Tony skinner 00:03
Hi, and welcome to the podcast channel at www.podcastmybusiness.com.au and today we have Lloyd Edge from www.auspropertyprofessionals.com.au buyer’s agent and author of Positively Geared How are you, Lloyd?
Lloyd Edge 00:29
Very well, Tony, how are you going? 
Tony skinner 00:31
Cool Cool Cool Cool. And we’re having a little chat about tennis and golf and how lucky we are here in Sydney to be able to play both of those sports.
Lloyd Edge 00:41
Absolutely. Yeah. I’m quite passionate about both and then particularly my go golf so it’s good to be Yeah, good to be able to get back out on the course and everything like that.
Tony skinner 00:50
Yeah, and of course we don’t have the straight on open this year. They haven’t in Melbourne, which is not gonna happen. But there you go. What do you do?
Lloyd Edge 00:59
Yeah, doesn’t regret them. moment but you know, hopefully that, you know, with with other lockdowns and stuff they got at the moment that they’ll be able to nip this in the button can be able to move on with things. I think they’re doing the moments necessary.
Tony skinner 01:11
Yeah, absolutely. It is. So out of interest does this prevent? So does this present buying opportunities if the it appears that the value of property is going to decline by a little bit?
Lloyd Edge 01:26
Well, Tony, there are buying opportunities. And the I guess the property values have declined a little bit at this stage. So I guess what we saw in June was about a 2%. decline in prices, about a point 2% in May, definitely less than what we you know, at the start of the year, the price was still increasing. So there’s definitely a buyers market at the moment. I don’t say there’s going to be a massive decline in prices at the moment. I think there’s a few reasons for that. I think there’s a lot of government stimulus packages that are gonna help prop up the economy along with the the low interest rates. So I don’t think we’re going to see a big crash. But I do see that there are definitely buying opportunities out there for the savvy buyer and those that are that are financed, ready to buy.
Tony skinner 02:09
Hmm, great. Okay. So we will I just touched on buyer’s agents. So what actually is a buyer’s agent?
Lloyd Edge 02:16
Okay, essentially, a buyer’s agent is, I guess the opposite to a selling agent. So everyone who’s selling a property generally has a real estate agent who’s selling the property on their behalf. a buyer’s agent actually represents the buyer of a property so instead of just going straight to the real estate agent and trying to negotiate on a property through them, you actually use a buyer’s agent who can actually find the exact property that you’re looking for, and negotiate on the price and terms. There’s a lot more to it than that, with the way I work. I also set a strategy for the clients, particularly if they’re investors, and they, wanted to achieve some kind of lifestyle and financial goals, then we really look at what they’re trying to achieve and the types of properties that will allow them to achieve those goals.
Tony skinner 03:02
Yeah, and I think that’s really important. What you’re talking about is the type of property. So yeah, I live here in Sydney. Yes, I do have some property in Newcastle, because I thought all I could see some growth there. So when it comes to looking at a house or a unit or what have you, what’s the difference? Apart from what you can afford? between getting into one or the other?
Lloyd Edge 03:26
Yeah, I will tell you that really depends on the demographic. So for example, let’s use Sydney’s example. If you’re going to buy in the outer suburbs, I Southwestern suburbs, such as Campbelltown, for example, the demographic out there demands families who are living in four or five bedroom houses. So you’re not going to go buy yourself a one bedroom unit there because it’s probably not going to be rented very easily not going to be in demand won’t get much growth. Likewise, if you’re going to buy near the city, though, that’s where apartments are actually really in demand and people like that. Those sort of low maintenance lifestyles. So is that buying the right sort of property? You know, for the right demographic essentially.
Tony skinner 04:06
So if I look at the values of houses, and each time it’s reported property prices, which we know can be a interesting little thing and will likely to get a better return on a house or on a unit.
Lloyd Edge 04:22
Yeah, generally over the years, the amount of growth that you’re getting on a house does outweigh the amount of growth you’re getting on a unit. Now I say growth because the return is calculated via both growth and then the return on the investment in terms of rental yield. rental yields tend to be a little bit higher on a apartment than what they are on houses, as long as you’re buying an apartment that does not have extravagant strata costs and all that kind of stuff. So that’s all part of the due diligence when you’re when you’re buying the property.
Tony skinner 04:54
And what I really like I have this constant discussion with people about negative gearing Why should you get rewarded by the taxation department for running a business at a loss and your book positively geared?
Lloyd Edge 05:08
helps you address that? Absolutely. So it’s never really, really made much sense to me to be losing money on a property just to get a little bit of money back on tax and all that kind of stuff. There’s a bigger picture of it as well. And that is, if you’re negatively gearing a property, that basically means that you’re paying out of your own income every month to subsidize, you know, the the rent, that’s not enough to cover your mortgage payments, and that’s effectively keeping you in a job. When you’re building up a portfolio. You really should be aiming to achieve retirement or achieve financial independence. So you really need to have properties that become cashflow positive. So the whole negative gearing thing doesn’t make much sense because that’s actually going to keep you in a job forever, which really isn’t the name of the game.
Tony skinner 05:52
Absolutely. And I mean, you mentioned that it helps you start up your business as well. And so what are some Tip. So you’ve got here that you can start off with as little as 40 grand and build up your own property portfolio. How can you do that really quickly? 
Lloyd Edge 06:09
Yeah, well, essentially, you know, you can get into a property fairly cheaply. You know, you don’t have to buy in Sydney, there are some very good regional centres outside of Sydney. You’ve mentioned Newcastle and if you branched out from Newcastle into some suburbs of the hunter such as Maitland, you’re gonna start getting some fairly cheap properties. And then if you even go sort of more regional places like orange or Armadale, where you can buy properties for, you know, perhaps under the 300,000 mark, and you only need to put sort of putting a $30,000 deposit plus your stamp duty, you’re getting property at you know, very well value price at a minimal deposit. The thing about that is when you’re buying that sort of properties, I like to find ways where you can add value. So rather than just buying a property and just letting it sit there, I like to be quite active. So finding a property where you can actually maybe do a subdivision or maybe do a cosmetic renovation that actually adds some growth, some manufactured growth as a call it to the property that’ll actually help propel you into your next property and so on. If you repeat that process, that original $40,000 deposit you had, you can keep recycling that and that can you actually build a substantial portfolio that way?
Tony skinner 07:18
Yeah, my brother, Mistral and nephews are out in. Not that up two hours from Orange, it’s not that far considering out in the country in a place called Greenfeld. Now they bought a house. What are we talking about 15 years ago, 18 years ago, and at a certain price, and I got it because it was cheaper. I want to get out of the city. But looking at the values, it’s pretty much valued the same from the border all those years ago. So there’s some obviously some negatives that you got to watch out for.
Lloyd Edge 07:51
Yeah, that’s right. So that’s one of the things to look at. And that’s why if you’re buying in integrations like that, you really should be looking at ways that you can actually add value to the property. If you’re doing, say a subdivision where you actually might be able to get a big block, subdivide the property and you’re actually adding value by creating a separate block from that original block. That’s really adding value. The other thing also is that you can just go to any regional center. So I like to go to areas where there’s several industries, pillars of economic growth. So if you’ve got a university, you’ve got a hospital, you may maybe got major shopping center upgrades with his government spending, lots of infrastructure, rising, population in jobs, growth, you know, not all areas have that so I’m quite familiar with Grenfell it’s personally not a place I’ll invest
Tony skinner 08:40
your big super light, it’s, if I didn’t have family there, I wouldn’t go there.
Lloyd Edge 08:46
But, there are regional centers where you can do okay, but the thing is that what people don’t realize is that, you know, Sydney and Melbourne generally have the highest growth in the country outside Sydney Melbourne must markets that get that much capital guys sure you can get it you can go to Newcastle and get some good growth, you can get a wound gone. Even Brisbane gets a bit of growth not as much growth is what people sort of talk about. But really, if you’re outside Sydney Melbourne, you really need to find ways to add value to a property rather than just letting it sit there because otherwise you’ll actually have quite so slow growth. You can even look at other major centers such as Adelaide, it’s a fairly flat market, Perth and Darwin, the only markets in Australia that actually had negative growth from the years 2010 to 2020. during that decade, they went backwards because they’re too reliant on the resources sector. So you know, you got to be very careful about location and the type of properties you’re buying.
Tony skinner 09:41
And there’s those three major rules location, location, location. Absolutely, for sure. Yeah, absolutely very, very important. Now I remember isn’t is it 10 k from the city Centre in relation to the CBD or that rule doesn’t, you’re saying it doesn’t really apply?
Lloyd Edge 10:02
Well it kind of apply and when you’re building a portfolio, you definitely should have some some properties. And within that location, you’re talking sort of eight to 10 cases of the CBD is generally what’s called Blue Chip properties. It does come down to finance there and your budget, you’ve got a smaller budget, you know, and you’re trying to buy property in Sydney, or Melbourne or even Brisbane, you know, a lot of people can’t afford to buy within 10 Kay’s of the CBD, so you need to go to other markets. But the goal is to be able to create that equity and the cash flow in those other markets that will eventually propel you into you know, these blue chip properties. That’s what I’ve done with my own portfolio. And that’s what I’ve explained a lot in positively good how I I started with cheaper properties, and I agree with the equity and yeah, now I’ve got a number of blue chip properties, but you know, I couldn’t afford them at first. I mean, I started my portfolio with a $30,000 deposit.
Tony skinner 10:53
Yeah, and so did I actually was that back in 2008 I think it was in a place not quite within 10 k but not far enough out in Ashfield, a little humble little place with a small deposit. And millennials constantly whinge Well, you know, that was then this is now, but I’m seeing lots of millennials are being smart about it. They buy an investment property in an area, they don’t necessarily want to settle in, but then they rent in the area that they want to certainly,
Lloyd Edge 11:27
yeah, Tony that’s a very, very popular thing these days very intelligent. It’s called rent vesting, and I highly recommend it for the reasons that you’re you’ve outlined because you know, you can live in a in a nice area where you want to live but what you may not be able to afford to buy and yeah, that could be condo beach and wherever, but then by such an investment portfolio by a property where you can afford to because it you know, does come down to your budget and everything like that.
Tony skinner 11:56
Okay, so any other tips you’d like to recommend? 
Lloyd Edge 11:59
The main thing that I would suggest to people is that you really need to have some goals into place, you need to know your why. So, you know, what are you actually trying to achieve? when, you know, you’re setting up a portfolio? Where do you want to be in 10-15 years time? You know, are you looking for some sort of retirement? Are you looking to maybe replace your income through cash flow from properties, you know, some people might have kids that they want to put through private schools, other people want to buy a dream home, all that kind of stuff. But if you’ve got some goals in place, then you can actually reverse engineer a strategy on how to get there. And sometimes you might need some assistance in in how to work that strategy out. But then you can decide the types of properties that will allow you to get there. And that can be a mixture of, you know, developments, subdivisions, nearby blue chip properties, buying apartments or buying houses. But if you’ve got a goal, then you can actually work out a strategy and how to get there without a goal, then there’s no point just sort of investing just for the sake of thinking is a good idea.
Tony skinner 12:57
Yeah, I think that’s a great principle for all businesses to have goals and objectives and what you want to achieve best if they’re written down, or at least, that you are working towards a set time target. So is there a, I get asked this a lot by different people, is there a good time to buy?
Lloyd Edge 13:18
So I think the best time to buy is really when you can afford to.
Tony skinner 13:22
Thank you. That’s exactly what I say thank you so much.
Lloyd Edge 13:23
Because at the end of the day, and even now, you know, people ask me, you know, is now a good time to be buying property. But the question that people really should be asking is not is now a good time to buy property. But where should they be buying property in the current climate, because there’s a big difference there. And the markets haven’t all been affected, you know, in the current climate, it my menu could change your strategy by different type of property in different area, but there’s definitely you know, the right time to buy the right place to buy and you just need to actually take that strategy but sitting on the sidelines, thinking That. And also I had more clients calling me this morning who I spoke to six months ago who didn’t want to do anything because they thought the market was gonna crash didn’t crash, now they’re thinking are a bit better go buy property because I don’t want to, I don’t know whether another six months again, that’s going to happen. It’s essentially evidence. Because if you bring in about location, you know, people always need somebody to leave, you know, as long as you stay away from mining towns and things that are only driven by one industry. And I’ve got a bit of a funny story about what I invested in the mining town once which I read a chapter about in the book, but that’s from learning experience. But if you buy in the right area, then you should be buying properties that there’s always demand for.
Tony skinner 14:40
Yes, interesting. You should say that because yeah, anytime is a good time to buy it when you can afford it. And yeah, just pick your areas and the market. You know, I’m saying it again, that it’s the premium properties that are being hit at the moment and they’re the ones that always get Hit, but the ones under a million dollars, well, that sort of thing or first Homer, there’s always demand for that.
Lloyd Edge 15:05
There is. So there’s, you know, I guess in a market likes like Sydney then you know, the price is sort of around the 750 to 2 million marker a very strong outside of those markets, you know, the really good price point to be buying in is perhaps between the 450 to 650 price point saying Newcastle in Melbourne, you can get some very, very low value properties from between, you know, 550 to 750. And so on the sort of the middle of the range properties and there’s plenty of demand there because that’s, that’s where the most you know, most people can actually afford to buy within that, that normal price range.
Tony skinner 15:42
Great stuff. Okay. So thank you very much for that. And we do have the page on your website under shop where you can buy the fantastic book, how to build a multimillion dollar property portfolio from a 40 k deposit. And, you know, I don’t have anything like you’d have a I think, but we both started off with a small deposit. So it can actually be done.
Lloyd Edge 16:06
It certainly can be done. Absolutely. And that’s one of the reasons why I read the book. The catalyst throughout the book was really if I can do something new, and that’s kind of the message that I want to get out there to people that, if you have a dream in place and you have a goal, and then you stick and you keep yourself accountable, then you can actually achieve those things.
Tony skinner 16:22
as Richard Branson says, screw it, just do it.
Lloyd Edge 16:25
Absolutely couldn’t agree more.
Tony skinner 16:28
Fantastic. Okay, look, thanks very much for that, Lloyd. And that’s at www.auspropertyprofessionals.com.au
Lloyd Edge 16:36
Thanks, Tony. Great to speak.
