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How to become a property investor for $300,000 · The Money Puzzle

0:10
Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm
0:13
Speaker 1: James Kirkby. Welcome aboard everybody. Now, if you're interested in
0:16
Speaker 1: property investment, you may already have heard of Nathan Birch
0:19
Speaker 1: and he's Being Invested Group. He's one of the most
0:21
Speaker 1: high profile property investors in the country. Only hundreds of
0:25
Speaker 1: residential properties, many of them at the lower end of
0:28
Speaker 1: the market, including units and apartments, which is the area
0:30
Speaker 1: actually I want to talk to him about on the
0:32
Speaker 1: show today. He has a business, of course, it's called
0:35
Speaker 1: Be Investors, and he encourages people and helps people out
0:38
Speaker 1: to get invested in property and actually to buy multiple
0:41
Speaker 1: properties if that suits you. I wanted to talk to
0:45
Speaker 1: him though, particularly about this line of inquiry that perhaps
0:49
Speaker 1: as investors we can get into the market for a
0:52
Speaker 1: lot less than we think right of the average house
0:54
Speaker 1: is a million dollars now and everyone says, oh a
0:56
Speaker 1: million dollars is an awful lot to put in as
0:58
Speaker 1: an investor as a proportion of my investing or my
1:01
Speaker 1: asset allocation. How are you and Nathan? Thanks for coming
1:04
Speaker 1: on the show.
1:05
Speaker 2: Well, thank you, James. I appreciate the warm introduction and
1:08
Speaker 2: thanks having me on the.
1:09
Speaker 1: Show really nice to have you. So let's just talk
1:11
Speaker 1: about that for an entry point. As such, many people
1:15
Speaker 1: think property is too hard to get into because it's
1:17
Speaker 1: become so expensive. The average home in the big cities
1:21
Speaker 1: is a million dollars, so people are thinking, oh, you know,
1:24
Speaker 1: it's an awful lot for me to go in on
1:26
Speaker 1: one line of inquiry, one asset to buy that much.
1:29
Speaker 1: But you really do You've worked and this is your area,
1:34
Speaker 1: lower entry level. So is there a figure that is
1:39
Speaker 1: a feasible figure for investors to think of instead of
1:41
Speaker 1: a million dollars?
1:43
Speaker 2: Yeah, And when I think a million dollars, I think
1:46
Speaker 2: a block of unit, so I think a big I agree,
1:48
Speaker 2: I think something very substantial for that. Most people, especially today,
1:53
Speaker 2: like my career buying property, started buying little housing commission
1:56
Speaker 2: stuff in western Sydney. Back in the day, I was
1:59
Speaker 2: playing two hundred grand for these little houses that are
2:01
Speaker 2: now a million dollars for a fibro nothing attractive at all.
2:06
Speaker 2: So a million dollars doesn't get you much out there
2:08
Speaker 2: in the greater market. But I look for value. I'm
2:11
Speaker 2: just a value and investor, and I look for things
2:13
Speaker 2: that have got a high intrinsic value. There's three things
2:17
Speaker 2: that I think are important when buying a property. One
2:19
Speaker 2: is a cashload element of it, because I'm not a
2:21
Speaker 2: fan of a proponent of negative gearing. I think having
2:24
Speaker 2: a positive cashlows better the others to buy below market.
2:29
Speaker 2: But the big thing that I look at today is
2:31
Speaker 2: buying below rebuild costs. And I was talking to one
2:35
Speaker 2: of my investors the other day and they were talking
2:36
Speaker 2: about buying building a granny flat and it was going
2:39
Speaker 2: to cost three hundred thousand dollars and I was like, no,
2:42
Speaker 2: don't do that right for a grainy flat, it's a
2:43
Speaker 2: lot of money for three hundre grand I'd expect to
2:46
Speaker 2: have a whole property. And the stuff that I look
2:48
Speaker 2: at today, you can still buy in capital cities throughout
2:51
Speaker 2: the country and you can still buy it Like I think,
2:54
Speaker 2: if I can pick up something for two hundred and
2:55
Speaker 2: three hundred thousand, you're buying it below rebuild cost today.
2:58
Speaker 2: And that's very active to me because at the nside,
3:01
Speaker 2: risk is removed from that and.
3:03
Speaker 1: It's a very attractive to any investor like who's done
3:05
Speaker 1: their homeworker, who knows the sort of textbook economics. If
3:08
Speaker 1: something is cheaper than its replacement cost. Well, the chances
3:13
Speaker 1: are you've come in at a very good point right
3:15
Speaker 1: in the property market. So what types of properties nationwide
3:21
Speaker 1: at the moment fit to build there in terms of
3:24
Speaker 1: replacement cost or less than replacement cost.
3:28
Speaker 2: It's definitely getting a lot harder out there to do so,
3:32
Speaker 2: going back twelve months ago, there was a lot more
3:35
Speaker 2: than there is today today. I'm picking up in the
3:37
Speaker 2: large capital city still, it's hard to buy in Brisbane
3:40
Speaker 2: that I was picking up. Ninety eight percent of the
3:43
Speaker 2: stuff five years ago was two hundred and fifty or
3:46
Speaker 2: less in Brisbane Gold Coast market. Now there's nothing around there,
3:50
Speaker 2: maybe one every six months. There's a lot of stuff
3:53
Speaker 2: in Melbourne that you can buy from one fifty to
3:56
Speaker 2: three hundred thousand. Melbourne's copped a beating over last few years.
4:01
Speaker 2: I'm buying in Sydney still for three hundred and three
4:03
Speaker 2: fifty thousand. You get like a two bendrom munit in
4:05
Speaker 2: Sydney for that prize, maybe rent for four hundred and
4:07
Speaker 2: four to fifty a weeks, so the cash flow is
4:09
Speaker 2: quite strong. I can buy in a large regional hubs
4:12
Speaker 2: throughout the country like Cans Council. I don't buy in
4:16
Speaker 2: today because I was picking up a lot of stuff
4:19
Speaker 2: there for one hundred and fifty grand a year ago
4:21
Speaker 2: and now it's four hundred thousand entry price and it's
4:24
Speaker 2: just too it's origin.
4:25
Speaker 1: There's really bounced, hasn't it. Yeah?
4:27
Speaker 2: Correct, even places like Gladston. I'll buying Gladsdon five years
4:32
Speaker 2: ago for sixty grand for little two bedroom townhouses and stuff,
4:35
Speaker 2: and now they're selling for three fifty four hundred entry price.
4:38
Speaker 1: So it's amazing because a lot of people on the
4:40
Speaker 1: show they're obsessed with investment grade property, and investment grade property,
4:44
Speaker 1: you know, tends to be at a different level. So
4:47
Speaker 1: for the average disty, just tell us three hundred grand, right,
4:50
Speaker 1: I've got three hundred gand and I'm interested in buying
4:52
Speaker 1: a property. I got to the chase. What sort of
4:55
Speaker 1: property can you get for three hundred grand in Australia
4:57
Speaker 1: right now?
4:58
Speaker 2: Two bedrom munits City, one bedroom unit's Capital City and
5:03
Speaker 2: more smaller cities like say TASMANI buy houses for one
5:06
Speaker 2: hundred and fifty two hundred grand. You can buy in
5:09
Speaker 2: areas around Canberra for three hundred thousand for two bedroom unit.
5:12
Speaker 2: You can buy an Adelaide for three hundred grand, three
5:14
Speaker 2: hundred and fifty grand for two better. Perth has gone
5:17
Speaker 2: way to my I was in Perth many years ago
5:20
Speaker 2: picking up all the stuff. Darwin was good. Two years ago,
5:25
Speaker 2: I picked up thousands of properties for ourselves, and now
5:29
Speaker 2: they're just too expensive at all. Yeah.
5:32
Speaker 1: Right, It's fascinating that it's the two largest cities that
5:35
Speaker 1: you've mentioned, and it's also interesting every time you mentioned it,
5:37
Speaker 1: you say two bedrooms, So tell me about that the
5:40
Speaker 1: two This seems to be the aftermoon property investment is
5:43
Speaker 1: is the two bedroom property because the one bedroom property
5:46
Speaker 1: everybody walks from home? What is what's the rationale there?
5:49
Speaker 2: When I say two better, that's like the upper side
5:51
Speaker 2: of it. You can get a two better, you can
5:52
Speaker 2: get it one better as well. I'm a fan of
5:54
Speaker 2: my bedrooms. I've got a lot of my portfolio shive
5:58
Speaker 2: four hundred properties. One hundred of them would be one betters.
6:02
Speaker 2: And I feel like we're in a world where a
6:04
Speaker 2: lot of people aren't married, a lot of divorced, a
6:06
Speaker 2: lot of that migrate here just markets go strong demand
6:10
Speaker 2: for it. If I look back at areas that have
6:13
Speaker 2: been to with the growth that's occurred in them. A
6:15
Speaker 2: lot of people think these properties will never go up,
6:17
Speaker 2: or you know, there must be substandard or whatever. I
6:20
Speaker 2: look at the Gold Coast. I was picking up houses
6:22
Speaker 2: in the Gold Coast five years ago for five hundred
6:25
Speaker 2: grand and are now one point four, which might think
6:27
Speaker 2: it would be good. I don't even like those numbers.
6:30
Speaker 2: The one and two venture munites at one hundred and
6:32
Speaker 2: fifty two hundred green and are now like seven eight
6:34
Speaker 2: hundred thousand, which is wild. Like the growth has been yeah,
6:37
Speaker 2: equally as good, but yeah, there's definitely a massive market
6:42
Speaker 2: for that.
6:42
Speaker 1: When you look at there raw numbers across the market,
6:45
Speaker 1: I don't just mean new numbers, I mean like the
6:47
Speaker 1: global numbers, the nation of my numbers. It is a
6:50
Speaker 1: lower end of the price range that's having the growth,
6:53
Speaker 1: isn't it at this time? But that wasn't always your
6:57
Speaker 1: That wasn't always the case, but it is the case now.
7:00
Speaker 1: Tell us about this the five percent deposit scheme, the
7:04
Speaker 1: universally five percent deposit scheme, which puts anyone in Australia
7:08
Speaker 1: basically anyone who can stand up and put a check
7:11
Speaker 1: forward can buy for the first time on a ninety
7:14
Speaker 1: five percent mortgage. What does that mean for your zone?
7:18
Speaker 1: For the low entry level zone? Is it good or bad?
7:23
Speaker 1: Right because you've got more people competing?
7:26
Speaker 2: Correct, Yeah, it's good for all the stuff that we bought,
7:28
Speaker 2: but it's bad because getting new stock is becoming more troublesome,
7:32
Speaker 2: I'm finding when you think about it, and it's something
7:34
Speaker 2: I look at the low end of the market like
7:36
Speaker 2: buying different segments of the market. I'd certainly go to
7:39
Speaker 2: the higher but everyone knows me for buying the cheap stuff.
7:41
Speaker 2: That's what I love the most. But looking at I
7:45
Speaker 2: always think about who are the people that are buying
7:47
Speaker 2: the property, who would be the person as the first
7:49
Speaker 2: time buyer? What would the incomes look like? When factoring
7:53
Speaker 2: is an area of good and I think about what
7:55
Speaker 2: could future growth potentially look like and a factor in
7:58
Speaker 2: what could the incomes. It's on a debt perspective for
8:02
Speaker 2: so we've seen interest rates go up, We've seen lifestyles
8:05
Speaker 2: get stretched out with inflation and whatnot. So I think
8:08
Speaker 2: what would the average income in a location service for
8:11
Speaker 2: debt And when we look at you know, people locked
8:15
Speaker 2: out of the million dollar market, people locked out two
8:17
Speaker 2: million dollar market, and you get a nice to get
8:20
Speaker 2: a standard Aussie red brick house from nineteen ninety five
8:23
Speaker 2: hundred fifty six square meter blog in a lot of
8:26
Speaker 2: locations a little bit in one and a half million bucks,
8:29
Speaker 2: especially here in Sydney, and that's in Blacktown or Penrith
8:31
Speaker 2: or something. To find the ability to get a seven
8:35
Speaker 2: hundred grand unit or a five hundred green unit. There's
8:38
Speaker 2: more people at the bottom end that can afford that
8:42
Speaker 2: when you're adding sentence in there, Like you think about
8:44
Speaker 2: a three hundred grand property in a five percent depositive,
8:46
Speaker 2: there's fifteen thousand dollars, so you can put on a credit.
8:50
Speaker 2: Cap'm not suggesting anyone to put on a credit.
8:52
Speaker 1: Now, but it's easy. It's easy to get in. Okay, Yeah,
8:55
Speaker 1: I think what we'll do take a short breequad. I
8:57
Speaker 1: really want to talk to you about is the realities
8:59
Speaker 1: of our audience getting involved here and doing this and
9:02
Speaker 1: what it might mean. What the day to day reality
9:04
Speaker 1: of owning one of those properties is, Like, is it
9:06
Speaker 1: different than owning a conventional million dollar property? Are there
9:10
Speaker 1: issues with banks? Are there particular issues in renting them?
9:13
Speaker 1: I'd like to hear you were just starting to tell
9:15
Speaker 1: me about the cash flow and the sort of rental
9:17
Speaker 1: yields you might expect, which I presume are much higher,
9:19
Speaker 1: but let's talk about that in a moment. Hello, Welcome
9:33
Speaker 1: back to the Australians Money Puzzle podcast. I'm James Kirby
9:36
Speaker 1: and I'm talking to Nathan Burch, very well known property
9:39
Speaker 1: investor and player with his b Invested group. So we
9:44
Speaker 1: were just talking in the first segment of the show.
9:46
Speaker 1: But something we don't talk about too often as maybe
9:48
Speaker 1: we should when we were talking property on the Money Puzzle.
9:50
Speaker 1: We're often talking we don't necessarily concentrate on the lower
9:54
Speaker 1: end of the market, the entry level of the market
9:57
Speaker 1: as investors, but in fact micro figures show that it's
10:01
Speaker 1: the lower end of the market that has been going
10:03
Speaker 1: better in recent times and that is accelerated to some
10:06
Speaker 1: degree by the new universal home deposit which Nathan was
10:09
Speaker 1: just talking about. So Nathan tell us about the yields
10:13
Speaker 1: we could expect at this level compared to conventional yields
10:16
Speaker 1: and investment residential property.
10:18
Speaker 2: You know, when I'm buying a property, I want to
10:21
Speaker 2: be mutual cash flow. Like I'm not a proponent of
10:23
Speaker 2: negative gearing, which is quite controversial. I think out there
10:27
Speaker 2: hates negative gearing. I hate it too, Right, So, if
10:30
Speaker 2: I'm buying a property for three hundred thousand dollars, I'm
10:33
Speaker 2: getting roughly four hundred fifty dollars per week, depending on
10:35
Speaker 2: the location and what the property is. But the people's
10:39
Speaker 2: budgets in that price range is generally four to fifty
10:43
Speaker 2: five hundred and four hundred in that scope. So that
10:46
Speaker 2: should cover your mortgage, say six percent interest rate, and
10:49
Speaker 2: cover any associated cost cancer rates, water rates, sporat of flease, insurance, whatever.
10:55
Speaker 1: Yeah, because the rentalers are relatively high compared to the
10:59
Speaker 1: cost of buying the property at that level, correct, what
11:02
Speaker 1: were the years compared to as I said, convention in
11:05
Speaker 1: the years.
11:06
Speaker 2: Are They're much higher. And I think about it even
11:08
Speaker 2: down to units. We spoke earlier on the show about
11:11
Speaker 2: buying two bedroom units and versus like houses, and I've
11:14
Speaker 2: seen in a lot of areas where the units have
11:16
Speaker 2: outstripped the growth of the houses. It can be in
11:19
Speaker 2: the reverse as well. But if I look at the
11:22
Speaker 2: cost of a house for eight hundred grand, you might
11:24
Speaker 2: get six hundred dollars per week. We might gut a
11:26
Speaker 2: unit for three hundred grand and get for fifty five
11:29
Speaker 2: hundred a week. So you might only get extra one
11:31
Speaker 2: hundred bucks a week in extra rent for the house,
11:34
Speaker 2: but you'd be paying an extra four hundred thousand for
11:37
Speaker 2: that property, and the yields don't work so good. So
11:39
Speaker 2: I always think about it when I'm buying and when
11:41
Speaker 2: my best are buying. What does the bank require from us?
11:44
Speaker 2: And how can we keep that bank happy to keep lending.
11:47
Speaker 1: So if you're thinking to avoid negative gearing, and if
11:51
Speaker 1: you were thinking the bank creads were six percent, then
11:54
Speaker 1: what sort of year would you need? What sort of
11:55
Speaker 1: need would yield? Does that propose an investment before the demand?
12:01
Speaker 1: I'd say around eight percent percent? Yeah, and there are
12:05
Speaker 1: eight percent residential property yields, you tell me widely available
12:08
Speaker 1: at that at this level.
12:10
Speaker 2: Yeah. Yeah, they're getting smaller and smaller out there, but
12:12
Speaker 2: they're definitely still out there.
12:14
Speaker 1: How do the banks respond to this part of the market.
12:18
Speaker 2: That's a very good question. That's a very good question.
12:21
Speaker 2: I always say that the for me, the property game
12:24
Speaker 2: is a bank's game, because the liquid that flows through
12:27
Speaker 2: these markets is based on what the banks are putting
12:30
Speaker 2: out there for people to borrow. So I shy away
12:32
Speaker 2: from studio units. I shy away from any holiday type properties,
12:36
Speaker 2: any over fifty fives, any specialized lending. I want vanilla properties,
12:40
Speaker 2: So properties that would be in large major regional if
12:44
Speaker 2: I'm going regional capital cities must be over forty square meters,
12:49
Speaker 2: ideally over fifty square meters. And I never have any
12:52
Speaker 2: issues from a learning perspective.
12:54
Speaker 1: Tell me two things. Why don't you like the negative gearing?
12:56
Speaker 1: And what's this about the fifty screen meters? What to
12:58
Speaker 1: tell us? That the ruction of the different questions, but
13:00
Speaker 1: if you can remember, if you can remember, the two
13:02
Speaker 1: of them, might repeat them if you deal.
13:04
Speaker 2: So negative hearing. I think about my property investing as
13:07
Speaker 2: a business. I've always thought about it from day one.
13:09
Speaker 2: I had a fear when starting out as an investor
13:11
Speaker 2: twenty three years ago, what happens if follow off my job?
13:14
Speaker 2: What happened? And I thought if I had to work
13:17
Speaker 2: at McDonald's and it was like thirty greet a year
13:19
Speaker 2: back in the day. I want to make sure the
13:21
Speaker 2: properties are looking after themselves, so if anything could happen,
13:25
Speaker 2: they could scrap negative hearing, tomorrows could change and a
13:29
Speaker 2: lot of people could be in trouble. For me, I'm
13:32
Speaker 2: a very it might sound crazy when I say I
13:35
Speaker 2: want to buy hundreds of properties, but I'm very diligent
13:38
Speaker 2: with the numbers that I buy, and so negative hearing
13:41
Speaker 2: you wouldn't. I don't see anyone setting up a business
13:43
Speaker 2: to lose money. So while we buy properties or assets
13:47
Speaker 2: to lose money, it's just not a good business.
13:49
Speaker 1: You mentioned the property should never be less than fifty squares.
13:53
Speaker 1: What was that about.
13:54
Speaker 2: This is the banks when they're learning, asked about the
13:56
Speaker 2: learning and never see any challenges. I'm a big fan
13:59
Speaker 2: of going eighty percent loan twenty percent posit, but you've
14:03
Speaker 2: got to think about the greater market out there. Who
14:05
Speaker 2: would be the buyer of your property, could be a
14:07
Speaker 2: first home buyer. Morge insurance if you go less than
14:11
Speaker 2: twenty percent deposit, they have a lot of parameters around that,
14:14
Speaker 2: and those parameters would adhere to the security type, the risk,
14:18
Speaker 2: by geographic location, little binding towns, whatnot. Fifty square meters
14:24
Speaker 2: is the good size to allow for growth.
14:27
Speaker 1: Right, So you didn't like studio, but one bedrooms were
14:31
Speaker 1: quite loky within your guide lanes.
14:33
Speaker 2: Yeah, between that forty to fifty. When I say I
14:35
Speaker 2: don't like studios, it's not what i'd naturally go for
14:39
Speaker 2: But I remember saying what someone said to me. Everyone
14:41
Speaker 2: has their price and the price to everything, and if
14:45
Speaker 2: I can get something so cheap, I'll take it. I've
14:48
Speaker 2: certainly got studios, but they're not my I'll like two bedroom,
14:52
Speaker 2: one better. Yeah.
14:54
Speaker 1: I mean, we're in a period where you can read
14:55
Speaker 1: just about anything, right, So they have these, we have
14:57
Speaker 1: these amazingly little to the vacancy roots and everything would
15:01
Speaker 1: suggest they're going to see amazingly little for a long time,
15:06
Speaker 1: just the demographics around everything. Are there any particular passions
15:10
Speaker 1: in terms of rentals at this end of the market.
15:12
Speaker 1: I mean, basically, is there more trouble? Is there more defaults?
15:15
Speaker 1: Is there more issues at this end of the market.
15:20
Speaker 2: It's a good question. It's a common conceived idea that
15:24
Speaker 2: you're buying a cheap properties that you can inherit a
15:26
Speaker 2: bad tenant or whatever the case may be. Partaken in
15:30
Speaker 2: over twenty thousand purchases over two decades, and I've seen
15:33
Speaker 2: the good, the bad, ugly, from Vour Clues to Mount
15:36
Speaker 2: drew It whatnot. Some of my best talents would be
15:40
Speaker 2: in the blue collar suburbs, and I don't buy much
15:43
Speaker 2: in the blue collar suburbs today. But some of my
15:46
Speaker 2: best tenants that have had for like fifteen years, they
15:48
Speaker 2: just fixed cap handle because it is their own house.
15:51
Speaker 2: That sort of thing. I've seen bad tenants in expensive
15:56
Speaker 2: properties fifteen hundred and two grand a week tenants, and
15:58
Speaker 2: I've seen tenants in cheaper stuff.
16:02
Speaker 1: Yeah, so there's no way to evidence that behavior is
16:04
Speaker 1: any better or worse at an any price level.
16:08
Speaker 2: Correct.
16:08
Speaker 1: I've never seen anything about that either, but I wanted
16:10
Speaker 1: to put it to you.
16:11
Speaker 2: Yeah, there's certainly some areas which are very poor social
16:15
Speaker 2: economic stuff out there would steer away from. I don't
16:18
Speaker 2: want to go into the real deep heavy pouse and
16:20
Speaker 2: commission stock for example. It's going to get trashed. Always
16:24
Speaker 2: make sure you've got landlord insurance. But it's important makes
16:27
Speaker 2: sure good company manager. And the funny thing is that
16:31
Speaker 2: a lot of these properties that I talk about for
16:33
Speaker 2: three hundred rand aren't old. I don't go and target
16:37
Speaker 2: old fibro houses that need the peers fixed like they're
16:40
Speaker 2: just ugly. A lot of these things might only be
16:42
Speaker 2: like ten years old. There's markets out there throughout the
16:45
Speaker 2: country where ten or ten fifteen years ago they had
16:49
Speaker 2: en rats and those type of properties people paid too
16:52
Speaker 2: much the market crash. You can go and pick them
16:55
Speaker 2: up really cheap and they might only be ten years old, depreciation,
16:58
Speaker 2: low work, and they're boom.
17:01
Speaker 1: Right. Do you find over the years that investors are
17:05
Speaker 1: more willing to buy interstate that they don't need to
17:08
Speaker 1: see what they own or you know, be able to
17:11
Speaker 1: drive past what they own anymore.
17:13
Speaker 2: I think a lot of people are comfortable with that
17:15
Speaker 2: a couple of reasons. I think people just can't buy
17:18
Speaker 2: in the neighborhood. They're seeing the results that are happening
17:21
Speaker 2: in different locations that we touched on. Places have gone crazy,
17:25
Speaker 2: like Townsville, Perth and those sort of locations. I'm not
17:28
Speaker 2: buying any of those locations today, but they just locations
17:31
Speaker 2: have gone off. I think the fact that we can
17:34
Speaker 2: have this conversation. Imagine fifteen years ago, we want to
17:37
Speaker 2: do a talk, we'd have to get a room full
17:39
Speaker 2: of people. Like you know, technology is tremendous. People can
17:43
Speaker 2: get information, they click up the finger, they can walk
17:45
Speaker 2: down the street with Google Maps. There's a lot more
17:47
Speaker 2: comfort there from buying.
17:49
Speaker 1: Yeah, okay, we'll take your breakfaks and we have a
17:52
Speaker 1: quick look at locations that you may be interested in
17:56
Speaker 1: that Nata might talk about from here rather than what
17:58
Speaker 1: he used to buy. Where he's going to go on,
18:00
Speaker 1: which I'm sure we'll find much more interesting. And we'll
18:03
Speaker 1: also just take a look at some of the issues
18:05
Speaker 1: for every investor on the agenda at the moment, which
18:08
Speaker 1: is reflected in a lot of reader a listener questions
18:10
Speaker 1: I should say at the moment, I mean rates have
18:12
Speaker 1: just gone up, but lending limits of titaned and there
18:14
Speaker 1: is the risk of CGT. We'll be back in a moment. Hello,
18:22
Speaker 1: Welcome back to the Australians Money Puzzle Podcast. James Kirby
18:25
Speaker 1: with Nathan Birch, first time guests on the show. Great
18:28
Speaker 1: to talk to you, Nathan. Really interesting focus, clear session
18:31
Speaker 1: we're having which I think people will find very interesting. Okay,
18:35
Speaker 1: you know it used to be Perth, it used to
18:37
Speaker 1: be Adelaide, it used to be Townsville. Clearly they've had
18:39
Speaker 1: their run. They're probably not going to do that again
18:42
Speaker 1: anytime soon. Looking out into twenty six twenty seven, regionally
18:48
Speaker 1: or even parts of the cities, where do you like
18:50
Speaker 1: at the moment.
18:51
Speaker 2: Yeah, I'm liking where Margaret's are going as a big
18:55
Speaker 2: big thing in Man I'm liking get too far into this.
19:01
Speaker 2: But if someone's a doctor overseas and they come to
19:05
Speaker 2: Australia and they go to a capital city, they may
19:08
Speaker 2: not be a doctor when they get here. If they
19:10
Speaker 2: go to there's pathways from to arrive, and it could
19:13
Speaker 2: be that they work in a regional location for ten
19:16
Speaker 2: years and they become a doctor. So there's a lot
19:19
Speaker 2: of migration moving to specific key locations out there, and
19:23
Speaker 2: it changes every quarter every six months, and I follow
19:27
Speaker 2: that data which allows me to go, okay, well there's
19:30
Speaker 2: a lot more demand that's coming into bucket.
19:32
Speaker 1: But data is THEREBS data.
19:34
Speaker 2: I'd have to double check the name of it, but
19:36
Speaker 2: it's a format of digit. It's like a designated regional
19:40
Speaker 2: migration area where in.
19:42
Speaker 1: My school to do your time. Basically if you come
19:44
Speaker 1: in and like what the areas are you thinking of?
19:48
Speaker 2: Yes, So for me today, a lot of larger regional areas.
19:51
Speaker 2: Like I'm hearing people just I'm not finding ten Worth today.
19:54
Speaker 2: But a conversation I heard recently direct flights into the
19:58
Speaker 2: country trends isition from an international airport terminal to a
20:02
Speaker 2: domestic airport terminal going to Tamworth to become a nurse.
20:07
Speaker 2: So there's a lot of large regional areas Orange Tamworth. Well,
20:11
Speaker 2: they're those sort of places. But as you trickle through
20:14
Speaker 2: each state, there's lots of these places. So even just
20:17
Speaker 2: an hour and a half out of Melbourne, we've got places.
20:20
Speaker 2: It's very controversial. So ones like more Well mob which
20:23
Speaker 2: have been devastated economically over the last few years, is
20:26
Speaker 2: a bit of activity with social changes. There even areas
20:31
Speaker 2: just in Sydney. People they arrive to Australian new migrants
20:35
Speaker 2: come here and we're getting six hundred thousand new rivals
20:38
Speaker 2: each year, which is amazing to keep bringing more in
20:41
Speaker 2: because it puts more demand on it are right, But
20:44
Speaker 2: someone doesn't arrive for and say hey I'm going to
20:46
Speaker 2: buy a property today. They're a student, they need a
20:49
Speaker 2: permanent residency and whatnot. So areas that are designed around
20:53
Speaker 2: migration because there's going to be the future key infrastructure
20:56
Speaker 2: projects unlike it and stuff for you can get it
21:00
Speaker 2: still of high value because people just turn to that.
21:04
Speaker 2: And I'd say ninety percent of Victoria has stuff on
21:09
Speaker 2: sale at the moment.
21:10
Speaker 1: Yeah, so I wouldn't disagree with that.
21:12
Speaker 2: Yeah.
21:12
Speaker 1: The larger city is Sydney and Melbourne. Where do you
21:15
Speaker 1: think are the sort of hunting grounds in the future for.
21:17
Speaker 2: You Southwestern Sydney. I've bought for fifteen years through the
21:22
Speaker 2: kember Banks Down area all the way through Mary's for example.
21:26
Speaker 2: St Mary's has got the new train line that's connecting
21:29
Speaker 2: to the old train network, so it's going to be
21:31
Speaker 2: one of the biggest hubs. And once they redo this infrastructure,
21:34
Speaker 2: then they start building twenty thirty story units which used
21:37
Speaker 2: to be graffeited on Abandon Chops and Winner, but all
21:43
Speaker 2: through Melbourne. But there's so much infrastructure and change happening
21:47
Speaker 2: down there. I like buying more so than area. For me,
21:52
Speaker 2: I like buying just the value. So someone came and
21:55
Speaker 2: bought something for four hundred and fifty grand ten years
21:57
Speaker 2: ago and I could buy it today for three one
22:00
Speaker 2: hundred or three fifty. People would normally look at that
22:03
Speaker 2: bill and also bad investment and it's like, what caused
22:06
Speaker 2: it to happen? What's the value here of a controlling
22:09
Speaker 2: dist so that they may up like, yes, a vigue
22:11
Speaker 2: at the bottom and the chance for it to go.
22:14
Speaker 1: But he says it takes a certain level of confidence,
22:16
Speaker 1: which course you have because you've been doing it for
22:17
Speaker 1: so long. Okay, I want to ask you one last
22:22
Speaker 1: thing just before we go, And it's marvelous to have
22:24
Speaker 1: your mix of macro thinking and practical thinking on the show.
22:29
Speaker 1: So you have it sounds to me like you're both
22:31
Speaker 1: a top down and bottom up. Most people are one
22:33
Speaker 1: or the other. I mean you have the coumbo. Anything
22:36
Speaker 1: on the agenda that you are concerned about. For property investors,
22:39
Speaker 1: I mentioned rates are going Oh, I mean that's not good.
22:42
Speaker 1: There's tighter lending limits which is not good. And there
22:45
Speaker 1: is this specific risk that's the CGD CGT Capital gainst
22:49
Speaker 1: Tax inquiry happening next month, with the distinct risk now
22:54
Speaker 1: that the government will zone in on CGT what you
22:58
Speaker 1: might call CGT. I did on CGT for property investors
23:01
Speaker 1: and it won't be as good in the future. Are
23:03
Speaker 1: any of those issues for you?
23:07
Speaker 2: Not for me? I think TH's tackle the CGT one
23:10
Speaker 2: for starters. My thoughts on it is I'm not a
23:13
Speaker 2: big fan of selling assets. I just want to buy them,
23:15
Speaker 2: so you know, I'm not thinking about that. A lot
23:18
Speaker 2: of the time. When they do adjust tax, it can
23:21
Speaker 2: be grandfather so that could be for existing investors, which
23:25
Speaker 2: I think probably be on the table, but who knows.
23:28
Speaker 2: I don't think it's going to change anything from more
23:31
Speaker 2: stop flowing out. If anything, people may not want to
23:33
Speaker 2: be selling for that period of time. There's been times
23:36
Speaker 2: that I've seen in my investing career, like going back
23:39
Speaker 2: fifteen years ago, maybe twenty years ago, Bob Carr changed
23:42
Speaker 2: the sale or tax. He put like a stampggy when
23:44
Speaker 2: you sell the property, and that was quickly repealed within
23:48
Speaker 2: a twelve period. For me, I don't see it big
23:51
Speaker 2: by they scraped. Negative gearing might have an impact, but
23:54
Speaker 2: then now that have other flow and impacts. Negative gearing
23:58
Speaker 2: could take investors out at the mark, but who's going
24:01
Speaker 2: to be able to supply the affordable housing for people?
24:03
Speaker 2: Would pressure on brand If anything took Stocky out of
24:06
Speaker 2: the market, that made my rents of jobs, so I
24:07
Speaker 2: get more cash flows. So the capitalist part of you sid,
24:12
Speaker 2: I'm not too fast with the CGT. I think an
24:15
Speaker 2: election discussion. Yeah, okay, very good. Look, thank you very much,
24:20
Speaker 2: and thanks for coming on the show. Really interesting. I
24:22
Speaker 2: wanted to just zone in on on that area. You've
24:24
Speaker 2: been great to concentrate on it. Thank you very much.
24:27
Speaker 1: That's Nathan Birch of the b Investor Group. We'll have
24:30
Speaker 1: you on again.
24:30
Speaker 2: Thanks Nathan, thank you very much, James. I appreciate you
24:33
Speaker 2: having me on the.
24:33
Speaker 1: Show and thanks for listening folks. Today's show was produced
24:36
Speaker 1: by Lias Sammon Glue And let's have some correspondence the
24:39
Speaker 1: Money Puzzle at the Australian dot com dot u. I
24:41
Speaker 1: do have some property questions. I'm collecting them and we
24:44
Speaker 1: might take a look at some of those next week.
24:46
Speaker 1: And we also have lots of general investment questions of course,
24:49
Speaker 1: which I will deal with on Thursday. Talk to you soon.