Debt and Lending News

Leverage refers to increasing the size of a prospective return. For growth-oriented investors, borrowing to invest or gearing is a tax-efficient way to expand the size of their investments.

Read our insights on the latest news, trends and changes related to debt, lending and gearing strategies.

Federal Budget 2021: what individuals need to know

The 2021 Federal Budget was announced on 11 May 2021 and Pekada will provide you with the resources to determine the potential impact to you, the opportunities and how to manage them effectively.

After the economic turmoil of 2020, the 2021-22 Federal Budget focused on measures to promote economic growth and recovery with big spending and very few surprises.

The biggest winners aged care, women, health, and childcare. Perhaps laying the foundations for an Election announcement?

There were also some wins for superannuation, although the rate of superannuation guarantee or changes to minimum pension requirements didn’t see any proposed changes. As a result, superannuation guarantee will increase to 10%, and minimum  pension drawdown requirements will revert to their standard levels from 1 July 2021.

On a positive note it was good to see the data confirming the economy is recovering rapidly, but the Treasurer did temper the excitement on this, noting that we cannot take the gains we have made for granted. Probably a fair point, as a fair chunk of the heavy lifting has come as a result of tax receipts off the back of an iron ore spot price that is 4 times higher than forecast. The deficit is still significant, however it is hard to argue that something of this magnitude isn’t required.


NOTE: It’s important to remember that the Budget announcements are still only proposals at this stage. Each of the proposals must be passed by Parliament before they’re legislated – and could change.





Repealing the work test for non-concessional contributions and salary sacrifice contributions for people aged 67 to 74

Expected to be 1 July 2022
The Government has announced it will allow individuals aged 67 to 74 to make or receive non-concessional (including under the bring-forward rule) or salary sacrifice superannuation contributions without meeting the work test, subject to existing contribution caps.

However, individuals aged 67 to 74 years wanting to make personal deductible contributions will still have to meet the existing work test. This measure is proposed to have effect from the start of the first financial year after the enabling legislation receives Royal Assent. The Government stated it expects this to occur prior to 1 July 2022.


Reducing the eligibility age for downsizer contributions to 60

Expected to be 1 July 2022
The Government has announced it intends to reduce the eligibility age to make a downsizer contribution from 65 to 60 years of age.

The downsizer contribution rules allow people to make a one-off after-tax contribution to super of up to $300,000 from the proceeds of selling their home they have held for at least 10 years. Under the rules, both members of a couple can make downsizer contributions for the same home and the contributions do not count towards a member’s non-concessional contribution cap.

This measure is proposed to have effect from the start of the first financial year after the enabling legislation receives Royal Assent. The Government has stated that it expects this to occur prior to 1 July 2022.


First Home Super Saver Scheme – increasing the maximum releasable amount to $50,000

Expected to be 1 July 2022
The Government has announced it will increase the maximum releasable amount for the First Home Super Saver Scheme (FHSSS) from $30,000 to $50,000.

Under the existing FHSSS rules, an eligible person can only apply to have up to $30,000 of their eligible (voluntary) contributions, plus a deemed earnings amount, released from super to purchase their first home.

This measure is proposed to have effect from the start of the first financial year after the enabling legislation receives Royal Assent. The Government has stated that it expects this to occur prior to 1
July 2022.


Removing the $450 per month minimum superannuation guarantee threshold

Expected to be 1 July 2022
The Government has announced it intends to remove the $450 per month minimum superannuation guarantee (SG) income threshold.

Under the current rules, an employer is not required to pay superannuation guarantee contributions for an employee who earns less than $450 per month.

This measure is proposed to have effect from the start of the first financial year after the enabling legislation receives Royal Assent. The Government has stated that it expects this to occur prior to 1 July 2022.


Complying pension and annuity conversions

Effective first financial year following Royal Assent The Government has announced people with certain complying income stream products will be given a two-year window to commute and transfer the capital supporting their income stream (including any reserves) back into a superannuation account in the accumulation phase. The member can then decide whether to commence a new account based pension, take a lump sum benefit or retain the balance in the accumulation account.

The income streams affected by this measure include:

  • market-linked income streams (otherwise known as Term Allocated Pensions),
  • complying life expectancy income streams and
  • complying lifetime income streams,

that were first commenced prior to 20 September 2007 from any provider, including self-managed superannuation funds (SMSFs).

Under the measure, any commuted reserves will not be counted towards an individual’s concessional contributions cap but they will be taxed as an assessable contribution of the fund. When commuted, any social security treatment the product carries such as 100% or 50% asset test exemption and/or grandfathering for income test purposes will cease.

However, the Government has confirmed there will be no re-assessment of the social security treatment the product received prior to the commutation. Therefore, the member would not be required to pay back any overpaid entitlements.

The Government has also confirmed the existing transfer balance cap rules will continue to apply. Therefore, on commutation the member will receive a debit in their transfer balance account based on the debit value method that applies.

Income streams not included in this measure include flexi-pensions offered by any provider and lifetime products offered by a large APRA-regulated defined benefit scheme (eg some older corporate funds) or public sector defined benefit scheme (eg CSS, PSS).


Relaxing residency requirements for SMSFs and Small APRA Funds (SAFs)

Expected date 1 July 2022
The Government plans to relax the residency requirements for SMSFs by extending the central management and control test from 2 to 5 years and removing the active member test.

Under current rules, SMSF trustees living overseas who intend to return to Australia at some point can be away for a period of up to two years and the fund will still meet the central management and control test. Under the proposal, the trustee will be able to be away for up to five years and still meet the test.

Further, the active member test will be abolished. Under this test, if the fund had members that were ‘active’ by making contributions or rollovers into the fund, the residency status of the fund could be jeopardised. This means that members who are overseas for a period of time often cannot make contributions to their SMSF or SAF. In contrast, a non-resident can contribute to large APRA and industry funds without putting the fund’s residency status at risk.

Abolishing the active member test simplifies the rules and ensures that members and trustees who are temporarily overseas can continue to make contributions to their SMSF or SAF without jeopardising the fund’s complying status.




Retaining LMITO in the 2021-22 income year

Effective 1 July 2020
The Government will retain the low and middle income tax offset (LMITO) for the 2021-22 income year, providing further targeted tax relief for low- and middle-income earners. The LMITO provides a reduction in tax of up to $1,080. The table below shows the amount of offset an individual client is entitled to depending on their taxable income:


This announcement means that an individual’s effective tax-free income threshold for 2021-22 financial year remains the same compared with the current financial year. An individual who is not eligible for seniors and pensioners tax offset can effectively have taxable income of up to $23,226 without having to pay income tax.


Modernising the individual tax residency rules

Effective 1 July following Royal Assent
The Government will replace the individual tax residency rules with a new, modernised framework. The primary test will be a simple ‘bright line’ test — a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident. Individuals who do not meet the primary test will be subject to secondary tests that depend on a combination of physical presence and measurable, objective criteria. The measure will have effect from the first income year after the date of Royal Assent of the enabling legislation.


Simplifying self-education tax deductions

Effective from the income year after Royal Assent Currently, tax deductions for Category-A self-education expenses must generally be reduced by $250.

The Government has proposed removing this $250 reduction amount to effectively allow individuals to claim a tax deduction for all Category-A self-education expenses.

Category-A expenses include tuition fees, textbooks, stationary, student union fees, student services and amenities fees, public transport fares, car expenses worked out using the ‘logbook’ method (other than the decline in value of a car), running expenses for a room set aside specifically for study.




Increasing the flexibility of the Pension Loans Scheme

Effective 1 July 2022
The Pension Loans Scheme (PLS), a voluntary, reverse mortgage type loan available through Services Australia, currently allows a fortnightly loan of up to 150% of the maximum rate of Age Pension. From 1 July 2022, the Government will implement two changes to the scheme – a No Negative Equity Guarantee and lump sum advances.

No Negative Equity Guarantee
A No Negative Equity Guarantee will be introduced so borrowers, or their estate, will not have to repay more than the market value of their property, in the rare circumstance where their accrued PLS debt exceeds their property value.

Lump sum advances
Eligible people will be able to receive one or two lump sum advance payments totalling up to 50% of the maximum Age Pension each year. Based on current Age Pension rates, this is around $12,385 per year for singles and around $18,670 for couples combined. Note, the total amount eligible people are able to receive under the pension loans scheme, including
any lump sum advance payments, has not changed. The total amount cannot exceed 150% of the maximum Age Pension which is around $37,155 per year for singles and around $56,011 per year for couples.




Increase in child care subsidy

Effective 1 July 2022
The Government announced it will:

  • increase the Child Care Subsidy (CCS) rate by 30 percentage points for the second child and
    subsequent children aged five years and under in care, up to a maximum CCS rate of 95% for
    these children, commencing on 11 July 2022, and
  • remove the CCS annual cap of $10,560 per child per year commencing on 1 July 2022.
    This will provide greater choice to parents who want to work an extra day or two a week. Removing
    the annual cap helps support the choices of parents to work the hours they want to work and, in
    particular, reduces barriers that secondary income earners face when seeking to work more.

The current hourly fee caps will continue to apply.




Increased funding for Home Care

Effective 1 July 2021
To support senior Australians to remain at home, the Government is funding an additional 80,000 Home Care packages:

  • 40,000 released in 2021-22
  • 40,000 released in 2022-23

Additional respite care services will be provided to assist carers and enhanced support services will
be provided to assist senior Australians to navigate the aged care system


Increased funding for residential aged care

Effective over 3 phases: 2021, 2022-23, 2024-25
To improve and simplify residential aged care services, the Government is implementing a range of measures To improve residential aged care quality and safety, including a new star rating system to provide senior Australians, their families and carers with information to make comparisons on quality and safety performance of aged care providers.

Reforms to residential aged care services and sustainability, including a new Government-funded Basic Daily Fee supplement of $10 per resident per day, funding to implement the new funding model, the Australian National Aged Care Classification (AN-ACC), and implementation of a new Refundable Accommodation Deposit (RAD) Support Loan Program; and
a range of measures to grow and upskill the aged care workforce.



We are here to help

For our ongoing service package clients, your financial adviser will be in touch with any specific actions or impacts to your situation.

If after reading this you want to chat, get some clarification in regards to any of the above measures outlined in the 2021-22 Federal Budget, please contact us so that we can discuss your particular requirements in more detail.


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Budget 2020 – what you need to know

This is without doubt one of the most exciting times of the year, well at least for some of us. Last night the Treasurer, Josh Frydenberg, released the Government’s highly-anticipated 2020-21 Budget, featuring the bringing forward of tax cuts, superannuation reforms, measures for Centrelink clients and additional aged care funding.  After going into a record deficit of $213.7 billion to support individuals and businesses during the Coronavirus crisis, the focus of this year’s Budget is to regrow the economy by creating job opportunities and encouraging spending.

Pekada’s team have reviewed the Budget and prepared a summary of the key measures for you, and will be updating our the Federal Budget 2020 page here throughout the day.

NOTE: It’s important to remember that the Budget announcements are still only proposals at this stage. Each of the proposals must be passed by Parliament before they’re legislated – and could change.



Personal tax cuts
The Government has announced that it will bring forward stage two of the previously legislated tax cuts that were due to take effect from 1 July 2022 by two years. As a result, from 1 July 2020:

  • the Low Income Tax Offset (LITO) will increase from $445 to $700. The increased LITO will be reduced at a rate of 5 cents per dollar between taxable incomes of $37,500 and
    $45,000. The LITO will then be reduced at a rate of 1.5 cents per dollar between taxable incomes of $45,000 and $66,667.
  • the top threshold of the 19% tax rate will increase from $37,000 to $45,000, and
  • the top threshold of the 32.5% tax rate will increase from $90,000 to $120,000.

What this could mean for you

  • The following chart shows the tax cuts you might receive this financial year based on your income levels and the amount of tax you’re currently paying.

Low and Middle Income Tax Offset
The Low and Middle Income Tax Offset (LMITO) was introduced in the 2018 Budget, to complement the existing Low Income Tax Offset (LITO). In 2019, the base rate for the LMITO increased from $200 to $255 and the maximum payment increased from $530 to $1,080. The Government had planned to discontinue the LMITO when the stage two cuts were to be introduced in mid-2022. However, even though the stage two cuts have been moved forward to the current financial year, the LMITO will also remain in place for the
2020–21 financial year.

What this could mean for you

  • If you qualify for LMITO you will receive payment after you submit your next tax return. Depending on your income, the maximum LMITO you can receive is $1,080. However, the LMITO is scheduled to cease next year. This means you could end up paying more tax in the 2021–22 financial year than in 2020–21. Dual income couples can both be eligible for the LMITO, up to a combined total of $2,160.



Default super accounts
Currently, if you start a new job and you don’t let your employer know where you want them to pay your super contributions, they will open a super account for you. The account will be in your employer’s default super fund. This may result in you having multiple super accounts.

By 1 July 2021, your employer will be able to obtain information about your existing super account from the ATO. They will then pay your super contributions into this account, unless you instruct them to pay it to a different account.

For people who don’t yet have a super account, their employer will be able to open an account for them in their default
super fund.

What this could mean for you

  • Over 4 million Australians currently have multiple super accounts, and this means they’re paying more than one set of super fees and possibly multiple insurance premiums as well. The Government estimates that this is costing Australians $450 million each year. The intention of this change is to keep people’s super accounts attached to them, so they can take them from job to job.
  • By having only one super account, you can stop paying unnecessary fees and insurance premiums that may be eroding your super balance. Having all your super together can also help your super savings accumulate faster.

Performance testing for MySuper products
MySuper products follow a strict set of government guidelines. They tend to offer their members lower fees, simple features and limited investment options.

The Government feels there are too many underperforming super funds in the market, and this is impacting members’ retirement savings. From 1 July 2021, MySuper products will be subject to an annual benchmarking test. If the fund is found to be underperforming, it will need to inform its members by
1 October 2021.

Further, if a fund is found to underperform for two consecutive years, they won’t be permitted to accept new members until their performance improves.
By 1 July 2022, all super funds will need to do the annual benchmarking test – not just MySuper products.
What this could mean for you

  • How your super fund performs can make a big difference to the amount of money you have when you retire. This change means that your super fund will need to tell you if your fund has underperformed compared to other super funds. You can then make a decision about whether you want to stay with your fund or change to another fund.

YourSuper online comparison tool
To help members easily compare super funds, the Government will release an interactive online comparison tool called YourSuper by 1 July 2021 which will:

  • rank MySuper products by fees and investment returns
  • provide links to super fund websites
  • show if you have more than one super account so you can consider consolidating them.

What this could mean for you

  • Choosing a super fund can be daunting. This comparison tool will make it easier to see what each super fund charges in fees and how they have been performing. However, it’s important to remember that past performance is not always an indication of future performance.



Additional support payments for welfare recipients
Government support recipients will receive two separate economic support payments of $250, to be paid progressively from December 2020 and March 2021.

This follows two previous payments of $750 to eligible recipients, with the new payments estimated to cost a total of $2.6 billion.
What this could mean for you

You may be eligible for the two payments of $250 if you’re currently receiving:

  • Age Pension (including Age Pension (Blind))
  • Carer Allowance*
  • Carer Payment
  • Commonwealth Seniors Health Card
  • Disability Support Pension (including Disability Support Pension (Blind))
  • Double Orphan Pension*
  • DVA Gold card
  • DVA Payments
  • DVA Seniors Card
  • Family Tax Benefit (fortnightly recipients)*
  • Family Tax Benefit (lump sum recipients)*
  • Pensioner Concession Card (PCC) holders (covers non- income and asset test PCC holders and people who have an extended entitlement to a PCC even though their payment has stopped).


Health services
Coronavirus has taken its toll on the mental health of many Australians. Therefore, the number of psychological services funded by Medicare will be doubled from 10 to 20, effective immediately.

The NDIS will also receive additional funding of almost $4 billion, to provide essential support to Australians living with a disability.

Women facing ovarian cancer will now be able to access the drug Lynparza through the PBS. Rather than costing $140,000 per course, general patients will now pay around $41 for a script while concession card holders will be charged $6.60.

What this could mean for you

  • If you currently access any of these services, or think you may need to in the future, it’s important to understand what you’re eligible for. As the first step, we recommend you speak with your doctor.

New jobs in key industries
The Government is committing $1.5 billion over five years from 2020–21 to support the building of competitiveness, scale and resilience in the Australian manufacturing sector. It will focus on six key industries of strategic interest:

  • defence
  • space
  • medicine and medical products
  • food and beverages
  • resources technology
  • recycling and clean energy.

Rural communities will benefit from $2 billion in funding over 10 years to improve water infrastructure, while regional businesses will benefit from an expansion of the instant asset write-off scheme. Regions that rely on international tourism will benefit from their share of $51 million in funding over two years to diversify their markets.

While the Budget doesn’t offer much financial relief to female workers currently impacted by Coronavirus, the government is committing $240 million over four years towards a range of employment initiatives for women. These include increasing female workforce participation in male-dominated industries such as construction.

What this could mean for you

  • With the pandemic causing massive job losses around the country, these measures are designed to get as many Australians back to work as possible. While some industries may currently offer more opportunities than others, it’s likely that many industries will be in a state of flux for years to come.


For our ongoing service package clients, your adviser will be in touch with any specific actions or impacts to your situation.

If you have any queries in the interim or would like further clarification in regards to any of the above measures outlined in the 2020-21 Federal Budget, please feel free to give me a call to arrange a time to meet so that we can discuss your particular requirements in more detail.


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Why you should see a mortgage broker

To use a basketball analogy, a good financial advisor should often run point guard for your personal finances. This means that they are the main playmaker, they decide the plan of attack moving forward. A good point guard is essential in having a championship calibre team, but it’s also important that the other positions are filled with experts in their fields such as accountants, lawyers and mortgage brokers. Today we’re going to focus on the latter and discuss why I think it is important that people should see a mortgage broker.

Mortgage brokers provide expert advice

A good mortgage broker will be able to offer you advice far greater than just finding you the best rate. Getting a loan can be confusing, especially if it’s your first time. Offset accounts, fixed vs variable, redraws… the list can go on in terms of different terminology. A good broker will be able to help you navigate through these different features and find out what is important for you. Often, I feel that getting the structure and features of your loan right can be more important than the rate alone.

Mortgage brokers choose from a range of lenders

They have access to a range of different lenders and rates, they may even have access to rates that you are unable to get due to the size of their business. You as a consumer have access to these lenders as well but you likely don’t have the software to go and compare these as quickly as a mortgage broker does and it will often leave you spending a lot of time comparing different lenders when you could have a broker do it for you far more efficiently.

Most of the time there is no extra cost

A majority of the time the mortgage brokers are actually paid by the lender for finding them business and do not charge an extra fee on top to you. Commissions are often a dirty word for people, especially following on from the royal commission but now most lenders pay a very similar commission and no decent mortgage broker would or should ever focus on the commission alone, rather looking at what loan and solution is best for you.

Mortgage brokers commit to an ongoing relationship

Similarly to a financial plan, you should be reviewing your loans on a consistent basis. Situations change, interest rates change, and products change so you need to be making sure you are reviewing these to ensure you have the best solution possible for you. Having a good mortgage broker should mean that they are proactively reaching out to you. It also means you will have an expert to call if you ever have any questions rather than having to sit on hold to a bank or other lender to get an answer.

If you would like to get in contact with a mortgage broker, please shoot me a message and I would be happy to do an introduction to one of our trusted business partners.


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The New and Improved Pension Loans Scheme

The Pension Loans Scheme (PLS) has been around for about 30 years, however it wasn’t until some big changes made on the 1st of July last year (2019) that expanded the eligibility criteria and withdrawal amounts were introduced that people started to take more notice of it. Under these changes, many more people of Age Pension age will be able to apply to use this reverse mortgage style scheme to gain access to extra income by borrowing against the equity they have in their home.

It can be a great way for Australians who are in the retirement planning stage of their life and of Age Pension age to be able increase their cashflow, especially as some Australian’s may find that they are asset rich (with the family home) but cash poor. This scheme allows them to access some of their asset in the family home to fund their lifestyle in retirement.

How does the Pension Loans Scheme work?

The PLS essentially works in a similar way to a reverse mortgage except that the loan is offered by the federal government, allowing borrowers of Age Pension age to receive a fortnightly income to supplement their retirement income by taking out a loan against the equity in their home. It is flexible in the way that the payments can be made for a short period of time or may be for an indefinite period, however you choose to use it.

This loan can be repaid in full or part at any time, the full amount of the loan plus interest owed at the time of the death of the person will be recovered from the person’s estate.

Who is eligible for the Pension Loans Scheme?

To be eligible for a loan under the PLS, you must meet all of the following. You:

  • or your partner are Age Pension age
  • get or are eligible to get a qualifying pension
  • own, or your partner owns, real estate in Australia that you can use as security for the loan
  • have adequate and appropriate insurance covering the real estate offered as security
  • aren’t bankrupt or subject to a personal insolvency agreement.


How much can I get under the Pension Loans Scheme?

Under the PLS you can receive fortnightly payments which top up your current pension amount (whether you receive some pension or nil pension) to 150% of the maximum rate of pension which applies to your circumstances. If you don’t want the full 150% you can nominate a lower amount.

This means that full Age Pensioners can borrow up to 50% of the maximum rate of the fortnightly Age Pension (including supplements) and part Age Pensioners can withdraw fortnightly payments up to a maximum of 150% of the full Age Pension less the amount of their current fortnightly payments.

How does the Pension Loans Scheme differ from a normal reverse mortgage?

One of the main differences is that there are no lump sums with the PLS as it is an ongoing income stream instead. Therefore, it may not be suitable for people who are looking to gain access to a larger sum of funds quickly.

Another point of difference is that the loans are from the government rather than a financial institution. This can be seen as a good thing for a lot of people who feel more comfortable dealing with the government.

Interest rates are generally lower than comparable reverse mortgages. The current rate for the PLS is at 4.5% pa. There are also no establishment or monthly fees with the PLS. This differs to most other mortgages. Centrelink may, however, charge costs (including legal fees). The Centrelink costs are determined after the loan application is made and can be paid immediately or added to the outstanding loan balance.

As always, if you have any questions feel free to email me at

Find more details on the Pension Loans Scheme here. 


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RBA Cuts Cash Rate To 0.25%

The Reserve Bank of Australia (RBA) has cut the official cash rate to a fresh historic low of 0.25% in an effort to soften the economic blow of the COVID-19 pandemic. Usually the RBA meets on the first Tuesday of every month but this emergency gathering was announced earlier in the week in response to what has been happening.


It is the first time a rate cut has been announced outside of a regular meeting since 1997. Governor Philip Lowe announced the rate cut along with other measures which included quantitative easing, which is designed to make sure credit remains available to individuals and businesses. Included in these measures is a $90 billion lending facility to banks for small business along with the purchase of government bonds.


The setting up of the $90 billion lending facility to assist small businesses and help banks with their own margin pressures is similar to what was announced by the Bank of England last week. This scheme will be complimented by the Morrison governments new pledge of $15 billion to enable smaller lenders to continue supporting Australian consumers and small business.


Below are some quotes from Governor Lowe:


“The various elements of this package reinforce one another and will help to lower funding costs across the economy and support the provision of credit, especially to small and medium-sized businesses.”


“Australia’s financial system is resilient and well placed to deal with the effects of the Coronavirus. The banking system is well capitalised and is in a strong liquidity position. Substantial financial buffers are available to be drawn down if required to support the economy.”


Read the statement here:

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Podcast – Property Update With Dave Robbins


In the latest episode of The Wealth Collective Podcast we talk to Dave Robbins from Performance Property Advisory and BuyerX about all things property. In particular we discuss the concept of rentvesting, general property market update and buying outside of your neighbourhood.

If you want to get in contact with Dave you can go to their website at or or you can email him at



Pete Pennicott:
Hi guys, and welcome back to another episode of the wealth collective podcast. Pete Pennicott here and I’m joined by my co-host as always Zac Masters.

Zac Masters:
Hey Pete, how are you going?

Pete Pennicott:
Very good. And we’ve got a special guest in the studio, not that you’re not special. So Dave Robbins from Performance Property and BuyerX.

Dave Robbins:
Thanks Pete. And thanks Zac for having me.

Pete Pennicott:
Yeah, so we thought really, really good timing to kick off, so with good note as well. So property is having a little bit of a little bit of a recovery, almost like a very sharp recovery since mid last year.

Dave Robbins:
It is, it’s rebounded quite well obviously with, um, the federal election probably getting the result that, uh, property investors were seeking and obviously interest rates coming off from sort of August onwards, uh, has really, um, brought some activity back to the market nationwide.

Pete Pennicott:
So we’re seeing a lot of inquiries from our clients and listeners just sort of checking in going, all right, is this the time to buy or have I missed the boat again? So the people that were sort of sitting on the sidelines, and I think that was sort of sickly hoping that it went further down so they could sort of get in and um, you know, perhaps they might have missed that opportunity or there might be different pockets of places to actually invest in. But in some of the other things we wanted to talk about today is awkward sort of rent vesting as well. So for people trying to enter the property market, especially in metropolitan Melbourne, it’s getting tougher and tougher. Um, and I’m hoping you’ll sort of cover off on why that’s difficult and hopefully is that going to end at any point?

Dave Robbins:
Sure. So we, we, uh, there’s 40 different metrics for us to, um, position a market somewhere on the property cycle, on the property clock. One of those is, the price to income ratio. Uh, and at Melbourne at the moment, uh, Melbourne house prices are 10 times the average income. So that makes it extremely difficult for first home buyers to save for a deposit to enter into a market. With still being able to live. So if you’re, if you’re having 50% of your average wage going to the average mortgage without any living expenses, it makes it extremely difficult to, to enter the market unless you’re gifted a lot of money from parents or guarantor loans and obviously, uh, the whole, um, market at the moment, is very sensitive. So not too many parents are willing to loan four or 500,000 to their kids to get into the market.

Dave Robbins:
Um, and, and it, it’s a bit of a compromise as well because if all your borrowing capacity gets you is 500,000, you have to compromise on either the quality of the asset, the location of that asset and are you going to travel an hour and a half to work every day if, if that’s what your 500,000 can buy or do you buy a one bedroom apartment in the city because that’s what your $500,000 can buy.

Pete Pennicott:
Yeah. And that, and then you might be sort of, there’s the trade off of what’s the longterm capital growth prospects for those different properties as well. Yeah. Um, and then, so a lot of people just look in the location where they live, so they only think of, I want to get into the property market. Um, I live in Melbourne, work in Melbourne, so I want to have, I think about that commute that you were talking about earlier. So are there other ways or sort of, how else can people, I guess, manage that compromise? So they are getting a toe in the water so that building an asset in property and something, hopefully what we’re, we like your service helps people sort of cut through the noise and actually put some, I guess, real research behind their decisions and make really good investment decisions, um, when purchasing the property. So can they do that without sacrificing all of their lifestyle or remortgaging their parents’ house?

Dave Robbins:
So rentvesting is a, is a property terminology, and that is, um, becoming more and more apparent as prices get further and further away. So a great example would be, a 24 year old, living with a renting with a girlfriend or, or mates or whatever it is. Um, let’s say they are renting in Richmond, obviously Richmond house prices at the moment, uh, far in excess of what a first time home owner can afford. So they may be working in the city or going to uni, um, somewhere in the city. Yeah. Um, so the idea of rentvesting is that you continue to rent in an area that is suitable to your lifestyle, your work, your family, wherever it may be.

Pete Pennicott:
You might be share housing as well to sort of spread those costs.

Dave Robbins:
Yep. Um, and then you, you, you still want to build an asset base so you can enter a more affordable market. And that may be regional Victoria at the moment where, let’s say it’s Ballarat or Bendigo, uh, average house price is around 400,000, and you’re going to get close to a four and a half, 5% yield on that. So by the time you put your, let’s say it’s an $80,000 deposit down, which is roughly 20% of the purchase price, um, the, the rental income is almost going to be servicing the debt, so close to cashflow neutral or very slightly negatively geared . Um, and entering a an $80,000 deposit in Melbourne, it doesn’t really get you anything. Um,

Pete Pennicott:
You might get a shoe box somewhere in one of those dodgy built, you know, one in Docklands that had the fire. Yeah. Literally fire sale process.

Dave Robbins:
So, so with rentvesting it’s not a get in get out two years later and try to take your money and put it on a bigger deposit in Melbourne, you really need to commit, the short to medium term, which could be anywhere from five to seven, eight years. Um, and the idea is that you’ve got an asset, in a growing market that is more affordable in a confident market where demand is exceeding supply. Um, and that isn’t costing you an arm and a leg to service the debt because we’ve got someone renting the property. You continue the, or you have the freedom or, choice to rent wherever you want to do. And it may be in five years time that you’re sick of the rental market and you want to buy a principal place of residence in Melbourne. But you can do that by, the asset that you have in, let’s say it’s Bendigo for example. That will have grown in that five to seven years and you can use that a deposit to reenter the Melbourne market and it hasn’t cost you anything. It’s only costs you the initial deposit, not the servicing of the debt along the way.

Pete Pennicott:
Yeah. And that’s good. And one of our listeners lives in Bendigo, so he’ll be very happy to hear the Bendigo one. So, yeah. Um, and in terms of timeframes, you mentioned sort of five years ish as a reasonable timeframe. Look where all about longterm investing. So is it something that can be part of a longterm portfolio as well to actually build? Or are you seeing most people actually using that as a stepping stone in selling that property?

Dave Robbins:
It’s all comes back to the individual client. But um, if you’ve got a growing asset in a market like that, the vacancy rate, the event, the rental vacancy rate at the moment in Bendigo is less than 1%. So it means there is a huge demand for people wanting to rent properties in Bendigo. So if you’ve got that, that puts upward pressure on rental pricing, it may be that you don’t need to get,

Pete Pennicott:
why sell this great asset, like what’s the rush in terms of turning over bomb properties and we see the same on other types of investments as well. So, um, if it can be built into a portfolio and you have got a cashflow positive, a property that’s growing in value and you can potentially use some equity, you’re not too sure leverage into the next property. Um, yeah, that sounds pretty well.

Dave Robbins:
The, the advice would only be to sell if you’re going to use the money for something immediately. So if you’re not going to use it on a principle place of residence where you’re not going to use it to pay back debt or whatever it may be you hold, because obviously there’s entry costs, stamp duty, et cetera, getting into the property and there’s also taxes getting out of it, through capital gains and agent’s fees, et cetera. So unless you’re going to use the money, absolutely. You hang onto the property.

Pete Pennicott:
I’m just thinking out loud, like in terms of you’ve got a few, you know, your cohort of people would be in this sort of, this zone could even sort of do even better if you’re living at home and no rent at all, so home investing.

Zac Masters
Yeah. Yeah, I was literally having this discussion, um, with a client the other day of going, you know, he’s in the position where he can potentially buy somewhere near the city but he’s going, is that going to be the best investment longterm? If I hold is this the best area to be buying, buying an hour? Am I better to just rent? So not even for the sake of, um, could he afford the property? It’s, is that the best investment decision for him as well?

Dave Robbins:
It all comes back to affordability. As I said, we’re, we’re, we’re 10 times a average house price to the average income in Melbourne. Um, how much further that can grow is really dependent on interest rates at the moment with Melbourne. Melbourne can really only grow if interest rates stagnate or fall. And when we’re roughly 3% at the moment with an RBA rate of 0.75. How much further can we go lower? Obviously the banks know better than us, but if you’ve got, in a more affordable market, like a Victorian regional, even if interest rates go up, those markets still have the ability to grow because of how cheap they are. They’re four times income. Um, and if you have a look at it from a, let’s say you’re in the public service, an ambo, a doctor, a police officer, you’re on the same wage in regional Victoria, and you can have a completely different lifestyle house, et cetera, for $600,000, as opposed to a house and land package in Melbourne, an hour from where you work for the same price.

Pete Pennicott:
Yeah. And that’s what we wasted a few people do that several years ago with Geelong. So in terms of the commute there is similar from a train experience, if you can get the right train. Coming into Melbourne and they’ve sort of got a property with a backyard. They’ve got sort of space in the house and they were living sort of, you know, quite cramped up and they had kids and stuff in inner city. Melbourne just wasn’t working for them. So they, their lifestyle is amazing and I think they’ve sort of loudly campaigning to get everyone to move down there as well. Probably just the drive up prices for themselves. So, um, so in terms of other stuff, Zac, what do we want to be covering off today?

Zac Masters
Yeah. So we’re going to be looking at hopefully just getting a basic property market update from you as well. So we’ve spoken a bit about Melbourne being quite high but probably a majority of the listeners sit around the Melbourne um, area. So if you could give your thoughts on that at the moment.

Dave Robbins:
So, so Melbourne’s last growth cycle began in 2012 and it ran to virtually the end of 2017 very beginning of 2018. Um, overall that was just shy of an 80% growth, um, through 2018 and 2019. Obviously with the, with the federal election, Royal commission, APRA changes, it was a world of negativity that went through finance and property. So prices actually came off in most of the blue chip suburbs in Melbourne. They’ve come off anywhere from 15 to 20%. Um, so that was a really good opportunity for people to buy. Then, if they had the ability to service the debt, which a lot of people didn’t.

Pete Pennicott:
Or even get the debt as well as it was getting harder and harder to get the funding.

Dave Robbins:
yeah. But as soon as the, the federal election decision was made, uh, and interest rates, were virtually 25%, 30% cheaper than what they were a year ago. It Melbourne, it made Melbourne more affordable. Um, but we, we believe it performance property that we didn’t go back to the start of the next cycle. A typical cycle in Melbourne lasts anywhere from six to nine years and it’s typically a 100% total growth. Okay. As I said before, it was a six year run and 80% growth. Um, we believe as soon as interest rates were made cheaper back to roughly 3%, it gave Melbourne the ability to run, we believe to finish off the last 20 to 30% of its last run. Obviously we can’t predict it to exactly what percentage that will be, but you can even see basically since, August or September, there’s been some, um, uh, cases where properties have gone back from an auction market, were we weren’t an auction market a year ago. The auction market is back and property prices are going two or 300,000 above the reserve.

Pete Pennicott:
And when you say was more private sales, is that sort of how they’re getting transacted on?

Dave Robbins:
Yeah, so, so real estate agents were, they would advertise a property, let’s say it’s on a 900 to 990 that they’d be accepting offers under 900. Okay. Now if that if it’s that same range, 900 to 990 at auction, they’re hitting 1.2, 1.3, and even more in some .

Pete Pennicott:
There’s going to be a lot of people are a bit worried that they might’ve missed the boat.

Dave Robbins:
Well, yes or no, but it’s all fragmented. Blue-chip suburbs are really, really flying and others are yet to get that, that influx of people.

Pete Pennicott:
And you mentioned the Bluechip. Like, what makes a property, suburb blue chip, are their certain sort of like a tick a box checklist that people can go through without engaging your services.

Dave Robbins:
Well you think about where all the private schools are, typically the character homes built before anything else. You’ve got better infrastructure. Obviously proximity to the CBD or work or whatever it may be and they’re all affluent suburbs with affluent people living in it and the idea is if, if you’re unable to purchase in those, the rental will still get a, you’ll get a really good rental because that gets people into the schools. So yeah, we believe Melbourne’s got roughly 20 to 30% left to run. Um, and then after that we believe we’re into a longer stagnation because the interest rate lever can’t be pulled much more because we’re going to be down to under 3%. We believe the only thing to allow the market to recover is wage growth. Where that’s going to take some time to catch back up to how quickly the property prices have moved. So Sydney, so as I said before, Melbourne is 10 times income. Um, Sydney is 13 times income, so that’s even further away from reality for a lot of people. I will. Yeah. It’s quite unique Sydney, cause obviously half of it is water and what’s left is just blue-chip real estate. So anything with a view to the Harbor is just gold. If we go around the country, we have a look, we’re doing a lot of buying in Brisbane at the moment. Brisbane is around seven and a half times price to income and since interest rates have come off that the, the auction market there is really gaining legs as well. So as investors we’re missing out by up to a hundred thousand, 120,000 on properties that we were able to buy six months ago with, with a lot of confidence. So it’s great for the people that we’ve purchased for because the market is doing exactly what had hoped. Um, but for people to get into Brisbane, it is time is of the essence, in another six months, another year it’s going to be too late. We’re doing a lot of buying in Adelaide as well and have continued to do that for for quite some time. Um, and Adelaide is just that, that, that slow burn, but, but a more sustainable, consistent burn. Um, Melbourne and Sydney have grown up to 12, 13% in some years. You’re not going to get that in Adelaide, but it’s going to consistently perform at its longterm average, uh, which is in the low 8%, which is great for great for clients. Ballarat that’s, that’s a market that grew extremely quickly from Melbourne buyers heading up there in 2018 but as I said before, when Melbourne peaked, that ripple effects sort of went out to Geelong, Ballarat, Bendigo. but, it is back. It’s recovered as I said, Interest rates have come off, and the market is really starting to go again. Um, it didn’t pull back like Melbourne did and the regionals don’t typically do that, but it certainly just slowed from the aggressive growth that was happening. Having a, and it’s now back to where it should be. Um, Bendigo, as I said before, that that’s really moving. And the buyer advocate interest there has just gone phenomenal. Yeah, it’s, it’s going, it’s going really well.

Zac Masters:
So you spoke a bit about there, um, around how you’re operating all over Australia and look all over Australia. Um, can you speak a bit more about you guys at performance property? You’ve got a different data driven methodology than we’ve seen to a lot of other property type of people so can you run us through a bit about that.

Dave Robbins:
Sure. So, yeah, if, if people want to log onto the website to have a look at that, um, or booking a meeting, we can do so. But basically the, the, the, the data and the research drives their advice. So, um, we have to have factual information to make a call on a market. It’s not a hunch. We’re not telling people to buy Docklands apartments because, the real estate agent told me it was a good deal or the financial planner or whoever it was. So without the research and data were nothing. So we need that and there’s, there’s 40 different indicators to be able to position a market on the cycle. And you can’t look at one in isolation and say, based on unemployment, you know, Adelaide is doing well or not doing well or, or based on, you know, last year’s growth, we need to be here or we don’t need to be there. So we take all the data back to 1980 because that’s when everyone was included and obviously there are patterns and cycles that form, for us to fit the data, those patterns and cycles and work at where a market is. Um, so there’s an investment team, within our company and they are fantastic, heated, robust discussions on where we should and shouldn’t be but it all always comes back to the data and without that we can’t make a call. It’s raw data that we get from abs core logic, local government, anywhere we can get data, um, airport arrivals in Perth cause they’re, they’re a really good indicator.

Zac Masters:
So that’s the performance property side, but you’ve also got the buyer X side as well. So what’s the difference between the two?

Dave Robbins:
Okay, so buyerX is our prestige home-buying service, um, predominantly operating in Melbourne and Sydney and really million dollar plus homes. So the main difference between buyer X, the home buying and performance property, the investment arm is the emotional attachment to it. So when we are home buying, obviously we have to be emotionally attached because we are going to live in it. We’re going to raise our kids there. It’s gotta be close to schools, work, whatever it may be. Our real focus there is busy professionals that, um, don’t have the time cause it could take six months to find the right house for some people if you’re lucky and in that time the market is getting away from you and that’s prevalent right now in Melbourne and Sydney. So if, if you’ve got a professional that on the ground that he’s able to perform that service for you, um, has access to off-market sales or pre-market sales, where it hasn’t even hit the market. Where in some cases we can get a deal done before it hits the market. Obviously with no competition from outside parties, only competing against the vendor or agent, we’re going to potentially buy it a better price or beat the market to it and definitely buy it a better price.

Zac Masters:
Because how do you have a percentage on how much properties you’re buying off market? Cause I think that’s the big one that especially when I first learned about buyers advocates and things like that is how much just as not on real

Dave Robbins:
Yeah well every market is different. Um, but at the moment, if I am a, an active agent in a, in a rising market and I’d be taking it to auction because we’ve got, we know we’ve got buyers, we know we’re going to get above our reserve or our asking range and why sell to someone like us if we know we’ve got four or five buyers wanting to buy this property. If it was six months ago, before interest rates were cut and when we were still sort of getting out of the, the, the election out and Royal Commission, a whole hot mess, we had more, more opportunities for off market because people didn’t know how much further property prices were going to fall and some, some vendors want a discreet sale. It could be a marriage bust up a deceased estate or they just don’t want to tell their neighbors that they’re selling their property.

Pete Pennicott:
And that’s a common one. Once you get into the sort of one and a half mil plus sort of property range, I don’t want every older neighbors coming in and looking through their stuff.

Dave Robbins:
And it’s an invasion of privacy. Like you’ve got to have your house spotless for a month. As you say, you’ve got your neighbors walking through at the open for inspection and you’ve got other people coming through that who knows, you know, they may see something that they like and come back when you’re on holidays and take off markets that they do vary. Um, in terms of the investment arm you asked before, that is we remove the emotion from that and it all comes back to the data. The data tells us where we should be and why we are there at that point in time. And it’s all cashflow driven. So if, if, if the strategy of the client is all about growth, but they have to have consideration to cashflow, um, we need to be in this market and we need to be here now because it’s experienced a stagnation phase. Rents have risen, um, vacancy rates have fallen, we should be buying. And it really comes back to that if, if it’s under the client’s budget, if they’ve gone to their broker and their, um, approval in principle is for 500,000, um, we’re purchasing a property for 420,000. It’s going to rent for $380 $390 a week. Is it under the client’s budget? Yes. Does it meet their servicing requirements? Yes. Is it, you know, is the data telling us to buy the, yes. Let’s buy, and it should, obviously it’s not that simple, but it should be.

Pete Pennicott:
And the same fundamental principles, do they, that we apply with the share market and other types of investments, does that apply with property on diversification? So, you know, should people, if they’re trying to build a property portfolio, which that sounds like a good thing to have. So you know, assets that are going to grow in value produce some form of income. Um, and yeah, it’s gonna sort of give you some discipline as well cause you’re gonna have to be paying these debts down as well when you buying them. Are your best property investors or the people that have built property portfolios over several years, are they doing so all in one capital city or are they spreading sort of their properties around Australia or they’ve been spreading risk? Yeah.

Dave Robbins:
Yeah. So it’s exactly like you guys, if you, if you have a client that comes in and everything they’ve got is all on one one share or one one form of equity, it’s not, it’s not smart.

Pete Pennicott:
So you can get it really wrong if you sort of bought into the right market, but we’re seeing it go horribly wrong as well. So, and even when we look, we like to think, yeah, property shares, managed funds, cash, bonds can all work together. And they all have their place. Sure. But what we get nervous about is people have their family home and yeah, it might be Glen Waverley, then they’ll buy an investment property next street down. Cause they;re familiar with it. They know the area and they’ll, yeah. Oh that worked. So the next property decision, they then go back to the well and go, Hey, should I buy again in that same area?

Dave Robbins:
Yeah. It’s all timing because if you look at Melbourne right now on our property clock, we’ve got Melbourne at around 10 o’clock and with 12 o’clock being the peak. Yeah. So the best buying is done at six o’clock on, on the property clock because at that time you’ve got the longest run left in that cycle. Yields are at their lowest when the property is at six o’clock and yields are at their lowest when the property is at 12 o’clock because the price growth is going to outperform the rental growth. It also comes back to land tax as well. So if you’ve got, if you own your principal place of residence in Glen Waverley, you’ve got a investment in Glen Waverley, potentially another one in Victoria. You’re going to be up for land tax and obviously that’s going to cut into any income that you’re going to make from it.

Dave Robbins:
So at the, the ideal portfolio is a diverse one and one in every state. Um, now if you had 10 properties in Melbourne, um, you’re going to be up for land tax. And then what tends to happen is that the client, micro managers, they drive past the place and they say that lawn looks a little bit long for me and then it’s just too much and then all you’re doing instead of worried about going to work and focusing on family and everything, you’re driving past all these properties and not liking what you see because, well, let’s face it, tenants don’t look after properties as well as homeowners know. So it’s not to say that we don’t want to know what’s going on, but we allow the property managers to do their job and don’t micro manage the property. So when we say the land tax part of it about, you don’t avoid land tax by going interstate. You certainly minimize it because the States don’t talk to each other. You can have something in Adelaide, something in Brisbane, something in Perth, um, and it not affect your Melbourne Mount Waverley home.

Pete Pennicott:
Yeah. And that’s good as well cause the economies will go at different speeds at different times as we saw like WA had its time in the sun years ago and it’s all cycle. So I think that diversification one, that’s a good message to get through.

Dave Robbins:
And if for whatever reason you need to reduce debt for whatever reason, you need to reduce debt with the, uh, from the property that has grown the much and ground them and also the one that’s closest to 12 on your property. And if you’ve got everything, let’s say Glen Waverley, if everything’s there and they’re all down at six o’clock. Yup. Um, why would you sell when we when we anticipate that growing market over the next five years.

Zac Masters:
So you spoke a little bit there on the fact that you’ve got property managers in each place. So that’s the big thing that some people would probably be worried about is going well, how do I know then who’s looking after the property and things like that. But you’ve got contacts in each, each area around Australia.

Dave Robbins:
Yeah. So that’s another arm to our business. So pathway asset management is our property management team. So we operate in the five major capitals, Brisbane, Sydney, Melbourne, Adelaide, Perth and they look after the properties. So they look after the investment properties that we buy, in the regional markets where we’re buying. Uh, it’s an overprescribed industry anyway, and there’s almost more real estate agents in Ballarat and Bendigo than there are normal people. So, so for us to go into those regional markets, it’s just going to upset the buying team and is not good for the relationships there. With the agents. Um, but yes, in the capital cities, you know, you’re going to go through a turnover of staff within that role. So you might have a fantastic property manager that either gets promoted or moved on or whatever it may be. Um, but there’s always alternatives. Um, we believe like all the staff that we’ve got in pathway, they don’t manage the amount of properties that a Ray white or a whoever would, um, because it’s all about quality of service and when you’ve got a problem, you need to act on it. Um, and there’s always problems. Um, so if you’re managing 300 properties, there’s no way you can offer the level of service needed to, to have confidence from a landlord.

Pete Pennicott:
So I think the big one that a lot of our clients are getting, spruiked at the moment. So in terms of people trying to, um, sell the benefits and very, very well put together marketing material with spreadsheet showing how much money they’re going to make, how much tax they’re going to get back on new developments. Um, in terms of historical at night, there’s no crystal bowl for how they sort of play out. But historically speaking, I guess the difference between buying an established home in a, in one of those blue chip or regional centers or sort of a quality location versus buying these new developments. So new estates or even sort of the ones that are happening within CBD. Are you buying into those markets, number one, or any other sort of red flags that people or checklists that people should be looking at going, Hey, is this gonna make my desire for capital growth? Is it gonna make my desire for income? The tax is attractive. So the tax deductions, but what we try and educate clients on is if this tax deduction means you’re losing money consistently and sort of, I know we just, you mentioned before about the rental income meeting your, um, all your outgoings. Yes. That’s a good place to be cause you can just hold that property in perpetuity if you need to.

Dave Robbins:
Absolutely. So we’ve talked about blue chip suburbs before. Yeah. In a capital city that is typically within a 10 to 12 kilometer radius of the CBD. Yeah. So people investing outside of that. It’s not to say that you won’t or can’t make money, but we focus on that because that’s where the, the major employment is. Um, and typically where people are making more money, therefore putting upward pressure on the prices. With the depreciation part of it and things like that, we, we are more focused and obviously every client’s different. And that’s what we’re all about with getting the right strategy for that client. Um, with a growth asse if we’re in a, uh, there’s 15,000 suburbs across the country and we grade them into a triple A, triple B, triple C, triple D, triple A’s, growing with, with a longterm compounding growth rate of above seven and a half percent. So if you’ve got money on the table in a triple D suburb, which is compounding at 4%, um, where would you rather put your money? Because I’d rather put it in somewhere that’s good. We’re not, that I know has got a better growth rate than something that potentially is an hour and a half from here, um, and is only growing at 4%. Now that 4% asset may have a fantastic yield on it that might have a 5% 6% yield on it. But typically those sorts of properties have a higher turnover of tenants. Therefore you have to have releasing fees and all your 6% yield can get gobbled up with releasing and having a tenant go in arrears with rent and things like that. Um, so we are more focused on the growth assets, um, to get our clients to whatever the next step may be.

Dave Robbins:
And that next step may be just to reduce debt off their principal place of residence with a, a large chunk. Uh, now if we’re growing at 4%, uh, and we’re, we’re, we’re banking on depreciation and things going down in value, that’s not a growth asset. Um, where there’s horses for courses. Obviously if we’re chasing the cashflow asset, we would more look at commercial where you could have, you know, 10% returns, so 7% net yield, but only 3% growth. And then if we’re looking at residential, we might have 7% growth but only a net 3% yield. And that’s the balance. So it’s regardless of whether it is residential or commercial, it’s going for the blue chip style.

Pete Pennicott:
Yeah, exactly. I think there’s that uniqueness factor as well, that you don’t get in a giant apartment block where’s you have something that’s sort of built and got a beautiful facade. Yeah. People want to live there. And that’s what drives growth.

Dave Robbins:
So, so if there is, um, a demand exceeding supply and, and a scarce product, that’s what’s gonna make people buy or pay more for it. And when we’re buying residential, we’re not buying investor spec only rentals. We’re buying something that has that owner occupier appeal. So even when it comes time to sell the property, we have five or six buyers wanting to buy it, not just the next investor going oh yeah. It’s got a great yield. Don’t like the look of it.

Pete Pennicott:
yeah cause you’re cutting out part of your market as well. So yeah. No that’s really good. And that’s way I look. I, I’d encourage anyone who’s ready to look at property investment, always engage us. We’ll have a chat with a property specialist, property advocate because I can help on both the buy and sell side. So yeah, if people do need to do that. And I’ve done that every time I’ve sold a property. I wish I had have engaged someone like yourself early

Pete Pennicott:
on because my first property decision was not a great investment but you know, still got out of there with a little bit of growth. But um, yeah really good cause you can get those insights. You’ve got all the data to support it. Um, and you have that a different mindset when you’re looking at it cause you can, you can remove the emotion. The hardest thing to do when you’re, you know, throwing over half a million dollars is to remove emotion out of that decision. Um, and it is a lot of the times that’s an investment decision. So you need it to tick the box on capital growth and income.

Dave Robbins:
And obviously, uh, there are people in clients that, um, don’t want to pay a fee for something that really, that they can do themselves. But it’s a full time job for us. We, we have area specific experts that know what streets to buy on. We know where the housing commission is, we know what streets to avoid. Um, and it’s, it’s an, I guess it’s an insurance policy not to make a bad decision cause the property’s not that liquid that you can just go, Oh no, this isn’t working and we can turn it around.

Pete Pennicott:
Even the stamp duty alone. The entry and exit costs are high, the time’s high. And I’ve had the privilege and benefit of saying that what you provide to clients when you’re doing an analysis on a property, it is super granular detail about he is okay, this is if you’re walking through here, this is how far it is to all these amenities. You’ve done that analysis for someone else to do that themselves. It’s taking time out of, you know, family time, work time and then they still cannot possibly do that on a scale of what’s best across the country.

Dave Robbins:
That’s right. And obviously people spend a lot of time trolling on Facebook and obviously we do that all day, every day on real and domain. And it’s a full time job as I said. So, you know, if you come home from work for after a 10 hour day at work and have the ability to spend four hours on, on those two platforms, that’s great. Um, but as I said before, if we’ve got the off market opportunity before it even hits those sites, because every one within our team, um, depending on their buying area, they’ve got the agent relationships and can get it done. So yeah, that matters as well.

Pete Pennicott:
Those agent relationships do carry something cause they want to work with you again cause they know you’ve got stock of property that, you know, if they look after you and then, you know, they’re sort of carry themselves.

Pete Pennicott:
Well, there’s potential for future business. Whereas for most people, if you’re dealing with an agent, you’re probably only going to deal with that agent maybe once, maybe twice, um, in your life. So, um, there’s a little bit more skin in the game when you’ve got the professionals that sort of, um, have a mutual benefits of doing that. So yeah. Um, that’s all good. But we might wrap it up there. That’s a lot of really good insights. So, um, we’ll put your contact details in the show notes, so if people want to reach out and engage your services, so yeah, but thanks for your time.

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