podcast

Portfolio update: SPI gives the inside scoop on its latest property purchase

By Tamikah Bretzke
Steve Waters from Right Property Group

It’s been a “long time between drinks”, but the Smart Property Investment team is back in the game having recently secured their latest investment property.

In this episode of The Smart Property Investment Show, Phil Tarrant and buyer’s agent Steve Waters give listeners a rundown on the settlement of their Queensland-based property and explain how the under market value premises will enable the team to move on to a more sophisticated investment strategy over the long term.

You’ll also hear insight into pest and building inspections, the team’s top tips for finding the right marketplace for investment, as well as how listeners can skilfully identify growth opportunities within their portfolio to increase its value.

Tune in now to hear all of this and much, much more in this episode of The Smart Property Investment Show!

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

If you liked this episode, please 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 insight!

Suburbs mentioned in this episode:

Logan
Springwood 
Woodridge  
Kingston 
Mount Druitt 
Blacktown 

Related articles of interest: 

Inaccurate Queensland jobs data throwing off investors 
Listings remain low as regional/capital gaps open, latest data finds 
Areas in regional Queensland – rising or declining? 
Price per square metre a crucial tool for any investor 

 

Listen to other instalments of The Smart Property Investment Show:
Episode 95: The top 10 things every investor should check before buying a property
Episode 94: BONUS EPISODE: From 1 to 28 properties – what's his secret?
Episode 93: 28 properties and an $11.5 million portfolio – how this investor did it
Episode 92: BONUS EPISODE: Investor reveals top tips for better property management
Episode 91: Why being 'pedantic' about property will enable this investor to be debt-free by 45
Episode 89: Renovating as a couple: two young investors share their story
Episode 88: Everything you want to know about the short-term rental market revealed
Episode 87: BONUS EPISODE: Former Olympian shares his property development know-how
Episode 86: How a former Olympian found new sport in property development: Ed Fernon's success story
Episode 85: Q&A session with Paul Glossop – more questions answered!

Full transcript

Phil Tarrant: G’day everyone. It’s Phil Tarrant here, the host of The Smart Property Investment Show and I am recording today with a much-anticipated and perhaps a long-awaited podcast where I unveil our most recent purchase. To help me do this, I've asked my buyer’s agent into the studio, Steve Waters from Right Property Group. Steve, how are you going?

Steve Waters:   Well mate, how are you?

Phil Tarrant: Good. For those and these are always very popular podcasts, so for us at Smart Property Investment, one of the reasons of establishing Smart Property Investment all those years ago was … Myself as a journalist, I love storytelling. But often when I ask people to share their property investment stories, most of the information I typically got, I always put my bullshit metre on it and really didn't believe it. One of the reasons with Smart Property Investment, we wanted to share our own story. In sharing our own story I wanted to show that we weren't bulletproof, that we weren't superheroes. That like anyone investing in property, we don't always get it right and I wanted to make sure that we could help steer some greater education around how to invest in property by learning not only from my own mistakes, but also our successes.

Fortunately, our success has firmly outweighed our mistakes and if you've been listening to these podcasts, welcome back and I'm going to reveal today where we've just purchased. But for those of you who are new and you've just tracked us down, come listen to some of this stuff. We've done some portfolio reviews with Steve and also I speak quite frankly and transparently with my accountant about our portfolio. Plus some other people will help us out buying property including our mortgage broker.

There's also a lot of stuff online, smartpropertyinvestment.com.au, where we've got heaps of stories written about all the properties that we've purchased. It's been quite a long time coming between … Well it's been a long time between drinks -

Steve Waters: Years…

Phil Tarrant: - if we're going to use that for us to just buying a property. I've spoken about it before and hey it's not because we can't afford it, it's just because I haven't really got around to it for a whole bunch of different reasons, but I'm back in the game. We've secured a new property and what we are going to do today is have a chat about it because I'm quite happy with the purchase, there's a reason for this purchase.

The new property has a role to play in our portfolio, which now is sort of the circa $6 million dollar mark and consists I think of around 12 properties now. It's between 11 or 12, I can't remember, I haven't got that number in front of me, but I think it's 12. Our total debt on our portfolio is just south of $4 million dollars, so it's $2 million dollars’ worth of equity in our portfolio, which is you know we have 66 per cent. On all accounts we've built attractive portfolio Steve?

Steve Waters: Yes, very.

Phil Tarrant: I hope that you've enjoyed joining us as we've gone down our journey and achieved that. I'll touch on some of the things that were good at, better a little bit later on, but I'm happy with the position right now. I'm confident with the risk profile of it at 66 per cent and if we were today to look to refinance the whole portfolio and look to dredge out some more money and start buying again, there's plenty of fat in there for us to do that. We're at an interesting point of our portfolio right now where we're looking to move into a more sophisticated strategy and find assets which allow us to continue to grow, but look for a longer term future proofing that portfolio as well. So increasing cash flow through whether it's a knock down rebuilds or small developments or additions of granny flats or just general land banking. So all that's taking place right now, but I'll touch on that in another podcast.

Today, me and Steve are going to speak specifically around the new property that we've purchased up in Queensland and I hinted that when we last spoke Steve, which is probably a month and a half or so ago now, go and check it out, you'll find it on the feed. The story behind this particular property is once I got my shit in order and provided our broker with all the information he needed in order to secure as a pre-approval and then I was able to confidently tell Steve that we're back in the game and ready to buy.

Steve Waters: Ready to roll, yeah.

Phil Tarrant: These guys at the Right Property Group went out there and tracked us down this property. The objective of this particular property, like most of the other stuff in our portfolio, is both a capital growth play but also a ‘you’ play.

Steve Waters: And renovation.

Phil Tarrant: And a renovation play, so Steve let's have a quick chat about that. What was it about this particular property you think suited us and what do you see its long term potential?

Steve Waters: Look, based on – and every property has a direct purpose for anyone's portfolio. In relation to yours this was going to give you some medium-term added cash flow via second income or another dwelling and a unit to be precise. It has enough ground square metres, so a footprint of 790-odd square metres and really good access, which we'll get to in a little bit later on and it was something unique for the Brisbane area being that it had … It was a high set house, which is in itself unique but it had been fitted out so to speak on the bottom story.

Now technically it's storage, but it has a kitchen in it, it has another bathroom, so it gave the potential upside of this property is renovation, is a second income to add total yield to the portfolio or total cash flow to your portfolio and also the capital growth. You need that as well.

Phil Tarrant: The property's location it's an area where we have secured previous properties in Logan, the Logan shire.

Steve Waters: Logan shire yes.

Phil Tarrant: For those of you who aren't familiar with the Logan shire it is south of the Brisbane City south west.

Steve Waters: About 27 minutes from the airport, yeah.

Phil Tarrant: Or the Brisbane CBD. There's a lot of noise around Logan shire and it's been popular with investors for a good sort four, five years. There's still quite a lot of upside investing in Logan and their long-term fundamental factors, which should help properties in the area continue to grow overtime, a lot of population obviously. I want to cover that, check out smartpropertyinvestment.com.au and it comes with a lot more details around that. We have a couple of other properties in the area there, Springwood.

Steve Waters: Yes, which is a couple steps up, yes.

Phil Tarrant: A couple of steps up and then also we're in Woodridge as well.

Steve Waters: Woodridge nice yielding tenant sort of villa.

Phil Tarrant: A villa in Woodridge and a property in Springfield, so go and check them out, they're on the website. This particular property is I think quite typical of a lot of investors are buying up in Queensland and these are the sort of high-set properties with at the bottom is being turned into storage and often a lot of people sort of look to get some greater use out of it and turn that into maybe a home office or like a teenager's retreat.

Steve Waters: Another lounge room or whatever.

Phil Tarrant: Another lounge room or a rumpus room or whatever and this is what this property really reflects. The property that we bought, it's in the suburb of Kingston. Steve, what's your thoughts on Kingston? I know you like it, but it's, probably sits in between in terms of social-economic context between Woodridge and Springwood sort of field.

Steve Waters: Yes. Look, it's very similar to the western suburbs city and this is what we like about it, Blacktown in particular. If we compare the Logan shire to the Blacktown shire of Sydney where there's a massive difference from one side to the other.

Phil Tarrant: Kellyville Ridge all the way through to…

Steve Waters: Yes, so you get one and a half million-dollar properties all the way down to – oh sorry – all the way down to Mount Druitt now – something just sold for over million dollars or whatever it was. But in those other more affordable corridors, when we first started buying there, they were very low 200s or high 100s. The Logan shire demographic is identical, not just visually, but also in terms of its demographics as well, so we have -

Phil Tarrant: It looks and feels the same, doesn't it?

Steve Waters: It does, very much so.

Phil Tarrant: Very similar.

Steve Waters: Yes, so you've got properties there over a million dollars on one side of the show all the way down to these more affordable properties. What we like about whether it be Kingston, Woodridge, Logan – it's pretty much all the same. We like the profile. We like the fact that we're buying in a below cost of replacement and yes, that's a pretty loose term which we can talk about later on. We like the yield, the cash flow that it generates, so we have great infrastructure, all the fundamentals: great infrastructure, good population growth, good yield and growth follows.

Phil Tarrant: In the Queensland market where we have been buying in the Logan shire, we've also been buying in the northern suburbs of Brisbane as well.

Steve Waters: Yeah, and the south-western areas – Ipswich area Logan, north of Brisbane, yep.

Phil Tarrant: All these places are quite attractive for a lot of reasons, but when you look at our strategy as property investors investing in Queensland … It's a diversification in terms of geography, but it's not diversification in terms of our strategy in that the areas we've been born in Queensland at this point in time, have all the hallmarks of us buying in the western suburbs of Sydney when we're buying -

Steve Waters: Back then.

Phil Tarrant: - in the suburbs of Sydney, so we're identifying affordable properties in affordable corridors with high demand, long-term for population growth and livability and also a price point which matched where we're looking to buy. So, we're not really doing anything different investing up in Queensland than -

Steve Waters: Not at all.

Phil Tarrant: - what we were investing in in the suburbs Sydney. It's our identical, it's just in a different state.

Steve Waters: Look, there's particular areas whether western suburbs Sydney back then or where we're talking about in Brisbane now, that just suits your profile, it suits your strategy in terms of how much you want to spend, the risk as we talked about in terms of the cash flow it generates, and how much you want to put your hand in your pocket on a weekly basis to support the portfolio. As I said, it's not the only area in Brisbane to invest, it just suits your strategy.

Phil Tarrant: It suits it right now and I know overtime also these properties will be nice additions to the portfolio.

Steve Waters: Well we've already had terrific growth like over the last three or four years it's been phenomenal growth. The data doesn't really reflect it or perhaps the stories don't reflect it, but us as investors knowing what we're paying for properties now versus what we paid for them one year, two years, three years, four years ago, there's a remarkable difference.

Phil Tarrant: Just one of the classic suburban street in Kingston close to all the amenities, transport links, all the basic stuff that you should be looking for when you are investing in a property.

Steve Waters: Yes, shopping centres, transport, education, hospitals – it's all there.

Phil Tarrant: Yes, but going back to the strategy we like to identify under market value properties.

Steve Waters: Correct.

Phil Tarrant: I know we recently had a conversation about this that we did on the Investing Insights with the Right Property Group podcast – go and check that out where we actually looked at the art of buying, the art of manufacturing equity. Part of that principle is identifying under market value property. So for us this is an under market property and in terms of the price point, we secure this out with $290,188, which is a good price point for the area. Four beds, two bath with a downstairs section as well. Why is this under market value? Because it's a bit of an ugly duckling.

Steve Waters: A bit of an ugly duckling, a bit cosmetically challenged.

Phil Tarrant: Needs a bit of work and we're going to have to roll our sleeves up and get some stuff done in order to realise the true potential is property -

Steve Waters: Correct.

Phil Tarrant: - for it to be on the value market property.

Steve Waters: Yes. It's probably one of the important things you've left out there is actually the squat, the size of the property.

Phil Tarrant: It's a big, big block.

Steve Waters: Just under 800 square metres which gives us some scope to add that second income and as with the … Well all markets that experience pretty good growth, at some stage within the market cycle, investors start to look for these larger blocks. And as a result of that they tend to accelerate in growth quite quickly and the prices sometimes too expensive to warrant buying. So when we can find them at a level where the numbers still work, when you add the potential we grab them as quick as we can. As a result of that some of those properties are cosmetically challenged as this one is.

Phil Tarrant: I quite like cosmetically challenged property, because with a lot experience that I had doing renovations in conjunction with the advice that you've given me, I can look at a property and say, "Yes, that looks a bit crap, but I know it's not going to be that much expensive to fix it.”

Steve Waters: Correct, yes.

Phil Tarrant: So we spend our money well, we can elevate this property to be comparable with other properties on the street and it takes a little bit of time for that to incubate as well. Got to get the work done, but the upsides are huge. This is going to be one of the decisions that we also spoke on that podcast with you recently Steve, do you renovate now or do you wait till a little bit later?

Steve Waters: Wait, yes.

Phil Tarrant: There's a couple of different factors which will influence that the decision we've made for these property in Kingston is to not renovate now but just to undertake essential repairs and maintenance that we feel is the appropriate thing to do as a GED care as a landlord.

Steve Waters: Well also in preventative maintenance as well, so some things you do now will save you quite a lot of money in the future such as a leaking tap or whatever it might be. This property is rented. It was rented before you settled, when you purchased it and it's getting $350 a week, which is probably around market rent in its current condition. Doing the renovation now perhaps isn't going to … Well first of all we come back a step, you don't need to recycle the capital as we talk about. There's enough sort of liquid equity that you have in other properties if you were to purchase again, so we don't need to withdraw the funds out of this one.

Phil Tarrant: There's no pressure on us -

Steve Waters: There's no pressure to do some -

Phil Tarrant: - to do something quickly to get on with that.

Steve Waters:   Yes, to enhance its value and get your money back. I'm not really sure that perhaps spending the money on it now is going to warrant the cash flow return either. By that I mean if we spent $10, $15, $20,000 – whatever it may be – that the rent we're going to receive or the increased rent we're going to receive is going to warrant that expenditure of capital.

Phil Tarrant: That said, we'd have to boot people out for a little while.

Steve Waters: Then there's a cash flow drain, correct yes.

Phil Tarrant: Yes. You're comfortable then with this is a purchase essential repairs and maintenance hold added to the portfolio. Let time do its work and then at the point in time when we feel as though we might want to get a little bit of a cash flow boost to improve our gearing position, we can undertake a reno on it or we might just let it sit there like that forever. We can make that choice when we need to make that choice.

Steve Waters: Well as the land appreciates in value and its capital worth increases, you don't have to do it. This is the beauty of your portfolio and its cash flow position and its equity position, is that this is a great long-term asset. It'll continue to grow in value, it's in a well demanded area and the cost of replacement is far and excess of what you've purchased it for and they're all pretty important factors.

Phil Tarrant: They're all pretty important factors and you could say this is a set and forget, put it in the physical process to make sure that people are paying their rent and et cetera, but we don't need to fiddle with it too much for a debate performance.

Steve Waters: Not at all, and if you ever did have to fiddle with it to give you something else, we can, we've got the ability to be able to put that second income on, subject to council of course.

Phil Tarrant: That being a granny flat in the backyard.

Steve Waters: Yes, you're pretty good.

Phil Tarrant: You do a two bedroom apartment.

Steve Waters: Two bedroom granny flat – I think 70 square metres or less. The important thing is, it's the opportunity, it's not just the standard block where you're confined to -

Phil Tarrant: It's got an X factor, it gives us choice.

Steve Waters: Yep, multiple opportunities and that's what's important.

Phil Tarrant: Yes and I think the gross yield of sort of 6.2 per cent – so the gross yield for those of you who aren't familiar with how that's established, it's pretty much your weekly rent, you times it by 52, divide it by the purchase price and you'll get a yield position. It's a blunt way for measuring the performance of a property, but a 6.27 per cent gross yield, it's pretty attractive.

Steve Waters: Look, so close to a major say bid, absolutely it is and that's part of the reason of course as well because quite often growth will follow a yield and if you compare 6.27 compared to some perhaps other areas of Brisbane or even Sydney or Melbourne and that's remarkably good.

Phil Tarrant: It is good. Let's talk about this concept of purchasing on the market value. At $290, $290,188, compared to other properties of similar condition, we've probably bought it under market value and there's a couple reasons for that. It probably wasn't marketed very well. I think it sat in the market for a very long time. I think some of the marketing around it and there's another point probably wasn't really reflective of the property itself.

Steve Waters: Let's get into that.

Phil Tarrant: Yes.

Steve Waters: Let's talk about it.

Phil Tarrant: Let's have a look. I remember when you, so the process that I go through when I purchase property with Steve in this business is that, I haven't seen this property bit. Steve you've seen it, your buyer’s agency have seen it -

Steve Waters: Yes, I could go through it. We take a video of every property that we go through off the iPhone that way it's real, so there's no fetish of pictures or anything like that. The we create a cash flow sheet based on the rule of numbers and nothing to tax and we package it up that way.

Phil Tarrant: You package it up, you send it to me. I'll watch the video while I get a feel for it. It's like being there, but I get commentary as well, special commentary which is good saying, here's the problem, here's an issue, this is good, this is bad, this is indifferent. Then I typically look at Google Maps and I go through all that process. I do a lot of work around it just to -

Steve Waters: You do your own diligence.

Phil Tarrant: - do my own diligence on it and then I typically look at the actual advert or the listing for it on realestate.com. With this particular property I think there was about three different pictures of kitchens for this property. There's a whole sort of office area in it at some point in time. So I think the listing of these had aggregated maybe 10 years of properties of this, they had photos of this property which shows the story from when it was very much a love property and obviously owner occupied property to a point where -

Steve Waters: Through some harsh living?

Phil Tarrant: - through some harshly living when you can see when the investors bought this property and I'm not going to say let it go to sea, but they haven't invested in it like because I'm not living there. There's a very attractive caravan in the backyard, which had an attached kitchen.

Steve Waters: It did?

Phil Tarrant: Imagine an older parent or someone lived there. It was very much loved. A beautiful garden.

Steve Waters: Rock gardens, right, yes.

Phil Tarrant: Yes. You look at the efficient, you go, that's a great property. Then, however, you get to the actual, the reality of it all or a term Steve used called the ground truth – a very, very different proposition wasn't it?

Steve Waters: Yes and this is what scares us and unfortunately we do see a lot of examples of it. The advertising pitches were of yesteryear and they look fantastic. You had just really, really clean schmuck property. However, because we go through every property, we saw a different side to it and the photos used were from yesteryear, they weren't current photos. Which in itself is misleading advertising and I'd like to think that the real estate agent wasn't deliberate in that, perhaps it was just the first year premise that made a mistake. Hence the reason why we always go through a property and for anyone listening that perhaps is buying interstate and aren't using buyer’s agent, that's cool. At least have someone up there inspect the property if it's not itself because what's often, or sorry I shouldn't say that, what's sometimes advertised is quite different from reality and nothing beats actually getting through the property.

Phil Tarrant: Yes, absolutely and your pest and building report, which I highly recommend you do undertake, and many times will be a requirement. It's not really the expectation of the person, building guy to give you his observations on whether or not that this property is actually the reality of it, that's not the job there. They look at termites, they look at structural issues.

Steve Waters:   And there was only half a dozen photos of I share tray and a bathtub and a vanity and a kitchen.

Phil Tarrant: Yes, so getting that ground truth and if you're not using buyer’s agent I reckon you get up there and look at these properties yourself because $290,000 is a large amount of money and it's not the sort of investment that you want to be making on a whim.

Steve Waters: On the flip side though, if the property was in the conditions of the photo, well then it will be a $340 property.

Phil Tarrant: Yes.

Steve Waters: $340,000 property.

Phil Tarrant: That's where it becomes under market value.

Steve Waters: That's where value is, that's right.

Phil Tarrant: For us now, the up size is to at a point in time to try and spend as little as possible to create this into a $350,000 property.

Steve Waters: Correct and that may not be now. It might not be in the first 12 months, we might do it in two years' time. It's just, we'll determine that based on the position at any one point in time and that's how we'll approach it.

Phil Tarrant: All in all Steve, you're happy with this purchase, you obviously are.

Steve Waters: Not really.

Phil Tarrant: No, not really. When you're buying property you need to think about if I buy this asset today, is it going to be the expense of other assets in the near future. There was a number of properties that we were looking at simultaneously and it's price $290, let's be fair it's not expensive. Compared to other properties in Brisbane it's...

Steve Waters: You’re not stealing it either. We're not getting this thing under market value or anything like that.

Phil Tarrant: Yes, so if anything's too good to be true it usually is too good to be true.

Steve Waters: It is, yes.

Phil Tarrant: Now it's up to us to realise what this value is, so we'll keep on that journey and we'll keep our listeners abreast of where we go with this property. Look, I've brought a couple of articles up on there as well and I'll add some pictures and stuff to the website, smartinvestentproperty.com.au. We'll share this. I'm happy this purchase, it takes a lot of boxes for me in terms of giving the long-term capital growth. If you've been listening to this podcast previously, in terms of cash flow. cash flow's key and it's important to us, but if I can't get both cash flow and capital growth, I'm happy to lean more so to the capital growth play, because I have the capacity to carry these properties through cash flow from other means. This is the decision you need to make, but often when you go to portfolio Steve you want to be looking for cash flow inside of properties to help balance and neutralise that.

Steve Waters: Yes. That's the motivation.

Phil Tarrant: It's an ongoing process, but this gives us exposure to suburb of the Kingston. It allows us to be in that space and now enjoy holding an asset within Kingston right now as Kingston goes through a period of growth.

Steve Waters: It plugs in well to the rest of the portfolio, it just gives it perhaps a larger footprint on that base bread and butter property so to speak, where we can now look to branch out into more sophisticated as you mentioned earlier on, types of investments in terms of property, perhaps a little bit of land banking as the portfolio increases in size and gives you more options. Once again very strategic from day one and this plugs in nicely.

Phil Tarrant: Go and check out the photos of it, you'll see that it needs a bit of love, it needs a bit of work, it needs a bit of attention. We're fortunate that should we choose to take that renovation and do it immediately, we can do, but it's just really getting this emergency maintenance done.

Steve Waters: Yes, we've got a leaking shower there, a leaking pipe or whatever it may be, which is a quick fix. A lot of this stuff you would not see if you were to visit the property and hence the reason for having your pest and building inspectors turn it inside out and upside down so to speak and never shortcut that part of the process.

Phil Tarrant: Let's just really touch on that. We've got the pest and building guys in and they come back with a pest and building report, which we then use to our advantage to give us some leverage in negotiation. Do run us through what we did with that Steve.

Steve Waters: The pest and building reports come back to you as a purchaser and for us we also get a copy. We always recommend that you speak when you read the report that you speak to the inspector and the reason for that is, quite often what they put on paper is full of disclaimers, it's worst case scenario. By speaking to the inspector you're actually getting it straight from the horse's mouth and the common sense approach or report so to speak. Once I've read the report and I've made my own notes, we went back to the vendor via the real estate agent to hit them from that side, but also from the solicitor side. I solicited a solicitor to ask for a reduction to contribute towards repairs and maintenance. The end result was we got $10,000, which was far in excess – I probably shouldn't say that in case they are listening, but it'll go a long way towards taking care of any of those emergency repairs that we need.

Now, when we say emergency we're not talking from a safety perspective, I know that's really preventative maintenance that we want to take care of because as I mentioned earlier on, if we don't do it now it might costs a lot more in 12 months’ time.

Phil Tarrant: I remember when we received this pest and building I called you up and I went, "Let's have a go Steve with you."

Steve Waters: You love this sort of stuff. Phil’s into me, “so you want a job?”

Phil Tarrant: Yes. It's just good. A bit for our listeners and we've spoken about it on previous podcasts, so please go and check it out. Negotiation is an art form, you've got to use whatever you can. For me negotiation needs to beat the street theatre, right, like a lot of the game. But when it comes to property investment, you guys do all the negotiation for us and that's a big value add. Good street theatre, good relations with the agency and stuff, but use what you can in your disposal -

Steve Waters: In your favour.

Phil Tarrant: - to give you cloud to just to go, "I want a discount," then they're going to go, "Well why?" "I want a discount because of X and I need to do this.”

Steve Waters: It's a stage, yes.

Phil Tarrant: Yes.

Steve Waters: Remember, the agent is doing exactly the same too; they're trying to extract every dollar out of you as a purchaser, that's their job.

Phil Tarrant: Yes. I was happy with the outcome and mate you completely correct the $10,000 we can use to undertake these sort of preventive maintenance and we're getting that done as we speak. As a nice, smooth, simple transition with this property because the rent’s already arriving in our bank account. I didn't have any period of time when I had to cover the cost of holding this property without any income coming on it, so look, $350, that's about right for what the property is right now.

Steve Waters: For what it is, yes. Let's not get greedy.

Phil Tarrant: Yes, let's not get greedy and from what I understand the tenants have been here for quite some time and they're happy to stay, so I don't want to … Don't need to shake the tree trying to get a few more bucks out of these guys, I'll let it be. In terms of a weekly hold position it's only costing us a few bucks to hold this.

Steve Waters: Pre-tax dollars, yes.

Phil Tarrant: Pre-tax dollars, so everything sort of stacks up.

Steve Waters: It's actually quite coincidental, it's very, it's almost an identical property to the Central Coast – the Central Coast house where it had the downstairs kitchenette and bathroom and typically, well sorry, not typically, this could actually be identical to that property. It could if we threw the dollars out, but it's just not necessary at this stage.

Phil Tarrant: It's just not necessary. Somehow I prefer to keep my money, keep my part dry and -

Steve Waters: Take the cattle.

Phil Tarrant: - look to hold more properties rather investing into more into this particular property, so that's a choice, which is very much associated with a long-term strategy to accumulate assets over time with a view to providing a choice when I choose to make that choice to not work as hard as I do right now. Let's have this property investment income put dollars in my bank account. What we could train about this property is a whole bunch of factors around it that I want to cover off, but this is just really an introduction for our listeners to this new property. I imagine Kingston's going to get hit by half of the show probably investors now wondering what we're buying there, but…

Steve Waters: It's funny because in the beginning of the podcast, you talked about getting your act together to be able to buy again and so there is also an opportunity cost here because we probably, we could have done this 12 months ago as well, which is all part of…

Phil Tarrant: Could have done this, should have kept going at it, but I shared the reasons why and it's mainly just getting bogged down with life.

Steve Waters: It is and I think that's a really important part of it, life does get in the way and that's okay.

Phil Tarrant: Yes, it's good to be back in the game Steve, let's keep in the game and we have for our listeners another pre-approval sitting there ready to roll, so we're ready to buy, we're out there hunting now. So me and Steve we probably speak, I would say daily, but we speak a couple of times a week, you filling me on how we're sitting with a number of properties that we're looking at the moment. For our listeners, they are up in Brisbane We still like the Brissy market – parts thereof – and in particular, we're sort of around in the northern sort of suburbs that sort of built upwards from the CBD on the, I guess freeway links, train links up through to Caboolture so it's a nice little gateway right now, so there's lots of good opportunities up there for investors.

If you want to have a chat about them with me, I'm happy to do so. If you want to get in contact it's at smartpropertyinvestment.com.au. We can have a chat about it, but we're going to do a lot more coverage around this property in Kingston, Kingston in general, Logan, but also these northern areas Brisbane just to chat about this type of options available to people. There's some interesting stuff going on at the moment in terms of resigning in some of these areas to try and deepen the density of these close to the CBD locations, so absolutely.

Steve Waters: There may be some diligence that you should always undertake.

Phil Tarrant: Absolutely and as always so I don't get carried away a lot of the noise just because everyone else is doing something doesn't mean you should have to.

Steve Waters: Absolutely right.

Phil Tarrant: You've got to play your own game and that's something that we do, so well obviously it's just a pretty general chat around our particular circumstances obviously around the difference, so you need to make sure you're speaking to the right people before you start spending a lot of money and make investment decisions. Hope you've enjoyed joining us. As I said before, I'm happy to be back in the game and building this portfolio which is now sort of around the $6 million dollar mark, so over the period that we have been investing, we've credit a couple of million dollars of equity in this particular portfolio. For an initial outlay of and we've spoke about this before and it's sort of like $250k in cash which without we'll go back anyway.

Steve Waters: It's not a bad return right?

Phil Tarrant: Beggars can't be choosers, right? Yes. It's pretty good and if you have a listen to the chat I had with our accountant recently, we go over all this sort of stuff. Steve, thanks for your help with this mate.

Steve Waters: You're welcome.

Phil Tarrant: I've enjoyed the journey, I'm very happy with the outcome and let's just keep at it hey?

Steve Waters: For sure.

Phil Tarrant: Thanks everyone for joining us. Remember to check out smartpropertyinvestment.com.au, where we'll have this property and all of the other properties, just click on our portfolio, you can check them out. Please do keep those reviews coming on iTunes, so if you're new to the podcast and you like what we're talking about, go and listen to the other ones, but I really do appreciate if you could just leave us  nice review on iTunes with a five star rating – it just means so more people can listen to us. I guess our overall objective is to demystify property investment. It's not the complicated process that a lot of people make you think it is. Investing in property is relatively simple if you get the basics right, so we hope to add to your knowledge pool, add to your ability to make the right decisions through learning from our experiences and some of the conversations that I have with other property investors. So we'll be back again next week until then, we'll see you then.

Disclaimer: The information featuring in this podcast is general in nature and does not take into consideration your financial situation or individual needs and should not be relied upon.  Before making any investment, insurance, tax, property or financial planning decision, you should consult a licenced professional who can advise whether your decision is appropriate for you. Guests appearing on this podcast may have a commercial relationship with the companies mentioned.

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