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FRIDAY DRINKS: The Victorian Homebuyer Fund · She's On The Money

• 0:00
  Speaker 1: She's on the Money. She's on the Money.
• 0:23
  Speaker 2: Hello, and welcome to She's on the Money, the podcast
• 0:26
  Speaker 2: for millennials who want financial freedom. This is our Friday
• 0:30
  Speaker 2: Drinks episode, hopefully one of the last ones we have
• 0:34
  Speaker 2: to do from lockdown in our homes team, where we
• 0:37
  Speaker 2: celebrate the money wins from our She's on the Money community.
• 0:40
  Speaker 2: There are so many great money wins and confessions that
• 0:43
  Speaker 2: are shared in our group every single week, and Jess,
• 0:46
  Speaker 2: Tony and I spend a very big part of our
• 0:47
  Speaker 2: week talking about you all and there things that you
• 0:50
  Speaker 2: guys have achieved. So this episode is for you and
• 0:53
  Speaker 2: we are so excited to share all of Tony's favorite
• 0:55
  Speaker 2: wins from the week in a hot minute. But before
• 0:58
  Speaker 2: we get there, Tony lot what happened on this Week's
• 1:02
  Speaker 2: Money Diary.
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  Speaker 3: Our money diarist this week, at seventeen, decided that she
• 1:06
  Speaker 3: was going to break away from her family and actually
• 1:09
  Speaker 3: become homeless to get out of a toxic home situation,
• 1:13
  Speaker 3: which is obviously such a young age to make that decision.
• 1:16
  Speaker 3: And she's now nineteen and living financially free. She's got
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  Speaker 3: an amazing house, she's got a great job, and she's
• 1:23
  Speaker 3: just living her best life, And it was a really
• 1:26
  Speaker 3: great chart because it just showed that you can actually
• 1:30
  Speaker 3: listen to your gut and know what's best for you,
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  Speaker 3: even when people that are around you maybe don't agree
• 1:34
  Speaker 3: with the choices you're making, that you should always listen
• 1:37
  Speaker 3: to your gut. And she was such a lovely young girl.
• 1:40
  Speaker 3: And I think Victoria, you and I both after we
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  Speaker 3: chatted with her, were like, can.
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  Speaker 4: We follow you on Instagram? You seem so lovely?
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  Speaker 2: We were both like, off their what's your Instagram handle?
• 1:49
  Speaker 2: Can we follow you? Or? Is that weird? And to
• 1:52
  Speaker 2: be honest, we've said it before, Tony, I feel like
• 1:55
  Speaker 2: that hour that you spend with the Money Dire is
• 1:57
  Speaker 2: like you go real hard. It's like a first date
• 1:59
  Speaker 2: with asking if you want kids, Like you're actually getting
• 2:03
  Speaker 2: really deep on who they are and what their values are.
• 2:05
  Speaker 2: And at the end you're always like, we're friends now,
• 2:08
  Speaker 2: we're best friends now. I'm pretty sure I've never been
• 2:10
  Speaker 2: closer to anybody in my life. So to be honest,
• 2:13
  Speaker 2: I really loved it when they're following or on Instagram.
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  Speaker 2: But again, another killer Money Diary Jess. What happened this
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  Speaker 2: week on our Wednesday Deep Dive episode with Georgia King.
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  Speaker 2: So on Wednesday, we spoke about a little bit of
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  Speaker 2: a heavier topic, but something that I think is really
• 2:32
  Speaker 2: important to touch on, and that is gambling and the
• 2:35
  Speaker 2: impact that it can have on you, the impact that
• 2:37
  Speaker 2: it can have on the people around you, and a
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  Speaker 2: little bit of insight into what that can mean for
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  Speaker 2: you financially as well.
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  Speaker 5: You know, gambling is something that some people may choose
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  Speaker 5: to dabble in recreationally, and we're not here to judge,
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  Speaker 5: but it can be a really slippery slope into something
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  Speaker 5: that has a really significant and negative impact on you
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  Speaker 5: and the people around you, and we just want to
• 3:00
  Speaker 5: shed a little bit of light on what that might
• 3:01
  Speaker 5: look like. We shared some really fantastic resources in case
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  Speaker 5: anybody or anybody that you know is going through it,
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  Speaker 5: because it can also be a really isolating experience. It's
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  Speaker 5: similar to the way that when you have large amounts
• 3:14
  Speaker 5: of debt, that debt that builds up from gambling can
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  Speaker 5: weigh on you emotionally and take a toll on you
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  Speaker 5: mentally and feel like you're in a bit of a
• 3:20
  Speaker 5: hole that's hard to get out of. So I think
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  Speaker 5: that that episode was really great to kind of let
• 3:25
  Speaker 5: people know that they're lit alone. Let people know that
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  Speaker 5: they can help themselves or their friends, and that you
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  Speaker 5: know there are resources out there that are accessible and
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  Speaker 5: that we hope that you will take up if you
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  Speaker 5: need them.
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  Speaker 2: Yeah, and if you need some of those resources, wem
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  Speaker 2: packed the show notes of that episode with them and
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  Speaker 2: Jess you've been sharing them on socials all week. So
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  Speaker 2: if you guys need to reach out, please do. We've
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  Speaker 2: said it before. The people behind these companies that exist
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  Speaker 2: to help you are good people doing good things, and
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  Speaker 2: they want the best for you, and they are not
• 3:56
  Speaker 2: going to judge you. In fact, they've seen worse, always have.
• 4:00
  Speaker 2: There's always a situation that they're like, oh, if you
• 4:03
  Speaker 2: think your story's bad, you should hear X y Z.
• 4:06
  Speaker 2: And that's not a good way to view it. But
• 4:08
  Speaker 2: at the end of the day, you might feel in
• 4:10
  Speaker 2: over your head and that person's going to go, oh, Tony,
• 4:14
  Speaker 2: that's fine, we can get you out of that. I've
• 4:16
  Speaker 2: gotten someone out of a way worse situation. You'd be like,
• 4:19
  Speaker 2: what I thought mine was the worst ever? And sometimes
• 4:21
  Speaker 2: that's just really nice to know when you're going through
• 4:24
  Speaker 2: a situation like that. So sure, that episode was really heavy,
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  Speaker 2: but I think really really necessary. Let's move on to
• 4:31
  Speaker 2: something a little lighter. Tony, what have you pulled out
• 4:34
  Speaker 2: of the Facebook group's money wins this week to share
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  Speaker 2: with us?
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  Speaker 1: All Right?
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  Speaker 3: I reckon I've got some good ones, I hope, so
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  Speaker 3: no I picked the worst ones. Nobody, Okay, we'll carry on,
• 4:46
  Speaker 3: all right. Georgia says and not our Georgia are different.
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  Speaker 3: Georgia Georgia says money win. A mate was throwing out
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  Speaker 3: an old Pine three shelf cabinet. I rescued it, sended
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  Speaker 3: it all back, painted it and brought new doorknobs.
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  Speaker 4: Looks as good as new and cost me in total.
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  Speaker 2: Forty That's a money win.
• 5:02
  Speaker 3: I wish I was smart like you, Jess and could
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  Speaker 3: do diy stuff, because whenever you post stuff and whenever
• 5:08
  Speaker 3: people say, oh, I rescued this and now it looks
• 5:10
  Speaker 3: like something that they've literally bought brand new from Freedom Furniture,
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  Speaker 3: I just can't believe it.
• 5:15
  Speaker 2: No, no, no, Like the chair I found on the
• 5:17
  Speaker 2: side of the road just looks like the chair I
• 5:19
  Speaker 2: found off where As if Jess found it, she'd be like,
• 5:25
  Speaker 2: this chair is now a luxury so far. Also, I
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  Speaker 2: probably sold it for ten thousand dollars.
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  Speaker 3: I wish, Rebecca says, money win. I decided to act
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  Speaker 3: on a lifelong dream and purchase a horse.
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  Speaker 4: What I know, horses are crazy expensive, right, so.
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  Speaker 2: Such a cool thing to buy. Imagine getting to that
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  Speaker 2: point in your life. We're like, hey, Tony, I'm gonna
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  Speaker 2: buy a horse.
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  Speaker 3: Well, the horse was advertised for two thousand, five hundred dollars,
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  Speaker 3: and she went to look at him, and while speaking
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  Speaker 3: to the owner, they decided to include his tack, which
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  Speaker 3: for horse people will know that it includes the saddle,
• 6:02
  Speaker 3: bridle and rugs, apparently.
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  Speaker 2: Assuming they're expensive as well. Do you know why I'm
• 6:07
  Speaker 2: assuming that, Tony. There's an entire company called saddle World,
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  Speaker 2: and I'm pretty sure i've driven before. Sounds expensive.
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  Speaker 3: Well, apparently it was all worth seventeen hundred dollars and
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  Speaker 3: she got it for free.
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  Speaker 2: Win.
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  Speaker 3: Yeah, so now she's got a horse and most of
• 6:23
  Speaker 3: the gear that she needs without forking out extra cash,
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  Speaker 3: and found a great paddock.
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  Speaker 4: I don't really know anything about this, but that's.
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  Speaker 2: Job, Rebecca. I mean, what if you can trust the
• 6:32
  Speaker 2: she's on the money community to do anything, it's fine
• 6:34
  Speaker 2: to money win. Whether that is a set of pine shells,
• 6:37
  Speaker 2: or a legitimate horse or.
• 6:39
  Speaker 4: An actual Madeline says money win.
• 6:42
  Speaker 3: A money win from a few weeks ago on the
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  Speaker 3: podcast prompted me to check my flybyers points. Turns out
• 6:48
  Speaker 3: there was enough points to get a ninety dollars calls about,
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  Speaker 3: which meant my grocery shop was very affordable.
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  Speaker 5: I've set it before and I'll say it again. If
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  Speaker 5: you don't have fly Buys.
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  Speaker 4: Get it.
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  Speaker 5: It is the best that you have to use the
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  Speaker 5: app to get the bonus points. That's where the money is.
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  Speaker 5: I feel very.
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  Speaker 2: If you could do you know what? Every time I
• 7:10
  Speaker 2: go to Call's, I get this pang where it's like,
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  Speaker 2: do you have Flybys? I'm like, Jess would hate.
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  Speaker 5: You can have it on your phone so you don't
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  Speaker 5: even have to carry a card around.
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  Speaker 4: If you're not going to tap it, let us tack
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  Speaker 4: for you.
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  Speaker 2: If you ask Jess what Flybys is she adding to
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  Speaker 2: any of the shoes on the money purchases mine, that's
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  Speaker 2: just smart. Tony take this a step further, Jess, do
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  Speaker 2: you use cash back on the shoes on the money purchases?
• 7:37
  Speaker 2: If we buy anything I used to shop back? And
• 7:41
  Speaker 2: whose count does it going? To Yeah, there you go back. Okay,
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  Speaker 2: and she's a genius.
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  Speaker 3: You know what, I can't even be jealous because it
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  Speaker 3: wasn't my idea. You're being smart. I can't hold that
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  Speaker 3: against you, to say.
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  Speaker 2: Money if we categorize it as income. But I mean
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  Speaker 2: the thing she's doing there, her employer knows, so.
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  Speaker 4: Yeah, that's true. It's not like you can turn around
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  Speaker 4: be and go hang on.
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  Speaker 2: I don't know anyone who is listening and goes, oh,
• 8:09
  Speaker 2: that's genius. I always put the coals order in for
• 8:12
  Speaker 2: my work each week. Don't do it without permission. That
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  Speaker 2: would be fair.
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  Speaker 3: Yes, make sure you ask first, unless you work at
• 8:17
  Speaker 3: She's on the money, But it's too late because jessing it.
• 8:20
  Speaker 2: She's just told me.
• 8:23
  Speaker 3: Heather says that she just started a little jewelry business
• 8:25
  Speaker 3: and found a bead supplier that had a fifty percent
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  Speaker 3: off sale to celebrate the end of lockdown.
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  Speaker 1: Cute.
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  Speaker 2: What is the company called?
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  Speaker 3: Okay, it's called Loveline Jewelry. Oh, hang on Heather's business
• 8:37
  Speaker 3: or where she got the beads discounted?
• 8:39
  Speaker 2: No, I don't care about the discount beads.
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  Speaker 4: Okay, I asked Heather for her business. I didn't ask
• 8:45
  Speaker 4: about the bead company.
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  Speaker 2: Thanks, yeah, okay, thanks for the money win. Heather, where'd
• 8:51
  Speaker 2: you get the cheap beads so I can start a
• 8:52
  Speaker 2: conflicting business.
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  Speaker 3: Yeah, we don't want to buy your products, but we
• 8:56
  Speaker 3: want to buy cheap beads make our own.
• 8:58
  Speaker 2: No.
• 8:59
  Speaker 3: Heather's business is called love Line Jewelry. Her instagram is
• 9:03
  Speaker 3: at love Line Jewelry and it's very very new and
• 9:06
  Speaker 3: she's starting an Etsy soon, so can't wait to see that.
• 9:08
  Speaker 2: Can you put her business in the show? Notes? Can
• 9:11
  Speaker 2: absolutely shout out Absolutely, you'll either wonder where everybody's coming
• 9:15
  Speaker 2: from or no, because you listened to this week's episode.
• 9:19
  Speaker 3: I really hope that she's listening. And Heather, if you're not,
• 9:22
  Speaker 3: shame on you. But you can't hear this, Molly says
• 9:26
  Speaker 3: money Win. After much research and overcoming my fear of
• 9:30
  Speaker 3: any degree of risk when it comes to money, I've
• 9:32
  Speaker 3: made my first small investments through spaceship and concept podcasts.
• 9:36
  Speaker 5: Exciting.
• 9:37
  Speaker 2: What a step.
• 9:39
  Speaker 3: Small amounts and super basic, slash and low risk choices
• 9:42
  Speaker 3: for now, but it's a big step for me after
• 9:44
  Speaker 3: having my savings sitting stagnant for so long.
• 9:46
  Speaker 2: I love love that that makes me so happy.
• 9:49
  Speaker 3: I know, And it's just so nice to know that
• 9:51
  Speaker 3: people are like looking at their money and going, oh,
• 9:54
  Speaker 3: I'm going to take charge of this and everybody at
• 9:56
  Speaker 3: their own pace, like some people are ready, some people aren't.
• 9:59
  Speaker 3: But it's just it's really cool that that's the money
• 10:01
  Speaker 3: when we get to share. And finally, Lizzie says she
• 10:05
  Speaker 3: got a new job earning double what she was earning before.
• 10:09
  Speaker 2: Oh my gosh. I love when people have these massive
• 10:12
  Speaker 2: stories of like it's double. Its really dramatic.
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  Speaker 3: But also she said that she's so much happier there,
• 10:18
  Speaker 3: which is amazing.
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  Speaker 4: Great job, Lizzie, Oh my gosh.
• 10:21
  Speaker 2: We are genuinely so proud of anyone who hustled a
• 10:24
  Speaker 2: pay us let alone a fifty percent one doesn't happen
• 10:27
  Speaker 2: all the time, but we can all seek a little
• 10:29
  Speaker 2: bit of inspiration from that.
• 10:31
  Speaker 3: Hopefully, at Lizzie's new job, they let her use her
• 10:33
  Speaker 3: coals car and her shop.
• 10:36
  Speaker 2: And maybe that's how she's making double.
• 10:47
  Speaker 5: So I want to chat about something this week that
• 10:50
  Speaker 5: I found particularly interesting as someone who's getting close to
• 10:53
  Speaker 5: being ready to purchase a home, which is super exciting.
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  Speaker 3: I know, let's talk it ahead of myself have you
• 10:59
  Speaker 3: been listening to the cast the Property Playbook?
• 11:01
  Speaker 4: I heard it's very very good and very informative.
• 11:03
  Speaker 2: I heard the producer if that was also a legend.
• 11:05
  Speaker 4: I'm very good looking.
• 11:08
  Speaker 2: And also great tylers.
• 11:10
  Speaker 5: I do listen. I get all my tips and tricks there.
• 11:12
  Speaker 5: But something kind of interesting in the property space that
• 11:15
  Speaker 5: I saw this week was that there's a new government incentive.
• 11:19
  Speaker 5: I can't remember the name of it, but Victoria. I
• 11:21
  Speaker 5: feel like you might be across it.
• 11:23
  Speaker 2: Maybe maybe it's called the Victorian home Buyer Fund. Is
• 11:27
  Speaker 2: that what you're talking about there? Yes, things recently And.
• 11:30
  Speaker 5: The thing that I thought was really interesting about this
• 11:33
  Speaker 5: is it's not a grant, which historically I'm really mad
• 11:36
  Speaker 5: that I couldn't get into the property market last year
• 11:38
  Speaker 5: because you could get like thirty five to forty five
• 11:40
  Speaker 5: thousand dollars in grants because there was all these different
• 11:43
  Speaker 5: grants around. The first home Buyer's grant is still existing
• 11:47
  Speaker 5: in Victoria specifically. Don't know about other states because I
• 11:50
  Speaker 5: don't live there. But the thing that I found really
• 11:53
  Speaker 5: interesting though, is that this is not a grant.
• 11:55
  Speaker 2: It's kind of alone. Would you say it is? Is?
• 12:00
  Speaker 2: It's technically so what jess is talking about is the
• 12:05
  Speaker 2: Victorian home Buyers Fund, and from what I understand is
• 12:09
  Speaker 2: it allows eligible Victorian home buyers, so it's not open
• 12:13
  Speaker 2: to everybody in the country, just if you're in Victoria,
• 12:15
  Speaker 2: but it allows Victorian home buyers to enter the market
• 12:18
  Speaker 2: with five percent deposits. And that sounds really good, and
• 12:21
  Speaker 2: you guys have probably heard that before because there's obviously
• 12:25
  Speaker 2: a couple of schemes that allow you to access that
• 12:27
  Speaker 2: type of thing already, so that's nothing new. But the
• 12:30
  Speaker 2: thing that is different here is that the government is
• 12:33
  Speaker 2: actually going to contribute up to twenty five percent of
• 12:37
  Speaker 2: the purchase price, which sounds like a money win, but
• 12:41
  Speaker 2: in turn they will own a share of the home
• 12:44
  Speaker 2: in exchange. So essentially the government will own a share
• 12:47
  Speaker 2: of your home up to the percentage that they contribute.
• 12:51
  Speaker 2: So it's kind of like having a guarranteur where they
• 12:54
  Speaker 2: own a percentage of your property, but it's actually what
• 12:58
  Speaker 2: we would but it's actly called a shared equity scheme.
• 13:02
  Speaker 3: Is this the first of its kind? I know that
• 13:04
  Speaker 3: we're talking strictly about Victoria at the moment, but is
• 13:07
  Speaker 3: this the first in Australia where it's like a shared
• 13:10
  Speaker 3: equity kind of thing.
• 13:11
  Speaker 2: As far as I'm aware, I did a little bit
• 13:13
  Speaker 2: of research when it first came out to see if
• 13:15
  Speaker 2: I could find anything similar. But I do believe that
• 13:18
  Speaker 2: this is the very first type of scheme to exist,
• 13:21
  Speaker 2: and I think there are a lot of pros and cons, Like,
• 13:23
  Speaker 2: there are a lot of things that are going to
• 13:25
  Speaker 2: make this really good and really accessible. But at the
• 13:28
  Speaker 2: same time, do I want somebody else to be in
• 13:30
  Speaker 2: on owning my property? In saying that, please do keep
• 13:34
  Speaker 2: in mind when you go and purchase property, Like Jess,
• 13:37
  Speaker 2: you're going to go purchase a property, and unless you've
• 13:39
  Speaker 2: actually purchased that home outright, you've got a mortgage, right
• 13:42
  Speaker 2: mm hmm, the bank actually owns that percent of your property.
• 13:45
  Speaker 2: So it's not a new concept for quote, somebody else
• 13:49
  Speaker 2: to own a percentage of your property until you've paid
• 13:51
  Speaker 2: the entirety of it off. Yeah, for example, the bank,
• 13:55
  Speaker 2: and if you don't pay off your portions of the loan,
• 13:58
  Speaker 2: they're going to go all right on you didn't pay
• 14:00
  Speaker 2: off your own We're just going to go and sell
• 14:02
  Speaker 2: it from under you and recoup our costs. So something
• 14:05
  Speaker 2: similar could potentially happen with this as well, I.
• 14:08
  Speaker 5: Have a question around the equity thing, and so if
• 14:11
  Speaker 5: the government owns a slice of my house pie, shall
• 14:14
  Speaker 5: I say? If I, let's say I put some money
• 14:19
  Speaker 5: into it. I want to make my house really homely.
• 14:21
  Speaker 5: I do some renovations, I do some upgrades. I put
• 14:24
  Speaker 5: my own money into making that property better. And then
• 14:27
  Speaker 5: when I want to sell it down the track, let's
• 14:30
  Speaker 5: say two or three years, I've outgrown the property. I'm
• 14:33
  Speaker 5: ready to move into a bigger one.
• 14:35
  Speaker 2: Yeah.
• 14:35
  Speaker 5: If the government owns a slice of that pie, is
• 14:39
  Speaker 5: that then going to be based on a percentage? So
• 14:41
  Speaker 5: if I sell for a profit, not only do I
• 14:44
  Speaker 5: have to pay back the equivalent of what I've borrowed potentially,
• 14:48
  Speaker 5: but they're also entitled to some of those profits that
• 14:51
  Speaker 5: I put the hard work in to get.
• 14:53
  Speaker 2: Yeah. So just at the end of the day, they
• 14:55
  Speaker 2: own a percentage of the property. So if that property
• 14:58
  Speaker 2: increases in value, their percentage has just increased in value.
• 15:02
  Speaker 2: I think the best way to explain this is actually
• 15:04
  Speaker 2: with a bit of an example. So let's just put
• 15:07
  Speaker 2: you in the place of the home buyer. Jess goes
• 15:10
  Speaker 2: out it's Melbourne. She's gone and purchased a property for
• 15:14
  Speaker 2: seven hundred thousand dollars.
• 15:15
  Speaker 4: Actually, hat you're.
• 15:17
  Speaker 2: Well done, Jess M. Payne. Later, once we're out of lockdown,
• 15:21
  Speaker 2: and Jess, you've got a five percent deposit or thirty
• 15:24
  Speaker 2: five thousand dollars, which is the criteria that you need
• 15:26
  Speaker 2: to meet. The Victorian home Buyer Fund is then going
• 15:29
  Speaker 2: to agree to cover fifteen percent of that property purchase,
• 15:33
  Speaker 2: which equals one hundred and five thousand dollars, and then
• 15:36
  Speaker 2: that total equals twenty percent, So you're five percent, the
• 15:39
  Speaker 2: government's fifteen percent. You've got your twenty percent deposit for
• 15:42
  Speaker 2: your property, which means you can actually avoid paying LMI
• 15:46
  Speaker 2: or lender's mortgage insurance. We've covered all of this on
• 15:49
  Speaker 2: the Property Playbook if you want to know more about it,
• 15:51
  Speaker 2: but that's all I'll say on LMI. Essentially, then Jess
• 15:55
  Speaker 2: is going to go get a home loan to cover
• 15:56
  Speaker 2: the remaining eighty percent of the property. The Home Buyer
• 16:00
  Speaker 2: Fund then owns fifteen percent of your property, so it's
• 16:02
  Speaker 2: not that one hundred and five thousand dollars that they've
• 16:05
  Speaker 2: put in that they're expecting to get back. They're still
• 16:08
  Speaker 2: expecting to get back fifteen percent. So Jess, you and James,
• 16:12
  Speaker 2: you move into your new property, you deck it out.
• 16:15
  Speaker 2: Obviously it's going to be very aesthetic because Tony just
• 16:18
  Speaker 2: lives there, and over the next few years, your property's
• 16:22
  Speaker 2: value grows to eight hundred grand money win. You've been
• 16:26
  Speaker 2: replaying the home loan. But the first home Buyer Fund
• 16:29
  Speaker 2: actually still owns fifteen percent of your property, and that's
• 16:32
  Speaker 2: now worth one hundred and twenty thousand dollars. So if
• 16:35
  Speaker 2: you were to go and sell that property, they still
• 16:39
  Speaker 2: get fifteen percent of their sale price.
• 16:42
  Speaker 3: Yeah, what if you like burn the house down and
• 16:45
  Speaker 3: then you sell it and their fifteen percent is now
• 16:49
  Speaker 3: no longer worth what they initially like bought into, Then
• 16:53
  Speaker 3: what happens do you have to like top that up
• 16:55
  Speaker 3: with cash?
• 16:56
  Speaker 2: I mean, I shouldn't actually googled what happens if I
• 16:59
  Speaker 2: burned it my house would have to pay the government
• 17:02
  Speaker 2: that that wasn't something that's a curveballs I didn't expect
• 17:07
  Speaker 2: you to ask me. I would argue, that's why you
• 17:10
  Speaker 2: guys are going to have home and contents insurance so
• 17:14
  Speaker 2: that you can potentially rebuild that. But I would say
• 17:17
  Speaker 2: that from the government perspective, this is an investment, So
• 17:21
  Speaker 2: as much as your property might now be worth just
• 17:23
  Speaker 2: eight hundred thousand dollars, what if it went backwards and
• 17:26
  Speaker 2: was now worth six hundred thousand dollars, their slice of
• 17:30
  Speaker 2: the pie is worthless, which is why it is a
• 17:33
  Speaker 2: shared equity scheme. Because they have equity, they've made an
• 17:36
  Speaker 2: investment in your property, so essentially they're investing in property
• 17:41
  Speaker 2: as well, which means they are being exposed to the
• 17:44
  Speaker 2: ebbs and flows of the market in exactly the same
• 17:46
  Speaker 2: way you are. So if you make profit, they make profit,
• 17:49
  Speaker 2: everybody should be happy because they gave you a leg
• 17:52
  Speaker 2: up to get into the property market. Yeah, but if
• 17:54
  Speaker 2: you made a bad property decision and they tipped in
• 17:57
  Speaker 2: their fifteen percent that time, well then that's just how
• 18:00
  Speaker 2: the market works.
• 18:02
  Speaker 5: And I feel like it would probably be safe to
• 18:04
  Speaker 5: assume right that, like any other grant or a scheme,
• 18:07
  Speaker 5: you have to apply, you don't just receive it, and
• 18:10
  Speaker 5: they would probably be looking into those things when they're
• 18:13
  Speaker 5: considering who will and won't have access to this fund.
• 18:17
  Speaker 2: So yes, there is a list of criteria that you
• 18:19
  Speaker 2: need to meet, just like everything else in Australia. You
• 18:22
  Speaker 2: do need to be a citizen or a permanent resident
• 18:25
  Speaker 2: and you need to be over the age of eighteen,
• 18:27
  Speaker 2: kind of a no brainer. You need to have a
• 18:29
  Speaker 2: gross annual income of one hundred and twenty five thousand
• 18:32
  Speaker 2: dollars or less, or for a couple who's borrowing two
• 18:36
  Speaker 2: hundred thousand dollars combined or less. The property also needs
• 18:39
  Speaker 2: to be your principal place of residence, so you can't
• 18:42
  Speaker 2: just go and buy an investment property and think the
• 18:43
  Speaker 2: government's going to be like, yeah, sweet Tony, let's go
• 18:45
  Speaker 2: in this together. Not going to happen. And you can't
• 18:49
  Speaker 2: buy a property from a family member, so like you
• 18:53
  Speaker 2: couldn't go and buy, you know, my dad's property and
• 18:56
  Speaker 2: think that that was a good way to get me
• 18:59
  Speaker 2: into a property. So they're trying to make sure that
• 19:01
  Speaker 2: there's no fuzzy lines or people doing dirties on the site.
• 19:06
  Speaker 2: You also need to be a natural person, and I
• 19:08
  Speaker 2: know that that sounds very strange, but it essentially means
• 19:11
  Speaker 2: you can't buy a property with an organization or a trust.
• 19:15
  Speaker 2: So a lot of questions we get when it comes
• 19:17
  Speaker 2: to property, especially on the property playbook, is should I
• 19:21
  Speaker 2: be buying my property and a trust? You can't do that.
• 19:24
  Speaker 2: The rule is you need to be a natural person,
• 19:26
  Speaker 2: and that just means you have to buy it yourself.
• 19:27
  Speaker 2: So I mean they could have just said that instead
• 19:30
  Speaker 2: of being weird about it, but the government just makes
• 19:32
  Speaker 2: weird decisions sometimes. And the other criteria that you need
• 19:37
  Speaker 2: to meet is that you can't own any interest in
• 19:40
  Speaker 2: any land at the time of purchase or be a
• 19:43
  Speaker 2: shareholder in any private corporation that owns land. So they're
• 19:47
  Speaker 2: like only giving this opportunity to people who don't have
• 19:50
  Speaker 2: property already. But it's not the first home buy a scrap.
• 19:53
  Speaker 2: I think it's important to just work out if you're
• 19:55
  Speaker 2: eligible for this or not before actually trying to work
• 19:58
  Speaker 2: towards it. And there is actually a Home Buys Fund
• 20:00
  Speaker 2: eligibility quiz and we will chuck that in the show
• 20:03
  Speaker 2: notes for you guys so that you can see if
• 20:05
  Speaker 2: you can access this scheme. In saying that, also relevant
• 20:08
  Speaker 2: is the fact that it is capped, so it is
• 20:11
  Speaker 2: a five hundred million dollar fund and that sounds like
• 20:13
  Speaker 2: a lot of properties, but essentially that's going to mean
• 20:17
  Speaker 2: that the Victorian government is going to become an investor,
• 20:21
  Speaker 2: which sounds fun in about three thousand homes. So it's
• 20:25
  Speaker 2: not a scheme that is going to see every single
• 20:28
  Speaker 2: young Victorian who doesn't have any property and is a
• 20:31
  Speaker 2: natural person purchasing a property and actually getting access to
• 20:35
  Speaker 2: this like every other ground, like every other scheme, there
• 20:38
  Speaker 2: are caps.
• 20:40
  Speaker 5: Yeah, it's interesting, isn't it? Because I looked into it
• 20:44
  Speaker 5: a little bit because I'm thinking about buying property and
• 20:47
  Speaker 5: I was like, is this something that I would consider doing?
• 20:50
  Speaker 5: And I think the equity thing really put me off.
• 20:54
  Speaker 5: And I don't know if that's entitled to say, but I.
• 20:59
  Speaker 2: Just didn't want it.
• 21:00
  Speaker 5: I Yeah, I didn't love the idea knowing that I
• 21:04
  Speaker 5: will likely do like a house and land kind of
• 21:06
  Speaker 5: thing and then do additional work myself to kind of
• 21:09
  Speaker 5: spruce things up.
• 21:10
  Speaker 2: Yeah.
• 21:10
  Speaker 5: I didn't love the idea of doing that work for
• 21:14
  Speaker 5: someone else to then benefit. I was kind of like,
• 21:16
  Speaker 5: if I'm able to access it, and there's a lot
• 21:18
  Speaker 5: of if butts and maybes in this situation, I guess,
• 21:21
  Speaker 5: but if I can just you know, take a mortgage
• 21:23
  Speaker 5: on myself without that input, that would be my preference.
• 21:27
  Speaker 5: But I can see that it would be appealing for people.
• 21:30
  Speaker 5: Not everyone is in the situation that I am. There
• 21:32
  Speaker 5: are people who might struggle to get a mortgage by themselves.
• 21:35
  Speaker 5: And I guess it's nice that there's something out there
• 21:37
  Speaker 5: that they can access to help them get a leg up.
• 21:40
  Speaker 2: Yeah, and I think it's obviously there's a lot of pros,
• 21:43
  Speaker 2: but then that is a disadvantage and just knowing that
• 21:45
  Speaker 2: you're going to have to repay yet another thing. I
• 21:48
  Speaker 2: know you're going to have to pay it on your mortgage,
• 21:49
  Speaker 2: but you kind of knew that that was yours in
• 21:52
  Speaker 2: like any additional value you add, you're not I guess
• 21:55
  Speaker 2: throwing it in the bin in a way, And that
• 21:57
  Speaker 2: sounds a bit negative. But the other thing that really
• 21:59
  Speaker 2: got me with this scheme guys is jes you said
• 22:02
  Speaker 2: before I'll go and get a mortgage. Well, my friends,
• 22:06
  Speaker 2: if you want to go and do this home by
• 22:08
  Speaker 2: a fund, you can actually only get a mortgage from
• 22:10
  Speaker 2: one of two places. Really anticipating this, yeah, I didn't
• 22:14
  Speaker 2: see that bit. No, it's actually crazy. So you can
• 22:17
  Speaker 2: only get a mortgage from Bank Australia or the Bendigo Bank.
• 22:21
  Speaker 2: That is it. Those are the only two banks that
• 22:23
  Speaker 2: are going to be at this point might change, going
• 22:26
  Speaker 2: to be lending to people who are using this scheme.
• 22:29
  Speaker 4: That feels a bit sneaky, doesn't it?
• 22:31
  Speaker 2: It does, But I guess both of those banks are
• 22:34
  Speaker 2: quite ethical, nice banks doing good things. It's not you know,
• 22:38
  Speaker 2: I don't have a problem with products from either of
• 22:40
  Speaker 2: those banks, like they're good mortgages. But it does, again
• 22:44
  Speaker 2: further constrain you in terms of flexibility. Or if you
• 22:47
  Speaker 2: already bank with NAB or you're already with Macquarie, like
• 22:50
  Speaker 2: you're not exactly chasing the lowest interest rate and you're
• 22:54
  Speaker 2: not potentially taking into consideration the bells and whistles that
• 22:58
  Speaker 2: you might want if you'd seen a mortgage. So for example, Tony,
• 23:01
  Speaker 2: you might go, oh, I'm buying house, I really want
• 23:04
  Speaker 2: like five offsets because I'm just going to offset every
• 23:07
  Speaker 2: single savings account I have. Maybe, and please don't quote
• 23:11
  Speaker 2: me on this, because I haven't looked into Bank Australia
• 23:13
  Speaker 2: or Bendigo banks products, maybe that won't be an option
• 23:16
  Speaker 2: because the bells and whistles aren't available at those banks.
• 23:18
  Speaker 2: That doesn't mean they're bad, It just means you are
• 23:21
  Speaker 2: a little bit more constrained.
• 23:22
  Speaker 5: Yeah, that's really interesting in terms of the mortgage because
• 23:26
  Speaker 5: something we've spoken about on the pod before is shopping
• 23:29
  Speaker 5: around for your mortgage not every yar and again not
• 23:33
  Speaker 5: to shove another plug in, but we actually spoke to
• 23:35
  Speaker 5: a mortgage expert all about mortgages and mortgage myths on
• 23:38
  Speaker 5: the Property Playbook. Very interesting episode if you're interested in
• 23:40
  Speaker 5: buying like me, but it takes away that option for
• 23:44
  Speaker 5: you to kind of play people off against each other
• 23:46
  Speaker 5: or go oh well yeah right, yeah, Like my rate
• 23:50
  Speaker 5: is three percent, but this place has two point five.
• 23:52
  Speaker 5: If you're only choosing between two places, I would assume
• 23:56
  Speaker 5: that these two banks would probably be offering similar rates. No,
• 24:00
  Speaker 5: that they're going to have a lot of people coming
• 24:02
  Speaker 5: for this fund, and they would probably be matching each
• 24:06
  Speaker 5: other or at least very comparable.
• 24:08
  Speaker 2: And so yeah, I hope that's not the case, but
• 24:11
  Speaker 2: you totally know it probably is going to be the
• 24:13
  Speaker 2: case because they don't have to be anything other than
• 24:16
  Speaker 2: non competitive. They're like, well you're going to need me,
• 24:18
  Speaker 2: so yeah. And going back to what you were saying
• 24:21
  Speaker 2: as well, Jess, like about not wanting to have somebody
• 24:24
  Speaker 2: else own your property, Like if you're paying back this
• 24:27
  Speaker 2: home buyer fund, they actually own a percentage, whereas the
• 24:31
  Speaker 2: bank they just have the loan. So say we flip
• 24:35
  Speaker 2: this and go back to that example that I was
• 24:36
  Speaker 2: talking to about before, and I said, you bought the
• 24:39
  Speaker 2: seven hundred thousand dollar property and only had the five
• 24:42
  Speaker 2: percent deposit, so you'd gone down a different system where
• 24:45
  Speaker 2: you'd only needed that five percent deposit, and then you know,
• 24:49
  Speaker 2: in seven years worth eight one hundred grand again, you're
• 24:52
  Speaker 2: actually going to be fifteen thousand dollars better off having
• 24:56
  Speaker 2: not used this fund because you would have got that
• 24:59
  Speaker 2: profit instead of having to share the profit with somebody
• 25:02
  Speaker 2: else who was technically a co owner. So the government
• 25:05
  Speaker 2: essentially is an equity holder, whereas the bank they've just
• 25:09
  Speaker 2: lent you that eighty percent loan, they just want it
• 25:12
  Speaker 2: paid back. They couldn't care less if the property doubled
• 25:15
  Speaker 2: in value and you made epic amounts of profit. They
• 25:18
  Speaker 2: just want their money back so that they can extinguish
• 25:21
  Speaker 2: the loan. So I think it's important to not I
• 25:24
  Speaker 2: guess lump it in. Well, I guess you're going to
• 25:26
  Speaker 2: owe someone something at some point. It's kind of like yeah,
• 25:28
  Speaker 2: But like in that example we gave before, if Jess
• 25:32
  Speaker 2: had just used a five percent deposit and you know,
• 25:34
  Speaker 2: gone down a different route, she would have been fifteen
• 25:37
  Speaker 2: grand better off, at the end of that story. So
• 25:40
  Speaker 2: that money, Yeah, that's a lot of money. And I
• 25:43
  Speaker 2: mean that was a pretty conservative example if we're being honest,
• 25:46
  Speaker 2: like seven years in Melbourne and property only increased one
• 25:50
  Speaker 2: hundred grand. Like I've seen auctions last weekend that when
• 25:53
  Speaker 2: one hundred grand over reserved consistently, So it's not something
• 25:58
  Speaker 2: that is small or even to just blink. Yeah, So
• 26:00
  Speaker 2: I definitely would be making sure that this really does
• 26:03
  Speaker 2: work in your benefit. And if I was to use
• 26:07
  Speaker 2: this scheme, I think I would be really trying to
• 26:09
  Speaker 2: pay that back as soon as possible, to kind of
• 26:11
  Speaker 2: like buy them out sooner rather than later instead of
• 26:15
  Speaker 2: waiting until I sell the property, because you do have
• 26:17
  Speaker 2: a couple of options to pay that back, like you
• 26:19
  Speaker 2: could pay it back in installments, or you could wait
• 26:21
  Speaker 2: until you sell the property and then pay the home
• 26:23
  Speaker 2: buy a fund back asap once you've done that. So,
• 26:26
  Speaker 2: I don't know, I just think there's a lot to
• 26:27
  Speaker 2: consider there, and obviously if you're potentially considering it, I'd
• 26:31
  Speaker 2: look at getting some advice and doing a whole heap
• 26:34
  Speaker 2: of research.
• 26:35
  Speaker 5: Mortgage brokers are really great for that as well. They're
• 26:38
  Speaker 5: usually free. Again, this is something we talk about a lot,
• 26:40
  Speaker 5: but their service is usually free and they can present
• 26:44
  Speaker 5: you with a whole range of different options. They usually
• 26:46
  Speaker 5: have a really good knowledge of the grants that are
• 26:48
  Speaker 5: available in your state and can help you make a
• 26:51
  Speaker 5: decision that's going to put you in the best possible position.
• 26:55
  Speaker 2: Yeah, agreed, And I think that we need to rely
• 26:57
  Speaker 2: on the professionals sometimes to give us the advice because
• 27:00
  Speaker 2: I think a lot of people saw this. I'm like,
• 27:02
  Speaker 2: oh my gosh, there's another fund I can get into
• 27:04
  Speaker 2: property sooner, and then you kind of like go, oh, great,
• 27:07
  Speaker 2: that's exciting. Oh that's not so exciting, which is a
• 27:11
  Speaker 2: bit disappointing. But at the same time, let's be honest.
• 27:14
  Speaker 2: That is going to give a leg up to like
• 27:16
  Speaker 2: three thousand people to get in the market when they
• 27:18
  Speaker 2: probably didn't have any other option or would have had
• 27:21
  Speaker 2: to say for like another ten years to get that
• 27:24
  Speaker 2: fifteen percent of their deposit.
• 27:25
  Speaker 5: And then it's hard because they're priced out because of inflation.
• 27:28
  Speaker 5: So exactly, it's a really hard right. Yeah, the right
• 27:32
  Speaker 5: race is real with property. I am feeling the pain
• 27:35
  Speaker 5: right now. Super interesting to know about. Thank you so
• 27:39
  Speaker 5: much for breaking that down, because it was something that
• 27:41
  Speaker 5: I was not unsure about, but it's worth I think
• 27:45
  Speaker 5: knowing what's available. And I know this is Victoria specific,
• 27:48
  Speaker 5: but I highly recommend anyone who's looking into property jumping
• 27:52
  Speaker 5: on your state government website. There will absolutely be a
• 27:56
  Speaker 5: property section on that website and that will break down
• 28:00
  Speaker 5: what is available, what the eligibility criteria are. All of
• 28:03
  Speaker 5: those fun things will be in one place, and it's
• 28:05
  Speaker 5: a legit source of information.
• 28:07
  Speaker 2: All right, guys, As we said before, make sure you're
• 28:10
  Speaker 2: checking your facts. But we have run out of time,
• 28:12
  Speaker 2: so no more home by a Scheme conversation until Friday
• 28:16
  Speaker 2: Drinks next week. And as always, just before we head off,
• 28:19
  Speaker 2: we'd like to acknowledge and pay respect to Australia's Aboriginal
• 28:23
  Speaker 2: and Torres Strait Islander people's, the traditional custodians of the lands,
• 28:27
  Speaker 2: the waterways and the skies all across Australia. We thank
• 28:31
  Speaker 2: you for sharing and for caring for the land on
• 28:33
  Speaker 2: which we are able to learn. We pay our respects
• 28:36
  Speaker 2: to elders past and present, and we share our friendship
• 28:39
  Speaker 2: and our kindness.
• 28:40
  Speaker 3: The advice shared on Shees on the Money is generally
• 28:43
  Speaker 3: nature and does not consider your individual circumstances. She's on
• 28:47
  Speaker 3: the money, exists purely for educational purposes and should not
• 28:50
  Speaker 3: be relied upon to make an investment or any financial decision.
• 28:54
  Speaker 3: And we promise that Victoria Divine is an authorized representative
• 28:57
  Speaker 3: of Australia Pacific Funds Management Proprietary Limited a b M
• 29:01
  Speaker 3: three four one three two four six three two five
• 29:04
  Speaker 3: seven af CL three three nine one five one.
• 29:07
  Speaker 2: See you next week, guys. Bye,