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Portfolio assessments

Investment tip: The importance of consistent portfolio assessments

By Bianca Dabu

Smart Property Investment’s Phil Tarrant has successfully built an impressive multi-property portfolio worth $7 million but as astounding as this feat sounds, his secret is as simple as it could get: good administration.

The property investor attributes a huge part of his success to the property professionals who have worked alongside him as he strives to reach his financial goals. In fact, he firmly believes that a good financial team is always “worth its weight in gold”.

Phil, together with his buyer’s agent Steve Waters and accountant Michael Johnson, discusses the current status of his property portfolio as well as his plan to continue growing his pool of real estate assets:

How are you looking to refinance at the moment?

Phil Tarrant: Got a [renovation] on the run … It was [a property bought] around July, I think. We announced that property in KingstonKingston, QLD Kingston, ACT Kingston, TAS, which is part of the Logan Shire in Brisbane in Queensland. We picked it up for $290,000 ... We've had tenants in it since then. It's quite a large house … [and] when we bought it, we knew it was in ... need of some love and TLC [tender love and care] … We were able to drive down the price on it a little bit after some building to accommodate for that.

What kind of renovation are you doing?

Steve Waters: The property does need a little bit of love and maintenance and repairs now ... Just to recap what the property is: It's an upstairs-downstairs scenario … All of that downstairs area needs some love. At the moment, there's a bit of a flea problem.

Can the property be back on the market for rent before December—considerably the worst time possible?

Phil Tarrant: Yes.

Steve Waters: Traditionally, [tenants] don't want to move [in December] … They usually wait until the beginning of the year. It may be prudent to drop the rent just slightly below market to get someone in there, and then have a ratchet clause in there, somewhere in that six-month mark.

Do you have other concerns about your portfolio right now?

Michael Johnson: There's been nothing major. We've had a bit of bank dramas—just getting all the documentation they need to be able to do the refinancing … We're also looking at putting a line of credit on one of the properties. I think that'd be a good little thing to get across the Smart Property Investment Show as well because I don't think it's something we've done before.

Should property investors consider putting a line of credit on their properties instead of refinancing?

Phil Tarrant: We normally just refinance.

Michael Johnson: This is another option you might have rather than refinancing, which is quite a significant undertaking … [A] line of credit gives us more of a continual thing to use. That's really what's on my plate at the moment. But other than that, all good.

How important is [having a] good administration in property investment?

Phil Tarrant: You don't have to do stuff absolutely immediately... as long as you keep up enough with the administration [of the] portfolio so you've got the numbers, so you can make decisions when you need to make them.

Right now ... Can we go out and make decisions about refinancing? [Yes], we can do all that sort of stuff. But, we need to get this thing updated to include the new properties we purchased—those five, which all will be their own individual thing on this spreadsheet because they're all their own individual income-producing properties, even though they all sit on one block.

Can you share some of the processes in your regular assessment?

Phil Tarrant: We always go through [everything] and go, "What do you think about this, Steve … ?" So, we've got some firm bank valuations on a number of our properties ... which is good, and we use them as the value even though they're typically conservative … [When] we don't have bank valuations, we do a pretty conservative assessment of where they are.

What is the value of your property portfolio now?

Phil Tarrant: At the moment, it's about $7 million, we've got about $4 million in debt, there's about $3 million in equity, and there’s an LVR [loan-to-value ratio] position of … 65 per cent, something we're comfortable with.

How do you plan to move forward on your property investment journey?

Phil Tarrant: That's $3 million of equity in there that we can use to keep growing … Even though there's a lot of talk about slowdowns of markets and Sydney coming off, et cetera, et cetera ... it's always a good time to invest in property if you're investing in the right place … There's always a market somewhere to be investing in and we're always looking for that market … We'll continue to keep pushing ahead and share the story with you.

 

Tune in to Phil Tarrant’s portfolio update on The Smart Property Investment Show to know more about the current state of different Australian property markets and where they are headed, as well as the best suburb for your next investment property.

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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
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  string(72) "mortgages-in-a-tighter-lending-economy-and-why-brisbane-is-a-good-option"
  ["introtext"]=>
  string(255) "

Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

" ["fulltext"]=> string(818) "

To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

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  • The pitfalls that he has seen people get into<\/li>\r\n
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    Whether it\u2019s building a successful property portfolio or investing in one of their Development Funds, Open Corp can help you through every stage of your investment journey. The team has 40 property specialists who collectively have been involved in over $4 billion worth of property transactions and the acquisition of more than 8000 homes and investment properties.<\/p>\r\n

    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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    • Why Brisbane is a good investment option right now<\/li>\r\n
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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

" ["fulltext"]=> string(2483) "

In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1185 (52) {
  ["id"]=>
  string(5) "18287"
  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

" ["fulltext"]=> string(2323) "

Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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