Sort Your Property Out E-Book

John Pidgeon

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 433

Veröffentlichungsjahr: 2024

Beschreibung

A handbook for investing in property in a smart and strategic way

There’s so much more to investing in property than having a double-digit property portfolio. Whether you’re a home buyer, a beginner, or a seasoned investor, Sort Your Property Out will revolutionise the way you think about property. When it comes to building lifelong financial security, property investing is about being creative and being prepared. In Sort Your Property Out, you’ll learn exactly what you need to know — and what you need to do — to buy well in today’s markets around Australia.

Inside, author John Pidgeon, co-host of the money money money and this is property podcasts (and a property investor and coach for over 25 years), will show you how to hone your investor mindset. You’ll discover actionable, step-by-step guidance on how to build a strategic portfolio. Ultimately, you’ll learn how to buy what’s right for you today — and how to set smart, realistic goals for tomorrow.

Sort Your Property Out: And Build Your Future will help you:

• Get your head around finance: understand loans, grants, schemes, and taxes, and use smart strategies for putting together that essential deposit.
• Choose the right property: learn the pros and cons of different property types and the signs that you’re looking at a hotspot (or a not-spot!).
• Buy successfully: get valuable tips for making a successful offer and securing your ideal property, through private treaty or at auction.
• Use advanced strategies for growing a diverse, sustainable portfolio: learn about rentvesting, joint ventures, residential property development, and more.

Sort Your Property Out is a comprehensive guide for buying property and building an investment portfolio in a responsible, sustainable way. Through its unique 8-Point Property Plan, worksheets, resources, and real-world investor profiles, you’ll get the skills and knowledge you need to build your future through property.

Leseprobe

Table of Contents

Cover

Table of Contents

Title Page

Copyright

Dedication

foreword by Glen James

introduction

Who am I?

What does my portfolio look like?

Why property?

How this book is structured

how to get what you want

1 knowing your targets + learning how to get there

It all starts with goals

Habits get results

Your wealth magnets: active and passive income

Understanding your risk tolerance

How you can manage these risks

Follow a mentor + join a community

Property risk assessment

Mindset gives you momentum

Sort your money out

Identify as an investor

2 home sweet home: the Great Australian Dream fallacy + the New Phenomenon

The Great Australian Dream fallacy

From big ‘home’ feelings to FOMO

Your dream location

How to be smart, strategic and creative when buying your home

Considerations for turning your home into an investment

3 developing your 8-point plan + unlocking your investing

How you make money with property investing

The 8-point plan

8-point plan #1: Strategy

8-point plan #2: Yield

Taking a broad approach

Diversification

4 assembling your dream team

Developing your team

money and the technical stuff

5 how lending works + getting the best deal

All hail the mortgage brokers

8-point plan #3: Loan-to-value ratio (LVR)

8-point plan #4: Price

Good debt vs bad debt

6 tailoring your mortgage + lending smart

Types of mortgages and choosing the right one for you

Principal and interest

Interest-only

How do you decide on principal and interest vs interest-only?

How often should you make repayments?

Redraw facilities and offset accounts: are they worth it?

Understanding your borrowing power

7 someone call my accountant

Understanding the tax + accounting timeline

8-point plan #5: Buying entity

Record keeping

Phase 2: At time of purchase

Stamp duty

8 i'm making some money + paying my bills

Understanding the tax and accounting timeline

Phase 3: During ownership

Managing your income

Managing your expenses

Working with your tenant to manage costs

Insurances

Claiming deductions

Depreciation schedules (investors)

Understanding gearing

Phase 4: Selling a property

Timing your sale

getting on the ladder

9 finding your hotspots + notspots

Hotspots + notspots

10 property radar: activated

8-point plan #6: Property class

8-point plan #7: Property type

8-point plan #8: Location

Buying a pre-existing property

Buying a new build

Working with project builders

11 from 100 to 1: Let's go shopping!

How to inspect properties like a boss

Inspection checklist: Online before an inspection

Inspection checklist: At the inspection

The secret property market

Tracking comparative sales

On-market properties: Buying at auction

On-market properties: Buying through private treaty

investing for your future

12 creating your long-term investing timeline

Creating your long-term wealth plan + investing timeline

Determining what your portfolio could look like

Reverse engineering the process

13 an advanced investing strategy

What's a small development?

What to expect

What to look for to develop

How to approach a small development

General notes on borrowing

The phases of a small development

My own experience

What can go wrong with developments?

where to from here?

a note on generosity and the affordable housing issue

Social housing + crisis accommodation

We need to shift investing culture

More support for charity-based housing programs

How Avalon Centre works

How you can get involved

acknowledgements

references

Chapter 1

Chapter 2

Chapter 6

Chapter 9

Chapter 10

A note on generosity and the affordable housing issue

index

End User License Agreement

List of Tables

Chapter 3

Table 3.1: the pros and cons of capital growth

Table 3.2: the pros and cons of cash flow

Table 3.3: the pros and cons of tax benefits

Table 3.4: property market performance assessment: Regional NSW 2021

Chapter 5

Table 5.1: the pros and cons of a cash deposit

Table 5.2: the pros and cons of using equity

Table 5.3: the pros and cons of joint ventures

Table 5.4: the pros and cons of using a guarantor

Table 5.5: the pros and cons of using gifts

Table 5.6: the pros and cons of using vendor finance

Chapter 6

Table 6.1: the pros and cons of a fixed-rate mortgage

Table 6.2: the pros and cons of a variable-rate mortgage

Table 6.3: the pros and cons of a split loan

Table 6.4: the pros and cons of a principal and interest loan

Table 6.5: the pros and cons of an interest-only loan

Table 6.6: the pros and cons of a shorter and longer loan term

Table 6.7: the eligibility criteria for the HGS options

Table 6.8: the pros and cons of the FHSS

Table 6.9: grants and schemes by state / territory

Chapter 7

Table 7.1: comparing the difference between first-home buyers and property i...

Table 7.2: the pros and cons of using a trust

Table 7.3: the pros and cons of using an SMSF

Table 7.4: the eligibility for stamp duty in each state/territory

Chapter 8

Table 8.1: landlord or tenant: who pays for what?

Table 8.2: claiming deductions for your investment property

Chapter 10

Table 10.1: the pros and cons of house-and-land packages

Table 10.2: the pros and cons of off-the-plan apartments

Table 10.3: the pros and cons of turnkey packages

Table 10.4: the pros and cons of working with custom builders

List of Illustrations

Chapter 1

Figure 1.1: the property risk-return spectrum

Figure 1.2: savers, spenders and investors

Chapter 2

Figure 2.1: the New Phenomenon

Chapter 3

Figure 3.1: the 8-point plan

Figure 3.2: capital appreciation on a home purchase

Figure 3.3: cash flow types

Figure 3.4: your strategy volume levels

Chapter 6

Figure 6.1: RBA cash rate

Figure 6.2: a principal and interest loan without any additional repayments...

Figure 6.3: an interest-only loan without any additional repayments

Figure 6.4: how offset accounts work

Chapter 7

Figure 7.1: the tax and accounting timeline

Chapter 8

Figure 8.1: the tax and accounting timeline

Figure 8.2: Jimmy and Jenny's property purchase timeline

Figure 8.3: Jimmy and Jenny's property purchase timeline

Chapter 9

Figure 9.1: the stages of The Property Clock

Chapter 10

Figure 10.1: the three property classes

Chapter 12

Figure 12.1: the phases of property investing

Figure 12.2: Liam and Emily's investing timeline

Figure 12.3: Lilly's investing timeline

Chapter 13

Figure 13.1: an L-shaped subdivision

Figure 13.2: development and its risks

Figure 13.3: the phases of mini developments

Guide

Cover

Table of Contents

Title Page

Copyright

foreword by Glen James

introduction

Begin Reading

where to from here?

a note on generosity and the affordable housing issue

acknowledgements

references

Index

END USER LICENSE AGREEMENT

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First published in 2024 by John Wiley & Sons Australia, Ltd

Level 4, 600 Bourke St, Melbourne, Victoria 3000, Australia

© UrbanGhetto Pty Ltd and ISR (S.A.) Pty Ltd, 2024

The moral rights of the author have been asserted

ISBN: 978-1-394-22237-7

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design by Jess PearsonCover design concept by www.askjasonknight.com

House icons: © Sathaporn/Adobe Stock. Part opener illustration: © Chorna_L/Adobe Stock. P168: Cap icon: © nadiinko/Adobe Stock. P203: Photo: © contrastwerkstatt/Adobe Stock. P311 and P316: © Visual Generation/Adobe Stock.

DisclaimerThe material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

We acknowledge the Traditional Custodians of the land on which we reside, and pay respects to their Elders past, present and emerging.

We extend that respect to Aboriginal and Torres Strait Islander peoples who may read this book.

foreword by Glen James

I don't think I've met anyone who lives and breathes property quite like John Pidgeon. At least once a year we record an episode on the money money money (formerly my millennial money) podcast where we battle the old (but fun) argument of shares vs property. I sit in the shares camp and every year John attempts (note: attempts) to win me over with his property arguments. We never quite reach a conclusion, but one thing I can attest to is John's passion for property.

I can't think of anyone who is better positioned to write a book on the subject — and here it is! This book is an essential resource for home buyers, beginners and seasoned investors. John provides insights and actionable advice that will revolutionise your approach, and importantly, help you achieve your goals.

Me and my mate John

Every year we run a listener census to better understand who is listening to us and to ensure we are providing the value that our audience is seeking. Without fail, every year, first-home buying or buying an investment property appear in the top five goals.

But — you probably don't need me to tell you this — property markets across Australia have completely changed in recent years. In order to buy or invest well, you need to stay educated and skilled so you can be agile in your approach. John encourages everyone to be smart, strategic and creative with their plans, and over and over his clients have proven his guidance to be invaluable.

When I ran my financial advice business around the corner from where John runs Solvere Wealth, I referred clients to him who had specific property goals. He was my property go-to, because his skill and 25 years of experience made him the perfect coach for anyone looking to build wealth through property as a part of their overall plans. There was no risk of my clients being treated poorly. This was a big concern for me.

Many members of the money money money community have booked a clarity call with John, where essentially they have an hour of his time to bounce plans and ideas off him to help in their decision-making. Many of these home buyers or investors have been stewing on an issue for months, and a one-hour conversation with John resolves tonnes of analysis paralysis, stalling and indecision. John has a way of cutting through the noise to get to the centre of what's really going on so you can set your course to take the next step without fear or concern.

John is about smart, steady and long-term wealth creation that can be done sustainably. He will talk you through the foundations of property buying and investing that you need to build on: goals, habits, risks, mindset and the strong financial foundations you need to carry out your plans well. Success in any endeavour requires clarity of purpose and the discipline to follow through, and home buying or property investing are no exceptions. By understanding the importance of setting realistic and achievable goals, adopting good habits and cultivating the right mindset, you will be well on your way to building a profitable and sustainable property portfolio.

Again and again, I hear John asking property buyers: ‘What's your strategy?’ He understands that making a move without a clear idea of what you're trying to achieve is pointless and creates a mess rather than lead to mastery. In this book he'll challenge you to build a solid strategy, with in-built, actionable steps to get it done.

He'll also challenge you to think outside the box around how you buy and invest. He's a big advocate for avenues like rentvesting, joint ventures, parental guarantees, maximising government grants and schemes, and adjusting your expectations for the kind of properties you buy. This creative thinking has become essential to get into property because we can't buy property like our parents did — times have changed.

A key area many first-time investors want to explore is how to build a portfolio. What, when and how do you buy your first, second or third property? Do you buy your home first, or wait a few years? As you delve deeper into this book, John will give you the tools and opportunities to craft your own portfolio, in a way that aligns with your goals. He also understands that many people consider flipping their first home to an investment to get into the market, and he'll share some guidance on how to do this well.

Another speciality of John's has been development — something more advanced investors may want to get a taste of. If buying land, subdividing, and developing it is something you crave, then take any tips and advice you can from John. He's carried out projects like this several times and has plenty of experience to share.

And no property book would be complete without the info you need to know when a property is worth a bid or offer! He'll share what top-quality property looks like, how to win at auction (even if you've never done it before) and how to make an offer.

This book is a treasure-trove of knowledge, experience and wisdom that will undoubtedly become an essential reference for anyone interested in property. Whether you are just starting out or have years of experience under your belt, this comprehensive guide will equip you with the tools, strategies and mindset to achieve your property goals and create lasting wealth.

Embark on this journey with John as your guide and witness the transformation of your property investing dreams into reality. The future is yours to create, and with the insights and expertise contained within these pages, you will be well on your way to forging a prosperous and fulfilling life as a successful property investor.

Glen James

Founder and host of the money money money podcast

Author of Sort Your Money Out and Get Invested and co-author of Sort Your Career Out and Make More Money and The Quick-Start Guide to Investing

introduction

So, you want to get into property — welcome! Well done. You're focusing on your education, which is key to buying and investing in property well. You might be looking to buy your first home, looking to get into property investing, or you could be keen to move into more advanced investing strategies. This book is designed to be a comprehensive guide to property without the unnecessary get-rich-quick marketing (fun fact: you don't need to buy 15 properties by next year). I'm all about building wealth through property in a non-greedy, smart, strategic and prepared way.

Property is an exciting space, but it's also evolving, so you need to stay on the pulse, educating yourself so you make decisions that keep you in line with your goals. Because you will face ever-changing property markets, the whirls of media speculation, changing interest rates, new government legislation and shifting lending requirements, you need to be prepared. You need knowledge, cash buffers and the right strategy to suit your wealth goals. It's all too easy to get excited about property, and begin building a portfolio, only to realise you weren't prepared to weather the conditions ahead. Then the risks become reality! It is high time we focus on building wealth through property in a sustainable, smart and strategic way.

But why listen to me? Great question — let me introduce myself properly.

Who am I?

My name is John Pidgeon. I grew up on a farm in country Victoria, Australia, and I'm a property investor and coach, husband and father with a passion for health and fitness. I've built my property portfolio over 25 years, and I spend my days coaching clients to build portfolios in line with their goals, showing them how property investing can be the way they get there. I live on the Central Coast of NSW, love running, cycling and swimming, and have a passion for property. I've built two businesses in the industry (Solvere Wealth, providing property and finance coaching, and Envisage Property, a buyer's agency service).

Glen James (hey, Glen) asked me to consider becoming a co-host of the money money money podcast he wanted to start back in 2018. Glen was operating his financial advice business just around the corner, and often had clients who needed property guidance. We decided to give it a good go for 12 months, unsure of how it would all play out. It went well. We've since created the This Is Property (formerly my millennial property) podcast, co-hosted by the wonderful Emily Wallace, to keep property lovers educated and informed, and to provide a community to grow with.

What does my portfolio look like?

In terms of my own property portfolio, I've bought and sold properties in Melbourne, Sydney, Brisbane, Adelaide, Minyip (where I grew up) and Horsham (VIC), Tamworth and the Central Coast (NSW). Across these locations, I've bought apartments, houses, I've knocked down and built duplexes, bought land to develop, and more recently, built our family home. Some of these purchases have been made as part of joint ventures and others have been individual purchases currently totalling a portfolio value of over $6 million.

Why property?

I love property for the same reasons all property enthusiasts do — it's an interesting space with opportunities to create wealth. It’s always been clear to me — everyone needs a property, either to rent or to buy. There's always something happening — you'll never be bored. It's a great industry to be a part of because to invest well you must get educated, stay on target with your strategy and build strong due diligence practices. The rewards for this are absolutely worth it on the other side.

Before you read this book, you must understand that there isn't just one big property market — there are thousands across the country. They all behave in different ways, and as you invest, you're watching, assessing and acting when the time is right for you. It's an industry full of change and growth, and the need to be smart and strategic has never been stronger than now.

How this book is structured

This book is structured to cover the theoretical and practical aspects you need to know to navigate property well. There are ‘action steps’ throughout for you to write down your thoughts and ideas, and graphs to help illustrate how things work, as well as downloads and resources at the end of each chapter.

There are four parts, each focusing on different aspects of property.

Part I focuses on your foundations. This is about your goals, habits and mindset. We'll touch on how to understand your risk tolerance and how property can add to your wealth. I'll explain why I think the ‘Great Australian Dream’ is a fallacy, and what home ownership can look like in our context. I'll share my 8-point plan for investing in property, which will become the cornerstone of how you invest. And I'll give you guidance as to the professional team you need around you.

Part II focuses on the finer details. We dig into how lending works when buying property, and how to set it up in line with your goals and strategy. I'll outline the government schemes and grants you should check out to help get you into the market. We'll also dive into the land of tax, walking through how that works at a high level, so you're prepared.

Part III focuses on how to get on the property ladder. These chapters will provide the practical knowledge and skills you need to find the right property for you, whether it's your dream home or an investment property. I'll outline the due diligence you need to do to find quality properties, and share the ins and outs of placing a successful offer on a property through private treaty or a winning bid at auction. I’ll also help you find your own hotspots and notspots.

Part IV focuses on investing in residential properties. I'll demonstrate how to set up a long-term property investing plan and give you a solid base for understanding more advanced investing options like developments (for those who really want to get their hands dirty).

There will be a number of investor profiles throughout the chapters from members of the money money money and Solvere Wealth communities to demonstrate how others have achieved their goals within the property space. I'm sure that you will find these case studies enlightening as they give you tangible examples of what's possible out in the wild.

Alright, enough with the chit-chat — let's go.

how to get what you want