How to make property investment a positive geared experience
Anita Fursland explains her business story, helping people to purchase positive geared properties.
She is known as the “UNREAL” Real Estate Realist with over 10 years of experience in buying positive geared investment properties.
Have you been struggling to get your first investment property as you are scared of making a mistake?
Then perhaps it can be easily fixed by advice from a property coach!
What is a property coach?
How do you find a property coach who will help you?
Anita, who are your customers and what problems are you solving for them?
As a property coach, most of my customers are first or second-time investors. I help them invest in positively geared properties. The problem I solve for them is that they don’t know how to get started. They don’t know where to look and who to go to for advice.
I help my clients to look at their present situation and decide whether they are able to invest or not. Then I help them through the process and advise them on who to go and see – for example, mortgage brokers or real estate agents.
I also help them source properties if that’s what they need help with.
The difference between me and other people in the property industry is that I care about whether you can pay the mortgage in five years time. Real estate agents just want the sale, they’re not thinking about your long-term future.I sit down with my clients and go through their lifestyle habits with them,and figure out what will happen if: they don’t have two incomes or if interest rates go up, etc.
You take clients through figures, their borrowing power, and consequences after the purchase. How long have you been in the industry?
I have been buying properties for myself and helping my family to buy property for about ten years. Though, it has not always been this way. I used to work as a professional radiographer.
When it comes to investing in any property, I think about that Monty Python movie – the scene where a crowd of people is declaring “We are all different! We are all individuals!” and one guy at the back says “I am not.” I feel like I am that person because I am not different from anybody else.
Lots of people make mistakes, they listen to the cliches like “property doubles every ten years”, “you cannot get capital growth from positive gearing” and “you cannot go wrong with the property!” Hearing all that becomes overwhelming so they make mistakes.
“With my first property, I did everything wrong.” [Tweet this!]
With my first property, I did everything wrong. Now I try to help people not to make those mistakes. I try to make them aware of the pitfalls and as well as the benefits of property investment.
How did you start with the idea of turning your hobby into a business?
I started because I felt like a career change. I completed a Certificate IV in Real Estate, as I thought of becoming a real estate agent, but I have discovered that it is more fun to buy property than it is to sell it! Then I did a personal development course and met a couple called Jeff and Kane who gave me some great advice.
Jeff said to me ”Do what you are passionate about, be the go-to person in your family, be the go-to person in your area” and I thought, I already do that. I was already helping my family and friends.
So I thought I could start a business doing what I love and help even more people. Now I am a property coach and mentor. There are not many people doing this type of coaching.
“I could start a business doing what I love and help even more people” [Tweet this]
What was the turning point to start Positive Properties?
I was at the age where I wanted to retire, but I wanted something to do in my retirement. I was a radiographer. So firstly I went part time, then I took my super as a transition to my retirement and now I am fully retired. What would I do otherwise? Sit on the balcony and go nowhere!
“It is a business now, but it started as a hobby, and it is something I love to do.” [Tweet this]
It is a business now, but it started as a hobby, and it is something I love to do. Last week I spent time going to open house inspections in my area and on Tuesday evening. I went to see them in the auction, so I could work out what is happening in the area.
Do you have a portfolio yourself?
Yes, I do. In the first six years of buying properties; I amassed a portfolio of 7 properties worth nearly 3 million dollars. Then, in the area where my family and I had few properties, the prices went up really quickly over the last two years. They were in South West Sydney, and we have now sold a few of them off.
Most seasoned investors are of the opinion that the prices around Sydney have peaked for the time being, so it is a good idea to start looking around and keeping an eye on the ones that are beginning to drop.
“I teach people how to look at the buying cycle that goes from suburb to suburb.” [Tweet this]
I teach people how to look at the buying cycle that goes from suburb to suburb. If you are serious about investment in a positive geared property and do your research well enough, you will be very surprised to find that there are still bargains to be had in certain suburbs.
How can someone start a healthy Property Portfolio? [Tweet this]
As I mentioned earlier, with my first property, I did everything wrong. I bought it on emotion. It was 5 acres, four bedrooms and a swimming pool, west of Sydney. It was a lovely property, but it was heavily negative geared.
My advice now:
- Get rid of the bigger properties
- Sometimes you are much better off buying 3 smaller units for the price of a large property
Now I help you to crunch the numbers. There is not one figure you need. You don’t necessarily need a deposit saved if you have equity in the family home
I deal with a lot of middle-aged clients who have young children or school aged children and who want to do something because their super is not going to be enough for retirement. They can get equity from their family home, and they can probably start with $50k.
It all depends on:
– How much you need to start off with
– What you are looking for
– What that property will bring in
What I like to look for is cheaper range property, now a little further out from Sydney. You can grab a property for about 150k already rented out for $250 a week. All you need is 10% deposit.
How does someone know if the property will be positive or negative? [Tweet this]
It is a case of crunching numbers and making sure you have somebody to help you with those figures. Don’t believe a real estate agent or land developer.
I don’t deal with any specific Real Estate agents or developers. Whatever you buy does not make any difference to me. If you buy one unit for 150K, it is the same to me as if you bought for $600K. The people who get into difficulty get the wrong information.
If you think you are going to pay $300k for a unit and get positive gearing because the rent is $300 a week, it is not even close. If someone tells you that you will get 5% return on investment, that is not true either. You are going to make a loss on the property.
Are real estate agents misleading people to make them purchase a property?
Well, what they say is true based on the way they do the figures, but 5% return is not positive geared. If you find a property that is between 7-10%, then you are getting close to positive gearing. What I help investors with is working out every expense, including buying costs, ongoing costs and the interest you are paying. For example, if you had, say $8k going into your bank account with only $6k going out. That is positive gearing.
“For example, if you had, say $8k going into your bank account with only $6k going out. That is positive gearing.”
I saw on your website that you offer something of value for free. “7 Critical Questions you need to ask yourself before buying and investment property,” can you explain that a little?
That is a checklist you should go through before you think about buying an investment property. It helps you to work out whether your super is going to be enough for your retirement. It does not do the calculation but it makes you aware “Is my super going to work for me?” For the majority of people, the answer to that question is pretty much ‘No’.
The checklist gives you an idea on how to look for positive geared properties as well as whether or not you have ‘serviceability’ for the bank.
Some people will actually exchange the contract on a promise from a phone call they had with the bank telling them verbally that they can get a loan. They put a deposit on the property and later find they have no money when it comes to settlement, and they lose their deposit.
The checklist will give you clarity on your current situation and what your next step should be. To gain the confidence to take action start by visiting www.positiveproperties.biz to opt-in for our Free 7 Critical questions you need to ask yourself before buying an investment property.
Do you run educational seminars or one-on-one coaching?
We do both! For our last workshop, we invited a panel of experts. We had a property lawyer, mortgage broker, and financial adviser, and all of us answered questions from the audience.
I also run smaller workshops based on The 5 Simple Steps to getting started before buying investment property. It is a 2-hour workshop with a small fee just to cover the room and refreshments.
I do one-on-one coaching for the duration of 6 months, which I think is a reasonable time where you exchange or settle. I charge monthly. If you get to a stage where it is not working for you or it is not what you want; you can leave when you like. If I have a client that likes a particular property, I go to an open house with them to give them an unbiased opinion. Sometimes they need someone to take the personal emotion out of it for them, as it is an investment property.
If you are in your thirties, and you plan for your retirement, start with investment properties. If you are planning to get one investment property a year, after ten years you will be getting positive cash flow. It’s not always possible to get one a year. So if you start investing in properties when you are 30, by the time you are 50 you can start thinking of retiring.
Do you help people from all over Australia or only around Sydney?
Most of my clients are from Sydney because I like to have close contact with people. I do things by Skype so it is possible that I could speak to somebody from QLD, but they are probably buying property in QLD, and most of what I do is NSW. I don’t look for investment properties from overseas or USA. I like the idea of seeing a place before you buy it.
Which marketing channels are the most successful for your business?
We do a lot on Facebook. We have Positive Properties business page on Facebook and also have a meetup group, Speaking of Property. Anyone can register in our Meetup group, we always put the link to this registration page on Facebook.
We organize meetings every 3rd Tuesday of each month in Sydney CBD on Kent Street. These meetings are for people who don’t have experience in the property market. They can come along and learn ideas on different strategies from long standing members who share their expertise.
What is your biggest motivator, personally?
I have a property that is 100 acres, in the Southern Alps. I want to build an eco-friendly lodge. I have just finally got approval from the council to build it. I want to make it wheelchair friendly because it is not going to be inhabited 365 days a year, it is going to be empty lots of the time. I am going to try to offer it to a few charities for respite, especially Youngcare. I want to give young people living in aged care homes a place to have a getaway. I am looking for investors to share it with me.
I want to give young people living in aged care homes a place to have a getaway [Tweet this!]
If you had 5K at your disposal, where would you use it?
Good question! Probably put a new kitchen in one of my units. It sounds funny, but it is important. If you have a good tenant, and the place is getting a bit shabby as they have been there a long time, I think it is important to give back to them. You are also putting a value on the property. The tenants appreciate that you do something for them.
Do you have any advice for someone starting their business in the property market?
The property market is a broad industry and there are many facets to it. You have to work out if you want to be a mortgage broker, financial advisor, real estate agent, property coach or a buyer’s agent. Do your research and find a niche.
I just deal with positive geared properties. If you come to me, and you want negatively geared property, you can get it anytime. You don’t need my advice; any Real Estate agent can get you one. You have to niche it down so you can offer something tangible to people, something of value.
Why would someone need a property coach? [Tweet this!]
I met a young guy who told me he bought a half of duplex; it was $520K and the rent was 400/week. My heart bled for him. He was quite happy with his fixed low-interest rate and since then the interest has gone down twice anyway. But, when the interest rate goes up, and it is already hopelessly negatively geared, what happens then?
I always say history repeats itself. Interest rates are right down, and they are bound to go up again, maybe not to the 16% they were many years back, but they will go up. Even if they go up to 7-8%, there will be many people hurting.
Where should buyers source properties?
I have people who send me lists; real estate agents send me information. A person needs to get advice on what sort of property is right for them.
Do you look for property for your client?
I don’t look for specific investment property, but people send me information. I go to see the properties for open houses and auctions. Last weekend I saw a lovely property for renovation, and I know someone who does renovations. So I always look out for great investments and inform people what would suit them.
What are the benefits of working with Positive Properties?
I find that when my clients first come to see me:
· They feel fear and trepidation?
· They think “I don’t know how to invest”?
· They are overwhelmed “ What sort of property should I buy?”
· Then they start to panic “I don’t know anything about buying cycles or demographics!”
. They don’t understand the jargon and don’t know who to trust.
. They are scared of making a wrong decision that will cost them a fortune
. They hear stories of people whose investments have failed, where the rent does not cover the mortgage, let alone any of the other expenses such as strata fees.
“I like to think of myself as the link between the Financial Planner and Real Estate Agent”
I guide them through the process from where they are now to where they want to be in 10 years time. I help them with the things they do not have the time or skills for, e.g., research and due diligence.
To them it feels like having a support throughout the process, or looking over their shoulder, telling them what to do not to fail. This process gives everyone confidence and clarity so that after a couple of investments they can probably do it themselves.
The process takes about six months, and at the end of this period, they are not telling their friends horror stories about having to take a second job to pay the mortgage but beginning to see that investing can be an enjoyable experience and looking forward to planning an early retirement!