Consolidation with an end goal in mind

By Todd Stevens 02 April 2018 | 1 minute read

Investor Glenn Newbery went into property investment with an end goal in mind: to retire debt-free with $150,000 in annual returns from his property portfolio.

Glenn Newbery, Investor

Just 18 months ago, Smart Property Investment’s Phil Tarrant caught up with Glenn where he shared his story which included bouncing back from bankruptcy to obtaining an impressive property portfolio. Now we find out just how much further he has come towards his final goal.

Having tried multiple strategies to consolidate his portfolio, Glenn now believes that he has found the one that works. He will share his strategy with you, details of how he is managing to minimise his debt and the next portfolio goal which he is working on.

He will also share the changes to his portfolio since he last joined us, discuss what consolidation is, and even share why one of his properties is soon to be leaving his portfolio.





Mount Druitt


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How to build a property portfolio using equity
Rocky relationship with debt





About the author



Announcer:    Welcome to the Smart Property Investment Show with your host, Phil Tarrant.

Phil Tarrant: Oh gudday everyone, it's Phil Tarrant, thanks for joining us on the Smart Property Investment Show. As you know, I like to follow a number of different people in marketing business that we've had on the show previously, and getting them back in the studio to see how they are fairing.

            Often, when we invite guests back on the show, they're thriving. Sometimes, less so. Today's guest is focused and driven on a particular strategy and as we will soon find out, whether or not things are going well, or going less than well, but welcome back Glenn Newbery. You might have heard him on the show, if you go and check it out right now, search on the Smart Property website, 8th of September 2016.

            So eighteen months ago we had Glenn on, and at that point in time, I'll read you the description that we've got on the website, the show notes, or the episode notes on the podcast. The headline was, "14 Properties and $13,000 cash flow positive, how this investor did it." It says, in this podcast, a property investor shares his story of how he bounced back from a redundancy and seven months of unemployment to build an impressive property portfolio.

            Glenn Newbery joins Phil Tarrant, that's me, to discuss what forced him to change his investment strategy, the difficulties of building a portfolio while doing contract work, and how he'll make his $3.5 million portfolio debt free.

            Glenn, are you debt free yet? Welcome back.

Glenn Newbery:        Thank you Phil, thanks to be back again.

Phil Tarrant: So you're firmly in a consolidation phase, right?

Glenn Newbery:        Yeah, correct.

Phil Tarrant: What typically happens when people invest in property, they accumulate then they hold a property, they let it just cook and then they consolidate and exit and go out, right?

Glenn Newbery:        Correct. Get rid of the debt.

Phil Tarrant: So, you're sort of towards the back end? Getting rid of the debt end of your portfolio.

Glenn Newbery:        Correct. That's right, yes.

Phil Tarrant: My perimeter was, we get people back on the show and some of them are flying along, some of them less so. In terms of realising your strategy, are you doing alright?

Glenn Newbery:        Yeah, it's going well.

Phil Tarrant: Good.

Glenn Newbery:        Obviously, I've started consolidation phase now, I've been waiting, and as we mentioned in the last podcast, I was sort of in that holding pattern because I was contracting and not able to borrow in that point in time. Bit of a holding pattern for a couple of years while I build up that income history. Got to that point last year, where I could start to borrow again, and hence, started the consolidation phase.

Phil Tarrant: OK, so you hear Glenn, Glenn will talk about this as if he's very familiar and probably one of the reasons why Glenn's a buyer's agent as well as being a property agent, he works with the guys over at Right Property Group, I've known Glenn for a number of years, just around the Traps when you were just an investor. Going to different property investment shows around the Traps, and subsequent to that, when you joined the guys over at Right Property.

            Today you are joining as a property investor to share your story and, what I hope to do, just get a bit of an inside look at what someone who is going through a consolidation phase, what that looks like.

            You work as a buyer's agent, we talk about cycles of people accumulating properties and then settling down properly. What does consolidation mean?

Glenn Newbery:        So basically, you build a portfolio, and that's great, but the income from that portfolio is predominately going to the bank. You're not really benefiting from the income of those properties. You're benefiting from the capital gain, you're not benefiting from the income.

            As an investor, what I want to do is have a portfolio that's debt free at some point in time, and living off the income from those properties.

            To be able to achieve that, you need to obviously get rid of the debt on those properties and then that way, you're not paying money to the bank and the incomes coming to you.

            Consolidation phase is all about getting rid of the debt on those properties, and that's exactly what I'm in the process of doing at the moment.

Phil Tarrant: You say getting rid of the debt, some people talk about retiring the debt. We'll use some easy numbers. If you're got a $5 million portfolio, completely debt free, that means that every single cent, by and large, that you generate through a rental return, goes in your pocket.

Glenn Newbery:        Obviously, operational costs.

Phil Tarrant: Operational costs and all that sort of stuff.

Glenn Newbery:        And tax, right.

Phil Tarrant: If you still hold debt on that property, you'd need to pay the bank, the mortgage, you might have a $5 million property but you might owe $4 million of debt on it.

Glenn Newbery:        That's right.

Phil Tarrant: That's a big loan to pay, so, consolidation is ways that retiring the debt. So, minimising the debt associated with portfolios, so at a point in time, it's completely debt free, you're unencumbered, therefore, if you'd like, retire.

Glenn Newbery:        Yup, stop trading time for money, that's it.

Phil Tarrant: That's when your portfolio pays you a wage essentially.

Glenn Newbery:        Correct, yeah, absolutely. It's giving you the income to live and, basically, have the choice to do whatever it is you want to do with your time.

Phil Tarrant: If you want to, go and press pause now, and go and listen to the chat I had with Glenn 18-odd months ago, the 8th of September 2016. Just search it in the search field, Glenn Newbery you'll track it down.

            At that point in time, it was a $3.5 million property portfolio, is that correct?

Glenn Newbery:        Yup, that's right.

Phil Tarrant: So, what is the total value of your portfolio now? Is it still that? Or has it gone up?

Glenn Newbery:        It's probably-

Phil Tarrant: You'd hope so, 18 months.

Glenn Newbery:        It's certainly gone up because some of those properties were in the Sydney market, absolutely, so it's probably tracking somewhere around about, just over the four, four and a half, or thereabouts.

            Portfolio at the moment, it's doing quite well.

Phil Tarrant: Doing pretty well?

Glenn Newbery:        Yeah.

Phil Tarrant: Now how much debt have you gotten rid of?

Glenn Newbery:        2.4.

Phil Tarrant: OK, 2.4, so you're sort of 50-ish percent LVR.

Glenn Newbery:        Yeah, that's right, I mean obviously, because I've been hamstrung from borrowing, I've just been in a waiting phase, so I haven't really been able to do anything, I haven't been able to borrow, I haven't been able to extract equity, I also haven't been able to borrow to purchase more property.

            So, the debts remain the same but obviously the Sydney markets grown in value pretty well.

Phil Tarrant: So this goes down to buying well, right? You've had an 18 month, two year break out of acquiring property because the properties in your portfolio have been secured well, they've gone up in value, and therefore, you've improved your equity position considerably.

Glenn Newbery:        Yeah, absolutely, that's right. I've got plenty of equity to utilise now, which I had pretty good equity before, but obviously it's been enhanced quite a bit over the time, and now I'm able to borrow again. I can get going and start consolidating.

Phil Tarrant: So, what's the end goal for you? Having no debt at all?

Glenn Newbery:        Yeah, correct, that's right. Having an owner-occupied home, which has no debt, and that is the scenario for me at this point because, as we'll probably talk about, I sold a property last year and that got rid of the debt on my owner-occupied home.

            My end goal is to have an owner-occupied home that's debt free and a portfolio that's also debt free and then I can just live off the income from the properties and do what I want.

Phil Tarrant: Have you got a number, a lot of people talk about a number, and a lot of people think that it is a number associated with how many properties you've got, whereas the number really should be how much income do you want to generate every single year for your property investment portfolio for you to live a comfortable retirement?

            So, have you got a number?

Glenn Newbery:        Yeah, 150 grand a year, for me is what I wanted. I figured I could probably live, when I'm debt free, I could live pretty comfortably on $3,000 a week. I figure even though I've got to pay some tax and some operational costs out of that, I think I can live pretty comfortably on that.

            That's the number I built my portfolio to, and as you said, it wasn't about the number of properties for me, I don't really care how many properties I own, and I do care obviously what the value of the portfolio is, but it's not the major driver for me. I'm not one that says, "Oh yeah, I've got to have a $5 million portfolio."

            I don't really care what the portfolios worth because at the end of the day, what does that mean?

Phil Tarrant: Well it’s just vanity, really.

Glenn Newbery:        Yeah, that's right. What does it mean? I've got a portfolio, you don't have the money in your pocket unless you sell it. For me, it's more about the income and what the value of that income is.

            At the moment, my portfolio generates about 178 thousand a year in rental income.

Phil Tarrant: How big is your property portfolio need to be for you to generate $150,000 a year in income?

Glenn Newbery:        I've still got 14 properties, which is what I had last time we spoke, but there's been some changes in the portfolio. The number of properties hasn't increased, though it's likely to increase in the not-so-distant future.

            What has changed is the debt reduction and that's been done by selling down some property and buying new properties as well.

Phil Tarrant: For you to generate the income that you want to generate in retirement, how big does your portfolio need to be unencumbered by debt? Is it five million bucks?

Glenn Newbery:        No, I think for me it would probably be less than that. It will probably be somewhere around the three and a half to four mill, what it is now.

Phil Tarrant: OK, and then with no debt on it, and then that'll generate the income that you need to generate?

Glenn Newbery:        Yeah, absolutely.

Phil Tarrant: So what you're doing now then, is you're balancing your portfolio in some ways so selling off some properties, which I imagine, might be either, have some great equity in it, or might be quite hard going from a yield play. Off loading knows, realising benefit of that and using the utility of that money to buy some other stuff to help you.

Glenn Newbery:        As an example, the one I sold last year, was a property I bought back in 2013, paid 270 grand for it-

Phil Tarrant: Where was that? Sorry.

Glenn Newbery:        Was in Ambarvale, which is a suburban in Campbelltown-

Phil Tarrant: Yeah, I've got a place in Ambarvale.

Glenn Newbery:        In Sydney. So yeah, I bought that for 270 back in 2013 and sold it off last year for 565, so it more than doubled in that time frame. With the profit from that, basically, allowed me, and what I was doing was taking money out of the market that I believe is now at the top of the market and potentially going flat, so the potential for short-term growth in that property's now pretty limited.

            So for me it was about taking money out of a market that's done its job, and putting it into a market that is growing to make that money work harder for me. Also, using some profit to consolidate debt.

            That's exactly what I did, I took some of the profit from that, paid off the remaining debt on my owner-occupied home, then went and paid down some debt on my portfolio, as well as, taking some of the money and investing it into a new property.

Phil Tarrant: Another high-growth property?

Glenn Newbery:        Yes, correct.

Phil Tarrant: So, you've replaced a property that's served its purpose in terms of, you bought in 2013, you sold in 2018?

Glenn Newbery:        2017.

Phil Tarrant: 2017, and it doubled in value, so you took 270 grand off the table?

Glenn Newbery:        Yup, that's right.

Phil Tarrant: Because you knew that's not gonna keep growing that way, so then you take the money, you park it somewhere else to try and realise the same effect.

            Where did you stick it then? What did you buy to replace your Ambarvale property?

Glenn Newbery:        I bought a property up in the Moreton Bay area, in Brisbane, which is obviously an area that you talk about quite a bit on the podcast. So that was a four-bedroom house that I bought, two bathroom, two garage, 600 square metre block, paid 335 for it. And it's renting out for 365 a week.

            The previous property was renting out at for 380, so my rental incomes dropped by $15 a week, but on the back of that, I've now got a property that I believe is gonna grow in value pretty quickly, give me that equity, and the plan for that property is to hold it for a few years. Get some really good growth out of it. Then sell it down again, take some more profit and use it to pay down the debt.

            That's my plan for that property.

Phil Tarrant: Do you know which properties in your portfolio today, are gonna be the ones that you're holding when you pay all your debt off?

Glenn Newbery:        Yeah, I've got a pretty good idea. Again, on the last podcast, we spoke about my Mount Druitt property, and I know you should never say never, but I'm never gonna sell that property.

            It's just been really solid performer, and at the end of the day, because I want to be living off the income from my properties, I need to have properties in my portfolio that are going to be really solid performers and give me that rental income consistently.

            That property for me is definitely going to be one that is gonna achieve that, just it's location, in that area is a really great location, I've owned it for six years and it's been vacant for one week in six years. It's just a really solid performer.

            That one's definitely going to be in the final portfolio, there's no doubt about that.

Phil Tarrant: Could you argue, though, that your property in Ambarvale and property in Mount Druitt have had the same result on the market? You probably bought Mount Druitt, that's probably had a lot of growth in it, so therefore I don't think Mount Druitt is probably going to go up too much more over the next, sort of, short-term period.

            So you could probably offload that now, and replace that with something else and pay down some debt. You could do that right away or hold on to it for some reason. You wanna hold on to it, right?

Glenn Newbery:        Yeah, that's right.

            That was the question, do I sell the Mount Druitt one? Because they had both effectively doubled in value over that time. The question was, do I sell the Mount Druitt or do I sell the Ambarvale one, and for me, it really came down to a couple of things.

            Obviously, the Mount Druitt one is a house, the Mount Druitt one is a unit, so it's a lower value, so there was less profit in that property. Even though they had both doubled, it was actually less dollar profit.

            But also, the Ambervale one, sort of had quite a few tenants during that time frame, from a rental perspective, it wasn't as strong a performer, I believe, as the Mount Druitt one.

            That was really the thing I looked at and went, OK, well this property here, while it's performed well from a growth perspective, from a rental perspective, its been a little bit up and down. It wasn't too bad, but Mount Druitt was definitely the better one. It was easier for me to make the choice of which one I was actually going to sell now.

Phil Tarrant: I think we spoke about this when we last were together. Were in Mount Druitt, which street is it on?

Glenn Newbery:        It's on Luxford road.

Phil Tarrant: It's on Luxford road, yeah that's right, I've got one on Luxford road as well. That's a great spot there. It's right opposite Westfield, you can walk to the station, shops, middle of everywhere, so, that's cool.

            You gonna keep buying and keep selling?

Glenn Newbery:        Yeah, that's right. My plan is to actually get another one, hopefully, before the end of the year. Again, that's the plan for that property, I'm looking to get a property that's got some add-value potential as well. Whether that's through renovation or a subdivision, or whatever.

            Buy that property, add some value to it, again in a growing market, hold it for a bit to let it grow, get some good equity in it, and then sell that down and take some profit and pay off debt.

Phil Tarrant: This is probably a rude question, I don't think it is anymore, how old are you Glenn? Now?

Glenn Newbery:        54.

Phil Tarrant: You're 54, and when did you start investing?

Glenn Newbery:        I've been investing for 20 years but the strategy that I'm using now-

Phil Tarrant: Very different.

Glenn Newbery:        Yeah, very different. I've done a whole host of different strategies throughout that time frame. From buy and holds, rentals, property developing, bought and sold overseas, all that sort of thing.

            Once I found this strategy, and really looked at how it works, and realised that it would actually get me to my goals where the strategy I was pursuing might have had a few flaws in it, and seeing this strategy pointed that out.

            I really started this strategy in 2011.

Phil Tarrant: So you start investing early-ish 30's?

Glenn Newbery:        Yeah, that's right.

Phil Tarrant: Now you're 54. The reason why I asked your age is I'm trying to get some scope, or some relativity around where you are in this journey. Essentially you're middle-aged in property, right?

Glenn Newbery:        Yeah.

Phil Tarrant: You're at the middle, probably, of your portfolio growth because if you're 54 now, you've still got a good 10 years if you really want that 15 years of work ahead of you.

Glenn Newbery:        Yeah, don't want to do that.

Phil Tarrant: It leads to the question, at what age do you think you'll be unencumbered with debt?

Glenn Newbery:        My goal is five years.

Phil Tarrant: So, before you're 60? You wanna be completely unencumbered with debt?

Glenn Newbery:        Yeah, completely, my goal originally when I started was eight years, because I was 47 when I started this strategy. Eight years was obviously gonna get me to 55, but of course with the redundancy, having to be on hold for a little while, that sort of put the brakes on that for a little while.

            Now that I'm able to get going again, I'm still targeting five years.

Phil Tarrant: OK, and that's cool.

Glenn Newbery:        That's the goal.

Phil Tarrant: Do you think, well obviously that's reasonable in related to you, but a lot of people who are your age, and you're not old by any means, a lot of people your age start getting that light bulb moment. Going, "Holy shit, I've only got maybe 15 years more of work ahead of me."

            So you were fortunately positioned that you get to make the choice now. You're down this path, you've got a goal in mind to, potentially, you get the choice to retire, before 60.

            That's great thing to do, if you wanna keep going, you can keep going, right?

Glenn Newbery:        Yeah, absolutely.

Phil Tarrant: That's up to you. Were as a lot of other people are thinking, "Hang on a second, I've probably got 15 years more of work, probably peak earning years of your life, is it too late to start?"

Glenn Newbery:        It's never too late to start. Obviously, the later you start, the harder it is to, well one, borrow money and be able to build that portfolio that you need depending on what your income goal is, the later you start the harder that becomes. You're always, in my opinion, you're always going to put yourself in a much better position come retirement time then what you would be if you didn't start.

            Yeah, it's never too late to start, I guess it just means that you potentially not going to be able to build that $200,000 property portfolio because you just won't have the time and the borrowing capacity, potentially, because the banks obviously as you get older, the banks get tougher because they go, "Well hang on a minute, you don't have 30-years working life left, to be able to pay off the debts."

            It becomes a little more difficult, but look, it's never too late to start.

Phil Tarrant: Are you happy with where you're at right now?

Glenn Newbery:        I'd be a lot happier if I was already retired, I can tell you.

Phil Tarrant: Do you think about it a lot? Is this a, in terms of a motivating force, that helps you either maintain an image of your portfolio, or assess it, or review it.

            How, sort of, front of mind is the goal and realisation of this goal for you?

Glenn Newbery:        It's pretty front of mind for me, I mean, I actually work in the property investing industry, so-

Phil Tarrant: You're in the game so it helps, right?

Glenn Newbery:        Yeah.

Phil Tarrant: Every day you're working, you're improving your education.

Glenn Newbery:        And I'm thinking about it every day, and I'm talking about it every single day, but from a personal perspective, obviously, I've got some personal goals, and things that I wanna do in life, and for me, it is a really driving factor.

            I've got two teenage daughters that, obviously, I want to give them a head start in life as well. It is very important, I wanna teach them about money, and how it works. How to try and make their lives a little bit easier as well.

            It is a very driving thing for me, I'm a very goal-oriented person.

Phil Tarrant: Which is great, and the best investors all see it that way inclined, but everyone's got their own motivations, right?

Glenn Newbery:        Yeah.

Phil Tarrant: Someone else's motivations shouldn't work as your motivation. You've got to realise and understand what your own motivations are.

            So it's going to be like a parting gift when you sort of say, "That's it for me," and you're six-feet under, are you gonna pass on an asset to your daughters?

Glenn Newbery:        Yeah absolutely, pass it on to my children and, obviously, I like to give back.

            One of the things I'm pretty passionate about is trying to find a cure for cancer, both my parents, unfortunately, passed away from cancer. I donate to the Cancer Foundation and everything, I'd like to give them something as well too.

            If the disease is not cured by then, certainly, be able to spend time doing some charity work for that, but also give something to it in the end of the day as well.

Phil Tarrant: Again, that's your motivation and you seem pretty clear with those.

            And that's commendable by the way, we do a lot of work with the cancer council ourselves here, and we speak to a lot of their researchers and executives there, and the idea is, hopefully in our lifetime, that cancer is something that you don't die from, you die with, right?

Glenn Newbery:        Yeah.

Phil Tarrant: That's the whole idea moving forward, but anyway, we're down that path, so that's commendable. I do appreciate that.

            And what about your principal place of residence? Now that it's completely paid off, do you sit there and go, "Oh, there's a lot of equity there, I could just pull some out," or are you not going to touch it again?

Glenn Newbery:        No, it's actually there, it's just sitting in redraw. Never actually paid the debt completely down because then it is locked in and you've gotta go through the process. It's all sitting there in redraw and if the deal of a lifetime comes up, then hey-

Phil Tarrant: It's the bank of Glenn Newbery there.

Glenn Newbery:        Yeah, that's right.

Phil Tarrant: You can kind of take it if you want.

Glenn Newbery:        Exactly.

Phil Tarrant: So, can you just explain how the redraw works for the guys who are tuning in who don't really understand that?

Glenn Newbery:        Yeah, when I say I actually paid down the debt, I actually didn't completely pay it down, I've got about, I don't know, $2,000 left owing. I still actually make my monthly re-payments because once you, obviously, pay it down it closes down the loan and the money is basically locked into the property, and if you want to get the money out, you've got to get it out through an equity loan or whatever.

            For me, the loan is still there, paid it all, except for like $2,000, I keep making my re-payments, and then obviously, as it gets too close to zero, I've got to redraw a couple thousand dollars again and go down that path, but I've got money sitting in off-set accounts that would be able to close that and pay it off if that's what I wanted to do.

            Yeah, leaving my money liquid is something, again we talk about in property investing, your money's not liquid when it's tied up in a property in an equity, basically what I've done is kept it liquid by just leaving it in an account that's still open and I can access it whenever I need to.

Phil Tarrant: Yeah, I've heard people get annoyed with their spouses because they paid off their home loan or a line of credit, and they're going, "What have you done? We need it, just chuck it in an offset or a redraw facility."

            It's quite strategic, if that doesn't make sense to you, you make sure you write into us, editor at Smart Investment Property dot com, we'll answer your questions or we'll point you in the right direction to go and speak to someone so you can get a better understanding, that's sort of a bit more sophisticated strategy.

            When you get to a point where you are, I'm not gonna say gaming, but if you're using your home loan, your principal residence, as a tool to not pay it down, but keep it as a bit of, it's cool, it works well.

            So, you're happy, Glenn? When we caught up 18 months ago, to where we are today, it sounds like there's been a pretty successful 18 months or so. Is there anything that you look at your portfolio that worries you or gives you frustrations or feel you could do a better job?

Glenn Newbery:        Yeah, I think there's probably one property in my portfolio that gives me a bit of grief, that ones one that I'm probably gonna look at off loading, and that's a regional property. It does give me a little bit of grief.

            It's not going to be a property that I'm gonna keep in my portfolio a long time.

Phil Tarrant: By a degree, just annoying, in terms of tenants, all the usual stuff?

Glenn Newbery:        Yeah, a bit of tenants, but also, quite a lot of maintenance issues, that property's in an area where its got reactive soil. It's forever causing water-pipe bursts.

            I was actually listening to Andy's podcast that you did earlier, and he was talking about his water bill, well, I can trump him because mine was like a 14,000 water bill.

Phil Tarrant: You just had leaking pipes?

Glenn Newbery:        Yeah.

Phil Tarrant: On your side of the metre?

Glenn Newbery:        Yeah, on my side of the metre, that's right.

Phil Tarrant: How close to your side of the metre?

Glenn Newbery:        It was actually in the back yard, it was definitely on my side, I couldn't even argue that. That one hurt a bit.

Phil Tarrant: So, cracked a pipe, and it was leaking for how long?

Glenn Newbery:        Don't really know.

Phil Tarrant: 14 grand is a lot of water.

Glenn Newbery:        Yeah, it was.

Phil Tarrant: About 20 swimming pools.

Glenn Newbery:        It was heaps, actually, ended up having a chat with Council about it, I still had to pay a large portion of it, I think I ended up paying still ten grand out of that.

Phil Tarrant: So you negotiated?

Glenn Newbery:        Yeah, I negotiated the reduction of that because part of the water charge is that the used water isn't going down into the sewer. Well of course that wasn't going into the sewer, it was watering the back garden, which was really great.

            That was looking alright, the grass was looking good.

Phil Tarrant: Was it alright? It wasn't flooded or puddled?

Glenn Newbery:        It was, the ground was all really soft and that's what alerted one of the tenants to it, but how long had it been like that before they went, "Oh, look at that."

            Anyway, that ones given me a little bit of grief, that ones probably not long for the portfolio, that one.

Phil Tarrant: Consolidation, I think we've done a reasonable job of talking about what it is, for everyone it's gonna be something very different, and mainly orientated toward your strategy. Your strategy is to retire, unencumbered by debt, at a particular amount of income every year. That's probably a good way to work backwards from and sort out what your portfolio needs to look like and the make up of that portfolio.

            Obviously there's a lot of moving parts, and as Glenn's outlined, selling down some properties but still acquiring to use new acquisition properties as a tool, a utility, to keep growing, keeping yields right, and cash flow good, etc, etc.

            You probably need some help, I think, to try and do this yourself. If you're gonna start looking at your portfolio, and if you've got 10 plus properties, to get in the consolidation phase, who would you be leaning on to help you work out what to do, Glenn?

Glenn Newbery:        Definitely accountants and property strategists. Yeah, for sure.

            I spoke to my accountant about it, beforehand, and told him what my plan was and why. I guess helped to consolidate which property I was gonna do and why that was probably the best one.

            Definitely when it comes to the sell-down phase, timing is important as well. Making sure you've been tax efficient with that, because obviously you've got to pay capital gains tax, which is a nice big slug of the profit out of that, trying to be tax efficient in making sure that you're selling, especially being a contractor in a year where your income might be a little bit lower, so you're not gonna pay so much in capital gains tax. All of that sort of thing.

Phil Tarrant: A beautiful thing about consolidation, if you can get away with it where you don't have to actually sell any properties, you don't have to pay capital gains then, right? You only realise capital gains once you sell it.

Glenn Newbery:        That's right.

Phil Tarrant: If you're gonna pass it on to the next generation, they can sort it out, don't worry about it. It's gonna be an even bigger bill.

Glenn Newbery:        Yeah, that's it.

Phil Tarrant: If they choose to.

            So, your number one tip then, Glenn, for people to approach consolidation, what would it be?

Glenn Newbery:        I guess making your money work for you. If you want to try to consolidate the debt, you need to be having your money in a market where the properties are growing in value, because that's what is essentially gonna allow you to pay off the debt.

            As we said, the properties that I've bought, I'm looking to get some pretty quick growth out of those to enable me to pay down that portfolio.

            Definitely that, but also obviously, speaking with your accountant, making sure you're going on the right path, being tax efficient with those as well. It's crucial.

Phil Tarrant: Well you gotta pay your taxes, right? That's how we keep this great country kicking along.

            Glenn, I appreciate your time, we've run out of time, actually but let's keep in touch. Let us know how you get on with it-

Glenn Newbery:        Yeah, will do.

Phil Tarrant: When you're buying and selling and what you're up to, and why you're doing it.

            And if you like this thing around consolidation, obviously, it's a very important part of property investment. We, obviously, talk a lot about the acquisition side of things, and that's the exciting stuff that people get into, but you be thinking about, you need to be investing with the end in mind. Actually understanding why you are acquiring a particular properties, what tool they have, what use they have in your portfolio, and how it's gonna get you to a position where in a point and time you can potentially retire, or have the choice to retire and generate income from it.

            Glenn's number is 150 grand, might change moving forward, might be 200.

Glenn Newbery:        Yeah that's right, it's very flexible.

Phil Tarrant: Yeah, it's flexible.

Glenn Newbery:        Yeah, you can chop and change it, you know? If I decide I only want 100 grand, I can just sell off a couple more properties and consolidate more debt with it and just live with a smaller portfolio.

            Yeah, absolutely you can do that.

Phil Tarrant: That's the great thing about investing in properties is that the idea it gives you choice to do what you want to do when you want to do it.

            Keep it up, Glenn, enjoyed the chat, mate.

Glenn Newbery:        Thanks, man.

Phil Tarrant: Remember to check out Smart Property Investment dot com dot AU, if you're not subscribing to our Morning Market Intelligence newsletter, so you’re the first thing going on with property, comes out every single morning. We'll have the latest and greatest information, to help you be a better investor, Smart Property Investment dot com dot AU forward slash subscribe, alternatively we do the same on social media, if that's what you like to get your info. Just search Smart Property HQ, and remember, any questions at all for Glenn, around his strategy, around consolidation, or on the show in general to me, email the team editor at Smart Property Investment dot com dot AU, and we will get to you for sure.

            We do Q and A sessions as well, so any questions you want answered on the show, let us know and we'll make sure we get around to it.

            Thanks for tuning in, we're back again next time, until then, bye, bye.

Announcer:    The information featured 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.


Consolidation with an end goal in mind
Glenn Newbery, Investor
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