Would YOU Still Invest in Established Property Today? | FUNdamental Fridays

Welcome back to Friday Fundamentals on The Property Couch.

In this episode, Shane and Luke tackle a question that’s suddenly everywhere:

Would you still buy an established property today if the negative gearing benefit is deferred?

Their answer? Yes — but it depends on your goals, your timeline, and the quality of the asset.

This conversation unpacks why negative gearing is only a moment in time, why growth still does the heavy lifting over the long term, and why chasing a tax outcome can be a dangerous way to build an investment strategy.

They also break down why established property still has a strong case, especially when land, location and asset quality are front and centre.

If you’ve been wondering whether the recent changes mean you need to completely rethink your property approach, this is a great place to start.

Got a question or a “hill” you want us to unpack? Send it through here 👉 https://thepropertycouch.com.au/topics/

Timestamps

00:10 – Welcome to Friday Fundamentals
00:49 – The big question: would you still buy established property?
01:13 – Luke’s answer: yes, but it depends
01:45 – Why long-term goals still matter most
02:03 – PPOR maxing and future strategy
03:17 – Why Shane would still buy established property
04:09 – The buyer’s decision quadrant explained
04:24 – Why not all “tax-friendly” property is good property
05:00 – Negative gearing is a moment in time
05:39 – Final thoughts and send in your questions

#ThePropertyCouch #PropertyInvesting #NegativeGearing #EstablishedProperty #MoneyManagement

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Transcript

SPEAKER_00 0:00

Negative gearing is really a moment of time. Yes. Would I buy an established property today if the negative the negative gearing benefit is deferred?

SPEAKER_01 0:09

Hey

Welcome to Friday Fundamentals

SPEAKER_01 0:10

couchers, welcome to another Friday Fundamentals. This one's a little bit different. This time we're doing an episode, well, what have we coined it? What would you do? What would you do? What would you do? And it's based off the back of quite a few questions that we're getting, not just from viewers and other couchers.

SPEAKER_00 0:25

Largely from the webinars as well.

SPEAKER_01 0:26

From the webinars as well, but also mainly from family. I know my younger brother, Chris. Yes, who loves a shout out. Asking questions about think all things negative gearing, property, what's happening right now. Also, big uh mention that it is obviously definitely not financial advice.

SPEAKER_00 0:45

Not advice. You're exactly right.

SPEAKER_01 0:46

So we are talking about today.

SPEAKER_00 0:48

We are talking about

The big question: would you still buy established property?

SPEAKER_00 0:49

Would you buy an established property today if the negative gearing benefit is deferred? And this is a question that we've been specifically asked for our point of view. So this is not financial advice, but what would you do? Would you buy an established property today if the negative gearing benefit is deferred? I mean, Luke's point of view, your broker point of view, tell me.

SPEAKER_01 1:08

This is a good one because it again, shout out to my younger brother Chris. He always comes at me with these kind of questions.

Luke’s answer: yes, but it depends

SPEAKER_01 1:13

Thanks, Chris. So I would say, look, honestly, yes, but it depends, right? So I think everyone's got a different long-term goal for what they want to do. And I think what you need to do, and what I tell a lot of my clients, is we've got to think about what is the most important thing for you.

SPEAKER_00 1:30

In your plan, in your vision.

SPEAKER_01 1:31

Well, yeah. Well, some people are like, I want that passive income at a certain age. Some people are like, well, I know myself personally, like, we wanted a home for us to live in. Yep. And now the next one, the next goal for us is okay, well, we need we want to upgrade the family home.

SPEAKER_00 1:44

Right.

SPEAKER_01 1:44

So

Why long-term goals still matter most

SPEAKER_01 1:45

you are maxing, it's back, it's still current and present.

SPEAKER_00 1:47

Thank you.

SPEAKER_01 1:48

You know, for us, that's that longer term sort of part. So, you know, for us holding our current property that will effectively become an investment property, like that longer term play is kind of just natural, like, yeah.

SPEAKER_00 2:00

I would so for you guys, it's gonna be

PPOR maxing and future strategy

SPEAKER_00 2:03

PPOR max, what you've got, draw down against it, and then go and buy a bigger PPOR and turn your current into an investment.

SPEAKER_01 2:11

Yeah. Well, we we've got a like our apartment is an amazing apartment. Um, that said though, we obviously want to have more space. Yep. Uh so it's got a great spot, it's a great view. Like, I would I can see myself downsizing back into that apartment when I'm thinking about retiring. So it's like like so for me, like I will never sell that apart.

SPEAKER_00 2:30

Well Do you know what I've I've said about three of the homes that I've owned with my wife, I will never sell this. And every one of them has funded the next one.

SPEAKER_01 2:38

Yeah.

SPEAKER_00 2:38

I mean, that's it. So the net the never happens when they when they go up in value the way they do, and you buy in the right spot. And before it was uh a coined phrase, we didn't PPY max a couple of our houses. And that allowed us to go up the property rung, you know, where we started and how far out away from where we worked and where we wanted to be.

SPEAKER_01 2:58

So if the most important thing for you is that next home for your family to grow up in, yeah, then you are making that call where you're like, okay, well, it's actually not as important for me to hold that property and we'll get to that spot.

SPEAKER_00 3:09

It's literally what we did, right? So, you know, would I buy an established property today if the negative a negative gearing benefit is deferred?

Why Shane would still buy established property

SPEAKER_00 3:17

Yes. Yeah. Established property, land and location is king, land is second, and the quality of the asset is third. That is just that's an ethos that we live, right? The asset has to have fundamentals. And given the changes in landscape, if we're not able to get quality of asset or the land holding or the location that we like, our approach is to get the very best of the next best thing. And that's literally where we fall on it. Like we're shooting for we're shooting for A plus. And if we if we come down to B, then that's where we need to be.

SPEAKER_01 3:51

I think you told me that when it was the case of you've got those four quadrants and you're trying to you can maybe get two.

SPEAKER_00 3:56

Yeah. The buyer's quadrant, which you know I touch on with all my clients is you know you you've got budget, location, how much land and the quality of your dwelling. Generally, two of those get locked in for one reason or another, largely finance.

The buyer’s decision quadrant explained

SPEAKER_00 4:09

And then secondarily, it's probably location or proxy to a location because of school, work, life, parents, whatever it is. So you get to play with the other two. Yeah. So trying to maximize those things on your established purchase is always going to be better, in my opinion,

Why not all “tax-friendly” property is good property

SPEAKER_00 4:24

than potentially going out into a new cookie-cutter house and land build or a high-rise apartment or anyone that promises a return or a guarantee on things. We are, I think it's pretty clear how I feel about those people that offer guarantees on investments. But with respect to established property, even if they remove the negative gearing benefit, what they're not removing is the capital growth benefit. And in fact, I would argue that they're going to accelerate that because it's harder for people to get those things. There'll be less rentals in those areas. And what doesn't change where that rental supply is is the quality of the area that people are living. That want and need for tenants to be there is just going to be driven up.

Negative gearing is a moment in time

SPEAKER_00 5:00

So always established, irrespective. Negative gearing is not a process.

SPEAKER_01 5:05

Ben loves to say, and if you've listened to his webinars and you know seen some of the latest sort of podcasts where it's like negative gearing is really a moment in time. Yeah. And it is only for a certain amount of time. Yep. So I think basing a long-term strategy on what happens within the first decade of a property is not a good thing. Well, it's not enough to it doesn't outweigh the drive everything, right? Like it's it's it's helpful and it can, you know, sometimes assist you or used to be able to assist you with borrowing capacity with how lenders look at it. But I don't think it should be the make or break in terms of what that overarching plan is.

SPEAKER_00 5:38

I agree.

Final thoughts and send in your questions

SPEAKER_00 5:39

If you guys have any more questions that you want to send us about uh what would we do, it's a new topic that we sort of just ran into today from the questions we've been sent. It's been a lot of fun.

SPEAKER_01 5:48

Um this is this is the second time we've been on the same side, too.

SPEAKER_00 5:51

I feel like we're getting better at it. Maybe we could be friends offline. Probably not. I mean, you just had your birthday, I didn't get the invite, but it's fine. It's fine. To be fair, all my friends got an invite. So there you go. That's true. We will see you on another episode. Keep sending your questions in. Thanks for joining us. And I nearly said that without fluffing everything. That's fine. See you later. See you guys.