we want in our life? This is kind of carrying over from the last rant I did which is onproperty.com.au/345 where I talked about some alternative ways to think about financial freedom. And a lot of people think about financial freedom in terms of how much money they want to make, the lavish lifestyle that they want to have. However, if we can fast forward it and imagine ourselves as 80, 90, 100 on our deathbed and try and think back to our lives and think about the things that were important and meaningful to us, often we find that the cars, the mansions, the lifestyle – that's not what's important. It's the family, it's the community, it's the positive you had on people. Well, that's my story, anyway. Yours may be different. So, I wanted to analyze, do you need to buy 10 properties in 10 years? Because it's a goal that a lot of people have and, look, it's a great goal. But a lot of people just think, "Okay, I need to buy 10 properties in 10 years in order to achieve something." and often, they don't actually know what it is. What I would encourage you to do is actually go back, listen to onproperty.com.au/345 and listen to that episode there and try and work out, "Well, what do I actually need in order to be financially free and in order to at least get a base level of the life that I want?" Me and Ben Everingham, who's the buyer's agent from Pumped on Property, we talk about this often. We set goals for ourselves that are unachievable or we don't have goals. Often, the easiest thing to do is to just say, "What is the income that I'm earning right now through my job and can I go about replacing that in terms of passive income?" and setting that as a goal. Because, at least then, when you reach that, you know you've replaced your income. You may not have the lavish lifestyle that you want, but at least you know that you're now financially free and if you lost your job today, you'd be able to survive and you'd be able to live a pretty decent lifestyle. That can be a good goal to start with if you don't have a goal or if your goal is too big. Maybe you want to start by looking at "Okay, well how can I replace my income through property investing first?" And then, once you've replaced the income, you can then move forward from there and begin to grow your wealth. Let's look at how 10 properties in 10 years ties into this. Obviously, when we set a goal, ideally we want to have a timeframe on it and the earlier we achieve financial freedom, obviously, the better because it gives us more of our lives to enjoy. Buy why 10 properties? Why do we need 10 properties? Look, I don't know. 10 is a nice round number and so, I think 10 properties in 10 years sounds achievable and it helps sell product, so maybe that's why people have jumped on to this. But let's analyze it and look at how much income do we actually need to survive and how are we going to go about achieving that? There was a story that I read in a real estate magazine years and years ago. I could never find the story again, but it was a little old lady who was financially free and independent on 2 properties. So she had 2 properties that was split into dual income properties, so they either had granny flats or they were split top and bottom so 2 people live in there. She rented 3 out and she live in one herself. Her and her husband had worked hard, they paid these off. So they were completely paid off and she was financially free from the 3 incomes she was deriving. And then, obviously, the almost-free accommodations she had because her house was completely paid off. I think one of the easiest examples to go through first is to say, "Okay, let's say I own properties, how many properties do I need to own completely outright in order to achieve my goal?" I'm going to go into some math here and I'll try and keep it simple so it's not too confusing. So, let's say that we want to achieve $60,000 per year in passive income, which is $5,000 per month. So we want to achieve $5,000 per month in passive income. How many properties will we need to own outright in order to achieve that passive income? So, $5,000 a month. L

[youtube id="LaVsfrn_20o" align="left" mode="lazyload" maxwidth="500"] In this investor profile we talk to Jonathan Preston who has purchased 5 properties in the last 4 years. If you want to be featured on On Property simply email [email protected] Hey guys! Ryan here from OnProperty.com.au, helping you find positive cash flow property. And one of the things that people love to hear is from investors who have gone out there, purchased property themselves and had some experience in the market and achieved some success. And so today for our Investor Profile, I have with me Jonathan Preston, who has purchased 4 properties himself and has built up quite a successful portfolio and has just written a book about it as well. Ryan: Hi Jonathan! Thanks for coming on today. Jonathan: Thanks very much for having me. Ryan: So, give us first an overview of what is your portfolio and what does it look like. And then we will talk more specifically about each of your properties and why you chose to purchase those ones. Jonathan: Yes. So at the moment I have 5 properties. 4 of them are located in Sydney, more specifically Western Sydney, and the last one that I purchased was in Queensland. Basically, I have the philosophy observed like yield-growth, and I believe in that you can actually to continue to build a portfolio over time. Ryan: Yeah. So we were talking a bit before this interview about how you like to invest in areas that are set to grow but you like to have a decent enough field so that they are either neutral or they are positively geared so you can afford to grow your portfolio because we all know that if you go super negatively geared, that is only a couple of properties before you run out of the income to support those properties. So I can understand your attitude there. So, talk us through the first property that you purchased. Actually, are you able to share results of like what have you achieved in terms of equity and stuff like that or passive income before you get into it? Jonathan: Yeah, sure. Well, I will go through each one individually and say what I think it was roughly worth, what I purchased it for, everything like that. So first one that I got was a 2-bedroom in Liverpool. I bought that towards the end of 2012, and that is just a basic kind of 2-bedroom unit. It was quite nicely renovated inside. I paid $217,000 for that one. The rental yield was appraised between $300 and $310 a week, so it was pretty good in terms of the yield there. I would say today, that is worth about $380 - $390, so capital growth on that has been pretty substantial. Ryan: Yeah. Obviously the Sydney market has gone pretty crazy in the last couple of years so you got in at a good time, definitely there. What was your reason for choosing Sydney, and for choosing Liverpool in particular? Do you live around that area or is there some sort of strategy behind it? Jonathan: No. Actually, I have not lived around there. Basically, I wanted to find somewhere that met the criteria of being high yield but also very commutable to Sydney. The commutability to me, to a major city is very important part of the equation. That is really because I think that the urban sprawl is going to take place over time, and I really think that how much a property could go up in value is largely determined by income growth over time, and the capital cities typically will find, basically see much greater income growth over the long term. So, Liverpool was quite attractive... Ryan: Is that something that you know, like is there somewhere that we can say that income growth in capital cities has grown faster than in regional centers or is that just something that we think? Jonathan: I do not know if I can quote you an exact source but if you look at the major centers of the world even when we are looking in Sydney, in New York, London, you will find that the incomes are much higher generally in the major areas than in the peripheral cities. And if you look at house prices across the major centers as well, often that is very much reflected in those prices. If you look at around Sidney and everything, if you look at the inner-city areas, you know the eastern suburbs, the coast in the west, lower north shore, these houses that are going for $2 million to $5 million for substantial houses; obviously, someone is going to need quite a lot of income to support one of those properties. And you can go somewhere like Bathurst or something, I cannot imagine that there is going to be that many people that are going to be earning $200,000 to $500,000 a year that are going to be able to actually support that. Of course, there are going to be anomalies to every situation but I really believe that the proximity to the capital city is going to allow people to earn more, which will allow them to afford a much larger mortgage basically; I guess just to expand a little bit further. Ryan: Well, I am just going to say that Liverpool is like

[youtube id="p2I24CyKqMo" align="left" mode="lazyload" maxwidth="500"] Many people get stuck thinking about financial freedom in a non-productive way. Here are some alternative ways to think about financial freedom. Today, I wanted to talk about some alternative ways of thinking about financial freedom and kind of poke the box of what we think financial freedom needs to mean for us and what the ideal lifestyle needs to mean for us. I used to be in the basket of the person who thought that in order to be happy, in order to feel successful in life, I needed to be extremely rich. And I would set goals for myself like, “This year, I'm going to make a million dollars.” and I had in my mind that if I made a million dollars, then I would be successful and I would be happy. And if you're thinking that way, then look, that's absolutely fine. A lot of us go through that phase. A lot of people always want that, but there are some alternative ways of thinking about financial freedom that I just want to challenge you a bit with today to start thinking about, okay, what is really important in my life? What do I really care about and what do I really want? Let me take you back a few years. I think it was October 2010, so it was about 5 years ago and I'm just going to bring it up. If you go ahead and Google "why I will be financially free in 5 years" let's see if I come up. Okay, ryanmclean.net should come up. If not, you can just search for "Ryan McLean" as well. This is a post that I wrote 5 or 6 years ago now. It's a very cocky post that I wrote when I was... How old was I? I must have been 21 when I wrote this, so maybe it was more than 5 years ago. I have the crazy dream ambition to become financially free in 5 years. So I planned on being able to retire by the time I'm 26. So, I'm 28 now. So, this was probably 6.5 years ago that I wrote this. Basically, I go through this post and I talk about why I'm going to be financially free. Why I'm so awesome and it's actually quite embarrassing to read through this, but I think what's really valuable is at the end; point number 7, I talked about one of the reasons I'm going to be financially free is I know my "Why". And there's this one sentence where I wrote: So I can have as much free time as I want to spend with my family. And so I can have a platform for which to speak into people's lives. And at the time, and still now, those are probably the 2 most important things to me. They're my family, being able to spend time with my family. Being able to see my kids grow up, being able to be a part of that. I had a stay-at-home dad when I was a kid and he was really involved in me and my sister's life. And that's something that I wanted to emulate and something that I wanted to do as well. And then, also, I wanted to, I guess, do some good in the world and I really love communicating, I really love speaking. And so, I wanted to be able to have a positive impact in people's lives. So, back 6.5 years ago, I thought about this. And then, when the 5 years came around, I wrote an updated post on how I'm not currently financially free, but looking back, I realised that I had achieved my "Why". Because the situation I'm in at the moment is I run my own online marketing business. I run a multitude of websites – one of them being OnProperty, which you guys are listening to now. I'm not financially free. However, I work for myself, I get to spend a lot of time with my family and I also have a platform to speak into people's lives. So, they're the 2 things that were important to me. Basically, what I want to challenge you with today is that financial freedom may not be what you think it is. Because we think about financial freedom in the terms of what it means. If we are financially free and not tied to a job, that we have investments that pay us passive income and we're then free to do what we want with our lives. However, that can be a really constricting idea if you take it as that. You can say, "Okay. I can only do what I want with my life once I'm financially free and no longer tied to a job." And you get yourself in a position where you're not living the life you want now because you're so focused on financial freedom. And then you can get distracted and it can take you longer than expected. Whereas, I took a very different path and I'm not saying that everyone should do this, but I took a different path where I went out and I wanted to do the things I wanted to do and I kind of made them fit into my life without financial freedom. So the challenge that I want to give you guys today when we're talking about alternative ways of thinking about financial freedom is really twofold. The first things is; do you actually need financial freedom in order to d

[youtube id="oUVgIuJyQCk" align="left" mode="lazyload" maxwidth="500"] How do you see the development applications for a given area? Microburbs.com.au displays them in an easy to read list. If you are interested in investing in an area or you own a property in an area, you may from time to time want to see the development applications for that area. Traditionally, you need to go to council in order to do this. However I have discovered how to see the development applications for an area for free, online, using a great free tool. So we are going to be using a free tool that is called Microburb, which you can check out at Microburbs.com.au. Now, this tool gives you a whole bunch of different information on the demographics of the area, commute times, like rankings of schools and all that sort of stuff. But one of the things that it also does is it gives you development proposals for the area. So let us go ahead and have a look at Lindfield in New South Wales, which is the suburb they recommend, and it is going to bring up a lot of different reports. There is affluence score, where we can go in and see the public housing for the area; family schools, you can see the schooling in the area; you can see so many different things. But we want to go to the investor data section. Now we want to go to the planning applications section, and if we click here we can see 14 more. And so now we can see all the planning applications for the area, and we can see when those planning applications were submitted. We can see a more recent one here, alterations and additions to an existing dwelling on the 22nd of January, 2016. We can see them all the way back to one in 2010, in May 2010; alterations and additions including a kitchen-laundry bi-fold doors, deck, garage, front fence and gates. So you can see the planning proposals that are here, you can see what they are. We can see one here: addition to the first story, dwelling development, internal changes. You can see a brief overview of what they are about. So you can see all the planning applications that are there, and also they have another section down the bottom - if we go to local government area statistics and we go to development, there we can see a breakdown of the different development applications or developments that have happened in the area. So we can see alterations that have happened, we can see new houses, we can see commercial properties, new multi-units and some other sections as well. If we go down we can see them ranked by price; how much did they cost to do. Obviously, multi-units are going to be $1 million to $5 million, or $5 million plus, whereas alterations to your house will be less than $100,000. And something that is really interesting is you can see the residential development intent, this line graph here, so you can see how many developments have been happening. And so we can see single houses: 17, 23, 16, 14; so we can see the graph there. We can see attached houses - the ones there; and we can see units as well. And so given that these graphs are showing 225 to 10, even in houses 22, single houses 18, obviously this report for the planning applications for the area is not going to cover everything. But this graph is really cool because you get to see the trends in the area, so for something like Lindfield, this goes back to 2013 by the looks of it. And so we can see back in mid-2014 that there was a lot of unit applications, and so what we would then do - we can see the drop off here, is then kind of track that and see how is that affecting the area, when are these units going to be released and how is that going to affect the supply and demand of the area. Let us go and have a quick look at Cronulla in New South Wales. For Conulla planning applications, we can see 95 more, so there is a lot of different planning applications in Cronulla. So you can go through and you can have a look at all of those if you want. What I want to look at is the government area statistics, and I want to show you something. We can see here that back in 2013, there was a bunch of units but then it was basically really low in early 2014. We can see this consistent trend in terms of growth of units in Cronulla. Now, I do know that in this area there used to be a cap on the size that you can build your units, so years ago maximum of 3 stories. I think the council has now changed that. I think you can now go up to 6 stories, and I think this has happened in the last couple of years. Do not quote me on it, but from my family living there and stuff like that; I think that is the case. And so we can see that this trend in unit development is going up, and I would predict that that would probably continue to go up as houses are sold and turned into units and stuff like that. A lot of developers are looking to get into Cronulla and to build 6-stories high or whatever they can do; so that would be something to track and think about for

[youtube id="BFsBTusM7LY" align="left" mode="lazyload" maxwidth="500"] How do you know the best time to sell your property? It's easy to monitor the market with this free tool. The property market goes up and down all the time. So how do you know when's the best time to sell your property? Luckily, there's a tool out there to help you assess the market on an ongoing basis to understand the trends in your current suburb and whether or not you should think about getting out and selling your property before the market goes down or before it plateaus. To do this, we're going to use a tool called DSR Data, which stands for Demand to Supply Ratio and you can get this over at dsrdata.com.au. This is a really great tool and it gathers a lot of different information from around the internet; different sources to try and assess how much demand is there for properties in the area compared to the supply of properties in the area. And so, ideally, you don't want to sell when the DSR is extremely high because this means that you're likely going to get some growth in the future. However, when the DSR starts decreasing, then you want to think about selling. Let's go ahead and look at a suburb where I used to live called Cronulla. So, I'm going to put in "Cronulla" for units and we can see – it will come up in a second – that the DSR for Cronulla is – I think it's 74 out of 100. There we go, 74 out of 100. Now, if the DSR is 50 out of 100, that theoretically means that the market is balanced, so there is equal demand and equal supply. If it's below 50, that means that there's more supply than demand, which is not a great situation. And if it's above 50, and the higher above 50 it is, means the more demand there is for the area. So if we go ahead and create an account and login, which is absolutely free. What we can do is we can actually Market Monitor. So if you own a property in an area, we can setup monitors for your area and you can get emailed every time something happens in your area that you want to be aware of. And I'll show you through this, but this is really cool because you can say, okay, the DSR data of my area is "X", notify me when it drops below that. So, let's go ahead and we'll put in Cronulla in New South Wales here. So we're going to go ahead and click Cronulla for units and then click on Add Market. Now, we can select statistics and get notifications when these statistics change. So the first one that I want to monitor is the DSR itself because that pulls from a lot of information. It's a really great reference point. So, here's the demand to supply ratio. If I click on the Context, then I can see we're currently at 74, which is very heavily in the green. Basically, we can see Australian average of 59 here. So let's say I want to be notified when the DSR falls below 70. We can look at the history of the DSR here as well. We can see that the DSR has traditionally been quite good, but then has been above 70 recently. So, when it falls below 70, I want to be notified. Another thing that I want to be notified of in this case is the Average Vendor Discount. If we look at the history of the Average Vendor Discount, we can see it's usually around the 4%-5%. Then, went up to between 5% and 6% and then dropped dramatically recently. But, a few months ago, it was actually negative and it now seems to be going up. So I want to get notified if it goes above 2%. So, if it rises above 2, then I want to go ahead and be notified. So, send me an alert whenever any of the above is true and alert me via email. If I go ahead and click Save, I'm now monitoring this suburb and whenever the DSR changes and drops below 70 or if the Average Vendor Discount goes above 2%, then I can know, okay, something's happening in this suburb. I can then do more research to understand, is now the best time to sell? There's other data that you can look into, so let's go ahead and put Cronulla in again, we've already got that market, so let's go ahead and choose another one. Moree. If we click Add Market, we can look at Auction Clearance Rates. We can look at Days on Market. The Demand to Supply Ratio. We can also look at Online Search Interest, Percentage of Renters, Percentage Rent Growth. What else is there under DSR? Percentage Stock on Market. Statistical Reliability and there's other things, like Typical Value, Vacancy Rates, Growth Rental Yield in the area. Vacancy Rate, I might monitor. Growth Rental Yield, I wouldn't. I wouldn't monitor the Statistical Reliability either. There are some great options in there for DSR+, if you want to go ahead and upgrade to that. So, Demand to Supply Ratio+ could be a good thing to look at. Market Cycle Timing could be a good thing to look at to understand where in the cycle this market is. So,

[youtube id="i7TebjG0MA8" align="left" mode="lazyload" maxwidth="500"] There are some great free sites for researching property in Australia. You can find out everything from capital growth trends to the hipness of an area. In recent years (and even months) a lot of great free sites have been made available to help Australian investors and homeowners do effective property research. Here are my 8 favourite sites that I think you will absolutely love. You can get almost everything you need for property research just from these 8 free websites. Let me show you through them now. 1. Searching For Property - MyRealEstate.com.au RealEstate.com.au and Domain.com.au are antiquated portals full of ads that get in the way of your property search. When I do a simple search for properties in "Cronulla NSW" my adblocker blocks 17 ads on RealEstate.com.au and 26 ads on Domain.com.au. Ads aside MyRealEstate.com.au is a better search tool for a number of reasons. A) You can use natural language (think Google) - "2 bedroom unit in cronulla under $700k" (click to see the results in a new window). Other sites force you to enter criteria which is more annoying. B) You can use search terms - I love searching for properties with the keywords "rented for" (click to see the results in a new window) to find out some yields of the area and even find positive cash flow properties. C) All properties - MyRealEstate shows properties from all major real estate portals plus real estate agents websites. So every property is going to be on there. 2. Growth Trends - DSRData.com.au DSR Data (stands for Demand to Supply Ratio) collects a lot of different data point to give you an idea of how much demand there is from properties compared to the supply of properties in an area. High demand and low supply leads to a high DSR score and correlates to short-term growth of the area. Low demand and high supply give you a low DSR score and correlates to negative or stagnant growth of the area. Sign up for a free account and you also get data or auction clearance rates, days on market, percent stock on market, percent renters in market, online search interest, average vendor discount, gross rental yield, vacancy rate and typical value. 3. Suburb Demographics - Microburbs.com.au Microburbs is a great new tool that gives you immense amount of detail into the demographics of a suburb. It will show you details and even heat maps of everything from public housing to crime rates to median income in the area. This tool is an absolute must if you want to get an understand of what the area is like before investing into the area. 4. Previous Sales History + Comparable Properties - OnTheHouse.com.au OnTheHouse is a great way to get a lot of the information found in a free property report. It will give you an estimate of the value of the property, give you zoning details, land size as well as previous sales history for the property. You can see exactly when the property was previously sold and for how much. Occasionally you can also see what the property was previously rented for. It will also show you comparable properties in the area so you can compare the value/asking price of a property to similar properties in the area. 5. Historial Listings - OldListings.com.au The major real estate portals don't show when the property was listed. They want to hide this from you as they want to serve the best interests of the selling agents. Often a property may stay on the market for a long period of time and have lots of price reductions. Looking at just the portals you will never know about this. OldListings.com.au doesn't have every property but it does have a lot, and will show you when the property was previously listed and how much it was listed for. This is great for negotiating and understanding how long a property has actually been on the market. 6. Previous Rental Listings - House.Ksou.cn/rent.php Ksou is a site primarily aimed at Chinese investors (thus the .cn) but it's English version is a really helpful tool. It has a lot of features but my favourite feature is the ability to find what properties have rented for recently. I personally used then when my rental agent wanted to increase my rent. I showed them what comparable properties were listing for and was able to negotiate the same rent for another 12 months. 7. Vacancy Rates - SQM Research When investing in property you almost always want to invest in areas with a low vacancy rate. This indicates demand for the area and means your property is more likely to be rented (and thus generate an income for you). SQM's vacancy rate tool is 2nd to none. The data is really fresh (like 1 month old fresh) vs other sources (eg. Magazines) where the data is 6 months old. Plus you can see the month by month trends for years! I think the data goes back to 2006 or something crazy like that. So if you want to know the vacancy rates of an

[youtube id="hzmcN7XT460" align="left" mode="lazyload" maxwidth="500"] If you want to avoid public housing hotspots in an area you can. I'll show you exactly how to find public housing hotspots so you can avoid them. If you're looking at investing in a property, chances are you're going to want to know where the public housing is in that area. Homeowners often want to know where the public housing is, as they want to avoid that area and some investors actually seek out public housing for the potential higher yields that properties around the public housing areas can deliver them with the potential of positive cash flow. So in this episode, I'm going to show you exactly how to find public housing hotspots in an area using a tool that's absolutely free. Hey, I'm Ryan from onproperty.com.au and the tool that we're going to be using to do this is called Microburbs and you can find that at microburbs.com.au. You used to be able to do this – you still probably can – through a tool called Ripehouse, but that's a paid tool that's going to cost you at least $200. You could do this free through the census. However, it was very difficult and technical to do. However, Microburbs have made it really easy and I'll show you how to do it now. So, here we are on the homepage, microburbs.com.au. All you do is enter the area – the suburb that you're interested in looking at. Let's just choose one area of interest that I don't know a lot about, Tamworth, New South Wales. So let's go ahead and have a look. Now, Microburbs shows you a lot of different things. There's a lot of information in here. If you want to see that they offer, go to onproperty.com.au/339 and I did a walkthrough with the creator of Microburbs and we went through absolutely everything. But for this purpose and finding public housing, we want to go to this affluency score section here. Go ahead and click on that, and we can see public housing here. So if we click on that, that's going to give us a heat map overlay of public housing in the area. Now, I don't know anything about Tamworth, I've never been there. So, I don't know where the public housing is. But I can see from this heat map, straightaway, that in West Tamworth, 16% of West Tamworth is public housing and in South Tamworth, it's about 8%, whereas in Tuminda is 0%. Regular Tamworth is 0%. East Tamworth, 2%. Kingswood, 0%. Hillview, 1%. So, all around, it seems to be very low. But in these 2 areas, it seems to be quite high. Now, the powerful thing about Microburbs is that we can actually break this down from just the suburbs, which we're looking at now, into smaller sections of the suburbs that they call microburbs. So when the census is done, they break it down into these different little areas of about 400 dwellings or 400 residences. So, if we zoom in, that's actually going to break those suburbs up into different micro sections or microburbs so we can see all the difference here. Now, it was West Tamworth and South Tamworth that seem to have the highest percentage of public housing. But now that we've zoomed in, we can see a red spot here where public housing is 59%, above that it is 49%, 38%, 36%, we've got 15% there. So we can see a big pocket of public housing here in the Southwest of Tamworth and we can see a few here, 19%, 25% and 38% – another pocket there. So, even though when we've zoomed out, this was all red for West Tamworth. Once we zoom in, we can see, actually, it's just the more Westerly side of things that have the high percentage of public housing. Actually, the East side of West Tamworth, if that makes sense, seems to be pretty good with public housing, 0%, 2%, 6%, that one's got 15%, 2%, 8%. So, a lot lower, but high percentages there. Basically, you can pull around. We can see Oxley Vale here. Let's go ahead and zoom in on Oxley Vale. Okay. We can see that that's got a pocket of public housing at 54% in the far North of Oxley Vale. So, when we're zoomed out, Oxley Vale itself looked like 8%, but as we zoomed in, we can see that, really, it's just that one area where the bulk of public housing is. So, Microburbs' a really great tool for finding public housing in an area. Let me just show you one more example. Let's check whether I'm right. I used to live in Cronulla, in Sydney. And there's a suburb right near there called Caringbah, where I used to work, and there was a section of buildings opposite Woolworths that had a high percentage of public housing. Let's see if the map is right or let's see if my knowledge of the area is right. We've got Caringbah in Sydney, New South Wales, whole bunch of different information. Again, we want to look at this affluence score and we want to go ahead and click on public housing. This is bringing up the public hous

[youtube id="ZSYMMKou7ZI" align="left" mode="lazyload" maxwidth="500"] Today I share a new tool that gives A LOT of information about a suburb so you can make more informed investment decisions. Hey guys. For years, it's been really hard to find decent data on an area that you're looking at investing in. If you're interested in investing a particular area, if you don't live there, it can be very difficult to know things about that area that you want to know. Things like; even capital growth or crime rates or public housing in the area. What the area is like? What kind of restaurants are in there? Over the last 6 months to 12 months, there's been a lot of tools that have been coming out that have made life a lot easier for us. And we have a new tool that I've actually just discovered yesterday called microburbs.com.au and I've got the creator and founder, Luke Metcalfe with me today to talk us through it and how we can use this to better help our investing. Ryan: Hey, Luke, thanks for coming on today. Luke: Hey. Thank you very much for having me, Ryan. Ryan: Okay. So, talk the people through what exactly is Microburbs and why did you start it? Luke: Yeah. Okay. So, Microburbs is a site, totally free site that gives you these detailed comprehensive reports for everywhere in Australia. Our goal is to provide all the information that you don't otherwise get in property ads and in a format that is really easy to digest. We break things down by all different kinds of qualities of a property like tranquility and hipness and lifestyle and convenience and provide scores of each of those. And then, break down the reasons why. So, for example, under tranquility, we show what kind of land nuisance nearby. Is it near industrial? Is it near public housing? Under affluence, we provide the median price and you can see that on the map as well. The convenience will show you how far it is from train stations and from the city. So, all the kinds of stuff that you might to find out about a property. All these things that you – it's such an enormous checklist of things, often as negative things, as well. Like, you might be surprised when you move in that you're in a mobile black spot. So we can answer that for you as well. Or the internet isn't very fast. So, all these things, we put them into one report for you so that you can be assured that a property is right for you, whether you're an investor a home buyer. Ryan: Okay. So the purpose of Microburbs is basically for anyone who's looking at investing in a particular area or if you're looking at a specific property, you can basically go to microburbs.com.au, you can put in the suburb or you can put in the property and it's going to give you a whole bunch of information on the demographics of the area, the restaurants and all the stuff. Basically, anything you would ever want to know and even things you wouldn't even think of about an area. I guess the goal is to make investors confident in their decision and know they're buying the right property, is that right? Luke: That's right. Yes. Good point. We do areas as well. You can search of suburbs, local government areas, any level, we cover – post codes. Our big thing is that realestate.com.au and domain.com.au, they're great to tell you about the house. So, whether it's got a Smeg kitchen, how many bathrooms it has, but it's not telling you about the neighbourhood. Obviously, majority of the purchase is actually the land value. It's the land that cost money. And land is only worth something if it's near other things. If you all you cared about was the house, then go build a mansion out in the Nullarbor Plain and you'll save yourself a lot of money, right? So, all these things about what kind of neighbors you're going to have, what risks that the property faces is really an information gap that we are filling. There's a large number of government sources out there. There's other private sources as well and we're all about putting that all together in one place so that you don't have to spend ages looking at council pdf's and spreadsheets. We're bringing it together and we try and talk about properties in as concrete and conversational way as we possibly can so it's understable to ordinary people with a bit of knowledge about property. Ryan: Yup. We'll get into a screen share in a minute, guys, where we're going to go through this site. So, if you are listening to the podcast, I do encourage you to go to onproperty.com.au/339 to get access to this episode and watch through the video because we're about to go through that. But before we jump into that, I just want to ask you, of all things that you could be doing and you've started and sold successful companies in the past, what made you lean towards the real estate

Renovation can be a great way to get instant equity and make money but first you have to find the perfect property to renovate.

[youtube id="wsrgNb4IU50" align="left" mode="lazyload" maxwidth="500"] There is a new, faster, better way to search for real estate online. A better experience with less ads. Hey, guys, Ryan here from onproperty.com.au, helping you find positive cash flow property. Today, I've got an awesome tool for you guys and an interview with the creator of that tool. The tool is myrealestate.com.au and the creator who's with me today is Nino Svonjia. Ryan: Hey, Nino, how's it going? Nino: Hi, Ryan. Good, yourself? Ryan: Very good. Now, you guys know when you go on to realestate.com.au or you go on to domain.com.au and you search for a property, the search listings aren't always the best. They're not organized the best. There's often those sponsored listings that get in the way that aren't in the same suburb or the same price range that you're searching for. Searching for properties online and finding a decent property can be extremely difficult and Nino is trying solve this problem with his tool, which I just discovered the other day, called myrealestate.com.au, which you guys can be able to check out. So, Nino, talk us through what is myrealesate.com.au and what are you guys trying to achieve over there? Nino: Thanks, Ryan, First of all, thanks for having me on your show. It's great to be here. MyRealEstate is a completely new kind of search engine for all listed properties in Australia. So, it's very unique, it's very different than anything that's out there. What we're trying to do is gather all of the listings that are advertised out there and put them together in one place. More like a traditional search engine rather than a property advertising portal. So, we want it to be fair. We want it to be fast and easy to use. Ryan: Yup. Nino: You mentioned some of those points there around fairness. We see a lot of that as we gather some of that data. Sometimes, prices can be put in a price range where they don't belong to, just so they're trying to attract more users to click on them, and this is really not fair for the buyers. Ryan: Often times, I'll do a search and stuff will come up that's listed as "auction" or it's listed as "no price" and it's not actually really in that price range. I can tell just by looking at the property. This property shouldn't really be shown to me in the price range I'm looking for. Nino: That's right. The reason for this is because some of these websites have the ability to specify a hidden price or a hidden price range so that they can still appear in search results. This is not fair because this is a little bit deceptive behavior and often, what advertisers do is put lower price ranges because they're trying to attract more buyers. With myrealestate.com.au, we just have a single price. You either have it said or you don't. And, we try and be very transparent about showing that to the users. In fact, if the price is not said, we try and penalize that and push it down because we think that if an advertiser hasn't put a price, usually, they try to involve in some tricky behavior. Otherwise, it's either too expensive, the vendor wants too much money or they're trying to fish the market, or something like that. Ryan: Okay. So, let's talk through the search software because I've had a little play with it, but not a massive play with it. I like some of the tools because you can search using keywords. So, I can search for things like "yield" and properties where the real estate agent has "rented", the yield will come up. Or, I can search words like "rented for" and then properties where the real estate agent has said "rented for" will come up. So, it can help us find out the yields of properties or find out the yields of areas, which is really helpful for people searching for positive cash flow. Is that how you designed it – to be like a search engine based on what the real estate agents say or is there some other way that we should be using it? Nino: No. That's exactly right. The idea is to make it more closer to like a traditional search engine, like Google. Based on research that we've done, a majority of users prefer using a keyword search box. They like the freedom and sometimes it's just very fast to just type in what you want. What I see with these other portals that are out there is that they're, if anything, even hiding these keyword input box and just making it quite complicated to go through all of these filters and click on things and find out where they are and they force you to go through this workflow by putting in a suburb first and so forth. So, we're changing that by making a very, very smart, we're bringing in cutting edge technology that can recognize the keywords that you are putting in and it goes even

[youtube id="bJlyM_sM6I4" align="left" mode="lazyload" maxwidth="500"] Analysing a property market and understand what areas are likely to grow can be difficult. In this interview with Jeremy Sheppard from DSRdata.com.au we learn how to use data to find the best places to invest. One of the hardest things to do as a property investor is to know how to analyse a property market. We can look at so many different suburbs. We can look at different cities. But it's really difficult to know – is that area actually going to grow in value or is it going to stay stagnant or decline? So, today, I did an interview with Jeremy Sheppard from dsrdata.com.au. He is my go-to person when it comes to understanding how data impacts our view on a suburb and impacts whether we think a suburb is likely to grow or not. There's a lot of people out there touting wisdom about population growth and income statistics and all of this sort of stuff, but often, the advise they give is actually wrong. And Jeremy has his counterintuitive approach where he really looks at the data, really understands what the data means and how it's going to affect a suburb. And he displays all the data for free over at dsrdata.com.au. So today, I got on the line with him and we discussed a whole bunch of things about how to analyse a property market. We looked at a lot of different things. Originally, I was going to break this up, but it was such a good interview, I decided to leave it all together. Here's a short list of some of the things that we're going to discuss. We look at the DSR Data story, so why did he start DSR Data? What's so great about demand and supply and why is that important? We look at is capital growth sustainable? One of the things people say is if an area has grown in the past, it's going to grow in the future. That may not actually be true. We look at how to analyse a property market using his tool and using other data. We look at whether or not population growth causes capital growth and the answer is, no, it actually doesn't, but we talk about that. We look at whether or not the property clock is a bogus idea. I really like this part of the interview where we talk about whether or not we think the property clock actually has merit, or is there a better way to look at things? We also talk about how to estimate the peak of a market, so we're not buying at the peak and then prices drop. We also talk about why we may not actually need to buy properties under market value. We discuss a whole bunch of other different things as well, but I'll leave it with you for now. Here's the interview with Jeremy Sheppard from dsrdata.com.au. Ryan: Okay. Well, let's start. So how did you get into property analysis, data analysis or suburbs? What caused you to start your site DSR Data? Jeremy: First of all, getting into the data. I found myself spending a lot of time researching and I also wanted to keep things objective. I knew that a numerical basis for property investing is a good idea for objectivity because the numbers don't have emotions and it helps me keep my emotions out and prevents me from making subjective decisions. But the other issue was that I wanted to buy in the best places in Australia and there's nearly 16,000 suburbs. So, how do you go about filtering that down? Having an automated tool just zips through all of them, looking for at least some positivity in certain statistics. That, to me, it just struck a cord and I found myself gathering the same sort of data all the time for individual suburbs, so why can't I just do it for all of them? So that's where, I suppose. Ryan: How do you decide on the criteria to say, "Well, I'm going to look at X, Y, Z." And the different points that you eventually decided on? Did you do this all by yourself? Like, is this a project at home sort of thing? Jeremy: Yes. Yeah, yeah. It started off as just a home project. Yeah. I want to make good investments, how do I go about it? Initially, it was really just what was available. If there was data that I could readily get my hands on and it had some kind of impact on supply or demand, then yeah, I grabbed it and used. There's still data out there that I can't get that I really, desperately want. Ryan: Like what? Jeremy: I really cool one would be the count of people turning up to an open inspection. I think that would be a great indicator, but you've got to there manually. That sort of stuff just isn't published online. So more work to do, I guess. Ryan: So you just kind of went as a home project, “Okay, I'm going to do this for my own investing.” Back to my previous question, what made you choose – there's a lot of data out there, right? You can get access to all these different points of data. How do you know that one data point will affect supply and demand and one won't? Jeremy: I g

[youtube id="xo0oUmJFp_Y" align="left" mode="lazyload" maxwidth="500"] How can you find a good suburb to invest in? A suburb that is likely to go up in value, one that is low risk and has the potential for capital growth. So you want to invest in property. Obviously, you want to choose a suburb that has minimum risks and the potential for maximum returns but what are the steps that you need to take to actually find a good suburb to invest in? What are the steps that you need to take to find a good suburb to invest in? 1. Start At A State Level The first thing that you need to do is to start broad. What most people do is they start from the ground up which is the wrong approach. They will find a property, someone might send them a link and say, "Hey, look at this property" or they might say, "My uncle is selling a property and you can buy it. If you don't go through a real estate agent he will give you a discount." And so for one reason or another, you end up starting at the property level and you then need to work your way up to understand, "Okay, is this a good suburb to invest in? Is this property a good price?" But what tends to be a better way to approach things is to actually start broad, so start at a state level or start at an area level. 2. Narrow Down To A Major District Let's say you decide to invest in Queensland, then let us first assess Gold Coast, Brisbane, Sunshine Coast, Hervey Bay, maybe some regional areas as well. Assess them as areas and first understand, "Okay, what kind of area do I feel comfortable with and want to invest in?" Analyze your area and look at things like past capital growth history. Look at the potential trends for the area moving forward. Look at the demand-supply for the area. Look at vacancy rates in the area and things like that. You can also go to council websites and you can try and assess what infrastructure developments are going into an area. Is the population growing or declining? What you want to do is to start to whittle down the area so you just have a couple of areas you want to look at. 3. Start Looking At Suburb Research Then you start going into the suburb research. What I advise is to do research on a lot of different suburbs, not just one. The way most people approach finding a good area to invest in or finding a good suburb to invest in is they say, "Okay, here is a suburb. Suburb X. Is this a good suburb to invest in? Yes or no?” That is one way you can approach it, but it's probably not the best way. It is very difficult to collect enough data to understand if one suburbs is a good suburb to invest in. It is very difficult for the average investor because you may not understand what all the data means. Maybe you don't understand exactly how to research a suburb. What is a lot more effective and a lot easier is to spread out and you look at all the different suburbs and actually compare those suburbs to each other. Look For The Best Suburb In The Area Let's say you decided the Gold Coast was a good place to invest. Rather than saying "Okay, the Gold Coast. There is a suburb in the Gold Coast called Robina, do I want to invest in Robina, yes or no?" That is the old way to do it. The better way to do it is to say: "Well, what are all the suburbs of the Gold Coast? There is Robina. Mudgeeraba. Burleigh. Broadbeach. Surfers Paradise. Southport. Which of these suburbs is going to be THE BEST suburb for me to invest in?" Collect all of the suburbs, do research and data on all of the suburbs and then lay them out in front of you and compare them to each other. You will then be able to rank them in order and you will see that some suburbs you definitely do not want to invest in and you will see a few suburbs that really go to the top of the pile. What you can then do is assess those top suburbs and decide which of these top suburbs do you think is the best for you. Don't Just Choose On Suburb And Hope For The Best Rather than just choosing one suburb and hoping for the best, you are actually assessing a wide variety of suburbs and you are ranking them on a scale to choose the best suburb. How Do You Find A Good Suburb To Invest In? Well, you: Start broad Analyse each individual suburb Rank them in order to find the one that is best for you. Tips On How To Analyse A Suburb That is all well and good for me to say that but what about some tips on how to actually analyse a suburb. When comparing suburbs, what are we looking for? While I go into this in full detail in the Advanced Suburb Research Course, I will give you a couple of tips here. Tip #1: Look For Risk Factors What I find as the best approach to suburb research is to actually look for risk factors in the area. I like to call these red flags. Red flags are indicators that the area may decrease in value or may not be promising in terms of capital growth in the future. So

[youtube id="0bnZqetOMZQ" align="left" mode="lazyload" maxwidth="500"] How can you know if an area is a good place to invest or if it is likely to decrease in value? Successful property investors know the areas they are investing in. How do you know if an area is a good place to invest in? So you want to invest in property and you are looking at a variety of different suburbs to invest in, how do you actually know if the suburb you choose is a good suburb to invest in, that will likely increase in value or if it is a bad suburb that is very risky and may decrease in value? Hi, I am Ryan from OnProperty.com.au, helping you find positive cash flow properties. This month we are talking all about research for the launch of my new course Advanced Property Research which you can check out at OnProperty.com.au/suburb. Now, I just want to put a disclaimer out there that this is probably not the best way to discover if an area is a good place to invest. The best way is probably to get access to hundreds of different data points and be a super nerd and understand exactly how to analyze them and analyze the trends and know everything to do with the suburb being like a super computer. But most of us cannot do that and most of us can only understand what a few different data points from an area mean. So this is going to be a good strategy for a lot of people out there especially if you are not of how to do a lot of stuff with research. But for those of you who are super smart, you can obviously take this further and go into more detail. So the first thing that I think you should do when looking for a good place to invest is to find good. And this starts by actually understanding your financial goals and your lifestyle goals and understanding what sort of property and what sort of area is going to move you towards those goals as quickly as possible. For one person, they might just want an area that is extremely robust and low risk because they just want to maintain their money and their portfolio and maybe generate some cash flow as well. Other people might be after fast equity growth because they are making the bulk of their income from their property portfolio and they want to be able to expand quickly. So depending on who you are and depending on your goals, the definition of good area is going to change. So it is important to understand what your financial goals are, what is the property investment strategy that you have chosen to achieve those goals. And therefore what kind of suburb are you looking for that fits in with your property investment strategy. So sit down, take some time to think about what do you actually want to achieve from the property, what strategy are you going to use - is it buy-and-hold, is it positive cash flow, is it renovation, all these sort of stuff. And then try and work out what is a good suburb for renovation or positive cash flow or for buy-and-hold. So first, understand what is good. For most people, I think, what is going to be helpful when looking for a good suburb is to try and minimize your risks and as well we want to maximize our return but I think that for a lot of people should be secondary to actually minimizing our risks. Because a lot of people go in and they are looking at a suburb and they are just looking at the upside. We get our greed on and we are thinking about how much money we can make from this deal and we are not thinking about the possibilities of things going wrong. So for a lot of people, I think minimizing their risks and focusing on the risks of an area to assess whether or not it is a good place to invest is probably the best place to start. And then after you have assessed the risk then you can look at data points of the area that indicate that you may be able to get maximum returns for the area. So to do this, we want to look for what I like to call red flags. These are risk aspects of an area. An example of this would be a high vacancy rate in an area. It would be a red flag that that area is oversupplied and may not be the best place to invest in. There are a lot of different red flags that you want to look for. You want to look for capital growth trends in the area. I especially get worried when an area has decreased in the last 12 months and especially when it has decreased significantly in the last 12 months. So when looking at capital growth trends, I will be aware that if an area is showing some abnormality in capital growth that could be a red flag. A red flag does not mean do not invest in this area. It just means do more research to understand why the capital growth trend is happening the way that it is happening. You can also look for a higher increase in vacancy rates. It is a red flag for an area. So if vacancy rates are actually increasing over time then that indicates that there is either more and more supply or there is less and less demand for properties in the area. And that can be a red flag. Popul