The Property Trio

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Today's episode is a special one. The Trio have often reflected on their own past experiences as investors and home buyers. This time, they decided to share their nerves, excitement and rookie mistakes when they each tackled their own first purchases.

Mike had an exciting week when he bought a home, rolled his car and took of to Thailand on a trip. He paid $230,000 for a home in Waratah (Newcastle) and thought hard about all of the ways that he could generate some income out of his asset. Renting a room to his previous flatmate, drawing up a depreciation schedule, and contemplating a cleanup of an otherwise rugged property was the beginning of Mr Mortlock's property success. 

A $30,000 immediate uplift for a $12,000 investment was a great payoff. 

Young Dave was a 25/26 year old mortgage broker, driving around in his EB Ford Falcon when he decided to get serious about mortgage broking. His red clinker brick, older style apartment caught his eye immediately, and for all of the right reasons. Dave paid $176,500 for his first home. 

Cate touched on the fear of debt and the enormity of the pressure she felt once she took possession of her first home. This isn't an uncommon feeling for some buyers.  "What if I lose my job?" Cate's first purchase was a townhouse that she bought off-the-plan in Mordialloc. She talks about the pros, cons, and the better alternatives she could have targeted. She contrasts the skills she had then vs now.

Dave was able to apply his mortgage broking skillset to his acquisition, but he maintains that he felt very nervous about the purchase itself. From contract signing to comparable sales data, Dave recalls that he was relatively green as a first home buyer. He recalls the ways that he monitored and researched loan products and interest rates. 

How did buyers navigate the home buying process back in their day? Cate recalls her expensive phone bills, when agents had mobile phones and Telstra charged by thirty second blocks for landline calls to mobiles.   "Doing the legwork" was different for first home buyers prior to online property search engines being commonplace. From slicing out line advertisements in the paper to collecting magazines in the coffee shops, Dave and Cate reminisce.

What were their income to asset price ratios? Clearly, Dave and Mike were on better incomes than Cate.  Mike: 3.4% Dave: 3.5% Cate: 4.8%

How did the Trio members each borrow? What were their loan products? Did they go via a broker? And how did grants and initiatives spur on their decision to purchase? 

And how have their first purchased properties performed over the years since reselling? 

 ..... and our gold nuggets!

Mike Mortlock's gold nugget: "Don't sell if you can avoid it!"

Dave Johnston's gold nugget: Getting into the market and making a decision is important. Don't overanalyse, get in the game. 

Cate Bakos's gold nugget: Surrounding yourself with knowledgeable people is important. Cate's top two picks are; 1. a strategic mortgage broker, and 2. a great conveyancer. 

Show notes: https://www.propertytrio.com.au/2024/09/30/our-first-property-purchase/

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Mike's company, MCG Quantity Surveyors, recently released a comprehensive report on affordable housing in our capital cities. The report focuses on the lower 25% of the property market across Australia’s major capital cities. MCG wanted to identify what’s truly "affordable" in each market by analysing the 25th percentile of sales prices.

This approach gives a clear snapshot of the most budget-friendly properties currently available, which is crucial information for anyone trying to navigate today’s challenging market.  Cate steps through some of the median prices around our nation and she contrasts Sydney against Perth.

Mike asks, "How many years of income it would take to purchase a median priced home in the market?"

House price to income multiples are a reasonable measure of affordability, and the multiples for both houses and units across the two cities is fascinating.  Contrasting other cities is intriguing too; Perth vs Hobart requires more consideration than just income multiples. There is no doubt that the metric is a bit of a blunt instrument, though.

Are there specific areas within our cities where affordability is better, or is it tough across the board?  I

In Sydney, for example, regions like the Outer South West, Central Coast, and the Outer West and Blue Mountains offer more affordable options compared to the inner suburbs. These areas typically offer a more suburban or semi-rural lifestyle, which tends to come with a lower price tag. In Melbourne, the western suburbs such as Werribee and Tarneit are also known for being more affordable, particularly for houses. These areas are popular among families and first-time buyers who are looking for more space without the hefty price tag of inner-city living. 

"Mike, for someone looking to buy or invest, where should they be focusing their attention?"  Despite the strong recent growth, Perth still rates. Tune in to hear why....

Cate prompts Mike to share what the data means for the future of affordable housing in Australia.

Affordability varies significantly not just across the country, but even within individual cities. It’s crucial for buyers and investors to understand these local dynamics and to do their homework. While the headlines often focus on the un-affordability of the major capitals, there are still opportunities out there if you know where to look.  

The data really emphasises the importance of being informed and strategic in your property decisions. Whether you’re buying your first home or looking to expand your investment portfolio, understanding the market is key to making the right choices.  

..... and our gold nuggets!  

Mike Mortlock's gold nugget: Median house price to income multiples challenge some buyers and Mike showcases the opportunities that quality units can provide when considering the lure of inner-ring, blue chip suburbs.

Cate Bakos's gold nugget: With all of the changes we're seeing at local council level, it will be interesting to see how the affordability measure changes with higher density developments that are closer to CBD. 

Dave Johnston's gold nugget: "Always flip it around to your own situation, your own economy and your own price point in order to work out what the best investment is for you." 

Show notes: https://www.propertytrio.com.au/2024/09/23/budget-friendly-properties-in-aussie-capitals/

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Mike kicks off this episode, and after establishing Dave's surname's correct spelling, the Trio launch into the August figures. National figures were up across the board +0.5%, but as Mike eludes, it's really a tale of eight cities. How long can the three top performers maintain this strength? And are they at their peak?

Perth's annualised growth is currently sitting at 24.4%, which is significant by any historical measures. 

"We've got three very heavy lifters, and their growth isn't really easing", says Cate. 

Although Dave's focus on Brisbane's growth rate suggests it may be a city that is coming off it's recent high pace of growth. 

Interestingly, median values are not the most reliable indicator of places on the performance league ladder. The Trio have discussed the imbalance of houses to units in the various capital cities, and they cite this example as a case in point. Given Melbourne has a higher proportion of units than each of Adelaide, Perth and Brisbane, the median value figure is influenced by this ratio in every city. 

What could trigger Melbourne's market to rebound? Cate steps through her three possible triggers for change. Dave points out the rental yield figure; a potential indicator of a price signal to a lot of investors. For the first time in the history of the Core Logic gross rental figures, this is the first time that Melbourne has been on par with Brisbane and Adelaide.

The Trio delve into the impact of COVID and the market recovery, followed by Victoria's static performance on the Victorian regions. Will pressure on rents continue to ease? Supply is our challenge, but quite a few cities are showing a slowdown in rental rises. An increasing household formation rate, seasonality in the southern states, and lower student numbers are contributing to some of the easing. In addition, holiday house sales have softened the rental conditions, as has the return to work for many workers. Less people need their additional bedroom for work-from-home purposes, hence household formation rates have been able to increase.

Listing numbers count for a lot when it comes to capital growth, because supply and demand can tell us a lot. The three high performing cities have particularly tight stock levels and a decline in old listing numbers, however Brisbane appears to be exhibiting higher new listing numbers this month; a possible sign of market easing.

And while listing figures are segmented for cities, unfortunately they aren't segmented for dwelling types, and as Cate points out, there are markets within markets. 

The Trio cast their gaze over the Westpac Consumer Confidence Index. A slight increase in the 'time to buy a dwelling' looks significant until we recognise that sentiment to buy a dwelling is still well under 100, indicating that less than half of the population believe that now is a good time to buy a dwelling. Dave's state-based focus is intriguing though. Which cities have had modest increases, and which have shown far higher figures? The answer may surprise...

Inflation remains our RBA's challenge. As Dave points out, inflation hurts everyone, while higher interest rates hurt a segment of our market. Our reserve bank governor's caution is palpable and the Trio's general consensus is that we won't see an interest rate cut in 2024.

Turning to finance and lending; refinances have fallen away and loan percentages have been impacted by this change. But what has caused the tumble in refinancing? The Trio unpack the various triggers for this.

And the Trio consider Loan to Value Ratios (LVR's) and the historical changes that have occurred with leveraging, deposit sizes and costs of borrowing..... an ep in the making! 

Dave, Cate and Mike discuss the intricate balance that the RBA have to manage between inflation, employment, wage growth and market confidence. 

Lastly, the three year bond yield currently sits slightly below our current interest rate and indicates a potential for short to medium term market expectations for a rate reduction (or two or three)... time will tell, but our money markets are interesting leading indicators. 

And... time for our gold nuggets...

Cate Bakos's gold nugget: For all of the investors who have been experiencing rental growth.... we have to keep market conditions in perspective, and given rental growth is slowing, investors need to pay attention to their property manager and take on good advice.

David Johnston's gold nugget: "If you invest, expect ups and downs, but don't lose sleep during the downs. Usually, when we make mistakes, it's when our investments are flat, and people feel the heat and sell." Maintaining a long term, pragmatic expectation is a healthy perspective. 

Show notes: https://www.propertytrio.com.au/2024/09/16/ep-275-aug-market-update/

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This week our topic comes from a valued listener, Gaurav.  Gaurav and his wife have made some impressive strides in building their property portfolio since moving to Australia in 2019 by now owning 6 properties, and they're at the stage where they are looking to achieve financial independence within the next 5 to 7 years.

"Hi Property Trio Team, I have been listening to your podcast for the last two years and have listened to every episode of the property trio previously The Property Planner, Buyer and Professor, we do miss Peter, though Mike is a great add to the team.  Our goal is to be financially independent in the next 5 to 7 years.  Are we on the right track, what are some of the steps we should take to get there in time." 

Mike steps through the specifications of the six properties in their portfolio, all the while marvelling at their acumen and sheer drive.  Their total debt sits at $3.219 million, giving them a Loan-to-Value Ratio (LVR) of about 76.6%.

This is impressive, and no mean feat! 

Our couple's rental incomes may be strong, but their debt repayments are greater, leaving them with a net monthly rental loss of $3,195. But stepping through living expenses, owner-occupied mortgage obligations, negative gearing benefits and other deductions change the figures significantly.

Mike sheds more light on the associated tax benefits that Gaurav and Amit have access to.  Given that their properties are negatively geared, they’re in a position to leverage some tax benefits. Their annual loss on the properties is approximately $38,340. With the properties being jointly owned, this loss would be split evenly, reducing both Amit and Gaurav's taxable incomes by $19,170 each. Given their current employment incomes, this reduction in taxable income would translate into a tax refund of about $7,092 per person. Combined, that’s a total refund of $14,184 for the year. When we break it down on a monthly basis, this refund adds an additional $1,182 to their cash flow each month. So, after factoring in this tax benefit, their after-tax surplus jumps to $6,570 per month. This is a significant boost to their financial position, helping them manage their expenses and potentially accelerate their investment goals.

Dave steps our listeners through the outlook and timing for our amazing couple to reach cashflow-positive status with their portfolio. 

Cate asks the big question: Can this couple retire within seven years?  At the seven-year mark, our couple's projected property portfolio is valued at just shy of six million dollars, but despite this impressive figure, they aren't in a position to retire. The Trio ponder the power of time and they mastermind some ideas for Gaurav and Amit to consider in order to optimise their retirement outcome. "To answer their original question, I think to be conservative and provide a range, I would say that they could expect to be able to live partially to entirely off their rent in 10-15 years on their current trajectory", says Dave. "A big part of this picture is to maintain good savings habits."

Dave canvases some suggestions to consider for our duo to maximise their lifestyle flexibility. Divesting doesn't always feel great for investors, but sometimes selling assets is an important part of an investor's long term plan. 

.... and our gold nuggets! 

Mike Mortlock's gold nugget: Dedicating time and being decisive is the key, according to Mike.

Dave Johnston's gold nugget: "Most people don't actually know their numbers when they are looking to make a purchase, let alone having a long term plan." Flying blind is so dangerous, as opposed to having a clear strategy that can aid you to make decisions that are aligned with where you want to be in the future. 

Cate Bakos's gold nugget: Selling a mature property vs holding - what is the right approach? It all stems from strategy. There is no right or wrong, but investors need to be clear about their strategy before they start acquiring assets.

Show notes: https://www.propertytrio.com.au/2024/09/09/listener-question-financial-independence/

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This week our topic comes from Cate. Dave kicks off the episode by delving into the concept of a "sixth sense", and questions the science behind it. From pattern recognition experience, to subconscious processing, and a study called heuristics, Dave questions the notion of this ability.

"When do your spidey senses start to ring alarm bells?" Cate steps through some of the signs that she has picked up on when canvasing a neighbourhood or a neighbouring property. What are the subtle signs? And what should buyers keep an eye out for? Cate shares some real life experiences in this gripping episode.

Safety is paramount, and the Trio talked together about some of her hair-raising, less than pleasant inspections. Having safety protocols in place is essential for all buyers, including buyer's agents.

When else do you get a sense of an issue with a dwelling? Being familiar with issues such as illegal conversions, works that have been conducted without permits, and questionable extensions/renovations that may not have insurance cover is a valuable accrued experience. How does Cate tackle some of these issues to determine whether a property is worth pursuing or not?

Mike delves into vendor behaviours and vendor personalities. How can an experienced person determine a potentially difficult vendor? And what insights can buyers apply to get a better idea of what type of vendor could be on the other side of the transaction. Cate shares some of her past actions when it comes to protecting buyers from vendors who attempt to do the wrong thing. One of her stories includes a vendor who swapped out good appliances for inferior appliances.

Contract inclusions and documentation is critical. Strata managers are another key person in the due diligence steps for a strata property, but gleaning information is not always easy. However, there are some warning bells that buyers should be aware of. Sometimes issues can stem from legal representatives that aren't responsive or throw other stressful challenges into the mix. Cate steps through some of the tell-tale signs and things to look out for.

And what about sinister issues? The Trio unpack some of the more spooky elements that can sometimes strike in a property.

..... and our gold nuggets!

Mike Mortlock's gold nugget: Mike shares a good tip he remembered about meeting the neighbours if in any doubt.

Cate Bakos's gold nugget: "If it's an important thing, and it's been agreed to, get it in writing. And if the other person is reluctant to sign, there is your warning bell.

Show notes: https://www.propertytrio.com.au/2024/09/02/intuitive-property-inspection-sixth-sense/

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This week our topic comes from a research report commissioned by Mike’s business MCG Quantity Surveyors, and it focussed on how yields change per city as distance from the centre of the town or CBD increases, so there’s a lot to unpack here. We often hear people quoting about buying within say 10, 20 or 30kms from the CBD, but Dave unpacks the factors that also need to be taken into account with this consideration, and Cate questions whether commute times are the more important measure.

But how do units and house metrics differ when it comes to distance from CBD? Rental yields are one interesting metric that MCG's study has focused on in each capital city. There is one city that bucks the trend... and it's Melbourne. Melbourne's unit rental yields decrease as the distance from CBD increases.  What is driving this? Could it be buyer attitudes towards outer ring locations? Is infrastructure the problem? Or is Melbourne's landscape physically different? Tune in to find out. A

Affordable and aspirational are two very different drivers. Cate and Dave ponder how our urban make up differs around our capital cities. In particular, Dave cites some interesting student population statistics.  The results may surprise our listeners!

Regional areas were also canvased in the study and some of the drivers for double-digit yields are explained by Mike, and he cautions those investors who target rental yields without understanding the other aspects of investment strategy and asset selection.

The Trio take a trip around Australia and uncover some of the highest rental yields across the nation.  Cate and Dave agree on the importance of looking beyond the rental yields. Conducting thorough due diligence is essential for any investment area.

"The study has essentially confirmed our thoughts that regions are higher yielding than cities and the super-yields are often associated with mining and the like. So getting back to these concentric rings of distance from the CBD. What do we think the strengths and weaknesses of an arbitrary division like that is for investors?"  

The Trio loved bringing this episode to life and MCG Quantity Surveying have provided the report for listeners to access. We've saved it in our show notes and we hope our listeners enjoy digesting it. 

  ..... and our gold nuggets! Cate Bakos's gold nugget: It's integral for investors to know what their purpose is for investing. Different life stages and different retirement strategies could shine a spotlight on yield.

David Johnston's gold nugget: "That's a great one Cate. I might just double down on that!" 

Mike Mortlock's gold nugget: Mike likes the fact that they took a metric that is often used, and demonstrated that research is not always valuable to investors. Yield is not everything, it's just one part of the puzzle. 

Show notes: https://www.propertytrio.com.au/2024/08/26/proximity-to-cbd-across-10km-rings-impact/

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Mike kicks off this episode, and the Trio reminisce about Pete Koulizos's special place in the history of the show as they marvel at Adelaide's stellar growth. How sustainable do they think the City of Church's continued growth is?

Dave references the quartile performance breakdowns, and the possible leading indicators when it comes to capital city growth cycles. The softening of the higher priced quartile of the market is important to note.

The market sentiment is currently hinging on interest rates and the possibility of a rate cut, and Cate canvases the challenges associated with this, and in particular, her local market. Despite the heightened listing activity, interstate investor interest is buffering Melbourne's price falls. The difference between the heated markets and the softer markets at the coal face boils down to the sense of urgency. Brisbane, Adelaide and Perth are plagued with tough buying conditions, while other softer markets are experiencing longer days on market, more indecision and relaxed competition.

The chart illustrating the onset of COVID in March 2020 relative to peak levels attracts some attention and the Trio consider the growth drivers, inhibitors and obvious reasons for the vast differential in growth figures. 

Considering that during this time, three cities that have delivered between 64%-70%, contrasted to 10.6% and 28.7% in Melbourne and Sydney, respectively is fascinating. How important is timing, and can we pick a market peak and trough?

The rate of rental growth is the smallest monthly rise since August 2020 and some markets are exhibiting rental drops. It's fair to say that rental movement appears to be plateauing now. Cate reminds listeners about the seasonality of asking rents and rental stock, particularly in cooler climates. Dave hints at the impact of reducing rental rates on the CPI money markets also, and considers that the impact on inflation could be positive.

And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. Mike points out the correlation between listing figures and capital growth and Dave circles in on Brisbane. Could heightened new listing figures hint that Brisbane's market is peaking?

The standouts in the Westpac Consumer Sentiment Index are relate to the Interest Rate Expectations index and the Family Finances vs a Year Ago. Are households getting accustomed to the conditions now, or have household savings stabilised now that some of the other costs like fuel and consumables have calmed down..... or could it relate to the recent tax cuts? Mike points out the impact of insurance and the costs associated with natural disasters on the inflation figures. Breaking the figures down into states and territories is interesting though, and NSW records the bleakest outlook for Time to Buy a Dwelling, as Dave cites.

The figures within the ABS lending indicators data demonstrate that investors are certainly strong. Owner occupier finance for first home buyers is reasonably strong in both QLD, VIC and ACT and Dave puts this down to incentives and government support.

Lastly, Dave discusses the delicate balance between interest rates, the unemployment rate, and the complexity that the Reserve Bank board have to consider at every step.

And... time for our gold nuggets... 

Mike Mortlock's gold nugget: While the monthly updates are great, month to month isn't a big indicator of movement. It's really the trends that we need to pay attention to.

David Johnston's gold nugget: "If you're not willing to purchase interstate, then the month to month figures aren't that relevant. If you're not willing to purchase interstate, then the best time is now." 

Cate Bakos's gold nugget: Household spending of toys has been curbed, and Cate takes some encouragement from the decrease in travel/holidays in the finance and spending activity figures. Here's hoping for an interest rate cut soon! 

Show notes: https://www.propertytrio.com.au/2024/08/19/ep-271-july-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM


Mike kicks off this episode, and the Trio reminisce about Pete Koulizos's special place in the history of the show as they marvel at Adelaide's stellar growth. How sustainable do they think the City of Church's continued growth is?

Dave references the quartile performance breakdowns, and the possible leading indicators when it comes to capital city growth cycles. The softening of the higher priced quartile of the market is important to note.

The market sentiment is currently hinging on interest rates and the possibility of a rate cut, and Cate canvases the challenges associated with this, and in particular, her local market. Despite the heightened listing activity, interstate investor interest is buffering Melbourne's price falls. The difference between the heated markets and the softer markets at the coal face boils down to the sense of urgency.

Brisbane, Adelaide and Perth are plagued with tough buying conditions, while other softer markets are experiencing longer days on market, more indecision and relaxed competition. 

The chart illustrating the onset of COVID in March 2020 relative to peak levels attracts some attention and the Trio consider the growth drivers, inhibitors and obvious reasons for the vast differential in growth figures. 

Considering that during this time, three cities that have delivered between 64%-70%, contrasted to 10.6% and 28.7% in Melbourne and Sydney, respectively is fascinating. How important is timing, and can we pick a market peak and trough?

The rate of rental growth is the smallest monthly rise since August 2020 and some markets are exhibiting rental drops. It's fair to say that rental movement appears to be plateauing now. Cate reminds listeners about the seasonality of asking rents and rental stock, particularly in cooler climates. Dave hints at the impact of reducing rental rates on the CPI money markets also, and considers that the impact on inflation could be positive.

And what is happening with listings? We have more new listings than previous years, but our total listing figures are still below historical levels. Mike points out the correlation between listing figures and capital growth and Dave circles in on Brisbane. Could heightened new listing figures hint that Brisbane's market is peaking?

The standouts in the Westpac Consumer Sentiment Index are relate to the Interest Rate Expectations index and the Family Finances vs a Year Ago. Are households getting accustomed to the conditions now, or have household savings stabilised now that some of the other costs like fuel and consumables have calmed down..... or could it relate to the recent tax cuts?

Mike points out the impact of insurance and the costs associated with natural disasters on the inflation figures.  Breaking the figures down into states and territories is interesting though, and NSW records the bleakest outlook for Time to Buy a Dwelling, as Dave cites.

The figures within the ABS lending indicators data demonstrate that investors are certainly strong. Owner occupier finance for first home buyers is reasonably strong in both QLD, VIC and ACT and Dave puts this down to incentives and government support.

And Dave discusses the delicate balance between interest rates, the unemployment rate, and the complexity that the Reserve Bank board have to consider at every step.

And... time for our gold nuggets... 

Mike Mortlock's gold nugget: While the monthly updates are great, month to month isn't a big indicator of movement. It's really the trends that we need to pay attention to.

David Johnston's gold nugget: "If you're not willing to purchase interstate, then the month to month figures aren't that relevant. If you're not willing to purchase interstate, then the best time is now." 

Cate Bakos's gold nugget: Household spending of toys has been curbed, and Cate takes some encouragement from the decrease in travel/holidays in the finance and spending activity figures. Here's hoping for an interest rate cut soon!  

Show notes: https://www.propertytrio.com.au/2024/08/19/ep-271-july-market-update/

Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

Emma has a great question: "I am early thirties and my husband late thirties, we have two young children. We recently made our forever home purchase in Seaholme around a year ago (not many in Melbourne know where that is but Cate will!) $2+ mil. Our mortgage is approx $880k, mostly offset. I love the area and all going to plan we stay here forever, no plans to upgrade. Our combined income is just over $500k per year (gross) I work part time and will increase my income when kids go to school. We own an inner city apartment that is rented at $900 a week and will sell when kids are out of childcare. We have cash savings that could enable a deposit on an investment property.  My husband has purchased multiple properties in the past, (mostly smaller interstate properties) and our PPOR is my first property purchase. I have always been into shares and have done quite well for us investing pre home purchase. My default thinking has been 100% share investment after buying the PPOR however perhaps an investment property is the way to go first. My query is timing, now or wait?"
 
Alignment of investment timing with personal financial stability is crucial for several reasons. 

• Financial stability determines an investors ability to manage and sustain and investment, particularly in volatile markets.
• It also puts an investor in a stronger stronger position to absorb any unexpected costs or economic downturns that might affect their investment.
• Factoring in time and compound growth, an investor has some positive outcomes to look forward to, and Dave talks our listeners through some realistic modelled projections.

"And this is why starting early is so advantageous."

Emma has also asked for the Trio's thoughts on shares vs property and what would be a good diversification mix. Emma has a background in shares and has done well. Starting off with diversification first, how should this consideration be factored into an overall investment strategy? From superannuation to asset allocation, there are many important considerations for investors to canvas. Tune in to find out... 

How does a person's age factor into an investment strategy? Mike dares to answer... but there is a common theme.... TIME. 

What role does property play in property investment, and how does it compare to shares? Dave shares another fantastic example of leverage vs cash. Over 10,20 and 30 years, the outcomes are astonishing. 

Shares versus property... Mike is in the hotseat, but Dave details the pros and cons of each too.  But canvasing a balanced strategy; for someone who is ambivalent and not particularly swayed towards either property or shares, the Trio have a few thoughts about how investors can achieve a balanced strategy.  Dave's key points include;

• An initial focus on securing a home and acquiring 1-3 investment properties as soon as possible,
• Opening a focus to shares, whilst maximising super contributions in the early days
• Retaining the ability to continue paying down any existing debt
• Timing share investments when rental cash flow becomes positively geared, and
• Maintaining a healthy balance of both asset classes

Cate's knowledge of Melbourne's inner-west shines through, but she reminds listeners that there is more to property strategy than just circling capital growth prospects. Assuming Emma is circling capital growth, Cate has some local insights to share.

What advice does Dave have for those who are anticipating inheritance and/or bonuses? Research suggests that this can impact negatively on people's diligence with budgeting and investing 

..... and our gold nuggets! 

Cate Bakos's gold nugget: These listeners are young and they are thinking pro-actively about investing. Time is their best friend!

David Johnston's gold nugget: What jumps out for Emma and her husband is the fact that they have been investing since a young age. Dave marvels at their diligence, and reminds listeners that this couple are in a great position because they started young. 

Mike Mortlock's gold nugget: Mike reflects on the shares vs property discussion and he challenges our duo to consider the power of leveraging. 

Show Notes: https://www.propertytrio.com.au/2024/08/12/demystifying-auction-campaigns-2-2/

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We often talk about property acquisition experiences from the buyer’s perspective, but this second part episode is all about the auction campaign process from an agent’s perspective. The Trio specifically circled in on the challenges and flavours of auction day, noting the various twists and turns that campaigns can take.

What visibility does the vendor have throughout the campaign? 

From campaign updates to online buyer activity reports, the agents can track a multitude of leading indicators to share with the vendors along the way.  Dave promps Cate to share some of the things that can go wrong for the vendor and their agent in the final week of the auction campaign. Buyers circumstances can change, finance delays could ensue, legal issues could arise, or buyers could purchase alternative properties. So many challenges can crop up and agents need to be prepared to pivot quickly.

And what happens when another similar property comes onto the market with a lower auction quote range? 

Mike questions vendor-led curveballs and Cate chats about the things that can lead vendors to change things up. 

Cate walks the listeners through some of the behind-the-scenes things that most buyers wouldn't realise, including reserve price setting. The Trio delve into the pro's and cons of leaving the reserve price setting to auction day. 

The pressure that many vendors face is quite significant, and Cate's insights into the 'half time show' (or referral) sheds light on the intensity of the decision to place the property on the market. 

Pass-ins can be terrifying for some, but being equipped with knowledge and comparable sales research can make a huge difference. Cate shares some tips for buyers who may face a pass-in. 

Cate demystifies heckling, auction disrupters and intimidating behaviours. She also delves into the risks that buyers take if they annoy the auctioneer. 

Intimidating bidding is tough for buyers who are ill-prepared, but there are other mistakes that buyers make at auction. Cate's real life story about bidding increments and auction rules illustrates the critical mistakes that buyers sometimes make. The auctioneer, agents and vendor's plights must be considered when bidders make mistakes.

.... and our gold nuggets!

Mike Mortlock's gold nugget: Mike reflects on the complexity of auction campaigns. 

Cate Bakos's gold nugget: How you are viewed by the vendor. The agent is the conduit between the buyer and the vendor. Buyers need to consider the impact and influence that the agent can have on the vendor when it comes to favouring certain buyers. 

David Johnston's gold nugget: Agents deal with different vendor personalities all the time. It's OK to ask for a bit of background about the vendor if you are wanting to understand more about what the agent is dealing with behind the scenes. 

Show Notes: https://www.propertytrio.com.au/2024/08/05/demystifying-auction-campaigns-2/