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Most Investors Leaned on Negative Gearing But Now Prices Are Falling | Where 4 Experts Are Buying · The Follio Property Podcast

0:00
Well, the Prime Minister's on the brink of breaking another major promise, this time on negative gearing and capital gains tax.
0:06
A lot happening with the election coming up and the benefit of negative gearing has been taken away.
0:11
There's a lot of noise post-budget from everywhere.
0:14
How important is location as well when it comes down to commercial?
0:17
There's a wave of the buyers, agents and the push of the regional markets.
0:20
There's some grave concerns.
0:21
Doesn't see value in Australia under $600,000.
0:23
He's seen the best of market conditions.
0:25
He's seen the worst in terms of who loses money and who makes money.
0:29
In times when markets are fundamentally uncertain, those sort of blue chip locations can hold their value.
0:35
So if you're not investing in property to get capital growth, then don't invest at all because...
0:42
You're listening to the Folio Property Podcast, number one property podcast.
0:46
My name's Rhys Bettle.
0:47
I'm here each week with my co-host, Lachlan Delahunty.
0:50
Lachlan, we've got a big run of big guests coming up, big influential people in the property space.
0:56
You've just said big four times and I swear every episode, every week is a big episode.
1:01
But no, this is referencing what's coming up over the next-
1:05
four weeks.
1:06
The guests are in order, I believe.
1:08
Scott O'Neill, Jack Henderson.
1:11
Ben Kingsley.
1:12
Ben Kingsley.
1:12
Sammy Gordon.
1:13
Sammy Gordon.
1:14
So four big names in the Property Institute, really.
1:18
They're household names for a lot of people, but four people that everyone says, aren't they?
1:22
You're direct competitors.
1:23
Yes, they are, but they're people we respect in the industry and four people with four very different strategies.
1:28
Absolutely.
1:29
And I think that that's the preface of today's episode is,
1:33
a lot of noise post budget from everywhere, right?
1:37
Whether it's people within the property space, whether it's people in the investment community, whether it's your standard politician at the moment, there's a lot of noise.
1:44
And I think what's going to be pivotal the next few weeks is hearing their voice in terms of what their strategies are.
1:51
All very different, like you said, as well.
1:52
And I think for us is to be unbiased, understand their strategies.
1:56
And I thought today what we'd go through is do a bit of a preview in terms of what to expect over the next four or five weeks.
2:02
Yeah, Grace.
2:02
One thing I've come to learn in the industry is property is a beautiful thing, but there's more than one way to do it.
2:08
And at the moment, everyone here, it's like, this is the way you make money in property.
2:13
There's another way you make money in property.
2:15
And everyone's got a different sales pitch, but everyone's got a different...
2:18
And the thing I like about these four guests is they're experts in their field, but more importantly, they're experts in their strategy.
2:25
So these are guys that have stuck the course and stuck with this strategy for pretty well more than a decade for most of them, maybe not Jack.
2:33
He's not old enough to be around that long.
2:34
But certainly for Ben, Sammy Gordon, Scott O'Neill, they've been...
2:39
at this and tried and tested their particular strategy through multiple cycles, be that an upswing and periods of stagnation.
2:46
And they are very, very different.
2:48
And that's one thing for the listeners.
2:51
Everyone's looking for a golden bullet.
2:53
They want the quickest way to get rich.
2:55
The reality is there is no quick bullets.
2:57
It's sticking the course of a particular strategy that's suited to you.
3:02
And I think that's the most important thing here.
3:04
Each one of these individuals have got really good insights and understandings into their niche or their market.
3:11
But that strategy is not necessarily suitable to the masses.
3:14
It's typically suited to a personality type at a different phase of their life or their career or an income.
3:22
And that's why it's so important to unpack these and to work out who it's for and who it's potentially for not.
3:27
Cool.
3:28
Let's kick start with Thursday's episode, which is going to be on probably the biggest winner in terms of the budget with his focus being predominantly on commercial property, and that's Scott O'Neill.
3:38
Now, Scott did say to us, and you'll get this on the podcast releasing on Thursday, he does have a residential business as well, but he did say the clear focus for him and where he sees the market direction is in commercial property.
3:50
Yeah, look at Scott.
3:51
He's tacked on residential because he's got to the size where he can do
3:58
It was a really good conversation, a very honest conversation, talked about a lot of these buyers agents are now popping up in the space.
4:08
What you'll see and hear and understand is that commercial property isn't for everyone.
4:11
He made that very clear in this episode.
4:13
It's off air speaking about trying to get quality deals, really good assets that are
4:21
give you the confidence of not having vacancy risk or tenancy risk, is very difficult under $2 million.
4:27
And he said there's going to be a flood of activity into the commercial space.
4:31
But he said there's only X amount of quality opportunities that exist in the country, and obviously he buys in New Zealand as well.
4:39
There isn't enough quality of deals for the amount of buyers that have entered this market.
4:43
So there's a large portion, 20%, 30%, even 40% of people that are now investing in commercial that are getting rubbish stock, things that have high tenancy risk.
4:52
And what people fail to understand is during the lean periods, the commercial's gone on probably the greatest run, certainly in the last 30 years in terms of capital growth.
5:01
And that was particularly during that falling interest rate environment we've seen in that COVID period.
5:08
that isn't sustainable and if typically you don't see significant capital growth in commercial property and where interest rates where they are today, it's sort of the perfect storm where it may run into some serious vacancy risk.
5:20
So that was a really interesting conversation, Rhys, in identifying that commercial's not for everyone, but certainly those with a more sophisticated portfolio have got some equity behind them and are looking not to scale with the sort of residential strategy.
5:36
rather than having 10 properties with 10 different tenants, we might be able to divest 50% of the portfolio, buy something for three to four mil and have six to seven, sometimes six to six and half percent returns where the tenants are paying all outgoings closer to retirement.
5:52
Makes a lot of sense.
5:53
Looking at like, you know, from your perspective as well, Lachlan, when we're looking at commercial property, you mentioned there earlier, and then Scott does say this on the episode as well, I know, so you can reference it when you tune into Thursday, but it is a crowded space now in terms of there are, you know, post-budget, a lot of either residential buyers agents now doing commercial or there's people entering that space.
6:15
So, it's starting to
6:17
to get to a point where it could be overcrowded, there could be a lot of ill advice out there.
6:20
For someone who is thinking on commercial, you know, do you have a blanket rule?
6:25
I know every strategy is gonna be different or every advice is gonna be different on the circumstances, but is there almost like a price point or a point where you should start looking at commercial?
6:34
Lachlan, we're talking a lot of strategy on today's episode, but for those that are listening and want to track their own strategy, we've officially launched PropStack.
6:42
You can now access it through the show notes on YouTube or Spotify and get free access for the rest of 2026.
6:48
We also have access to every suburb in Australia, so not only can you track...
6:52
potential new investments, but more importantly, track how your current investments are going as well.
6:56
That's why we created PropStack, Rhys.
6:58
Now live and free for users that sign up in October for 2026, more important than ever, we talk about strategy.
7:04
It's no in your numbers.
7:05
I can't emphasize that enough.
7:07
In so much uncertainty, people need to know their baseline.
7:10
And before they do anything, buy, sell or hold.
7:13
Make sure you plug it into PropStack.
7:15
Work out your current position and your scenario planner before you do anything else.
7:20
There is recent, and speaking off air and anyone in the industry, if you don't have a $1.5 million budget or north, ideally the sweet spot is $2 to $6 million.
7:30
And it's a lot of money.
7:32
And if you are fishing around that $1 to $1.5 million, you are competing.
7:36
with the droves of investors that think now post-budget, I've got to chase yield, and the droves of buyer's agents that now unfortunately don't have a business in the residential space, they're trying to jump ship and try to educate them on commercial property.
7:50
They don't understand the fundamentals and they're going into a high risk area where I've got commercial property in my portfolio.
7:56
I'll tell you what gives me the most headaches and at times the most sleepless nights, a vacant commercial building that's difficult to lease.
8:04
And okay, at the moment, it's fine.
8:05
Three to five years ago, it certainly wasn't.
8:07
So yes, it's a crowded space, particularly at that lower end.
8:11
And if you're looking or you're fishing under a million dollars, do yourself a really big favor and don't do anything.
8:17
If you're going to invest in a commercial property under a million bucks, put it back in the bank.
8:23
You're looking at areas where there's risk-free money.
8:25
Commercial property isn't risk-free money.
8:26
It's very risky money if you don't have a really good tenant covenant.
8:30
That's why you're going in there.
8:31
We have Cal Doggett coming on the show very soon talking about, again, commercial property and talking about getting exposure to some of these big players in times of uncertainty.
8:40
So having Woolworth's share prices might drop by 20% to 30%, but the asset that they're leasing won't drop by that much.
8:48
But that's a very technical episode and we'll unpack it at another point in time.
8:52
What about location fundamentals with commercials?
8:55
So you've mentioned there some of the risk around asset quality and it's around tenants as well.
9:01
Like the tenants is going to be a huge aspect to a strong commercial asset.
9:05
How important is location as well when it comes down to commercial?
9:09
Extremely.
9:09
And the risk you're taking on is reflected in the yield that you receive.
9:15
And post-budget, everyone's talking about cash flow.
9:17
So yield, you must be buying five, six, seven, eight.
9:21
I've heard 12% returns get thrown around rates.
9:24
Just keeping it back in mind, the higher yield you're receiving, the more cash flow you're receiving, the higher risk you're getting.
9:30
That's why in mining towns, you're receiving sometimes gross yields of 10%, 11%, 12%.
9:36
That's why in Darwin, you're getting higher gross yields because you are arguably taking on more risk.
9:42
So to answer that question, yes, in commercial, the same...
9:47
Covenants are the same tenant profile.
9:49
Let's use an IGA in a metropolitan city.
9:54
You might get them on a yield of, we'll call it 5%.
9:57
You take the exact same business, the exact same brand, and you put it into a regional, it could be upwards of 8%, 9%, 10% just because of the risk you're taking on because the...
10:11
exposure to population, negative migration, fluctuations in the market are far more volatile in regional areas than they are in capital cities.
10:18
So therefore, the higher return needs to be factored in when you're purchasing that as an investment.
10:24
Is it all about cash flow or is there an element when you are looking to invest in commercial, you should be looking at some capital growth?
10:30
You should always, when investing, be looking at capital growth.
10:32
But when historical
10:36
When you look at commercial and you go back 20, 30 years, when I started in the early 2000s looking in and educating myself on property, commercial was cash flow.
10:46
You weren't investing in commercial to make capital growth.
10:48
Capital growth was a bonus but not a given.
10:51
And the old golden rule, you get sort of 6.5%, 7% return from cash flow point of view and you might get 3% capital growth and the reverse would be in residential.
11:00
So the same is true.
11:02
We've just gone through a...
11:05
almost perfect market conditions that surge in commercial real estate.
11:10
And the whole innovation boom that, you know, your Amazons, your big warehouses, the online boom that took place has, you know, washed through and pushed prices in the industrial market.
11:24
There is definitely some upside, but commercial for me is a cash flow play in a space where you can get the tenant to pay the outgoings.
11:32
Beautiful.
11:32
For those that want to learn more about commercial, make sure you tune in for Thursday's episode.
11:37
Next up, probably one of the most controversial figures in our space and very polarizing, either love him or hate the guy, someone we've had on the podcast before, Jack Henderson.
11:46
Very much a focus with Jack is that high-end value and particularly the yield, he calls it the M, but the yield accelerator.
11:53
So whether that's the granny flat or even the knockdown and the construction strategy, but really focusing on either high net worth individuals or areas at a higher price point too.
12:05
Yeah, well, he's got an integrated business model, Rhys.
12:08
So you look at his strategy is to try to be a one-stop shop for property advice, buyers agency, and then he's got a construction business that sort of all feeds in.
12:19
So the one client goes through that entire process.
12:22
His overall arching strategy is around value add, which we like, and a big advocate of value add on business.
12:29
the podcast because active investors, particularly when you're starting your journey where you want to be more active, you've probably got a bit more time.
12:35
You may not have the equity, but you've got the time and you're happy to roll up the sleeves.
12:39
So broadly speaking, I really like the strategy.
12:42
I suppose his point of difference is that he's got a lot of money.
12:44
in the market is really trying to target higher net worth individuals that sort of just don't want any involvement.
12:50
They want to sort of invest into an asset, let him go and construct and his value adds gone from sort of renovations to granny flats to now really knock down and build two or three houses, which...
13:05
in essence is a fantastic strategy.
13:08
Just got to be careful with the timing of those strategies.
13:10
Scaling that model in your portfolio into a downturn can be quite daunting and it can be quite costly because you obviously got to offset the holding costs because you got no income when you're going through a complete development like that.
13:22
But, you know, I think
13:25
The upside with those that have got development palettes can be quite rewarding, particularly if you get tailwinds of rising market conditions.
13:32
That's when that value-add strategy really comes together.
13:35
So you mentioned there tailwinds, so almost getting in at the right time of the property cycle or also looking at where construction costs are.
13:41
You mentioned there you love a value-add strategy yourself, right?
13:44
Where in this market does a value-add strategy make sense for a particular client?
13:50
I like it more of the entry price points.
13:52
I know Jack's more of a premium...
13:55
He's buying a lot in, say, New South Wales is an example, which my problem is that strategy, when you've got the headwinds of a falling market, you've really taken on a lot of risk potentially for less reward.
14:08
The opposite is true, I think, in entry levels of market where you've got the tailwinds of some market uplift because it's a really competitive price point, first home buyers competing with investors, and you can add value through more modest renovations, so you're not overexposing yourself and spending money.
14:26
significant capital and looking to get a tenant two, three years after you start construction, you're talking about windows of probably three-month vacancy period where you can get in, get out, get an accelerated rent and increase capital that way.
14:38
That's probably where I'm seeing more opportunity in this current market.
14:41
So, look, I think from a value-add perspective, an opportunity there, especially in today's market, I think from what you're saying there, you know, you can have the strategy at the high end, but where it probably can make the most sense is at that more entry price point where you can actually control a bit of the growth early on in your journey as well.
14:58
That's it.
14:58
You want to work in markets where you've got more tailwinds than headwinds, right?
15:01
That sounds so simplistic and typically it's not that easy, but the reality is if I can artificially add value to the property, regardless, and that's what I like about Jack, he's not just relying on the market.
15:14
You can go into a flat market and you can develop, you can value add and get uplift in difficult times.
15:20
But if you can overlay that and get in the right market at the right time, you're going to have a lot of money.
15:25
You get natural market uplift, which is tailwinds, as I spoke about, and then that artificial wealth that you're creating through a renovation.
15:33
When we talk about spending a dollar to make three, that's the cream on top.
15:37
And so, yeah, broadly, love the strategy.
15:41
But-
15:42
I guess with Jack's episode, which you'll see in detail, he's probably less interested in the data and the locations of markets.
15:50
And he's obviously, you know, he's Newcastle born and bred.
15:53
He's got a business there and in Sydney.
15:55
So he knows that local market.
15:57
Better than most.
15:58
And that localised area, if you're in that market, like I said, even in a flat market or a falling market, you can probably still get some wins and create enough artificial growth through renovations or building that you can still end up in front.
16:14
But...
16:15
My takings from that episode and for those listening, if you can take some of that theory out of what Jack's doing through Value Add and apply it to a market that is performing really well in a really competitive environment, you've got so many factors working in your favour.
16:30
And I just think that's a great way to de-risk it because you're not solely reliant on the market.
16:35
but you're certainly going to get more tailwinds if you can time it.
16:38
I think a big part of Jack's strategy is looking at blue-chip locations, which is something that you talk about all the time on the podcast as well.
16:44
Local expertise, like you said there, he knows the market's in.
16:47
He's very passionate as an East Coast investor, particularly New South Wales, and as you mentioned, Newcastle and Sydney are some prime targets as well.
16:56
So there's a lot of similarities in there as well.
16:58
I think it's, you know, in the markets he's in, he very much probably will pick the micro markets, but potentially, you know, for those that don't have the budget or are at that stage in their investing career, there isn't an alternative option to utilize what he's doing from a strategy, but actually just get into a cheaper, more affordable market that has the growth potential to actually accelerate a lot quicker.
17:18
Yeah, not be wedded to a certain location due to proximity.
17:22
The beauty of what he's set up is the fact that he's got a building company in a location where he's dominant.
17:28
That's awesome because that means you're going to get cheaper trades, you're going to get access to those trades.
17:31
But if you don't want to be locked or wedded to a location based on where you've got access to trades, broaden those horizons and look.
17:39
Australia's a big country and we know that markets move within markets.
17:43
So I think there's a lot to unpack and take from that episode.
17:45
I think people will really enjoy it.
17:47
And obviously he's an entertainer, first and foremost.
17:49
Very entertaining.
17:50
Where's his heart on his sleeve?
17:52
So that's a cracker to listen to.
17:54
Absolutely.
17:54
And then the big one as well, which there's some similarities there, he's very much a long-term investor.
17:58
So these players, he specifically says in the episode, and probably says it throughout his content as well, he's after the medium to long-term holds as well.
18:05
So yeah, that one will be coming up in a couple of weeks.
18:08
Next up, we've got Ben Kingsley.
18:11
probably one of the OGs in the space, definitely the one with the most years in the industry, a lot longer than everyone else in this group.
18:18
He's very much a blue chip buy and hold operator, but talk us through, you know, from a strategy perspective, what he's seeing in the market post-budget.
18:26
Yeah, so just referring to that episode with Ben, obviously I was in Melbourne.
18:31
He's based there, he's got an office there in North Melbourne.
18:34
There's no one that's more across the Victorian and Melbourne market than Ben Kingsley.
18:38
And it's an interesting time.
18:39
We're speaking about that market a lot.
18:41
I think everyone's speaking about that market a lot.
18:43
A lot happening with the election coming up.
18:45
But yeah, Ben...
18:46
He is one of the OGs and probably someone I respect the most in the industry in terms of his viewpoint.
18:52
Mostly because he loves data and we're very passionate about data.
18:55
But he's been tracking and he's been around a good decade, maybe two longer than we have, Rhys.
19:01
So he's seen multiple cycles.
19:03
And that's what I unpack in that episode that will come out in three weeks is the similarities and the differences between previous cycles.
19:08
And he's been through...
19:10
the biggest downturns we've seen in Australian property markets and compares them to this one.
19:16
And that's a super interesting podcast, so definitely stay tuned for that.
19:21
But it's his strategy, you know, similar to us, I guess, raised in probably a bit more conservative, very data, heavily data-focused, very aligned with us with that, and looking for more blue chip.
19:32
He sort of, he doesn't see value across Australia under $600,000.
19:35
So I guess that episode, who's it not for,
19:41
early in their investment journey or trying to build a portfolio of nine, 10 properties, that's not going to be the episode for you because he's very much buy one to two blue chip assets and hold for the long term.
19:52
Doesn't see value in Australia under 600,000, which I felt quite fascinating that he's not seen any opportunity regionally.
19:59
He speaks probably
20:02
against the wave of the buyers, agents and the push of the regional markets and has the reasons why, so he unpacks that.
20:08
So very interesting episode and I think our viewers will align a lot with what Ben had to say.
20:15
With Ben's strategy as well, I think he's very much blue chip asset like you mentioned there, capital city focus as well and also, I mean we call them metropolitan regionals,
20:24
I think he calls them something like commutable regionals and very much has the same ideologies as on that standpoint.
20:30
But yeah, fascinating to hear in this market, he's not seeing too much value under 600K, considering that is where a lot of the investor market is at the moment.
20:36
Yeah, he's got grave concerns and particularly around those regional areas that have been saturated with high levels of investment.
20:42
And that's what he unpacks in looking at...
20:44
He calls them spirit animals, I think he references in terms of buyers agency.
20:49
And he's been around and seen the waves of speculation come in the markets from investment groups, right?
20:56
It was rife in the early 2000s that led into the GFC.
21:00
And then it peaked again as sort of, you know...
21:04
The house and land package spruikers took control in the 2010s.
21:08
He's seen the best of market conditions.
21:10
He's seen the worst in terms of who loses money and who makes money.
21:13
Over the long term, he's a big believer of the fundamentals and how markets move based on supply and demand, population growth, and where people want to live, not just now, but in 10 years and 20 years, and that sort of longer-term view.
21:27
fascinating episode and the strategy there really is about not owning seven, eight, nine, ten properties compared to, say, Sam Gordon, who we'll get to in a moment.
21:37
It's really about buying one, two, maybe three extremely blue-chip properties and holding them for the long term, mainly for risk mitigation.
21:48
So it's not as sexy, not as exciting, similar to what we speak to, Rhys, but in times where markets...
21:55
are fundamentally uncertain.
21:57
Those sort of blue chip locations where family want to aspire to be to typically can hold their value.
22:04
And then in times when sentiment returns and you get that own Occupy competition, they outperform the market.
22:11
So if you like that one, it's going to be in about three weeks' time.
22:13
Obviously, we release our guest podcast on a Thursday.
22:17
So for those that are interested in listening to these guest podcasts, it comes out Thursday at mid-afternoon.
22:24
Reading between the lines there from what you said from a strategy standpoint with Ben, we're very much focused on a passive investor, probably a high net individual.
22:32
Jack as well from his strategy, especially with the yield accelerator program, he's got all the value add very much in the areas he's targeting, probably a high net worth as well.
22:41
Ben, now, what would an investor look like that could potentially fit Ben's strategy?
22:45
If he's looking at these, probably good quality, longer term holds, passive though.
22:48
It sounds like, from what you're saying there, very much two to three properties is a good home.
22:52
A mum and dad investor is like a perfect client.
22:56
Mum and dad investor, dual income, not looking to take on too much risk, but obviously protect their downside and buy one to two high quality properties.
23:07
investment properties, that's sort of the mandate and probably the listenership that will resonate a lot with Ben.
23:12
Cool.
23:13
Last one was Sammy Gordon.
23:15
That was a fascinating chat.
23:16
So, when that one comes out in four weeks' time, a lot of energy.
23:21
He does know his stuff, right?
23:23
He very much was data-driven, but completely different strategy to the other three.
23:29
So, his focus was
23:31
was really on, and to be fair, Sammy did keep his cards close to his chest in terms of exactly where, what areas he likes in terms of investment, but he did tell us he's after emerging markets, so he wants to be the first one in there.
23:42
I think he calls it a- Pressure cooker.
23:44
A pressure cooker, and so he's really targeting the lower populations, which is regional.
23:49
really essentially and the reason he wants to target those lower populations is he feels there's more of a market to move on and a growth.
23:55
So it's almost like an artificial growth created from activity there from investors.
23:59
What would you take from that chat as well?
24:02
It's super interesting, probably underestimated his understanding of these markets from a data point of view.
24:07
I was very impressed in terms of his own knowledge into the reasons as to why he was in particular markets and potentially not.
24:16
It's certainly the conditions over the last five years with regionals played absolutely into that strategy.
24:21
It's really well suited for sort of the younger investor, that rent investor demographic that needed to get in at a lower price point and try to accelerate their equity position early.
24:34
It's not for probably a more sophisticated investor that's a bit more later in their journey that's looking for more blue chip exposure, doesn't want the headache of seven, eight, nine, ten properties in their portfolio scattered across low socioeconomic areas.
24:50
It was a fascinating conversation and super passionate.
24:55
So like I said, very different strategy, chasing high yields, regionals and low yields
25:03
The volume in terms of his transaction is really aggressive.
25:08
If I was to summarise it, its buy property on a high yield would have been likely in a trust structure lead up to the budget.
25:20
get a valuation to withdraw that equity out as soon as you possibly can and then recycle that into another market and rinse and repeat and rinse and repeat.
25:27
And look, had a lot of success doing that with clients, particularly younger clients where their incomes wouldn't have supported the debt levels they're currently on.
25:35
The big thing that we kind of took out of it was, yeah, very much getting people at the start of their journey.
25:39
He has a lot of repeat clients from what he was saying on the podcast, and it probably shows getting into those markets early at a cheaper price point.
25:47
Like you said, they're utilising some of that equity to go and get in other markets.
25:51
The thing that probably stood out amongst Sammy compared to some of the others was,
25:56
A lot of his philosophy or ethos was around building bigger portfolios.
26:00
And I think he's been in the news for someone who has 100-and-something properties within his portfolio, and that's very much the journey a lot of his clients are going on as well.
26:09
So a lot of properties, which is something we do talk about, can be a headache.
26:14
If you compare, and it would be interesting for the viewers when they listen to Ben's podcast to Sam, because that's a polar opposite strategy.
26:23
And fundamentally, both have worked for various and different clients.
26:28
And that's what you need to understand.
26:29
There is more than one strategy.
26:31
It's got to be the one that sort of suits you.
26:33
And I see Sammy's strategy is one that's worked for those, like I said, where the major banks wouldn't have liked them.
26:38
They wouldn't have been able to go out there and buy a blue chip property with Ben or with Jack.
26:42
They certainly didn't have the budget to buy something with Scott O'Neill.
26:47
But where do they start?
26:48
The Sammy's strategy has absolutely worked for those clients to get them in.
26:52
Hopefully, he has the same success moving forward in these regional markets as he has for the last five years.
26:56
If you would speak to Ben, he's going
26:58
he would completely disagree and he would be concerned about the exposure of some of these portfolios.
27:03
But the reality is Sammy's very bullish, very confident and talks about this pressure cooker of a market.
27:09
It's easier to shift a market with 30,000 people in terms of seeing significant growth from a percentage point of view.
27:16
A population centre of 30,000 people, you could see 20%, 30% growth very, very quickly compared to a market like Melbourne, he referred to as 5 to 6 million people
27:26
You need a lot of tailwinds.
27:28
You need a lot of activity to move such a big beast.
27:30
And there's definitely merit in a lot of the things that he said.
27:34
And he knew his stuff, knew his data, and it's a fascinating podcast.
27:38
For those that are starting out in their journey, I think they'll really enjoy it.
27:42
All right, Lachlan, let's – four big personalities.
27:45
They're four completely different strategies.
27:46
Let's just do a bit of a summary from a strategy standpoint.
27:50
And is there any that these particular people that we've had a conversation with, any that they're missing that you think in this current market?
27:57
One thing that was clear in unpacking –
28:00
all scenarios and all conversations is that, you know, they may speak about nothing's changed post-budget, and that's the interesting thing.
28:07
Everyone, you know, you see on social media or when you listen to a podcast, nothing's changed.
28:11
The fundamentals haven't.
28:12
But when you speak to them, things have definitely changed, and there's no denying that.
28:17
They're all super passionate, very anti the current government.
28:19
That was the one consistent thing.
28:21
I think if we got them on a panel, you wouldn't get more passionate.
28:24
But one thing is clear, Rhys, is that all their strategies are now...
28:28
are to some level tailored towards post-budget outcomes.
28:34
And what I mean by that is you can't ignore that now cash flow is seriously considered, right?
28:39
Scott O'Neill, that was his strategy and I guess the government have lent very favourably into his strategy in terms of pushing commercial property and higher yields.
28:47
Sammy Gordon's always been...
28:49
really big on yields and particularly in regional markets where you typically get higher cash flows.
28:55
Jack, his strategy has been artificially trying to create cash flow through, he calls it the YAM or whatever, the granny flat strategy.
29:03
So there's no denying that post-budget you can't ignore cash flow anymore and we speak a lot about it on the podcast is you do invest effectively.
29:16
to make money, to make equity and to generate capital growth.
29:20
Otherwise, why are you investing in property to begin with, right?
29:23
You can put your money, as we've said, in bonds, in government bonds, arguably risk-free at the moment at a very good return.
29:30
So if you're not investing in property to get capital growth, then don't invest at all.
29:35
But you can't ignore the cost of money and the benefit of negative gearing has been taken away.
29:43
So it was clear from the discussions we had with all those four professionals that the strategy is now certainly not centralised, but more focused on cash flow certainly than it was in the conversations we had with Jack and Ben 12 months ago.
29:59
exciting couple of weeks coming up for us.
30:00
So for those that are listening over the next couple of weeks, give us your feedback.
30:04
Let us know if there's anyone else in the space that we haven't had on the podcast that you'd love to get their viewer opinion as well.
30:10
So big weeks coming up.
30:12
You've been listening to the Folio Property Podcast.