Don’t get ‘caught up in the now’: an expert reveals his tips for success
podcast

Don’t get ‘caught up in the now’: an expert reveals his tips for success

By Tamikah Bretzke

A ‘lightbulb moment’ motivated The Property Couch co-host Ben Kingsley to become an investor when he realised that residential property was an essential and prosperous need.

In this episode of The Smart Property Investment Show, host Phil Tarrant turns the spotlight on to our guest who returns to the studio to reveal his own motives behind property investing, as well as how he plans to achieve his financial goals for the future.

Together, the duo discuss the importance of cash flow management, why buyers should ask the ‘big’ questions before investing and why Ben encourages investors not to get caught up in the moment and first consider their investment options.

You’ll hear all of this and much, much more in this episode of The Smart Property Investment Show. Tune in now!

Would you like to share your story with the SPI team? Send us an email at [email protected]

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Did you like this episode? Show your support by rating us on iTunes (The Smart Property Investment Show) and by liking and following Smart Property Investment on social media: Facebook, Twitter 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 insight!

Listen to other instalments of The Smart Property Investment Show:
Episode 104: New podcast: Q&A session with Paul Glossop – more questions answered!
Episode 103: Special Episode: Phil and Munzurul talk steering the growth and development of portfolios by managing cash flow
Episode 102: Investor reveals how to find the perfect property manager
Episode 101: From 12 to 100 properties – how this investor will achieve his goals
Episode 100: BONUS EPISODE: Property investor talks research, teamwork and balance in his portfolio
Episode 99: Portfolio update: SPI opens its books to reveal all the nitty-gritty details
Episode 98: BONUS EPISODE: Buyer's agent forecasts what’s to come for Aussie property market
Episode 97: ‘How we achieved financial security through property’ – the Property Twins reveal all
Episode 96: BONUS EPISODE: Tips for tackling pest and building inspections head-on
Episode 95: The top 10 things every investor should check before buying a property

Full transcript

Phil Tarrant: Good day everyone, Phil Tarrant here, editor of Smart Property Investment. Thanks for tuning in to our podcast. Today I’ve got the competition in the studio.

Ben Kingsley: Hey, wait a minute. We’ve had you on already. You’ve had us on. What’s going on, competition?

Phil Tarrant: It’s not competition. This is very much about collaboration and for us, property investment and I guess the ethos of what we’re trying to do with The Smart Property Investment Show is to try and make property investment as open and as transparent to every Australian as possible. On that basis, I’m very pleased to have Ben Kingsley in the studio. Ben is from Empower Wealth, and he’s also the host or co-host of the Property Couch. Ben, how are you going?

Ben Kingsley: Good Phil, yourself?

Phil Tarrant: Good. Now it’s nice to have you in here.

Ben Kingsley: Yeah, well I always love coming up to Sydney and having a chat.

Phil Tarrant: It’s good. So if you’re not familiar with it, the Property Couch is a very successful podcast which is hosted on iTunes, where The Smart Property Investment Show is and also across … You’ve got a website I think.

Ben Kingsley: Yeah, thepropertycouch.com.au.

Phil Tarrant: You guys have been going for about a year longer than us I think, so you’ve got plenty of episodes there.

Ben Kingsley: Yeah, we’re coming up to our 100th episode on Australia Day long weekend.

Phil Tarrant: Is it 100 episodes?

Ben Kingsley: Yeah.

Phil Tarrant: If I put the two podcasts side by side, I’m a journo so my job is to talk to people and-

Ben Kingsley: A very smart journo…

Phil Tarrant: Well, don’t get carried away, but we like to get investors on the show to talk about their journey through property investment. What I like about that everyone’s on a different journey and everyone’s got very different strategies and very different processes or reasons why they invest in property, and what they try to achieve from it. What I’m happy about, having Ben on the studio, is Ben’s podcasts are probably a lot more technical analytical strategy-focused than The Smart Property Investment Show. I listen to it on a weekly basis because it’s a very big part of my personal education in property, is to listen to Ben and his co-host, Bryce-

Ben Kingsley: Oh, don’t worry man. We listen to your podcast as well. Well look, we’re always fascinated to hear how people have got there because there’s not … You know one size doesn't fit all. There’s strategies everywhere. There’s probably 100 different ways to slice the cheese, so I think it’s really important that you learn about these different opportunities, and then you tailor what’s right for you.

Phil Tarrant: I think it’s really good. I think the two podcasts sit side by side really well because they get the stories from us on how other people are doing stuff, and they get the actual meat, the expertise, the experience, from the work that you guys do. So side by side, they’re the only two podcasts you need to listen to on property.

Ben Kingsley: Yeah, we pretty much dominate it anyway, so…

Phil Tarrant: Yeah, and what we’re going to do today, and this is something very interesting is that we’re actually going to run this podcast on both The Smart Property Investment Show and on The Property Couch.

Ben Kingsley: Correct, we’re going to syndicate it out there because we’re passionate about educating people around property investment. If you can just get two or three great takeaways from this show, then hopefully you’ll start to listen to each other’s shows, which I think was going to be advantageous for everyone listening.

Phil Tarrant: Absolutely. The more people Ben that we can get thinking the right way about property, I think it’s great for Australia in terms of you think about the wealth that Australians hold in property is absolutely huge. There’s some good numbers floating around. I know RP data puts out some reports and there’s about five trillion bucks in residential properties.

Ben Kingsley: Keep going, 6.1, 6.2 now, trillion dollars. Obviously, we’ve had a good run. I mean if you look since, what is it? Since 2014, so the start of the Sydney cycle and so forth, we’ve raised that bar. I mean I think Sydney is up around 60% in this cycle, and this is a longer cycle than normal. Yeah, normally the cycles last about 18 months but we’re pushing into 23, 24 months now, maybe even more, so it’s interesting. Low interest rates…

Phil Tarrant: I guess for Ben’s listeners on the Property Couch and also for our listeners, today I want to find out a little bit more about Ben and the way he sees the world in terms of property, and some of his personal experiences. I know you don’t often touch on this in your show Ben, and I think I’m the bloke to try and extract this info out of you.

Ben Kingsley: Well, sometimes I don’t know whether it’s relevant if I’ve got six or I’ve got eight or I’ve got 12 properties. I remember having a chat in the car – we were doing an expo together and you were kind enough to drop me in town at one of my hotels. You said, “So home many in the portfolio? What’s it look like?” I said, “You know what? All I know that back when I was around 35, I set myself a target and that was to have $150,000 passive income by retirement, by the age of 50.”

Now I’ve moved that target up a little bit higher, it’s now 160. What did that mean and what did that look like? That has been the catalyst for what I’ve built with Empower Wealth, and certainly, the planning work that I’ve done. Because once you get to three or four properties, the question is how many more of these things do I need? How do I retire the debt out? How does all of that look together in combination? I went searching for software programmes to try and work it out, some off-the-shelf type stuff. There’s some terrific software programmes out there, shout out to the Summer Soft team. They do a great off-the-shelf product to look and isolate each property in isolation.

When you try and put global offset accounts and tax implications and interest savings across the portfolio probably, it becomes harder. So in 2009, I set off and with the help of a very, very clever Michael Pope, we built a simulator software that was designed to build portfolio property, projections, and forecasting. That was the light bulb moment for me.

When you professionally advise other people and you’re playing with their livelihoods … It’s not just like a $50,000 play on BHP. This is hundreds of thousands of dollars in debt. Naturally, what you might do in your portfolio … Like I’ve documented that I’m trying to buy a property in Broome at the moment. Now people are like, “Broome, that's bottoming out. It hasn’t hit the bottom yet.” For me it’s like well, I’m in a position where I can make that play. I’m looking at an 8% yield on that property and I think it’s bottomed out. I could have bought that property four or five years ago for almost $900,000 and I’m going to pick it up for $580,000.

That's just my personal circumstance. I don’t want everyone to go out and buy in Broome. The point being is that if you bring it all back to people situations, it’s like it doesn't fit all. That’s what I love about your show in the sense that we hear all different stories and all different income ranges, of all different aspects. So when Jane and I decided to build out our portfolio it was about how many do we need? When do we need to buy them and do it comfortably whilst also enjoying life? That all comes down to cash flow and management, and so that was the pieces of the puzzle that came together.

Phil Tarrant: This is a question I ask pretty much everyone that comes on the show. Why do you invest in property? Now you’re talking about having a passive income at retirement. I say that in inverted … Whenever that is and I reckon that's got to happen soon mate. What is it about property for you over any other share or asset class that works for you?

Ben Kingsley: Yeah, look, I touched on this in the book, The Armchair Guide that Bryce and I wrote, which is basically the back-story. The quick back-story was that money in our household was discussed heavily and tightly fought over. Dad, he retired at 55. He worked 37 years at Ansett. He retired a week before they collapsed, but he worked three jobs for 35 years. Mum was always trying to look, after us, make sure we had the right things. There was always this budgeting debate going on in the household.

To both of their credits, they did a great job in raising me and my brother, but they also were able to, dad was able to hit his target. I took away from that that money causes anxiety in households. I certainly didn’t bottom out. I’m not a rag to riches story, but I took away from that I never ever wanted to argue about money in the household. That was my main takeaway.

So I went on a journey of education and I looked at shares. I did trading courses and I learned about stock loses. I learned about contracts for different CFDs and all this type of stuff. I then started to understand my risk profile. I took a little bit of my father’s risk profile, which was quite conservative. To try and do aggressive things when you’ve got a conservative risk profile, you’ll do your head in. You won’t be able to lie down on a pillow really well because you’re just contradicting yourself. You’re not in flow, or whatever you want to call it.

The design to do the research, I went to all the presos. I’ve seen the Henry Casebrugers of this world. I’ve seen all of those guys and I’ve seen the good ones too. Even the bad ones, you get to take away a bit of gold. Just don’t sign any paperwork on the day. That's my greatest tip for anyone who goes to those sessions. Don’t get caught up in the now moment. Digest it and see what it’s worth, and that's basically what I did. I never got sold on doing any of their boot camps or their weekends away but I took a little bit of each, and then read a lot, obviously a lot of books and so forth.

Now my lightbulb moment was the fact that residential property is an essential need, once I understood it as being shelter. Then I understood that, traditionally, it’s low in volatility and I could put some gear in. When I looked at cash on cash returns, when someone showed me the slide on cash on cash returns, I’m like I’ve found it. I finally worked out how I can do this. Get the cash flow management right, borrow when you can borrow, make sure you don’t overextend yourself, buy assets that are effectively scarce in design,  high on occupier appeal, and just ride the long-term gain, and that was it.

Once I knew that … And that got me into … Back in the day, I was a sales manager of Hamilton Island Resort and Ayers Rock Resort. I had the best job in the world. But once I moved out of the tourism industry to set up my company, the first thing I wanted to learn about is how I got my hands on the gearing and the leverage, because leveraging can be very, very positive, but it can also destroy you if go too hard.

That was the back-story of once I knew that residential property is an essential need, and there was emotional attachment to it which holds its intrinsic value and I could work out what that looked like … And I didn’t work that out straight away. I mean it took me 10 years to come to some of the conclusions I did around the research we do now. Early on, it was really just a story of if I do this well and long enough and I see what values continue to keep going, I’m going to be all right.

Phil Tarrant: With your own portfolio, and your job is to work with property investors or wealth creators to take them on a journey to financial independence, the broad scope.  The business you’re in is wealth advice.

Ben Kingsley: Yeah, but we have total bias towards residential property.

Phil Tarrant: Which is okay, and one of the points I make often on this show when we talk about financial planners, and we get people in that see a financial planner, but most financial planners don’t recommend property. They recommend something else. The cynic in me says they do that because they get fees off the recommendation from other asset classes.

For when you’re looking at wealth advice as just a punter, as someone who wants to create wealth, don’t overlook those businesses like yours, which have a bias towards residential property. If you invest in property in the right way, there is a great way to create wealth, sustainable wealth over time. But with your own portfolio, Ben, and your approach to building wealth through property, what is it that worries you about your portfolio? What is it that keeps you away at night that makes you question whether or not you’re doing the right thing?

Ben Kingsley: Look, very little in my portfolio because it’s not a big portfolio. I think there’s six properties in there at the moment and they’re all relatively blue chip. I’ve gone for that sort of inner city locations, Alexandria, Flemington, Moonee Ponds. There’s a couple of more speculative ones there, one in Cairns which I bought about 18 months ago, a three-bedroomed, two-bathroomed townhouse for $150,000. It’s yielding a 10.8% gross rental yield. I was doing a research trip up there to see what’s going to happen in Northern Australia around lower Australian dollar in the tourism story, and the scarcity that's going to come of that. Because the fact of the matter is that market is tanked big time. That was a little bit more of an aggressive play and that’s in the self-managed superfund.

I think from my point of view, I’ve always bought properties in my personal home. I got some great advice early on from a very good accountant friend of mine, Quinton Young. I’d read all the books on the property investment trusts and these hybrid trusts and all these complex ways to save tax. He’s great advice to me. Mate, the taxman will catch up to you. He will block this type of play. Now I’m hearing stories of people that have got these hybrid trusts that can’t borrow any money and they’ve got to reverse all their portfolio out of it.

I still believe in asset protection if you’re in a risky environment. A lot of the portfolio is in my wife’s name. There’s one in my name and then there’s a couple in the self-managed superfund. But again, I don’t want everyone to go out there and set a self-managed superfund up. It’s for a sophisticated investor. It’s quite detailed. You carry all the responsibility so you can outsource some of that responsibility, but ultimately, the risk is with you. If you stuff it up it’s on your shoulders and you can’t blame anyone else, even if you’re outsourcing most of the pieces. So it’s not for everyone, and again, when you’re in an advisory business you don’t want to be playing in that space.

Phil, when you were talking about these financial planners, I mean so of it is, one, they’re not trained on it. They do probably one afternoon or four pages on residential, or what they call direct or real property. They learn about how to calculate capital growth and how to calculate rental yield, and that's it. So one, it’s not trained, because it’s not a licensed investment product. It’s not an investment product. Hence, it doesn't fall under the regulatory requirements. So when financial planner, even if they do want to talk about it, the majority of them can’t because their PI cover and their dealership group won’t allow them to.

That is the big challenge when you go and see a financial planner traditionally, is they will talk you out of it. They will use the classic line of divestment, so basically be diversified and now you’ve got your family home, let’s diversify into shares and the like. Now for me, shares is not the right word. You’re investing in businesses. Have a look at the businesses that live under those.

If you’re going to invest in a managed fund, what are you investing in? Are you focused on energy because you know there’s absolutely a big need for energy globally, and batteries? Are you going to try and look for opportunities in the graphite sector of which they make these lithium batter- … All those things is what you need to understand, not so much the share price. That's a product of a damn good business being well managed and operated.

I think from that point of view, again, that's where I came back to property. You know, this whole controlling piece was I couldn't control that, whereas I’d  a piece of bricks and mortar standing there and I could say … I could let it sit there doing nothing to other than keep it well maintained, or I could potentially add value to it down the track. That's what I love about your show. You’re teaching people how to potentially add value, do all those types of things, whereas the majority of our clients are predominantly set and forget.

They’re high-end professionals, time poor, and they just basically want to build out a passive income, I call off farm investments, because they concentrate on the work that you do, do really well, and they have a great career that will get your money working harder for you.

Phil Tarrant: We do different things but we’re very fortunate that we spend all day chatting with property investors, and me in particular, because they’re not clients or people that we work with, or we work within the property industry with. I’m fortunate that I get to ask people all the questions that I want answered and it’s a great education for me. I’ve probably got one of the best platforms for education around property in Australia because I get to chat with leading people and property guys like yourself, or your Margaret Lomas’s, or your Damien Collins or your Steve Waters. All these different guys and I feel very fortunate and privileged to be in that position. That's sort of helped shape and grow my evolution as a property investor and what I choose to do.

In your situation, you chat with investors all day and a lot of it’s from an advisory capacity. The questions you ask people when they first walk into your offices and they’re going down that journey of property investment, those questions you ask them, what are they, and do you ask yourself those questions?

Ben Kingsley: Certainly, because it’s not just … The way in which we do the property wealth planning piece is it’s not just about the investment purchase, and that's the difference. A lot of investment houses might focus on the execution of the investment, which is pretty much what financial planners do. They’ve got to fact find off you and they say, “Well, you can afford this right now. Go and execute on this.”

The first question is what brings you here? The question is what is it about coming here that’s got you interested? I want to get an understanding of what they know about property. I want to get an understanding of what’s happening in their lives, because we’re going to probably have kids. I’ll give you a great example where we’re dealing with one particular couple at the moment, about to have their third child. We’re umming and ahhing about upgrading in the local suburb, downgrading, renting in the local suburb, moving to a neighbouring suburb, or completely relocating to a regional city. All of these are the questions that we’re playing with their lives.

Phil Tarrant: Like a counsellor as much as an advisor.

Ben Kingsley: Totally are. Elite advisory is all around, basically, trying to identify their personal goals and the financial piece of the puzzle that fits into that, and in some cases getting them off the fence. They actually know the answers Phil, absolutely, but they just need it validated in some cases. Or in some cases, it is about pulling them off the fence, but in most cases it’s actually about validating. I’ll give you another example.

A couple out at Tazzi, a lovely young couple, really focused, but they want to move to the Gold Coast, right? The debate they’ve been having with themselves for the last 24 months is they want to move to the Gold Coast but they’re just, “Yeah, the family is so good down here. The business is going so well down here.” So I said, “Well, I can keep you down there and you can not be happy. Or, we’re going to the Gold Coast.” The moment we said we’re going to the Gold Coast, they both were just like, “Oh, validation. It’s good. It’s the right decision for us.”

All of a sudden, the property piece came after that. Again, because a property advisor or any great advisor should be able to deliver judgement calls when the client needs some validation on that …. Now we’ve still got to make it work financially, but if you don’t put those big rocks in the jar early there’s no use in having six or seven or 10 properties in your portfolio if you’re not happy, if you’re not doing the things that you want to do.

So, why are you here? What’s your back-story? Have you any experience with professional advice before? What was it like, good, bad, indifferent? Get all of that, start to … Also, one of the things I say, one of the first question is like is anyone here under sufferance? Because sometimes you’ll bring the two in and then the husband has got the arm crossed and the wife is sitting there all eager for this conversation, or vice versa.

It’s like, “Oh, so John you’re here under sufferance,” and he goes, “What do you mean?” I say, “Well, you know, I can get a sense that you’re not right into this story yet.” “Oh, you know, I don’t know. I’m just a bit sceptical.” “Great, I’m really happy that you’re sceptical. I’m really thrilled that you are concerned about your livelihood and if this is going to change things.” Because if I can’t get them both on the same page …

Or couples who come in with two different bank accounts, running two different budgets, this isn’t going to work. I say, “Good luck with it all, but I’m not going to be able to look after you because you haven’t got combined household financials. I can give you separate living sort of party budgets, lifestyle budgets, but if you’re not going to combine those we’re not going to get the value of having the offset account working hard for you.”

They’re the big questions that are the breakthrough moments because once you get that and you’re able to then get the client’s trust, the rest of it in terms of the execution of the property stuff is still bloody hard, and in some cases it doesn't work. I always talk about compromise. There’s four moving parts, four levers, income, expenditure, time, and target. If you’re not going to play with your income and you’re not going to give me any savings on expenditure, you’re going to be working longer which means it gives that income so I can build a portfolio, and/or the target is too high or too low.

It really is a combination of those and that's where the simulator software just gives the advisor the tool that they need to help make informed decisions. As long as all the variables and parameters that you’re working in aren’t ridiculously set … If you had interest rates set at 4% for the next 40 years, it’s a joke. You’ve got to make sure that you’re trying to be conservative with the cash flow analysis that you’re working with.

Phil Tarrant: How often would you stress test your own portfolio so that there’s an old adage that the plumber has the worst plumbing in the street, and the carpenter’s got his falling down and all this sort of stuff, right? How often would you stress test your own portfolio and aggressively or inwardly look at are you doing the right stuff? Is that an ongoing thing or is it a structured thing for you?

Ben Kingsley: It’s not too bad for me because I’m a buy and a hold traditionalist. Not to say that there’s any … I’m fortunate, I don’t have any bad properties in the portfolio and I’m always a believer that with a great portfolio, each property shouldn't take more than 10 hours a year to manage. There might be the odd year where, take for example the Flemington property. I was coming into one client at the start of last year. I said, “This property for the last seven years, I haven’t had a phone call on.” It’s just been flying along and then all of a sudden I get the phone call. Well, the back fence is falling down and we’ve got to replace this and it’s due for a paint. It was I think about $12,000 or $13,000. Now I had provisioned that anyway because we provision 1.5% of the value of the property indexing at 3% as part of our models. From that point of view, yeah, I finally had to call on the war chest that I’d built.

The Cairns property, because I sit on the body corporate, it’s probably a little bit more time because I wanted to take an active interest in that. If I’m getting clients to buy units or townhouses, I want to also experience that in terms of good body corporates and bad so I can be a better advisor. I took it upon myself to sit on that particular body corporate and lead the story there. There’s some value add that we can do there. All the back of those townhouses, basically, is open land. I’m going to basically segment them off and have private courtyards and so forth as well. So I know I can add some value to that story as well.

Phil Tarrant: Your approach to financing in your portfolio, do you have multiple lenders who support you with financing?

Ben Kingsley: Yeah, there’s normally two. My debt level is sitting at probably just on 1.7, 1.8 mil because effectively, I only need one more, right? I’ve gone and got this one in Broome as a little speculative play, but that’s because the portfolio is probably sitting at over four million, four and a half million now. The reality is, from that point of view, that normally I would get three or four with one lender and then look from a servicing point of view for the others.

Again, I’m not aggressively trying to chase the next property and the next property. The irony here is I’ve probably got one every five years on the journey, so it hasn’t been as aggressive as some. I’m 45 now. When I meet someone who is 45 and they have no properties, but they have really strong income and the kids are now getting to high school or whatever, and they’ve got to do a little bit more and they’ve got great equity, we might buy three properties in 18 months. That's quite aggressive but it’s also going to come down to their risk profile.

We do one quickly and then we wait six months, just so it feels right, like you’re getting into the routine of receiving their rent, making sure. If you go three properties inside nine months and they have a problem with one of them, all of a sudden-

Phil Tarrant: Yeah, it frames the whole thing. It’s a confidence thing.

Ben Kingsley: Correct, it is, yeah. It’s really sad when you … We’ve had experiences where one couple had a really bad experience; tenants, bad property manager, and then the fence was basically, the council told them they have 48 hours to knock down their brick wall … It was a $14,000 fence … because it was unstable. That was after that poor incident in Melbourne city were those people were killed. The neighbour rang up and said, “I think that fence is a bit dangerous.” The council was straight out there.

That was a horrible experience for them and so they just gave up and they sold the property against my better judgement . I said, “It’s been unfortunate that you had all of this bad experience,” but they also want people to know that it’s not all roses.

Phil Tarrant: I think it’s also, as a property investor, you have responsibilities as well. If you have  an unsafe fence, you’ve got to fix it up, which is the reason why you need a good war chest or a set of funds that you can draw upon. That's obviously part of your strategy is to make sure that you can meet those requirements.

Ben Kingsley: Exactly right.

Phil Tarrant: The thing is that my point would be is that you’re an extremely sophisticated property investor because you’re a property investor in your own right, but this is what you do for a living. You’ve got these equations. You’ve got these formulas. You’ve got these benchmarks which are used in your own portfolio, which says this is the real cost of running a portfolio. This is how you can create wealth over time, but this is how it needs to be budgeted through the process.

What would be those key things be? You mentioned 1.5% of the total value in terms of upkeep and maintenance on your properties over the years. What would be those couple of key things you could tell our listeners that they should be thinking about?

Ben Kingsley: The big ones are 90% occupancy rate, so the property is vacant four weeks of every year indefinitely. Depending on whether you’re buying a townhouse or a house, you could get away with 1%, but we use 1.5% for ongoing holding costs, and that will cover off on things like land tax as the properties grow in value. We originally set, back in 2009, our long-term interest rates at 7.25%. I’ve given the team now some latitude to go into 6.5%. Because if interest rates are going to stay lower for longer we’re actually doing an injustice to our clients in the sense that there’s an opportunity that’s being missed. If our cash flow needs to, for the models to work, we can go as low as 6.5, so long as they run it by me and I get to review it and I sign off on it.

They’re the big ones. They’re the big variables. Management fees, around 7.7% inc GST. In some states, like in Perth and so forth, that can be as high as 9 or 10. If we’re going to be buying over there next year or the year after, we’ll start to play around with those models, but in some places like Melbourne and Sydney you can get them as low as 6, 6.5%, depending on how well you negotiate, or the quality of the property manager that you want.

We always say these people are responsible for your assets. Pay the fair market price. Don’t try and haggle if you don’t have to because they’re basically the connection point, the intermediary between your asset and your tenant and you, so start to look after it. They’re probably the main ones. Indexation, so obviously, the value of money going down, we use 3%, so a little bit higher than normal.

If we go back to 1993 when we first set the model, we set that when the Reserve Bank was decoupled from the Federal Government to become an independent body. Then we looked at long-term inflationary rates and so forth between that 2 and 3%. We went conservative to say the costs are growing at 3% and wages are growing at 3%.

Phil Tarrant: You’re a really interesting case Ben, because you have this successful advisory business running in parallel with your own wealth creation. You’re doing what you advise people to do and you’re very good at the advice side and you build a really nice portfolio. This is something I think about quite often, about my journey through wealth creation and property investment, is that how can I be a better property investor?

Putting aside the tangible stuff you just spoke about and the work that you do on a daily basis, how can you be better on your own portfolio about being a property investor? What would be those couple of things that you’d work on?

Ben Kingsley: Well, the game starts and stops. We’re big on the ABCDS. It’s selection, borrowing power, cash flow, management and defence, like making sure that you’ve got all those pieces and that’s the professional piece. For me, the total game is asset selection. It’s the science of picking the right properties.

Phil Tarrant: That suit your portfolio and what you’re trying to achieve?

Ben Kingsley: Or just generally, that the value of your portfolio is going to be the value of those properties over time. The science and the data piece … What is it that I want to be elite at, moving forward? It’s continuing to keep turning these stones over and running these algorithms and using big data and machine learning and all of those types of things to try and get better predictive modelling on where to buy and when to buy.

We’ve invested heavily in things like demand and supply ratios and will continue to keep fleshing those out to try and … One of our key people that we need to bring into the firm is a data scientist to start putting that piece of the puzzle together. Because, like anything, we went into Brisbane 18 months ago … We still believe in the Brisbane story but it hasn’t popped as quick as we thought it would.

Some people were still buying in Sydney when we pulled out of Sydney, and in a sense, there might have been some opportunities that we’ve missed in that Sydney market. Yet our data was telling us that there were still opportunities there but this was unchartered territory. We were in a record low interest rate environment so we just didn’t know how much more we had to go. The last thing we want to try and do is get people in there at the top of the cycle. We try and get them in … We’d prefer to turn up at 6:00 p.m. or 7:00 p.m. and let it run through that cycle, rather than turning up at 11: p.m. before it gets to the top of the property clock, if you call it that.

Phil Tarrant: That's good. Ben, we’ve run out of time, mate. It’s -

Ben Kingsley: Well, I never had a chance to talk much about what you guys do, but now that -

Phil Tarrant: It’s not about us. It’s about you.

Ben Kingsley: I’m going to flip it over now. I want to say now, as the host of the Property Couch, just wrapping up, check out The Smart Property Investment Show on the podcast. It’s a ripper. How many shows have you done now?

Phil Tarrant: I think we’re nearing, coming up to 50 or so.

Ben Kingsley: Yeah, 50 or so and there’s some great stories of young investors, individuals, couples. It’s really great. That’s what I love about the questions you get to ask them, is you can unpack their story around what's your back-story, what’s your income? How’s it all working? What did you do? Did you equity harvest? Did you renovate? Did you just sit and hold? What’s been the story?

I think that's why I think that the real die-hards can get a lot out of both of our shows, because it’s all about education and knowledge is power.

Phil Tarrant: Absolutely. Look, I do appreciate the insights from the Property Couch. It’s one of those things that I’ve used to help frame my portfolio and we speak very open about the portfolio that we’re building through Smart Property Investment. For me, it’s about sharing that knowledge and sharing that education and those experiences, good or bad, because I’m a big believer in property, as you are. You need to invest in property the right way.

From a personal point of view and I’ve been very vocal about this, we lean pretty heavily on the team of advisors that we have. I’m very pro-advice. I run a media business so I’m not a property investment expert. I know a lot about property and fortunately, I get to speak to people about property, but I work in the media, so…

Ben Kingsley: Who was that expert that said you need 10,000 hours of doing one thing - ?

Phil Tarrant: Yeah, before you come next week … I can’t remember exactly.

Ben Kingsley: Yeah, but I know who his name was.

Phil Tarrant: I’m so far away from…

Ben Kingsley: But that's the truth and the fact that these podcasts weren’t around. When I started investing, the internet wasn’t around. I’ve got folders and folders of archive cutting that I was cutting out and doing a recording of values and all that type. I think people have got a little bit easier with the aggregation of data, but it’s shows like yours and ours that are going to fast track these people’s knowledge. Maybe it’s only going to be 5,000 hours or go off and get some professional advice.

Phil Tarrant: Yeah, absolutely. Yeah, this was really good.

Ben Kingsley: Yeah, terrific.

Phil Tarrant: Remember to check out Ben’s show on iTunes, the Property Couch. You can go to propertycouch.co.au.

Ben Kingsley: Correct.

Phil Tarrant: Correct. I think all the different episodes and series are up there. You can contact the guys over at the Property Couch on …

Ben Kingsley: There, I see I’m not the technical person.

Phil Tarrant: Somewhere?

Ben Kingsley: Inquiries at…

Phil Tarrant: There will be a form on the website.

Ben Kingsley: Yeah, there will be info at, or inquiries at the Property Couch. One of those two should work.

Phil Tarrant: Okay, well you shoot me a thing. I’ll pass it on. You can contact us, [email protected] If you want to check us out, smartpropertyinvestment.com.au. We’re on all eh social stuff, as is the Property Couch. That's pretty much all from us today. I think that’s not a bad idea to do.

Ben Kingsley: Yeah, I’ve enjoyed it. Let’s do it again.

Phil Tarrant: Yeah. Tell your friends about both podcasts, I think, and keep those rankings coming in on iTunes as well. We like five stars. It’s only two podcasts you need to give star rankings to.

Ben Kingsley: Very good.

Phil Tarrant: All right, goodbye. Thanks for tuning in. We’ll see you next week. Bye-bye.

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BERKELEY VALE 46.03%
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EDGECLIFF 45.06%
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PAMBULA 43%
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EAST LISMORE 41.38%
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SOLDIERS POINT 37.89%
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