Property investor Michael Ossitt reveals to The Smart Property Investment Show podcast how he went from having just $2,000 to his name as a backpacker, to owning a multi-property portfolio – and what you can learn from his financial transformation.
Michael and host Phil Tarrant also discuss if investing in your own backyard is always a mistake, and how property investors can tell the difference between less-than-ideal cosmetic issues in a property and serious structural faults.
All this and much much more on this episode of The Smart Property Investment Show.
Tune in now!
If you have any questions you want answered by the team, or if you would like to appear on the show, please get in touch: [email protected]
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Intro: Welcome to The Smart Property Investment Show, with your host Phil Tarrant.
Phil Tarrant: Hi everyone, welcome to the show. Phil Tarrant here. I am the editor of Smart Property Investment. Thanks for tuning in, it's always good to have you listening to the show and hopefully improving your knowledge around property investment. That's what we're all about. Today I'm joined by my regular co-host Vivienne Kelly, or do I always call you Viv?
Vivienne Kelly: You do always call me Viv, that's why you stumbled on my full name. I don't think you've used it for five years.
Phil Tarrant: I know, sorry about that. You were always Viv, I've never asked you.
Vivienne Kelly: I am. After five years Phil, I'll let you get away with it.
Phil Tarrant: Thanks Viv, always good to have you on the show. Today's guest, Michael Ossitt, is a property investor, so he's emailed in a little while ago and Viv got back to him. He's a long-time listener, first time podcaster.
Michael Ossitt: That's right.
Phil Tarrant: Is that good?
Michael Ossitt: Yeah.
Phil Tarrant: There we go. Thanks for coming on mate.
Michael Ossitt: Pleasure, good to be here.
Phil Tarrant: I was going to ask you this off air but I didn't. Can I detect a slight twang to your accent?
Michael Ossitt: Yeah, there's a bit of an English accent there. Northern England.
Phil Tarrant: You've been here a while though, haven't you?
Michael Ossitt: Yeah, it's probably about 10, 11 years now.
Phil Tarrant: Okay, so that's softened quite a lot?
Michael Ossitt: Yeah, there's a bit of a twang.
Vivienne Kelly: Michael is one of those classic came to Australia for a year with $2,000 with his girlfriend I think, and 10 years later he's still here.
Michael Ossitt: Still here, can't get rid of me.
Phil Tarrant: Backpacker. It's cool. So you arrived in Sydney 10-odd years ago. Just stumbling around the world as you do, and then landed in Sydney?
Michael Ossitt: Yeah.
Phil Tarrant: Then what happened?
Michael Ossitt: Well, landed in Sydney. Thought we'd give it a go, get a bit of work and then travel for a few months. Maybe try out a few different cities and the plan was to go back after 12 months, that's what we told all the friends and family back in the UK. Landed in Sydney and both of us fortunately got a couple of jobs fairly soon, loved the city and got settled down. Ended up turning that into full-time, permanent jobs and still here now.
Phil Tarrant: What work you do?
Michael Ossitt: I work in commercial and industrial property, so I'm a design manager.
Phil Tarrant: Design manager, what does that do?
Michael Ossitt: Look at the architectural side.
Phil Tarrant: Okay, so when someone builds a big commercial building or an office, retail whatever.
Michael Ossitt: Warehouse ...
Phil Tarrant: You're the guy that says this is what it should look like.
Michael Ossitt: Yeah, we look after the design process and engage a few external architects to do that for us.
Phil Tarrant: That's pretty cool.
Michael Ossitt: Yeah, it is quite interesting.
Phil Tarrant: Talk me through the journey from being a backpacker to residential property investor.
Michael Ossitt: Yeah, so I suppose once we'd been here a while we knew we wanted to put down roots, and I've always been a fan of property. Worked in construction previously and always been around it. We had that passion to get into the market and get established, so the first property we bought was our principal place of residence.
Phil Tarrant: You keep saying we, is this the girl that you were travelling with, your girlfriend?
Michael Ossitt: That's right, so girlfriend at the time. Now wife and mother of our one-year-old daughter.
Phil Tarrant: Excellent.
Michael Ossitt: We're a bit of a pair now.
Phil Tarrant: Are you Aussie citizens?
Michael Ossitt: Yes, so we got that back in 2011.
Phil Tarrant: Nice, so first property, principal place of residence.
Michael Ossitt: Yeah, so we got a unit. We saved hard first few years and we always knew we wanted to buy somewhere eventually, so saved and bought our first place which was a two-bed unit in Manly Vale. We'd been renting on the lower north shore and really liked the area, but we knew we could never afford to live there. Took a compromise, moved a bit further out and lived there for three years. Then it was during that period that the passion for investment came into it, and we decided to use some of our savings to try and get another property to rent out. Really loved Manly Vale, it's a bit of a strange suburb. It had that stigma previously.
Michael Ossitt: Yeah, in about 15 minutes and it's flat.
Phil Tarrant: It's not that massive hill up Sydney Road or whatever?
Michael Ossitt: No, so that was the thing about it. It had the stigma from a long time ago, but it was a growing suburb. New cafes, shops and restaurants going in but so close to Manly.
Phil Tarrant: You bought a principal place of residence, I want to fast forward really quickly. How many properties do you have now?
Michael Ossitt: We've got six properties now.
Phil Tarrant: Okay, so I've got to fill in five there.
Michael Ossitt: Yeah, there's a few.
Phil Tarrant: PPR and then you bought another place?
Michael Ossitt: Yeah, that's right. We actually bought another place in Manly Vale, so in hindsight it was one of those things that people make the mistake of now buying an investment in their backyard, because they know it well. I think the fundamentals were still there when we did the research and decided to do it. Still a growing suburb with great potential, and it's one of those areas it was the poor cousin of the suburbs around. You’ve got Balgowlah and Manly itself, Fairlight and Manly Vale was always that bit cheaper. It's probably caught up.
Phil Tarrant: Was that another two-bed apartment?
Michael Ossitt: It was. It was a much older building.
Phil Tarrant: Like a red-brick type thing?
Michael Ossitt: Yeah, original condition and it was on the market for about six months before we bought it. I'd been keeping an eye on it. I suppose that's why we bought it, because we'd been looking at it for so long. The price had dropped every month ...
Vivienne Kelly: Were you able to leverage off the fact that it had been on the market for so long, get that price down?
Michael Ossitt: Yeah, absolutely. I went to a few of the inspections and there were other people looking that looked like first-time buyers, but they walked in and walked straight out again.
Phil Tarrant: Couple of things. What do you pay for your principal place of residence the first time around?
Michael Ossitt: Back then we paid $568,000.
Phil Tarrant: Okay, and this next property, two bedrooms, different sort of blocks, same suburb. Three and a half, four years ...
Michael Ossitt: We paid $378,000.
Phil Tarrant: Okay, and what were they marketing it at when you first saw it?
Michael Ossitt: They were asking $440,000 originally.
Phil Tarrant: Okay, so that's dropped by a lot of money. About $60,000 - $70,000.
Michael Ossitt: Yeah.
Phil Tarrant: Do you think the property was overpriced or poorly marketed, or what do you think was the problem?
Michael Ossitt: Overpriced, too high on expectation and really bad marketing. The photos had been taken with a Blackberry and the condition as well. It was original condition, it was full of furniture, it was smelly.
Phil Tarrant: Just a great property ...
Michael Ossitt: Yeah, from an investment perspective and a potential ...
Phil Tarrant: It also sounds like the real estate agent didn't do a very good job.
Michael Ossitt: Didn't try very hard, no.
Phil Tarrant: Did it change real estate agents the property, when the price was coming down? Did you notice?
Michael Ossitt: No, they stuck with the same guys.
Phil Tarrant: I don't want to ask who it is because I don't want to ... I think it's a really good point there you make. When you see a property languishing on the market for so long, you need to ask the question ‘Why?’ One of the reasons why and you know this, Viv, we talk about this all the time, is that it could just be a very bad real estate agent who hasn't been able to manage the expectations of the vendor. They've gone, "I think my property's worth $440,000," and the real estate agent's going, "I really want the listing. I think it's worth that much as well," and then it ends up selling at $378,000.
That's sometimes one thing, but the other side of what you said is that it's really poorly marketed, and it's a product also of perhaps the real estate agent hasn't done a great job. Bad photos, not well presented either, so smelly, heaps of furniture. It sounds like so much more could have been done for those guys to get a higher price, but on the other side as a property investor these things are gold mines. They're gems, so how did you end up buying this property? Did you just give it a silly offer and they took it?
Michael Ossitt: Yeah, we went in pretty low. We started about $360,000s and went up from there, and managed to obviously bring them down a long way. I think when we started offering they were still asking $390,000s to $400,000 for it, and there was obviously no other interest there at the time. As I say the condition of it was bad but we just ignored all of that, and coming from a design background I could see past the crap that was in there.
Vivienne Kelly: I was going to ask that Michael. How could you tell that it was just, you said it smelt bad and it looked bad, how could you tell that they were just cosmetic issues, not actual, deeper, real problems?
Michael Ossitt: You could just see past the furniture, the carpet, the horrible vermiculite ceilings and I knew a couple of other units in the same block had been renovated previously. I'd seen what they'd done and the potential was there, so I walked in and I said, "This has great potential." My wife walked in and she wanted to walk straight out again. She said, "There's no way we're buying this."
Phil Tarrant: What'd you do it? You picked it up for $378,000, did you ...
Michael Ossitt: Yeah, and then we basically gutted it and then did a full renovation on it in three weeks, and got it rented out on the fourth week. Really quick turnaround.
Phil Tarrant: What rent did you end up getting for it?
Michael Ossitt: Originally we got $450 a week, so it was quite a good yield to begin with. That was based on the renovation.
Phil Tarrant: Did you get it revalued pretty soon afterwards?
Michael Ossitt: About a year afterwards.
Phil Tarrant: What was it coming in at?
Michael Ossitt: I think then it was low $400,000s, so we got a bit of an uplift straightaway.
Phil Tarrant: That's good, and today you still got it?
Michael Ossitt: Yeah, still got it today. It's been the best-performing property and it's about $650,000 today.
Phil Tarrant: Okay, not bad and it's yielding pretty well now? Rent’s gone up?
Michael Ossitt: Yeah. Rent’s gone up to $540 now, so doing well.
Phil Tarrant:: How'd you go from number two to number three, which is often the hardest?
Michael Ossitt: That was our first one, and then three years ago we sold that first PPR to be able to buy into a bigger property. We'd outgrown that, new family was on the cards, so we sold that unit and bought up the road in Frenchs Forest. We got a house up there.
Phil Tarrant: Okay, so family home?
Michael Ossitt: Yeah, and we had the investment hat on when buying that, so it had two incomes in there already. It was a split house with two separate tenants in, and we bought that. Moved in upstairs and kept the tenant downstairs, so from a cash-flow perspective it helped pay for the mortgage. We bought that in 2013.
Phil Tarrant: What'd you end up paying for it?
Michael Ossitt: We got that for $920.000.
Phil Tarrant: It's really interesting, so you sold your PPR and then bought this place. Was there a big transition between selling and buying?
Michael Ossitt: No, we did it within about two weeks. It was coming up to Christmas and we'd just got married, we'd got back from honeymoon. We said ‘What do we do now?’ We'd been planning a wedding and a honeymoon for 12 months, let's go and look at property.
Vivienne Kelly: The expense of a wedding and a honeymoon can often set people’s investment journeys back by years. How did you do that so quickly, from getting married, coming back from a honeymoon? It's approaching Christmas time, which is an expensive time of year. How did you have the money ready to upgrade?
Michael Ossitt: We had a good cash buffer there already, so we'd continued to save. Always lived quite modestly and always been keen to save money, and not live on the line. I suppose that passion to step up in the market was there when we got back, and the market was fairly buoyant then at the end of 2013. We spoke to a couple of real estate agents and they gave us a really good price expectation for our unit. We thought if we can get that for that, we can move up and use the equity that's in there to fund the deposit on the next one. Although it was a bit of a jump, it wasn't out of reach.
Phil Tarrant: Your PPR was principal and interest, so you've been paying it off. Were you paying extra into it as well?
Michael Ossitt: Yeah.
Phil Tarrant: Okay, so you manufactured some equity as well as getting the realisation of price growth, which is good. I think you made a really good point when you said that you approached the purchasing of your new PPR from the perspective of an investor, rather than being emotional. Obviously there was a place that you wanted to live in, that's a good thing, but the fact that it’s dual-income is a really smart way to approach it. Do you still have this place now?
Michael Ossitt: Yeah.
Phil Tarrant: Do you still live there now?
Michael Ossitt: Yeah.
Phil Tarrant: Still have someone downstairs?
Michael Ossitt: Yeah.
Phil Tarrant: Great, so as a percentage of the total mortgage on that property, what do you think your tenant pays?
Michael Ossitt: Probably about half of it.
Phil Tarrant: That's pretty good, and that empowers you then to use the cash you're generating to buy other properties? Okay, so let's talk about property four and five. What happened after that?
Michael Ossitt: I suppose the market did really well in Sydney in the last three years, and I was keen to get another property as an investment. My wife was probably less keen, she needed bringing along a little bit, because I knew property was a great tool to build wealth and create a passive income down the track, so I was really keen to go again. We got a bit of mentoring to try and push us along that next step.
Phil Tarrant: Okay, where'd that come from?
Michael Ossitt: We went to see Destiny, Margaret Lomas.
Phil Tarrant: Margaret is a big friend of our show. She's a good operator, Margaret.
Michael Ossitt: Those guys are great.
Phil Tarrant: Did you do one of her courses?
Michael Ossitt: Yeah, we did. The fundamentals in that I pretty much understood all of it, but it was great to get my wife on board. After she'd done the course and realised the potential, she came out of that and said, "Right. Let's do it."
Phil Tarrant: It's really funny you say that, because we chat with investors all the time and in many instances you've got someone who is very bullish in a relationship versus someone who is very conservative. Say you have a person saying no, no, no and someone saying go, go, go and it happens a lot. More often than you expect, and your experience you explained it as in you went down the education path and your wife.
The confidence outside of you just going, "We're going to do this because it's great." To hear it from someone else sometimes is a really powerful thing, because then it empowers that person to make the decision themselves. Rather than thinking that their wife or husband has pushed them into something, so it's a good way to do that. I've heard other people go through that.
Michael Ossitt: I think it's important as well. I think it's important for both people to be on the same page. It's no good one person wanting to do something and the other person not wanting to do it, so I think you’ve both got to make that decision jointly. It was good to do that and do the education component, and then the mentoring to really push you to that next level.
Phil Tarrant: How does mentoring work? You've done the course and a byproduct of that was that it empowered your wife to actually go, "Yes, I want to do this." What else did you take from that course that was the real one thing that made you go, "This is how we're going to do it," or, "Let's not do it this way anymore. Let's do this way." What was that?
Michael Ossitt: I think it was the goal setting, and basically working out from the equity projections and the cash-flow projections, what you could actually achieve by buying and holding on to property for the long term. I think it was that hand holding through that process that really made the picture clear, so we came out of that with a 15-year plan and with a projection to replace our salary with a passive income. That's really been the driving force to take the portfolio forward.
Phil Tarrant: A lot of people, I don't know how much Margaret's courses are but I know you pay for them. How did you overcome the idea of spending money on education versus spending money on just investing in property? A lot of people are hesitant to invest in education, and one of the reasons why is that there are so many free seminars or courses that revolve around property. You go to most of those things and someone's going to flog you a property, rather than educate you. Was that ever a hindrance for you thinking, "I've got to pay for this money. To give it to someone else for them to help me be a better property investor," or was that an easy decision?
Michael Ossitt: There was a bit of hesitancy there from a cost perspective, but the way that we looked at it was the potential return we could get from a property in the one or two years afterwards – it far outweighed to the cost of doing the education.
Phil Tarrant: Did you do an Excel spreadsheet and try and work it out in a logical way?
Michael Ossitt: Yeah, absolutely.
Phil Tarrant: Is that the way you're wired?
Michael Ossitt: Yeah, very analytical. So once you get a clear picture of that it made better sense to get the education and then take it from there.
Phil Tarrant: The investment obviously has paid off for you.
Michael Ossitt: Absolutely.
Phil Tarrant: Good to hear. It's funny how many times people get burned investing in property. There are some people around historically who've taken people for a lot of money in terms of property education, they just end up getting sold off-the-plan apartments.
Vivienne Kelly: Yeah, and I think that makes people hesitant to spend money on education, which can be a double-edged sword. They don't want to spend because they don't want to get ripped off, but then they don't spend and then they don't really know what they're doing. I think it's about finding someone who is a good operator in the industry, so they can educate you and you don't get ripped off, but then you know what you're doing.
Michael mentioned he's come out with a 15-year plan, and knows what sort of passive income he wants to have, knows when he wants to replace his existing income, so that sounds pretty solid and you've got a pretty good plan moving forward.
Phil Tarrant: What would be your tips for our listeners, around that decision you had to make, around investing in property, education or even investing in buyer’s agents or however you choose to pay for advice? What would be your tip for our listeners, for them to understand the best way to do that?
Michael Ossitt: I think you need to decide what it is that you want. You need to set your goals up first and then work at how you're going to get to that goal. So if you're a proactive person and you want to take 100 per cent control of the investment of the portfolio, then I think that avenue that we took is fantastic. You get the education, the knowledge to begin with and the tools to set you off. You go off and you do it yourself, with someone holding your hand along the way.
I think for someone who might be time poor and wants to understand, but doesn't want to do all the leg work, I think a buyer’s agent is obviously a great way to go and to pay for that professional advice, and for someone to hold your hand that way. I think just taking the step to do it, and there's always a bit of hesitation there but I think you've got the jump and actually go for it.
Phil Tarrant: You've bought your principal place of residence/investment property, and then you did your education.
Michael Ossitt: That's right.
Phil Tarrant: Okay, so that helped frame your strategy moving forward because you had some long-term goals. In terms of replacing income with property investment, so what happened after that? Your properties post your education.
Michael Ossitt: We realised that we'd built up a bit of equity in the house only after two years of owning it, so the Sydney market has gone so well and we took that ride. We knew we had that equity that was accessible, so we spoke with a broker. Managed to get at that equity, pulled it out and then used that for the deposit and the cost on the next four properties.
Phil Tarrant: Did you go quite quickly?
Michael Ossitt: We went one, two, three in one hit, and as part of our plan the idea was that we might be able to get to that fourth within the first 12 months, maybe the next year after. I think it's having that plan in place that really pushed us forward, to get that next one.
Phil Tarrant: Crystallized your goals, so that's three properties. How quickly was that?
Michael Ossitt: Within about four months, so May and then two in August.
Phil Tarrant: Okay, and then the one after that was the year after?
Michael Ossitt: The end of the year December, January.
Phil Tarrant: Okay, and you managed to make a kid in that period as well?
Michael Ossitt: Afterwards.
Phil Tarrant: Okay, so you got ...
Michael Ossitt: Get the property first and then the child afterwards.
Phil Tarrant: That's cool, so those three quick consecutive ones, where were they? Where were the properties?
Michael Ossitt: The first one was up near Ipswich, up near Redbank Plains. The second one was in the Moreton Bay area of Rothwell, so two areas that we really did the research on and targeted that infrastructure, investment, population growth. All those drivers that Margaret teaches people, but all those fundamentals that you've got to follow before you make a decision to buy in an area. Bought those, the first one was $300,000 and the second one was $390,000. Both yielding above five per cent.
Phil Tarrant: Good, and then the one after that?
Michael Ossitt: The two after that, the next one was in Adelaide, so the northern Adelaide suburbs. Less favourable with some people, I suppose from an employment perspective they're not doing great right now, but there's other drivers there. In terms of infrastructure and town upgrades, and that was a bit more of a long-term development play, so it was a bigger block with an older house on it. That's got the potential to knock down and build a couple of town houses down the tracks.
Phil Tarrant: So you’re starting to get a bit more sophisticated in the type of properties that you’re looking for – so stuff that you can add value to through subdivisions or granny flats et cetra? Okay, good. And the last one?
Michael Ossitt: The last one we got that south of Adelaide, that's down near Aldinga Beach. A bit more of a lifestyle location but still commutable back to Adelaide, and there's a lot going on down there in terms of the town centre upgrade. Again that was in an area that's got potential for townhouses down the track.
Phil Tarrant: So, the place you bought you can knock it down and put townhouses on it?
Michael Ossitt: Yeah.
Phil Tarrant: Okay, so you had to go through the whole process of understanding council requirements around development now and into the future, the right-sized block, right frontage size ...
Michael Ossitt: That's right, yeah.
Phil Tarrant: You spoke about mentorship through this, so did you have someone looking over your shoulder the whole way through these four purchases, or someone that you could throw ideas around with?
Michael Ossitt: Yeah, someone you could bounce ideas off, and they won't tell you yes or no to go into a property. It's more about bouncing it off and is this a good thing or a bad thing? And making sure you've done the research and you've done the process as part of that decision.
Phil Tarrant: The way in which you bought the back-end of your portfolio is very different from the front end of your portfolio. The front end was very much ‘Oh Manly Vale is good. I've got a place here, I'll buy another place there’ – through to a lot more analytically orientated process, where you researched some core fundamentals which are the growth drivers for property, and why should I invest in property? I know Margaret talks about those a lot, and they're very good and they're very common-sense based stuff. You've gone out there and used those as a blueprint to identify locations, properties et cetera for growth, so out of the last four that you've bought do you think you've got all four of them right, or any of them lemons or you're not particularly happy with?
Michael Ossitt: All of them I am really happy with so far, and it's obviously only been two years now. They've been fully tenanted since we got them, couple of maintenance bits here and there as expected. They've probably seen some growth since we bought them which is good, so a bit of an uplift. We can hopefully revalue those down the track and pull some more equity out, to go again.
Michael Ossitt: Yeah.
Phil Tarrant: But all the other stuff is just ...
Michael Ossitt: It's all interest-only.
Phil Tarrant: Did you receive any advice around that, that sort of process of actually driving down the principal component on your PPR?
Michael Ossitt: Yeah, definitely. With our accountant as well, so she helped us in that structuring field and just how to set up the loans. While ever you've got non-deductible debt on a PPR, it’s obviously the best idea to try and reduce that down, before you start tackling the principal on any investments.
Vivienne Kelly: Phil, you just mentioned to Michael that his portfolio is almost in two parts. There was that first part and then the second part where you went quite hard. How did you make the adjustment from you admitted that you bought in Manly Vale because you knew it and you lived there, to then going to the fringes of Adelaide and up in Queensland? How did you make that mental adjustment, because I think that's something that quite a few investors struggle with? If it's not in their backyard they just can't do it, even if they know they should. Sounds like you started out a bit like that, how did you make the jump to being what we'd term a ‘more sophisticated investor’? It is also more risky because you don't really know what you're getting.
Michael Ossitt: I think it's just understanding the fundamentals of the area, so you've done all the research on the micro stuff and then you get down to the macro. Understand the property type and the area that it's in, and then leverage help on the ground in those areas. Using a really good property manager that comes on a recommendation, and use them to look at the properties for you and get advice that way. Then obviously get in a building and pest inspection done, to really cover off that risk that the property is not a lemon. I think once you've covered all of those bases and that yield is right, the demographics is right then you've gone a long way to reducing your risks.
Phil Tarrant: You've stepped inside all these properties yourself?
Michael Ossitt: No, so those last ones were all site unseen, so it was very different.
Phil Tarrant: Are you okay with it?
Michael Ossitt: Yeah, absolutely. Once we got over that hurdle I think it was easy to do.
Phil Tarrant: What next?
Michael Ossitt: A bit of consolidation at the moment, so reduce debt. Saving hard to reduce debt on the principal on our PPR.
Phil Tarrant: Okay, so you'll draw down on your PPR. So are you going to use that as a cash cow?
Michael Ossitt: Yeah, so we're obviously reducing the principal on that and we'll pull out more equity from that when we can do, and then go again. Maybe second half of next year. The plan is to go again, so the target is a portfolio of around 10 properties. It's more about a value than a number, so the target I would love to get to $8 million if we could in 15 years’ time and try and bring the debt down to around $4 million.
Phil Tarrant: You'll buy and wait for these things to go up in value – I’ll simplify this – at a period of time, in 15 years’ time and then reduce the debt. You reduce the debt by either getting a massive windfall and chucking a whole bunch of cash in them, or selling off parts of them, ending up with a number of properties unencumbered, so that number for you of unencumbered properties that just deliver you a yield, a yearly income. What is that number?
Michael Ossitt: The yield I don't know off the top of my head, but the unencumbered of say $4 million if we were to sell everything, is a very a passive income of about $200,000. If you were to invest that in something giving you an interest return. That's the exit strategy now. I think it might change when we get closer to the time.
Phil Tarrant: It was always does. It won't be $4 million. It's funny how people’s paradigm changes as they get more and more properties, and they think a couple hundred k as a passive income upon ‘retirement’, inverted commas, versus you know what? I think maybe we might need three hundred or four hundred or whatever, so it's good to see how that journey changes.
Michael Ossitt: That's right. I think it's setting the plan now. Having something to aim for. If you know what your goal is you can work at how to get there.
Vivienne Kelly: Then you can always increase it. As you go.
Phil Tarrant: Yeah, absolutely. I think it's the diligence. It's the ability to be able to set a plan and follow it, and it's okay for your plan to evolve and change over time. It's the planning part is the important part, so if you can start early investing in property by planning then you can evolve your plan. As long as you’re still planning, it's okay so it's a really good point.
We’ve got to wrap up.
Vivienne Kelly: Yeah, we do. Always run out of time.
Phil Tarrant: We do, it's like property just keeps happening. Thanks Michael, appreciate it.
Michael Ossitt: Pleasure.
Phil Tarrant: Really good to have you on. Couple of things I'd take from this conversation is the value of education, probably the major thing. The fact that you've gone out and you've invested in your education, and you've invested in the right type of education I think as well. Education actually empowers you to make more effective property investment decisions, other stuff that you want. There's a lot of bad education out there, and that sort of education is how to buy an off-the-plan apartment with some guy who's selling it to you.
Be wary of those type of things. Understand the sort of education you're getting and what you hope to receive from that education. First point, and I guess the second point is that stuff changes. What you're doing today as a property investor won't be what you're doing in two, three, four years’ time. Evolution is a good thing. As long as the evolution is going forwards rather than backwards, so let's get you back in.
Michael Ossitt: Love to. When I’m onto the next one.
Phil Tarrant: I love the idea how you purchased a principal place of residence, that also had an investment component with it. Obviously there's tax implications with that, you've got to declare that as income and all that sort of stuff, but it's a smart way to do it. I've got a good mate of mine who bought in Frenchs Forest, did exactly the same thing. He's got his house up top and it's a one-bedroom apartment downstairs that pays for a lot of his mortgage.
Michael Ossitt: Yeah, it's a smart thing to do.
Phil Tarrant: Very smart thing to do. Thanks Michael. Remember to tune in next week, The Smart Property Investment Show. You can also check us out online, smartpropertyinvestment.com.au you can follow me on Twitter @PhillipTarrant. You can find Smart Property Investment on all the social stuff as well. Please keep those reviews coming.
Vivienne Kelly: Only if they're positive.
Phil Tarrant: They’re coming in thick and fast. Positive reviews please, so five stars. If you’ve got any feedback for us, anything you'd like to see or not hear about, we're really keen to understand how you guys are engaging with the podcast and what more you'd like. Email us at [email protected]
Vivienne Kelly: I will eventually get back to you.
Phil Tarrant: Viv will get back to you. Thank you, appreciate you tuning in. We'll see you next week, bye.