Episode Summary

In this episode of Property Soup, John and Allan interview William Tong, a commercial buyers agent and property strategist with 21 years of experience in the industry. They discuss the benefits of investing in commercial property and the role of a buyers agent.

Highlights

🏢 Commercial property offers higher returns compared to residential property.

⏰ A buyers agent saves time and provides access to off-market opportunities.

📚 Investing in commercial property requires expertise in research, analysis, and negotiation.

🤝 Buyers agents and property strategists mitigate risk and offer valuable insights for investors.

Summary

In this episode John and Allan discuss specific strategies to pay off a mortgage in 10 years or less. They explore the concept of leveraging more properties to achieve financial freedom and address the fear of taking on more debt.

Highlights

🔑 Bad debt includes loans on depreciating assets like cars.
🔑 Leveraging more properties can lead to financial freedom and getting debt-free on your home mortgage faster.
🔑 Good debt, such as investing in property, can be tax efficient and create wealth.
🔑 Principal homes are considered bad debt as they do not generate income.

This episode of Property Soup dives into the mortgage trap, where people find themselves paying mostly interest and barely any principal on their mortgage for the first 10-15 years.

Allan and John discuss the frustration of home owners in this situation and explore the concept of the mortgage treadmill.

Highlights

- 💡 Many people are shocked to discover that the majority of their mortgage payments go towards interest rather than paying down the principal.

- 💡 Banks make money by charging interest, and homeowners often end up paying almost double the property value due to interest payments.

- 💡 There are options to avoid being stuck in the mortgage trap and paying off a home well into retirement.

- 💰 The mortgage trap occurs when homeowners pay mostly interest and little principal on their mortgage for the first 10-15 years.

- 🏠 Upsizing or renovating homes can lead to a cycle of refinancing and extending the mortgage, keeping homeowners in a cycle of debt.

- 📈 The mortgage trap can be avoided by staying on the original mortgage and resisting the temptation to continually upgrade homes.

- 💡 Understanding the concept of a mortgage and how interest payments work is crucial to avoiding the mortgage trap.

- 🤔 Many people feel frustrated and overwhelmed when they realize how long it will take to pay off their mortgage.

- 💼 Exploring alternative strategies and options can help homeowners pay off their mortgage sooner and avoid being stuck in the mortgage trap.

In this episode, Allan and John discuss the lessons learned from the previous conversation with veteran property investor Morry. They highlight the importance of overcoming fear, having a clear vision, and embracing failure as a learning opportunity.

Highlights
💡 Success is not based on luck, but on hard work and planning.

💡 It's never too late to start investing in property.

💡 Overcoming fear is the first step towards success.

💡 Failure is a valuable learning opportunity.

💡 Having a clear vision and writing down goals is crucial for success.

💡 Believing in your own worthiness is essential for achieving your goals. Believe that you CAN do it and you CAN be successful!

In this podcast episode, the Allan interviews his neighbour, Morry, who successfully built a property portfolio of seven properties over a 14-year journey. Moryy shares his wisdom and insights about life, property investment, and the importance of overcoming fear and having the right mindset.

Highlights

- 🏠 Moryy acquired seven investment properties that allowed him to enter the share market during a low point.

- 🧠 Overcoming fear and adopting the right mindset is crucial for success in property investment.

- 💡 Morry's childhood experiences and role models drove his ambition to improve his life.

- 💇 Morry transitioned from hairdressing to owning and managing multiple salons with around 40 staff.

- 📝 Setting and working towards goals played a significant role in Morry's achievements.

- 🤝 Morry emphasizes the importance of helping others and finding happiness through the success of others.

- 💰 Managing finances, staying within budgets, and enjoying life responsibly contributed to Morry's success.

In this episode, Allan and John discuss the importance of macro and microeconomic data when investing in property. They emphasize the significance of looking at the big picture (macro) and then zooming in (micro) to find the right investment opportunities.

Highlights

🌐 Macro data involves assessing national and state-level factors, such as population growth and infrastructure investment, to determine the overall market condition.

💼 Micro data focuses on specific city, local government areas, and suburbs to identify potential investment properties within a chosen market.

💰 Affordability plays a crucial role in property investment, considering both median household incomes and property prices.

📈 Population growth is a key macro indicator, indicating demand for property in a region.

🏗️ Infrastructure development is essential for ensuring future demand and desirability of an area.

🌆 A diverse local economy reduces risk and enhances the long-term sustainability of property investments.

⚠️ Caution is necessary when considering investments in areas with a single industry or economy to avoid potential downturns.

In this episode of Property Soup, hosts John and Allan tackle the widespread myths about pinpointing the perfect moment to invest in real estate.

They take a deep dive into the psychological hurdles that often hold investors back, emphasizing the critical role of financial readiness.

They also explore how market conditions can impact investment decisions, providing insights into navigating these factors effectively.

This episode will equip listeners with a more realistic and informed approach to property investment.

Key Points

This episode features a really insightful conversation with 20-year industry veteran Mark Sing. 

Over the course of the conversation, Allan and John talk with Mark about the reasons Self Managed Super Funds are consistently becoming more utilized by numerous investors who want to take charge of their financial future and specifically talk about how that relates to the option of investing in property.

This is an open and honest conversation about investing where we acknowledge that there are no silver bullets, only trade-offs… but also explore the opportunity that’s on the table for everyday Australians to substantially improve their retirement outcomes when done correctly.

This includes a case study where a couple with four children was able to 6X their retirement assets in 15 years (on very conservative projections).This is essential listening if getting your future right is important to you. 

So now that we're aware of the fundamentals, where do things go wrong for most first-timers?

Allan and John explore both sides of the coin... There are two kinds of mistakes that most first-time investors are prone to falling into. The first kind is to try and make a new, uncomfortable process (investing) as comfortable as possible. The way many people will attempt to do this is to limit the options of what they'll consider based on their feelings rather than logic.

To paraphrase Layne Norton... In finance, just like in science... DATA > FEELINGS

 
They also explore the trap of "Accidental Investing" that upsizers will often fall into without thinking it through... and why this first move into property investing often becomes someone's last move. 

Following that, they explore the extreme end of rookie errors, the kamikaze novice who decides to go balls out and start out as a property developer for their first investment.

Throughout the episode, Allan and John relate some cautionary tales from client experiences to help you avoid the pitfalls of uninformed optimism and the false security of "Comfortable" decision-making.

In this episode, Allan and John cover the fundamentals for becoming financially literate as a property investor - getting a clear understanding of capital growth, leverage, rental yield, and cash flow. But let's be clear, this episode is about a hell of a lot more than getting some textbook definitions. 

More than that, they share their own experiences of feeling overwhelmed as novices from not having a clear understanding of these concepts before they were educated by mentors and how that knowledge has helped them immensely both personally and professionally. 

In addition, what you'll learn by the end of the episode is how it would be difficult (if not impossible) to make a clear investment decision without having a clear picture of what influences each one of these metrics and how each ingredient needs to come together in the right proportion to make a delicious Property Soup. 

Even if you hold a good understanding of these concepts, we're confident this episode will give you a firmer grasp of how they work together in a successful portfolio-building strategy.