Colin: Hello, hello, I think I'm
live. Well, good evening
everybody. My name is Colin from
Inspire Realty. I'm the founder
and CEO. I we've started this
live show for quite a number of
weeks and months now we're on
episode 14. And I just wanted to
share today on this show, two of
my big lessons that I've learned
since I've started investing
over 10 years ago. So I wanted
to share that with you. But I
just wanted to say that I'm
thinking about our friends in
Victoria at the moment. And
everywhere around we've got
friends all over the country.
It's not been easy for a lot of
us. I've I'm still talking a lot
to a lot of my clients at the
moment and giving a lot of
assurances to a lot of my
clients about their investment.
And that's what I wanted to
share today is just some of my
big learnings and I hope you
take a leaf out of today's
presentation in life, which
we'll be posting up on our
website as well. What I wanted
to say before we get started is
obviously this is, by general in
nature This is does not
constitute any professional
advice in any way. If you wanted
to go down into more of the
numbers, please seek your
financial advice for that.
And But anyway, I wanted to
share with you a story. So my
family and I migrated to
Australia just after the Sydney
Olympics. Actually, we didn't
quite make it for the Sydney
Olympics. My family and I
decided to pack up all our bags,
sell our house, say goodbye to
all our friends. It was very
tough for for my parents, you
know, having grown up in, in
Malaysia all their life. I was
only fairly young at the time.
19 so that tells you how old I
am. And we packed everything up.
We decided to sell the house
that we had and decided to come
to a better country and we, you
know, thankfully my mom and dad
decided to choose Australia to
come. You know, my mom had a
brother here and my dad had a
brother here as well. So it's
kind of made the choice fairly
easy for us. We could have gone
to Canada, we could have gone to
New Zealand. Those were the two
other choices that we had. So
when we arrived in 2000, I was
still a student nails. I started
University doing a electrical
engineering degree. And my
brother was two years younger.
So he was you know, just about
to, to get started. And I've got
a younger sister who started
school. And when we came both my
parents had fairly good jobs in
Malaysia. My dad was a banker,
and my mom was doing a lot of
lecturing for law. And she was
you know, doing working with a
local university, which which
twinned with a with a university
in Melbourne. So we thought with
all of that It'll be fairly easy
to come to Australia and get a
job and you know, settle down.
But it
took my parents months and
months and months before they
could, you know, get anything.
In the end, my dad didn't end up
becoming a bank managers, his
he, you know, is most qualified
to do and my mom got into, you
know, an administration role
within a law firm. And it was
very difficult at a time for our
family. I mean, we had to drop
our living standards and kind of
really started from from scratch
again. We had some money from
the sale of our property in
Malaysia. So for two years, we
found it really difficult to buy
any property at all because both
my parents didn't have a job.
And I and I started a part time
job. I actually was working two
jobs during my university. Three
of you considered, you know,
you're running my own little
side business as well. And it
was tougher. We're just trying
to make money where I can but
fortunately after two My parents
had some track record with a
work. And we were able to get a
loan for a property. And it was
just for fortuitous, I guess
that my uncle lived in baulkham
Hills. And so we naturally
gravitate, gravitated to
baulkham Hills. And we looked
around for land. Not sure if you
know baulkham Hills or the hills
area, the hills area is is very
well established and big homes.
So it was very hard to find any
brand new properties, not that
we specifically wanted brand new
properties, but we looked for
months and we couldn't find a
property that suits you know,
our lifestyle. We You know, my
mom and dad had three children.
So we needed at least four
bedrooms or five ideally, and it
was hard so so we kept looking.
And finally we found this plot
of land. It was a cul de sac.
And it was a very big estate
they subdivided into about nine
lots and being Chinese
Malaysian, we chose Number
eight. So what you can see here
is a house and land actually was
a land that we first purchased.
And then we got a project home
built on it. So the address of
the property is eight, McBurney
place baulkham Hills, you can
certainly look that up on
realestate.com. We decided to
put a five bedroom or brick
house on it. three bathrooms was
about a 950 meter square land.
So in 2002, we bought the land
we paid a deposit on the land
$250,000 and then we got a loan
to build a property 260,000 so
all in all, we invested plus
them, Judy, plus legals plus
everything, we would have paid
about 535 plus miners for the
property. So in 2004, when the
property finished early 2004, my
family younger siblings, all
decided to move in the property.
But just out of curiosity, I've
looked at the property in 2004,
and it's already gone up by
about 50 Thousand So, you know,
it was two years and it's gone
up a little bit, obviously a
time of settlement, we had to do
valuation on the property. And
we were quite excited that the
property has gone up in value.
So this was our little family
home, which I was paying a bit
of rent to live in there as
well, you know, helping my
parents to, to manage this loan.
So anyway, the long story is
that, you know, I moved out and
my brother moved out and my
sister moved out and all of a
sudden the five bedroom house
became a little bit too much for
my parents to look after. I
don't know if you can see the
trees around the property. We
can't cut them down. It's it's
illegal by the Council. These
are very well established trees,
but the trees were well lit
physically on top of our
property. And so every, I guess,
three to six months, we have to
do a massive cleanup. And you
know, I kind of remember
climbing up on the roof and you
know, I did a lot of rock
climbing. When I was little, and
I would attach myself in a
harness and rope, I don't know
why I did that I would never do
that again. And I would
literally be going around the
gutters and cleaning up the
leaves. So I couldn't imagine my
parents doing that. And there
was a massive driveway a massive
backyard as well with lad. So it
was getting a bit too much and
we wanted my parents wanted to
sell it, we wanted to sell it,
you know, back in 2010, and then
2012 and I went to a property
seminar and one of the things I
really took out of it was that
never, never, never sell because
properties grow in the long
term. And it was it was a
throwaway statement, which I
thought yeah, okay, well, I'm
gonna share that with my
parents. So that kind of started
my investment or property
journey I started with very
curious about property. And
unfortunately, in 2014, when my
younger sister moved out and you
know, we were all not home and
it
it was sort of like the the
straw that broke the camel's
back. My mom said, you know, no,
we got to sell the property and
we wanted to buy a property. You
know, that's, that's totally
unencumbered and we just want to
live and retire and, you know,
some downsize really, so they
don't have to look after the
property. Anyway, long story
short, they sold a property in
2014. So that's about six years
ago, and sold it for 1.2 5
million. And with that money,
they paid and bought a property
out in up north shore. And, and
they're living there since then.
But I've just looked back in
history, and in that 10 years,
or remember, we settle it in
2004. And then in 2014, we sold
it for 1.25. Maybe we got lucky
but we bought it at a fairly
good time, but we made $715,000
so in that 10 year period, that
probably more than doubled. So
you must say that's a that's a
pretty good outcome. I mean, you
know, we we timed it to the best
of our ability and to be quite
frank. My parents lived in there
for for a couple of years before
they moved out on their own, and
and so two years ago, I, you
know, I just I was driving
around the area, and I kind of
looked at it again. And I said,
I wonder how much this property
is valued today. And that
property is valued at 1.6 5
million in 2018. Obviously, with
with COVID, and pandemic and all
this that's happening, I just
recently looked at the, you
know, valuation on the property,
and we could get anywhere from
about 1.3 to 1.5 million, let's
say it's 1.5 million. Because I
really think it's a really good
property. And there's just
really very few comparisons of
the type of property that we've
got there. It's harder and
harder to get land in baulkham
Hills to you know, nearly 1000
meter squared. But I was just
looking so even if we even if we
held it on for another four
years, five years, six years,
let's say we would have made an
extra 250,000 today in a space
of six years if we hadn't sold
that property. So that was one
of our biggest revelations. That
was one My biggest mistakes I've
made, you know, in our property
journey we could have, I don't
know how many people can save
$250,000 in six years. But
that's certainly something that
has happened in this property.
So what I want to show you now
is is just a quick snapshot of
how properties have fared in
Sydney in particular house
prices. Over the last, say, 2022
years, you may see that this
stops at 2018. But I've got the
latest figures in the next
slide. But if you rewind time
back 20 years ago in Sydney, and
that was around the time when we
came to Sydney about 2000. The
median price of Sydney
properties were 276,000, that's
22 years ago. And then it grew
at quite a rapid rate. I think
it grew by about 10% capital
growth rate, it's pretty
significant. And then obviously
plateaued from about 2003 ish
2000 to 2003. plateauing Quite
for quite a while 2008 You know,
there was a bit bit of a dip,
but call it you know, 2008 535
as a medium price, so between
1998 to 2008, in that 10 year
period, probably grew by about
6.82%. Now, I'm not sure if you
know the law of 72. But
basically, if anything grows at
the rate of 7.2%. And basically
in 10 years, that means that
investment would have doubled.
So it just was shy of doubling
its value. So that's 2008. We
actually I looked at the
valuation in 2008, on this
particular property on a 620,000
in 2012, which we nearly sold,
by the way this property and we
lucky we held it for another two
years, but that valuation was
about 880, we could potentially
get about 950 for that
particular property. And, and so
then you look at the last 10
years from 2008 ish 2010 until
today, the average growth rate
is about 7.6%. So that's over
double. So Sydney has kind of
really run away in terms of its
capital growth rates. So that's
what's happened to our property.
And then and then you look at
today. So I haven't had a chance
to complete this graph. I wanted
to do this presentation as
quickly as I could. But in
today, so back in 2019, that's
last year, the median price of
Sydney house was at 1.142. So
that was a slight increase from
the 2018 median price. Not
surprisingly, I think Sydney has
always done well, but it's not
grown as fast it has in the last
10 years.
In 2020. The prediction is that
it'll be at 1.25 or sitting at
about three to 5% growth from
2019. Look, this may not be you
know, totally accurate. We've
still got you know, three or
four more months before the end
of the year. But you can see
already the trajectory of you
know how Sydney property prices
have fed it. over the long term.
So I get a lot of questions. One
of the main questions I've been
getting from a lot of
homebuyers, I work with a lot of
first home buyers at the moment
with all these rebates that are
going on. And you know, some of
the kids and the children of
clients that have invested with
me in Sydney, by the way, you
know, 10 years ago, they're very
happy in the happy to play
guarantor or be guarantors for
my first home buyers. A lot of
first time buyers are able to do
it themselves as well. So you
don't necessarily need a
guarantor. But I am getting, you
know, really good feedback and
just very grateful that kids now
are starting to, I would say
kids, but they're in the 20s now
are starting to get into the
property. They've been holding
off for a while. But with all
these rebates, I just find
myself naturally gravitating to
working within that market,
which I'm just so grateful for.
So so that's been that's been a
big, relevant revelation for me
and my clients. And I just
wanted to just share this
particular slide because this is
the very slide that I showed
With my clients as they look,
you know, property prices, you
can never predict it. And I
don't try to predict I get so
many people that say, Oh, yeah,
the property is going to do well
over this period and appear and
they try the best to try and get
the timing right. Now, I wish we
all had a crystal ball. I
haven't seen one person who's
been able to predict in the
short term how property prices
would fare. I mean, you got all
these people that say probably
prices will go up. But then
pandemic hitting, it's
plateaued. It's not grown as
quickly as it was. And then
there's a whole bunch of people
that said property prices will
drop 30 to 40%. Just in the last
couple of months since COVID hit
Sydney I think has only gone You
know, single digit drops at the
moment in terms of property
prices. So I don't think it's as
bad as it sounds. But I want to
just justify that and just share
with you why I think that that's
the case as well. Before I go
into that, by the way, I just
wanted to show you Melbourne as
well because when I'm looking at
helping my clients bill, a
property portfolio. I don't just
look at one major capital city I
look at all the major capital
cities, I study them, I see how
they go. And I try my best to to
get some level of timing right.
But that's not my main goal. My
main goal is, you know, to share
with them that it's about how
long you hold the property for
it's about timing the property
versus trying to get the timing
right. Having said that, you
know, there's no harm in doing a
bit of research and finding out
how property is fared over the
long term. Melbourne has gone up
a little bit, I think with the
latest restrictions with
Melbourne, Victoria, I think
that is going to show a slight
dip that's already showing that
Melbourne prices are dropping a
little bit. So that's Melbourne
and Brisbane, Brisbane, it's
been been coming up fairly
recently 2019 2020 I think
Brisbane has one of the smallest
drop I think point one or point
2% in terms of its its capital
growth. So it's relatively small
compared to the other major
capital cities. Starting to look
at Canberra as well, at the
moment, I think there are some
really good opportunities in
camera, they've got very, very
low vacancy rates. And Canberra
I think has only been one of the
very, very, I think the only
capital city that has actually
increased in price since COVID.
So I'm starting to watch
Canberra quite closely to look
at some opportunities there. And
hopefully, I'll have that soon
to present to some of my
potential investors. But my big
lesson, my one big lesson, if
there's one thing I hope you can
take away from this particular
video, is that property is a
long term investment. It is you
can't, you can't buy property
and and keep it for the short
term and expect to make a lot of
money out of it. There's no such
thing as a get rich quick
scheme. And I've learned the
lesson the hard way. If you try
and pick the market, right? Then
you you have the probability of
making mistakes, you get lucky
if you hold on to the property.
Let me just show you what's
happening. You know I'm always
very curious. And I love
research. I just looked at the
median historical prices for
property from 1980 to 2019. We
haven't got the 2020 20 figures
at the moment. So I can only
show this to you. But this is
what's happened to us in the in
the City Market. But I mean, I'm
showing you the three major
capital cities. When I was born,
I'm giving my age away. I was
born in 1980. And the median
price of Sydney properties was
$68,000. And you believe that
68,000 I wish I bought a
property when I was born. And
there were a number of events
that's happened over the years
between 1980 obviously, it's 40
years until now, but when I saw
this graph, I'm a little bit
more short, that property is a
long term investment, and you've
got to hold it to your best
ability for as long as you can.
So I got to be curious, I said,
well, let's look at what are
some major events It's happened
in in our Oh, I just realized
you couldn't may see really the
the slides very well, my
apologies for that. Hopefully
you can see this one here, or
just have to zoom in. What I
wanted to show you here is a
slide that I that I put together
just in terms of the long term
viability of properties and some
major events that's happened
over the last 40 years. So like
I said, 1980 I was born 1987
there was Black Monday, some of
you may or may not remember it.
And then there was the Asian
financial crisis in 1997 2000. I
think everyone was the y2k bug
in the.com bubble, and everyone
talked about property prices and
the world economy, you know, you
know, just suffering. And then
and then 2001 you know,
September 11 happened, you know,
terrorism and all that started
to happen. Again, if you look at
how resilient Sydney and
Melbourne and Brisbane probably
Australian property prices in
general, it's been very
resilient over those really
difficult times. 2003 that was
a, you know, Iraq war and there
was a slight dip. But 2008 This
is the one that's quite
surprising. In 2008, the Great
Recession This is where I wish I
bought, you know, a few more
properties because, you know,
there's a saying that goes get
greedy when everyone's afraid,
by Warren Buffett, not not that
I'm suggesting you get greedy,
but when everyone's thinking I
should I buy Should I not buy,
obviously you got to be making
informed decisions. I just feel
there's some really good
opportunities now for a buyer to
get a good deal to get a good
bargain. To You know, it's a
buyers market so you have the
opportunity to negotiate. And
also finding a lot of sellers
now are starting to become a
little bit more realistic with
their prices. And I'm also
finding a lot of developers are
willing to sacrifice a little
bit of margin to make it work
for the buyers. So it's a win,
win for For for a bias now. So I
wouldn't go past and I think
there's some really good
opportunities in this market to
get a good good property a solid
property that would, you know,
fair for the long term, but 2008
the Great Recession. Okay, so
overall the property prices did
for a little while, but he kind
of came out of it pretty
quickly. 2009 The European debt
crisis in Greece was happening,
and then there's the earthquake
in 2011. Anyway, you get my
juice, you know, we're in 2020
now, and COVID hit in Yes, you
know, property prices have
suffered a little bit, but the
fundamentals of property is
still there, you know, it's all
about supply and demand.
There's, there's just going to
be demand people, you know, the
population is growing, we may
not get population growth as
fast as we we have had because
of international migration, but
there's still natural population
growth. And we can't forget
that, you know, because, you
know, for the for many years,
there has been a lack of supply
for properties in some of our
major capital cities in certain
suburbs. So I think you've just
got to make some educated, you
know, choices about where you
buy as well. And that's where we
come in, you know, we, I, I've
bought a lot of properties that
I have recommended my clients to
purchase, I walk my talk, and I
show you some examples of some
of the properties that I've
purchased, made made a number of
mistakes and not proud to say,
but I am an advocate for not
having to sell. But I've had to
sell a couple of my properties,
just to be able to make it work
for myself. So even I'm hit. So
that's without a doubt, but I'm
very confident that in the long
term, the portfolio of
properties that I have will will
do well, eventually. And some of
them have done really well
already Anyway, you know, so,
so, in the long term, yes,
absolutely. I've kind of found
this out. You know, when I was
looking around and back in 1980,
this is just the major capital
cities, other capital cities in
Australia. Let's not forget
Adelaide, Perth. Canberra and
Hobart but you can see the long
term growth potential of
properties. Sydney is a little
bit of an outlier. I think it's
starting to correct but I
definitely see it you know,
Sydney is a solid investment.
And Brisbane has just got so
much room to growth and so much
potential so there's Adelaide, I
think Adelaide is flat at the
moment. Canberra like I said,
I'm watching very, very
carefully, Melbourne, I'm a
little bit unsure but I'm sure
if you you can get some pretty
good deals in Melbourne, I think
with the lockdown with
Melbourne. A lot of people,
sellers are willing to do deals
and there's certainly some good,
you know, opportunities from an
off the plan perspective as well
in Melbourne that you can
certainly look at. Just wanted
to share before I conclude,
these are just a few of the
properties that I own. It's a
mixture of different cities in
Brisbane, Gold Coast and Sydney
and apartments high rise as well
from some award winning
developers Way to fairly
boutique style, a, you know,
unit type blocks, you know,
fairly fairly unique, unique,
and obviously some land. One
thing I've learned is you, it's
always a good idea to try and
buy as much land as possible.
But, you know, with the amount
of land taxes that you pay in
maintenance, there's only so
much land you can hold because
generally speaking, the yield is
a little bit less than your
townhouses or your apartment
locks. So for over the years,
I've made some pretty good you
know, choices in investing in
property. I've learned some big
lessons. Like I said, I've had
to learn some hard way and sell
some you know, a couple of my
properties just to be able to
make it work. But all in all,
I'm you know, for migrant that's
arrived in Australia 20 years
ago to be able to build a
portfolio of properties and I'm
not a genius, I you know, for
me, I just wanted to retire and
my main reason for purchasing
properties is just so I have,
you know, some assets that that
will, I know will go in the long
term that will eventually turned
to passive and something I can
retire on fairly comfortably and
provide for my family as well as
a young family. So I want to
make sure that I prepare my next
generation and my parents has
always said, you know, property
is the way to go. So, something
I've learned is, you know,
invest in a long term. And so if
you want to have a chat with me,
or any of my team members about
how this all works, how do you
get from, you know, your first
property to your second tier
third, obviously, all that is in
the mechanics, but I'm happy to
share with you my own story, and
the many stories from my, from
my investors, we've got about
nearly 85 five star Google
reviews at the moment as we
speak, and these are you know,
some clients that I've worked
with and people I've worked
closely with for over the years
and you know, please go check
them out. You know, and and give
us a call or email us visit WWW
dot inspire realty.com and fill
in your details to booked for a
45 minute consultation. It's
obligation free. I'll have a
chat with you to see if this
would work for you. And we can
go from there. The second big
lesson that I've learned before
I finish off is please know your
numbers. When I invested one of
the biggest, I wouldn't say
mistake, I think I got lucky
that I was able to get a lot of
loans across the line. Some of
them I wasn't prepared for and
I've had to fork out quite a
fair bit of money out of my
savings, which I wasn't quite
prepared to use for for property
and put all that into into my
property portfolio. But you've
got to know your numbers. And my
recommendation is to speak with
a finance broker or mortgage
broker to work out what your
borrowing capacity is, how can
you a good broker would walk you
through your property strategy
and just talk about your goals.
What are you trying to achieve,
and then kind of work backwards
from there. So here's just some,
some ideas on what you should
do. You know, from a finance
perspective, not not afraid to
share that. I'm also So finance
broker and I don't do my finance
for a lot of my clients,
sometimes they use their own
brokers which is fair enough. So
but I I'm able to give, you
know, finance and property, you
know, tips and strategies and
combine both property and
finance together, which I think
is a really good combination.
But these are some of the things
I would recommend that you start
to think about. You know, please
know what your taxable income
is, it's it's interesting how
many times I speak to a client
and they don't even know how
much their taxable income is,
and how much taxes they're
paying, which is really
interesting. So know how much
taxes you're paying and see if
you know building your property
portfolio can help you minimize
your tax or maximize your your
your, your your taxable income,
your household expenses, more
and more. I see banks these days
really taking notice of how much
you spend, and so they're
needing your bank statements.
And so keeping a budget keeping
a spreadsheet on how much you
spend on your education, you
groceries, your transport your
insurance. All that is very
important because when you go to
the bank or lender for a loan,
you already have all that and
you're able to provide that for
the lenders, your borrowing
capacity. Obviously, this is a
little bit hard to work out. But
that's why speaking to a broker
would really help. I just had a
client who went to a bank
directly, and she went to two
banks, believe it or not. Now,
can I just say like, it's okay
going to the bank. But if you're
rejected, if you if you're
rejected by a bank, or every
bank that you go to, and you do
you do a loan application, it's
actually a credit inquiry. And
you may not think that that's
big, but in the end, it goes
against your name. So I don't do
a credit inquiry unless I'm very
confident that you're able to
get a loan and then we go
through with the pre approval
process. But what I'm finding is
clients that they go to the bank
directly, they they try and get
a pre approval on that bank,
they may get knocked back. And
so that is against your credit
file. So you just got to be
mindful You know, I think, you
know, whether it's me or another
broker, I think, you know, speak
to a broker who earns the
Commission's from the banks
anyway. But they have access to
4050, maybe 60 lenders that they
can have options for, and
they're going to be able to find
the right product for yourself.
Please know your interest rates.
You won't believe this. But it's
true story. One of my clients is
paying about 4.5% interest at
the moment on their unoccupied
property, and that's, you know,
that's you can get as low as
2.19. And I just did a
refinance, one of my clients,
who was on 850,000 was
unoccupied. Paying about 3.27 in
interest and managed to refi to
about 2.19 that we worked out is
about $1,030 in savings every
month. Imagine how much that is
over the year that's 12 13,000
over the year. Now, imagine if
your loan is for 30 years, how
much you really save in the long
term. So understand and know
what your interest rates are,
what you're paying, and then you
know, just be curious. say if
I'm able to get a better rate
2.19 How much would I be saving
a month and I think it'll be
worth your while to look into
that and investigate whether you
can save some money every money
saved is $1 earned as my mentor
has said many times, look at
your savings capacity, how much
money you can put aside every
week, you know, for you to save
up for your deposit or your
whether that's an investment or
owner occupier, value of your
properties and value of your
assets. Just kind of know what
your assets on your liabilities
as well. What your super
balances are, there are a number
of instances where it could be a
good idea for you to consider
looking at purchasing properties
with your super if you want to
set up a self managed Superfund.
Know how much tax you pay, like
I said the overall debt you're
carrying all your liabilities.
Also, this is just a little bit
of a thing if you already have a
property portfolio, know how
much rent your achieving and
your property. It's a little bit
hard now to increase your rent
but you working back Words and
for the long term, you got to
know what revenue you need to
increase to increase your
borrowing capacity. So all your
income does go towards your
serviceability and helps you to
get a better loan in the future.
So I want to leave you at that
just something to think about.
If you haven't looked at your
numbers, if you don't know what
your numbers are, feel free to
give me a call, or send me an
email or jump on our website.
And we can certainly work out
some of these details for you
just know what your starting
point is, and you know what your
current situation is in terms of
your borrowing capacity to see
if you're really in the position
to invest at all or buy your
principal place of residence. So
I'm here to help. Thank you so
much for your time, please visit
us on www dot inspire realty.com
for more information. Thank you
and have a good night. Bye for
now.
