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The Property Trio

By: Cate Bakos David Johnston and Mike Mortlock
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  • Summary

  • Formerly The Property Planner, Buyer and Professor, our show rebranded in 2023 to The Property Trio.

    Residential property is the only asset class we live in, it is where we raise our families, and it is our most expensive investment, yet property advice remains unregulated. Our objective is to educate time-poor professionals through deep insights from our experts who have provided thousands of Australians with personalised advice and education spanning two decades. In a climate where we are overloaded with information and one size fits all recommendations from the media, well-meaning friends and family and so-called advisers, we will distill the raw truth from the ill-informed.

    So join the Property Planner, David Johnston, The Property Buyer, Cate Bakos and the Quantity Surveyor, Mike Mortlock as they take you on a journey of discovery through the maze of property, mortgage, and money decisions to empower you to create your ideal lifestyle!
    Copyright The Property Trio
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Episodes
  • #257: The Comprehensive Guide to Townhouses – Performance, Selection, Property Planning and Development Projects

    #257: The Comprehensive Guide to Townhouses – Performance, Selection, Property Planning and Development Projects
    May 13 2024
    Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

    Cate circles on on what technically defines a townhouse. She shares an example and talks about the differences between apartments and townhouses when it comes to land on title.

    Mike asks a tough question, "How do townhouses perform, as compared to houses?" but as Cate points out, it's not a hard and fast rule. There are elements that can bolster up the value (and performance) of a townhouse such as vista, prestigious locale, water views etc. Of course Land to Asset Ratio comes into play, but it isn't fair to classify all townhouses the same.

    Dave talks about the complexities of buying a townhouse that is yet to have it's subdivision registered. This is technically deemed an 'off the plan purchase' and this does carry lending risk for some buyers. But what can buyers do when they need to move in to their new home by a certain date, but title registration is delayed? Cate shares an interesting possible solution .... a license agreement.

    Cate runs through the various subsets of units; apartments, villa units, and townhouses. She breaks down the hierarchy of land ownership for each subset and details some of the formats of townhouses and common land versus no common land. And how do some townhouses qualify for no owner's (or strata) corporations?

    "These types of townhouses are inherently more valuable".

    The Trio delve into the attributes that developers look for to optimise their profits on a multi-unit development site, but Cate also talks about some of the investor mistakes associated with medium-density development activity areas.

    What are some of the attributes that Cate looks for when assisting developer clients? Tune to find out...

    Lending is not always straight-forward or easy for developer finance and Dave shares some of the categories of lending and LVRs, from small-time residential to larger-scale commercial. Buckle in for some valuable, technical insights and explanations, and Cate points out the risks.

    And what are some of the things that developers get wrong?

    ..... and the gold nuggets!

    Cate Bakos's gold nugget: Bedroom count can create a difficult compromise. Is the bedroom too tight? Is the proportionality of the unit not feeling right? You have to ask yourself the question; "Have you bought yourself a lemon?" Overcapitalisation risk challenges the profitability of making changes, so buyers need to search in the right area for the right townhouse.

    Dave Johnston's gold nugget: If a townhouse is going to be a stepping stone home or an investment, it can be quite feasible for first time buyers. Dave implores buyers to consider buying into a great location that is close to where they would ultimately like to live in their family home.

    Mike Mortlock's gold nugget: Mike likes townhouses! Provided, of course, that they are well-located. He notes the stronger rental yields, but his concern is that of scarcity.

    Show notes: https://www.propertytrio.com.au/2024/05/13/all-things-townhouses/
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    47 mins
  • #256: Property Investor and Taxpayer Insights from the ATO Unveiled – Exploring the Shifting Sands of the Property Investment Landscape

    #256: Property Investor and Taxpayer Insights from the ATO Unveiled – Exploring the Shifting Sands of the Property Investment Landscape
    May 6 2024
    Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

    Mike has crafted a great episode from the 2020/2021 tax year data.

    The average income rose to $68,289. Surprise, surprise, Double Bay came in at first $266,000 and Dover Heights, Rose Bay and Vaucluse came in second at $230,597, and Toorak (Vic) starred, but Cottesloe and Peppermint Bay in WA came in third at $229,000.

    The median is what’s interesting. Stats can be distorting. The median in the top ten suburnbs is $80,000, but the average is significantly higher”Cate sheds light on the returns lodged during the year 2020/2021 which were up 28.3% on the 2006/2007 financial year.

    A large proportion of SMSF owners account for this strong differential and the Trio ponder the popularity of SMSF investment.

    “If you don’t own your own home, you’re in big trouble when you retire.” How much truth to this claim is there?

    The Trio unpack the history of superannuation and reflect on super from an employer’s angle too.

    The big bucks earners start with Surgeons at an average income of $457,281, followed by Anaesthetists, then ‘Financial Dealers’ (whatever that means?!), and fourth with Mining Engineers.

    Where does the revenue come from? Company tax and GST, followed by individual income tax, and only 15% is GST. Dave dares to raise the concept of bracket creep.

    Mike shares a startling stat, “88.35% of Aussies earn less than $120K, but the remaining 11.65% pay just over half of all income tax in Australia.” The bracket that most Australians sit within is the $6001 – $37,000 income earners. Dave adds that 4% of income earners pay 35% of tax and he highlights the sensitivities of bracket creep and the required changes.

    Historically we have always had net rental losses, but what happened in 2020/2021? Cate explains…tune in to find out!How many people earn six or more properties? Cate has some insightful stats to share. Check out our show notes to see an interesting breakdown.

    .….. and the gold nuggets!

    Mike Mortlock’s gold nugget: Things are a little bit more complex than the media would have you believe. When you slice and dice the data, you get some interesting results. But stay tuned for the battle leading up to the Federal election.

    Cate Bakos’s gold nugget: The fiancial year where we saw net rental gains (2020/2021) needs to be contrasted against the following year. We’re on treacherous territory with over 90% of private investors servicing the rental market while our politicians focus on the downside of negative gearing.

    Dave Johnston’s gold nugget: The word negative gearing needs to be understood better in relation to all business activities. As Dave points out, when this term is associated with property it’s portrayed as ‘the big bad wolf’, but negative gearing is widely misunderstood.

    Shoe notes: https://www.propertytrio.com.au/2024/05/06/ato-insights-unveiled-what-does-the-data-tell-us-about-investor-behaviours/
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    46 mins
  • #255: Property Plan Case Study #9 - Can We Scale Back Work With a Sea Change at Age 50? Navigating Work, Wealth, and Waterfront Dreams!

    #255: Property Plan Case Study #9 - Can We Scale Back Work With a Sea Change at Age 50? Navigating Work, Wealth, and Waterfront Dreams!
    Apr 29 2024
    Got a question for the trio? https://forms.zohopublic.com/propertyplanningaustralia/form/GotaquestionforthePropertyTrio/formperma/zYCQAxzE_24CVlDafP1ozyzwtmB-8m1iCNtCTgDvHXM

    Cate kicks off the episode and invites Dave to share a bit of information about our exciting case study couple and their quest to move to Venus Bay to enjoy a simpler life. They asked Dave's team to help them work out how they can achieve their goals, including the generation of a passive income and retaining their Melbourne home as an investment. Is it realistic? Is it achievable?

    The Trio delve into the emotions that can run when setting these types of goals. They also congratulate our case study couple for having a firm goal and setting about constructing a plan.

    "Not having a plan is like chipping away at a piece of marble without knowing what the statue is going to be", says Mike.

    Rachel and Marcus have a very solid financial outlook. Cate gives a fiscal snapshot of their debt, income and equity position for context and Dave runs through the critical questions that are asked in order to determine their property plan.

    Our case study couple rated themselves on the risk profile meter as 4-4.5 out of 5, however the Trio challenge this and discuss their rationale for down-scaling our couple to lesser risk score.

    Dave steps through the assumptions and inputs, and Cate weaves through each of the three scenarios that were presented to the couple. What is a prudent capital growth forecast rate? And when should consumers be wary? Mike expands on the reasons why some claims can be dangerous and Cate warns about the risks of buying brand new.

    The three scenarios show a progression of outcomes, and with small tweaks and changes, each scenario is quite different from the last option. But what are some of the most stunning outcomes, and what are the powerful tweaks that could surprise many of us? Tune in to find out....

    Cate touches on the risks of buying a future home, and the Trio share some of the mitigants others who find themselves in a similar situation to consider. One of the three scenarios not only gets our hard working duo to their goals, but enables them to enjoy an even higher passive income. What are some of the tips, tricks and counter-intuitive moves that they had to consider?

    We wish Rachel and Marcus a wonderful and rewarding journey, and a fabulous future in Venus Bay!

    ..... and the gold nuggets!

    Cate Bakos's gold nugget: The tiny little decisions that can be made from one scenario to another may not seem significant, but can be very conservative in the long run. The counter-intuitive suggestions can make a huge difference.

    Dave Johnston's gold nugget: This is a great example of the benefit of creating a property plan. "For anyone who's interested in creating wealth through property, setting a plan will set you a step ahead."

    Mike Mortlock's gold nugget: Make sure you have income protection insurance and other risk-mitigating insurances. Congrats to our case study couple!

    Shownotes: https://www.propertytrio.com.au/2024/04/29/listener-questions-moving-to-the-coast-for-a-simpler-life/
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    53 mins
Economics Personal Finance
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