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The Finance Show With Joe
Welcome to the Finance Show with Joe hosted by It’s Simple founder, Joseph Daoud. We chat about the financial issues facing ordinary Australians from managing the cost-of-living to investment strategies in order to help you make more informed financial decisions.
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The Finance Show With Joe
Is There Still Money to be Made in Melbourne?
Manny returns to discuss the latest shifts in Australia's property market. (Melbourne might be back in the game).
Join us for our upcoming event "Ready, Set, Buy" at Strathfield Golf Club on Thursday, April 10th, featuring expert insights from Manny, Joseph, and Peter Ishak on property investment fundamentals.
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As we know, markets shift right. They almost feel like they shift on a monthly basis now, but there's opportunities that we weren't considering two years ago, 12 months ago, that have started to come onto the horizon, which is quite exciting.
Speaker 2:What are these trends? What you weren't considering 24 months ago, what you're considering now.
Speaker 1:I think so an area that we had a lot of success, in which we invested. We had the opportunity to put four clients in a suburb court. I can talk about it now because it's boomed.
Speaker 2:Manny, you have a finger on the pulse. You know all across Australia. What kind of tactics are you using to help both your clients and yourself For sure In establishing this is a good investment this is the right one.
Speaker 1:The biggest misconception that I see is Welcome to the Finance Show with Joe.
Speaker 3:He's Joe, I'm Michael and we have Manny back today.
Speaker 2:I am so excited to have Manny back, because Manny has been on an adventure for the last four months. Manny, do you want to tell our listeners what's been going on since? I want to say November?
Speaker 1:Yeah, I got married at the end of November. Woo yeah, manny. And then, yeah, traveled the world for almost two months it was about seven weeks. So I got back at the start of Feb and right into work, right into buying properties. Where did you travel to? We went to a few places. So we went to Egypt, went to Dubai, abu Dhabi and a little island off the coast of Africa called Mauritius, which Joey's been to and he said he hated. What about?
Speaker 3:you Did you like it? Whoa, okay, no, no, no, I'm going to cut.
Speaker 2:I? What about you? Did you like whoa? Okay, no, no, no, I'm gonna cut. I didn't hate the island of mauritius, I hated the fact that I broke my toe and my wife made me hike a mountain. That's a kilometer up like that way at like, and then the going up isn't the hard part, it's the coming down on a broken toe. Yep, okay. And she made me rush because we had a special breakfast. Do you want to know what the special breakfast was? What? It was the exact same breakfast we had had the previous two days, only next to the pool.
Speaker 3:That sounds pretty special. I don't know, and that's why I don't like Mauritius.
Speaker 2:But the island itself. It's actually really pretty. Okay, I really enjoyed it. So you highlighted something. You've been buying property, you've been assisting a lot of people. Tell me, tell me, what's going on at the moment.
Speaker 1:Yeah, definitely so. As we know, markets shift right and they almost feel like they shift on a monthly basis now. So there's a few areas, a few capital cities, a few regional markets that we were sort of very heavily investing over the last two years that I feel are no longer the right investments. They're sort of at the top end of their cycle and buying now would probably be a bit foolish because they've run so hard over the last 24 months. But there's opportunities that we weren't considering two years ago, 12 months ago, that have started to come onto the horizon, which is quite exciting.
Speaker 2:What are these trends? What are you seeing specifically for what you weren't considering 24 months ago, what you're considering now.
Speaker 1:For sure. So the Melbourne market when we first started talking about Melbourne on this podcast or Victoria in general I was a very big fan of regional, yeah, and I was pretty much shitting on capital city I was saying, look, it's not the right time to invest. Vacancy rates are too high, the days on market are way too high, people are listing their properties and it's taking three months to sell it's. It's not the right time to be buying in Metro Melbourne. That's changed. Is it flipped or is it? Look, it's not quite there yet, but it's all trending in the right direction. So what I mean by that? For example, days on market. When we were looking three, four months ago, some of these suburbs had 60, 65, 70 days on market, meaning that you were advertising your property to sell and it was taking 70 days for you to get an offer accepted on that property. Right, this is trending downwards in a very fast direction. So instead of 70 days, we're seeing 35 days now, which is halved in terms of that means the demand has increased.
Speaker 2:Exactly so the Melbourne market. As I understand, they introduced a land tax where, if you own a property or an investment property that's worth, I think, the land area $50,000 or more, there's a new tax that's on it. Have you seen people exit and new investors enter because they can afford it?
Speaker 1:So Melbourne as a city was being scrutinised a lot in the news.
Speaker 2:I scrutinised it like crazy. I did too, I did too.
Speaker 1:So things like land tax being introduced obviously is the opposite of what you want to do when you're trying to bring investors into the market right, and creating hype, creating demand, making it easier for people to purchase properties is what any state government should be trying to do. Where in Victoria, they did the opposite. So they introduced land tax practically at no threshold, unlike every other state in Australia where you're buying a property if you're purchasing a property in your personal name there is a threshold for land tax, and once you go above that threshold, that's when the land tax is applicable. In Victoria, there is a threshold for land tax and once you go above that threshold, that's when the land tax is applicable. In Victoria, there's practically no threshold, which means that you have to start paying land tax from a very low value of land ownership. So that definitely didn't have good publicity.
Speaker 1:I think I do get asked that question a lot from investors. But what about land tax? And I think every state has its pros and cons right. So the easiest way that I sort of explain this to investors is as long as we're taking these calculations into consideration when we're making our choice and it still makes sense for you to consider this market from a cash flow position, then why not? Because in Queensland, for example, insurances as an average are a bit higher.
Speaker 3:Yeah, which never gets talked about. It's always about the land tax in. Melbourne Exactly.
Speaker 2:Well, it's also stamp duty in other states. You know, stamp duty is a lot higher than in other states on a percentage level compared to New South Wales.
Speaker 3:But people don't bring that up.
Speaker 2:They only bring up, oh no, this new land tax. This new land tax. We've had a client of ours purchase recently in Melbourne CBD beautiful three-bedroom, two-bathroom apartment. They've got a six-month settlement Now if you wanted to buy a brand-new three-bedroom two-bedroom apartment in Sydney.
Speaker 1:What are you paying?
Speaker 2:oh, in the heart of the cbd yeah, it's double digit millions it's it's, you're looking at two to three million dollars, but when you go to melbourne cbd, this this client of ours purchased for a million dollars in the heart of melbourne cbd wow, wow so manny has brought up several times our episodes of the show joe Invest where people want to live.
Speaker 2:Look for where the owner occupies are. If you're going to purchase a property, look at the amenity that's around there. What better than Melbourne CBD at the moment? You go to Melbourne CBD, you're connected via the tram, you can get basically anywhere in the span of 20 minutes. It is so fast and it is so connected and so easy to get around that it's kind of silly to think to yourself why this market wouldn't boom for sure, especially because melbourne I mean population wise it's now bigger than than sydney.
Speaker 3:Now, right, yeah, so greater melbourne, cbd.
Speaker 2:Yeah, is more populous than greater sydney, cbd however, you know new south wales as a state. It's three times the size of victoria. Yeah, but sydney itself it's congested, it's hard to get around.
Speaker 1:Okay, it's pretty, let's let's not beat around the bush sydney's.
Speaker 2:Sydney's pretty good looking, as far as you know, cities go, yeah, but melbourne itself, as far as amenity, entertainment like the functionality of a culture, all of it it's fantastic. What I'm looking forward to and this is just speculation, especially when it comes to politics and stuff I don't think this land tax is going to last long. I think it's more of a how do we get out of the recession that we created during 2020, 2021 and get all that money back that we invested into the economy, and how could we quickly do that? I think it's a short term thing and I think I agree with you, matty Now is the time to start investing in Victoria and Melbourne, for sure. You know. I think it was Warren Buffett that said invest when people are fearful and be fearful when everyone's investing. How many times did we talk about perth on this podcast?
Speaker 3:well, it's yeah, so many times and honestly. Perth is is slowed down a lot, and that's why I was scared of perth last year yeah, because everyone was buying.
Speaker 2:Everyone was buying in perth. You don't know what's hype, what's real, what's not, and now we're starting to see you're the expert um, yeah, for sure.
Speaker 1:So. So it's definitely slowing down, I guess, testament to the important metrics that we want to consider when we're investing, right? So, again, if I relate it back to surrounding yourself with owner occupiers, regardless of what the investor market is doing, people still need a roof over their head. So if we're buying an investment and we're buying in an area that is more than 80 owner occupiers, now we've seen the investor market completely leave perth. All that hype is gone. Yeah, yes, the demand is decreasing, but all of the areas that are driven by owner occupiers are still being driven by owner occupied.
Speaker 3:Okay, that makes it because we I remember we talked in the last one of the other episodes that um perth limits the amount of investors that are allowed to come in. They have like a set.
Speaker 1:Yeah, that was more so with new land releases. Oh, okay, yeah, yeah, okay For controlling future supply.
Speaker 3:Yeah, okay, that makes sense.
Speaker 2:You know I've got some stats here. So Melbourne reported a really strong growth in February up 0.4%. The median dwelling value did increase and it ended 10 months of decline.
Speaker 1:Yes.
Speaker 2:I want to kind of pick apart two of those items. The median dwelling value increased Median is not mean. So median is what most people are paying and the mean is the average. Averages can get blown out.
Speaker 3:By extremes on either end of it as well.
Speaker 2:Yeah. So the reason we use median is because what most people are paying. If that has increased by 0.4%, people will hear oh, 0.4%, that's not too much. Okay, on a $600,000 property, that means your property has still gone up. What $2,400? Still? Making money for sure the capital worth is there and that's that's 0.4. I'm almost certain that's a month-on-month increase it was the.
Speaker 1:I think it's the last quarter yeah, last quarter that was the core logic report.
Speaker 2:Yeah, this is core logic data yeah if, if your property is increasing by you know, let's say, 1.6 a year, that's still a pretty damn decent investment, especially when you're purchasing something worth 600 000. Yeah. And the reason I want to highlight that is people will hear oh yeah, but you bought it for 600 000. It only went up 1.6, but you didn't use 600 000 to purchase that property. Yeah, you used a 5% or 10% deposit. So let's say I invested $60,000, 10% deposit and then my return is $2,400. That isn't a 0.4% increase. That's actually almost a half a percent. Sorry, that's almost a 4% increase, if I'm correct, and that's over one quarter. Imagine you had a 16% increase over a year. That's a big difference and people need to consider that when they're looking at things like rent, vesting or things like investing in property for example because you're not using your money to make money.
Speaker 2:You're using the bank's money to make money.
Speaker 2:And that's how you got to think as a property investor. Yeah, leveraging credit. Jack Henderson is actually really good at this and he's got his own podcast and he's got a fantastic social footprint and he always brings up rent vesting. He always brings it up because the guy drives around in a McLaren. He's done extremely, extremely well for himself. And the reason he has done well for himself is because he rents the property he lives in. He hasn't bought the property that he lives in. He rents the property that he lives in, he preaches it and you know, when we see these sorts of numbers, you know you might be able to go buy a property in Sydney that has fantastic capital growth, but it might take a much higher deposit. Where you can go and buy at the low end of the market right now, which is Melbourne, yeah, okay, you might be able to buy two or three properties down there and Melbourne's still got room to grow because, like these, prices are still 2.5% below what they were this time last year.
Speaker 1:Yeah.
Speaker 3:Exactly so if we're starting to see this trend go upwards well, I think it's going to hit its boom.
Speaker 2:I think it's going to hit its boom. I think there's going to be a boom period in Victoria, and it's because everyone else has had their run. It's going to be Melbourne. It's going to be South Australia this time around. You know Adelaide. We're starting to see some, you know, serious runs on the board as well.
Speaker 3:Which makes sense, because they didn't really have that crazy boost that Perth did or like that Brisbane did before Perth and all those kinds of things. So it just makes sense that it's its turn. Do you reckon darwin's ever going to get that boost? No, no, I don't think so either darwin.
Speaker 2:Darwin is very, very different. Um, it's, and it's as much as they want to try and pump the economy there and as much as they want that place to grow. Darwin, as you know, manny has said look where people want to live. Darwin's too fucking hot for six months of the year and then it's really wet for the other six months Don't get me wrong. I love a good tropical season, I love a good holiday, but when you look at areas like that to live, it's not easy.
Speaker 1:The same is true for Tasmania, right. So places like Darwin and Tasmania, they have an aging population as soon as like. If you've grown up in Tasmania, your parents are probably cousins. But aside from I'm Lebanese.
Speaker 2:My parents are cousins anyway, skip it in.
Speaker 1:No. So, all jokes aside, aging population, right, because they turn 18, 19,. They leave, they go to Melbourne, they study, they go to university, they establish their lives get work, job opportunities. So, obviously, who's buying properties? It's the 25 to 45 age group, right Age bracket. They're the ones who are investing, they're the ones who are in their accumulation phase.
Speaker 3:Yeah know there's either starting families or they or they, you know, have a family and yeah, you've got to keep that money flowing somehow manny, you have a finger on the pulse, you know all across australia.
Speaker 2:Tell us about construction at the moment. You know what states have construction aligned with their population growth? Because we know for a fact, new south wales, it's way too expensive to build. Yeah, yeah, I'm gonna give you perfect example. Last night I got a contract of sale on my desk. It was a 1.8 million dollar contract of sale. The client already signed it. Okay, it went to auction. They've signed the 66w. They're trying to get out of it. Oh my god because they've purchased.
Speaker 2:And then they ran their feasibility and they saw it was too expensive to build a duplex. And then they looked at child care senate options for this area. That's too expensive, they won't get any yield on it. So they are trying their hardest to get out of purchasing this block of land because construction is too expensive in new south wales. But can you provide commentary on the other states for For sure?
Speaker 1:So we're still nowhere near building enough homes to keep up with the demand right. So that's across the country In terms of what's happening at a micro level. So construction in Queensland is quite fast, pretty affordable, depending on the spec level of what you're building. So if you're going to build, you know like a home for yourself to live in and you're going to up spec it and you know, with all of the fancy features, a bit more custom, yeah, the custom build. Obviously prices are going to be a little bit higher because you're fully customizing it, but as an average the build timeframes are quite quick. So from an investor, obviously you know InvestorMate, we specialize with helping investors, so I'm just going to speak about that opposed to sort of custom builds.
Speaker 1:No, that's fine Do what you got to do, man For sure.
Speaker 2:Throw your cheap plugs in here and there. If you need a mortgage to help with an investment, it's simple, right there, buddy, do what you got to do. Matty, do what you got to do.
Speaker 1:But look from the investment build standpoint. You can build a home in six to seven months from slab down, which is crazy fast.
Speaker 3:That is really fast.
Speaker 1:Slabs down. Your property is being handed over in seven months.
Speaker 2:I'm just thinking about New South Wales and just the time it takes to build. Two years, yeah, our time frame is 24 months at the moment, yeah, um, and six to seven months. Queensland, that's just, oh, it's a fantasy yeah, south south australia.
Speaker 1:You're looking at 10 to 12 months perth. You're looking at 14 months. Okay, um, and that's kind of what I expected.
Speaker 3:Yeah, melbourne, melbourne's pretty quick melbourne seven to eight months.
Speaker 1:Perth. You're looking at 14 months, so that's kind of what I expected. Melbourne's pretty quick. Melbourne's seven to eight months as well, from slab down. So all those timeframes that I just quoted are from when the slab is finished. So yeah, if I was an investor wanting to build a property, I would not be building in Perth. I would be pretty skeptical about building in Adelaide, where I see the value is parts of Brisbane, and definitely in Melbourne.
Speaker 2:Do you think Brisbane is benefiting from the Olympics coming up in 2032?
Speaker 1:They've been riding that way for the last two years. Everyone talks about the Olympics, the Olympics. I think they're going to benefit from the amount of infrastructure spent to lead up to the Olympics.
Speaker 3:Yeah, because there's like a lot of trams and trains and stuff.
Speaker 1:Underground bus tunnels, like it's crazy in terms of the infrastructure, really Underground bus tunnels. Yeah, one thing that they're doing really, really well is they're actually spreading out their stadiums. So if you know, brisbane, toowoomba's like their Wollongong equivalent, toowoomba's, about an hour and 10 minutes from Brisbane City, but they are building stadiums in Toowoomba. So imagine we hosted, when we did in the year 2000, the Sydney Olympics, but we had stadiums in Wollongong. We built Sydney Olympic Park, a whole suburb, newington, just like, completely rushed it just for the Olympicslympics. All the stadiums were right there. So you put sydney on the map, you put sydney olympic park on the on the international stage. I think brisbane's doing it right yeah, I mean sydney olympic park.
Speaker 3:Right now it's like you're not really making money there from residentials or anything like that. It's a bit of it's a bit of pain in the ass to get to and from. Like you've got that one station on one line? Yeah, and it's also like I'm pretty sure it's the only station on that line Back and forth from Lidcombe.
Speaker 1:That's it, yeah.
Speaker 2:So I went to. I got invited by Westpac last year to go watch the Canterbury Bulldogs semifinal.
Speaker 1:Okay.
Speaker 2:It wasn't even. No, it wasn't, it was a quarterfinal um this. This wasn't even a grand final match. And to get to and from lidcombe, I think it took 40 minutes to get onto a train yeah, because there's only so many trains that they can allow. So imagine, if it was today's day olympics the amount of traffic congestion, the amount of residential apartments that have gone up in that area.
Speaker 1:Yeah, it is near impossible to get in and out of, especially when there's entertainment on I live in strathfield, which is it should be an eight minute drive from sydney olympic park. I was having dinner at a friend's house. Um, they live like right in the heart of olympic park during um the taylor swift tour oh my god and God, and it took me an hour and 30 minutes to get home. Eight minutes and it's an eight minute drive. An hour and 30 minutes.
Speaker 3:So yeah, I think Brisbane's doing it right. Honestly, that should never happen.
Speaker 2:So what areas have you seen, brisbane-wise?
Speaker 1:Yeah, so look anywhere really within a 45-minute drive of the CBD, I think is a great opportunity. I'm sort of biased and I really like the northern part of Brisbane. When you sort of look at the terrain and the topography of that region, it's very landlocked up north of Brisbane where when you go down towards Logan and sort of down south west of Brisbane CBD there's an abundance of land.
Speaker 3:Okay, and is that up north? Is that like prone to flooding or anything like that in that section?
Speaker 1:There are flood zones but obviously, if you're working with a buyer's agent or you have the right tools to understand if your property or the prospective property that you're looking for is within a flood zone or bushfire risk, then you can sort of make your decision um yeah, so.
Speaker 2:So 45 minutes north of brisbane, would you call that regional, or is that still metropolitan?
Speaker 1:yeah, still metropolitan brisbane um yeah yeah, yeah, to put it into perspective, to give the viewers actual suburbs that they can research, the furthest I'd probably look is Moorayfield, which is about a 50-minute drive, relatively close to the water. So on the other side of the highway there's suburbs, premium suburbs, burpengary East, which Stocklands has a beautiful estate there You're looking at sort of $950 as a total price now, which is quite expensive, but again owner-occupied demand is driving.
Speaker 2:That Are these $950 house and land packages, or are we looking at $950 ready-built turnkey?
Speaker 1:Oh yeah, so to clarify, house and land packages and ready-built homes are in the same same sort of market price um, what?
Speaker 2:what's the mix? Are we looking at three betters, four betters for better homes, really so serious homes that people could live in for 950k yeah?
Speaker 1:That's actually, oh, when you compare it to Sydney's median house price.
Speaker 3:That's what I'm thinking, because you said it was expensive and I'm like that's kind of good.
Speaker 1:It's expensive in comparison to, you know, relative to other pockets of Brisbane. So I guess one thing that excites me when we're sort of understanding different suburbs to invest in I probably wouldn't buy a $900,000 property as an investment because what you're going to be renting that property out for is not really going to meet the minimum yield that we need to consider. So I think the sweet spot is probably around $800,000. But when we look at urban sprawl, there's suburbs surrounding Burpengary East that are much more affordable, even in some cases closer to the CBD, that you can purchase properties between $750,000 to $800,000.
Speaker 2:So I wanted to highlight something that you mentioned it's near the water. Yeah, how far are we saying you know what's near the water when you're talking about these suburbs?
Speaker 1:For sure. So I believe Morayfield to the beach would probably be a 15 minute drive. Wow and burp and gary east is like a carrying bar to cronulla beach.
Speaker 2:Wow, um, for 950k yeah, I'm just thinking about carrying by trying to buy a house there, four bedroom, brand new, built for 950 000. It's impossible I think the most recent one I did was a 2.1 million dollar one. Um, and it's just the price. It's chalk and cheese. Yeah, we understand the difference. I think the most recent one I did was a $2.1 million one Double the price. It's chalk and cheese. We understand the difference between Sydney and Brisbane but it's still cheap.
Speaker 3:The mathematical difference.
Speaker 2:That means their cost per acquisition for each lot of land is a lot cheaper than what it would be in Sydney, because that's where a lot of the building costs come from. It's the acquisition of the land, materials and trades and labor that's going to lot of the building costs come from. It's the acquisition of the land. You know materials and trades and labour that's going to cost. You know, almost uniform all across the country 100%.
Speaker 2:But it's the actual, it's the extras, it's the land, it's the holding costs, it's you know how much does it actually stack up? And I think that's why we have a construction problem in New South Wales compared to places like Brisbane, problem in New South Wales compared to places like Brisbane. Are we seeing a lot of internationals move to these areas or are we looking at, you know, retirees, 60 plus. You know your average mum and dad. They built their super up and they go. You know, I want to live somewhere warm.
Speaker 1:It's. I think COVID was where Queensland really benefited from that interstate migration. So people leaving Sydney and Melbourne because of the price points at the time and they could have afford to purchase in Brisbane for a bit cheaper, a bit closer to the city, nicer lifestyle, and they were able to work from home. So that really changed the landscape. And then Sydney Newcastle was the same, sydney Wollongong was the same. So people are sort of starting to explore areas a little bit further away because they don't need to be 40 minutes from CBD anymore. You know what I mean.
Speaker 1:So I don't think there's much in terms of net migration interstate. So people leaving Sydney and going to Brisbane as much as what it was during COVID, because prices have actually grown quite well in Brisbane between you know 2020 till now. But one thing that I think I wanted to sort of provide some value on and to bring it back to the Melbourne market, one thing that I'm a very big fan of when we're looking at areas to invest in is one what can you build a home for and what is the established market currently doing in terms of house prices? So an area that we had a lot of success, in which we invested um in feb last year, so just over 12 months ago we had the opportunity to put four clients in a suburb called. I can talk about it now because it's boomed we won.
Speaker 1:Anglevale. So we bought in Anglevale for 600, between 600 to 630,000,. We bought house and land packages. Four clients are now coming to completion of those properties and you can't buy an established property in that suburb for less than 800,000. Today, only 13 months later, wow, right. So at the time, what opportunity we saw in that market was we were buying house and land packages for 600 to630. Established properties were selling for $650 to $680.
Speaker 2:That's a 30% to 35% growth in a year Wow.
Speaker 1:The exciting part is that it was actually cheaper or more affordable is the right term to use more affordable to buy a house and land package than it was to buy an established property in that market. So it's very hard to come by those opportunities. I'm starting to see it quite frequently in Melbourne. So there's suburbs 30Ks from Melbourne CBD where you can buy land and build a home for $650,000. But if you were to buy an established, already completed property in that same suburb you'd be paying $50,000 more already completed property in that same suburb, you'd be paying 50 grand more.
Speaker 2:So, Manny, I want to ask you what kind of tactics are you using when purchasing interstate?
Speaker 1:What are?
Speaker 2:the three key drivers to help both your clients and yourself in establishing. This is a good investment. This is the right buy.
Speaker 1:Definitely the biggest misconception that I see is when people come to sort of speak to us. They think just because their neighbor or their friend has bought in a specific area, that means that they can buy in that area or it makes sense for them to buy in that area. So what I mean by that is where I'm at in my personal journey of investment. The next property for me is not the right property for Joey. The right property for Joey is not the right property for Liam, for example. What I mean by that is you can't take an overarching approach with investment.
Speaker 3:Yeah, everyone's financial situation is completely different and their portfolios are different. What they can afford is different. Yeah, exactly.
Speaker 1:So there's a personalized element to it. When we sit down with clients and we sort of help build out their strategy. Um, one thing that we look at is what's the maximum purchase price that they need to consider, based on their borrowing capacity. Let's say they can buy up to a value of 700 000. Yeah, that gives them plenty of options, okay, but what we start to do to actually narrow down on suburbs that will work for for the client is understanding what is the yield in that particular location and where does the yield need to be for the cash flow to be comfortable for that specific client to hold?
Speaker 2:yeah, so what are the considerations when looking at the yield, because buyers need to understand that it's not uniform across all of australia. You know what are the different costs that you'll help analyze yes is there a funding table that you provide that highlights this is your cost, this is your stamp duty? Provide us a little bit of detail. You know, when people look at a buying state, what are the key metrics that they need to be looking at.
Speaker 1:For sure.
Speaker 1:So when it comes to cash flow on a property, we do a very comprehensive calculation.
Speaker 1:So we first look at again the maximum purchase price that that client can consider If we're open to multiple states, understanding in each state what the stamp duty is going to be, understanding whether they're using equity from another property to purchase or whether they're actually putting a deposit.
Speaker 1:That's a very important factor because if you're putting a 5%, a 10%, a 20% deposit, that is going to make a difference to what the end result looks like, right? So if you're using equity, you're effectively borrowing 100% of the value of the property plus stamp duty and legal fees, which means that the cash flow is not going to be as pretty. So sort of breaking that down and looking at the stamp duty, looking at the cost of things like land tax, if applicable, council rates, water rates, landlord insurance, understanding what the average yield is in that particular location insurance, understanding what the average yield is in that particular location, and then sort of breaking it down all the way down to actual tax benefits of having that investment property, specific to how that, how much that client is earning. So by presenting our clients with that breakdown we can very quickly see whether that strategy is actually suitable for them or not. If it's not, then to be honest with it, doesn't matter how good that investment is, it's not the right investment for them, yeah.
Speaker 2:Manny, we've spent 40 minutes on this podcast. You've got a wealth of knowledge. What I can say is buyers aren't going to benefit just from a from a 40-minute podcast you have an event coming up, don't you? Yeah we do, and I think you have it with well, you just said we with it's simple finance can you tell us a little bit? About this event definitely so.
Speaker 1:Hashtag shameless plug. Yeah, so the event is called ready, set by yep, and I'm very excited for the event. It's going to be myself, joseph from it's Simple, and we're having Peter Ishak from Ishak's Conveyancing. So a wealth of knowledge between us all. What I'm planning to talk about is the fundamentals that we need to consider when we're investing. So what are the eight metrics? The main eight metrics that we need to look for when buying an investment property, all the way down to infrastructure supply and demand, demographics, the affluence of people that are living in the area, the population growth, the infrastructure. Spend really educating the attendees of the event on how to actually buy the best investment property and what to look for, as well as the tools to implement to actually have the confidence to purchase.
Speaker 3:Okay, so when and where is this event?
Speaker 2:I want to go, so it's going to be a Strathfield Golf Club. It's on Thursday, april 10th. You know, manny speaking, I'm speaking, ishak Kavadzian is speaking. I'm going to highlight just the plain simple thing you want money. This is how we're going to get you money. All right, people try and over complicate property and they try and over complicate finance. What we try and do is break it down so for the average individual I'm not going to say schmo, but so the average individual can seriously benefit from property and be able to build wealth from it. I hear multiple people all the time oh, it just sounds too difficult. Everything is. It's so hard, you know, that's why you need an investor, mate, and that's why you need somebody to make it simple for you.
Speaker 3:so you know we can be able. It's almost as if you guys keep it simple it's.
Speaker 2:It's what we're going to be doing, so I'm really excited for this event. You know, manny, thank you so much for coming on to this episode. It's always a pleasure. We got so much out of you today. I believe we're going to get so much more out of you on april 10th and for anyone that needs help with purchasing an investment you can go to wwwinvestormatecomau and if you need help with financing that investment, you can go to wwwitsimatecomau, and if you need help with financing that investment, you can go to wwwitsimplecomau.
Speaker 2:As always, manny, thank you for coming on. Thank you, that's Michael. I'm Joe. Thanks for listening.
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