The Right Area Changes Everything - The Reventon Property Podcast - S01E06 - Ft. George Nicolaou

-🎙️ New Episode of the Reventon Property Podcast is live – featuring Reventon Senior Investment Strategist George Nicolaou

Watch now on YouTube: https://youtube.com/playlist?list=PLfDevVhdzythVK7OizPRB6hz8XfDPj_RV&si=W2BRBUqrO8keyOJe

Our latest episode of the Reventon Property Podcast dives deep into what actually creates long-term success in property investing—from selecting the right locations to building scalable portfolios, understanding market cycles, and why taking action matters more than waiting for the “perfect” time.

Joining us for this episode is Reventon Senior Investment Strategist George Nicolaou, who brings almost 10 years of experience helping clients build wealth through property, alongside regular hosts Reventon Founder & CEO Chris Christofi and GM of Sales Lachlan Morrey.

One of the biggest themes from this conversation?

The right area does 80% of the heavy lifting.

George shares insights from nearly a decade in the industry, helping clients not just buy one property—but build multiple-property portfolios that have helped many pay down debt, create equity, and completely change their financial position over time.

Some of the key insights we unpack in this episode:
- Why buying in the right growth area matters more than timing the market
- The difference between new builds and established properties—and when each strategy makes sense
- How infrastructure, migration, schools, jobs, and affordability drive long-term capital growth
- Why owner-occupier appeal is critical for both resale value and rental demand
- How Reventon researches and selects builders to ensure quality, consistency, and long-term value
- Why analysis paralysis stops so many investors from getting started
- The growing rise of rentvesting—and why it’s becoming one of the smartest wealth-building strategies
- Why affordable price points between $500K–$750K continue to outperform in many markets
- How investors buying during periods of uncertainty have seen significant growth in markets like Perth, Adelaide, and Brisbane
- The importance of balancing strong cash flow with long-term capital growth
- Why holding property long term remains one of the most powerful wealth creation tools
- How the right structure, strategy, and support team can help clients move from one property… to multiple

One insight that really stood out:

There’s never just a “good” or “bad” time to buy. The real question is: Where is the right place to buy right now?

That’s why at Reventon, we focus heavily on research, strategy, and identifying emerging markets before they boom—not after.

This episode captures exactly what the Reventon Property Podcast is all about:

Real conversations
Real experience
Real strategy

If you’re serious about understanding the market, cutting through the noise, and building long-term wealth through property—this is the episode for you.

#Reventon #PropertyPodcast #PropertyInvestment #WealthCreation #AustralianProperty #PropertyInvestor #RealEstateAustralia #Rentvesting #PropertyStrategy

Transcript

SPEAKER_01 0:18

Welcome back to another episode of the Reventon Property Podcast. I'm joined by two of our very young, Lachlan Moray and George Nagala. Thanks for joining us, boys. Good to be here, Chris. Thanks for having us. Now obviously, we always like to talk everything about real estate, you know, a little bit about how people can get into the market, things we've learned over our 21 years at Reventon, 26 in real estate for myself. I've always had a long tenure as well and helped hundreds of clients.

SPEAKER_02 0:46

Laughlin, you're in entering your uh just ticked over five years um and yeah, bought about 250 properties for clients over that uh five-year period, uh, which has been great. So seeing most things that can happen through a property transaction. Um, yeah, over that five years, obviously you've seen Reventon grow into the uh the beast that it is today. So George?

SPEAKER_00 1:08

Yeah, so I started this industry in 2014. Um, been with Reventon. This will be my tenth year in October, September October, which is great. Um, seeing I've helped quite a few clients, not just purchase one property, purchase multiple properties and CMB, you know, see their plan of attack fold, which is great, and reach their goals and um and continue to do so, which is great.

SPEAKER_01 1:30

Now you look at obviously you both look at new builds and vice advocacy. You specialize more in the new build space. Yep. I know you've got to focus on buy's advocacy as well. So it's very, very good that we look at different components of that and we look at different areas. Now, you've been fortunate enough in the last six years to go into a lot of areas and see it's very and I always say I love going into an area where we're looking at land, we know that we're gonna generate X sales. We go back in a few months, the civil start, the property start, and as they're going up stage one, two, or three, they're always growing in value because the the land's going up in value and we're creating that buzz. We've we've done that in Brisbane a few times, we've gone up salt town houses in Mango Hill with development as well. We've now, I know you've seen Perth, you've seen Tazi, you've seen Toombasa. Tell us a bit about those journeys. Tell us a bit about some of the clients that are getting into the market.

SPEAKER_02 2:21

Well, you touch on sort of new build and established. So I mean here at Reventon, I think we're probably one of the biggest companies that offer both. Uh, and the reason for that is we don't look at it on a national scale, new build versus established. We look at each particular location and see where the value is. Okay. Because let's be honest, all established properties were new built at one point in time, right? They have to get built at one stage. So they're really not that different to each other. It really just depends on the particular area and where the value is. So in some areas, if we look at the new builds that we're able to put together, they might be $100,000 more than the established market. And in that case, you might go, well, let's buy an established property. But in other areas, we find that we're able to build new builds around the same price as the established market. And in that instance, why wouldn't you build a brand new home for the same price that has maximum tax benefits at all here? Tax benefits, stamp duty savings, warranties, low maintenance, higher rent. Why wouldn't you want to get all of those benefits if you can do it for the same price as the established market and not deal with the issues that a 20, 30, 40 year old property might bring with it?

SPEAKER_01 3:19

Yeah. And I think the good part there is too, knowing that we manage that whole process and the property management, we want to we want it good for our clients from front to back. Now, George, you're um we always said that in when we always speak, you're very, very good with your hands. So when we're going to different sites around the country, it's good to um what do you mean by that? He's very good with his hands. He's very handy, he can build stuff total opposite to me. That can be not what you're talking about.

SPEAKER_02 3:46

I'm gonna say there's it, it makes it even weirder knowing your relationship that you've gone down that.

SPEAKER_01 3:50

That is my brother-in-law, but yes, we didn't mean it like that. He's uh he knows exactly what he's what he's doing when it comes to build. So we do a lot of research when we go to different areas. Now we do our research in terms of the land builders, the developers that we're using. Now, when we uh research, we look at their how financially strong they are, their their reports when it comes to when they build and their time frames. And we see us always walking in George and we're looking at the house, and he's looking at different areas, the bathrooms, and looking at their fixtures and fittings to a lot more detail than definitely what I do. I look at the build, the time frames, and and their I guess their financial reports. You're looking at the the actual build. Yeah, tell us what you're looking through because as I said, you used to do begolas, you should do a lot of things as well when you're building.

SPEAKER_00 4:35

Yeah, yeah. I just basically, yeah, I do have a little bit of experience in doing that. I've had hands-on working on bagolas on the roof and all that kind of stuff. And um, I do tend to do that, I do tend to have a look in particular things that people don't notice. And um the good thing is that a lot of our builders are very consistent, they have their own tradies. So whenever I see a build, I'm thinking this is you know, it's a consistent finish, it's not stuff contracted out to other different tradies where we're getting different types of finishes and all that kind of stuff. And every time I go and see a property, um, not the first one, the second one, the third one, even the fifth one, I see that the same consistency is there. And I think it's very important to our clients when they're doing a new build not to have big um defect, a lot of defects, um, like major defects, which is great, and that's what's been happening. So um we we do select our builder very carefully, um, and that's one thing I'm very proud of as well. We do our due diligence behind that to make sure that you know we've got a good wholesale builder who's got a good fixed price contract as well in place, full turnkey, and has its own tradings. I think that this is why we've been very successful in the long term. Um, and it goes to show, you know, you've Chris has done a lot of research.

SPEAKER_01 5:43

Well, research, it's not myself, it's the company. I I thank you for that. But it's we've got an amazing team, and I think the way we select properties is very, very important. People always ask me for the methodology, and I always share a three-stage process and they'll say, What is it? I go, Well, it's a revenant-approof property when it meets all these criteria. Yeah. Okay, that's box number one. We tick. Number two is independent research. It's very, very good for us to look for something online, but uh I want to know that the research is backing, and what does that mean? Is there schools, is there shopping centers, is there infrastructure, what's the migration like? What's the school uh walk scores like? Is there a cost going? Is there a bunning zoping there? Now these organizations spend tens and tens of millions of dollars on research or a company where the population is going. Now that creates uh contract jobs and it also creates permanent jobs. Is there hospitals going in the area? All these things determine a good investment, it's not underpinned by one thing. So we look at all of us being different expertise, we look at your physically looking at the build and all that stuff. For me, I don't look at all those things, but I'm very, very fortunate that we've got other people like yourself that are good at this stuff.

SPEAKER_02 6:52

Yeah, the uh the builders hate George when we take him to site looking through their builds because he picks them apart. But um, you know, obviously the number one thing for us is picking the right location. But when we do identify a new location um and we do meet with a few builders in the area to try and work out who we're going to work with, um, you know, the good thing that once we get rolling with that builder is we do put together the revenue specification. So we're not here just building cookie-cutter homes that are the most budget um inclusions. Before we get going with the builder, you know, we work on the floor plan, we work on the design, and we work in all the inclusions throughout the home. Um and over 21 years, this business has worked out what inclusions are important for resale and rentability. And our property management team always say that that the properties that we build and buy for clients just rent out so much quicker and easier than what they get from outsourced from other external parties.

SPEAKER_01 7:39

And there's a couple of reasons to unpack. We look at obviously there's got to go very high owner-occupier rate because it makes it more appealing that they're not all investors. Owner occupiers tend to usually spend more money on their properties, they'll upgrade their property by putting up a gola or things like that, which increases the value. They look after their properties in a very good way as well. So all of these things determine a better medium house price. If the medium house price is high, which we look for before entering an area as well, I always say uh rising tide lifts all ships, which means if the medium house price is higher and we're entering the market here, there's a better chance for capital growth, which is how our clients can get into our second, third property. And I think because we're also renting the properties and we're the ones we want to hold ourselves accountable to that full process, we want properties that can be rented easy and rented for more. So we're gonna put the inclusions in there that are important for people to rent. But the second part of what Loughlin was saying, we want to put inclusions that make it appealing, not only to investor, but also to an owner-occupier. So these properties are very, very easy to sell and to rent because they've got a, I guess, a dual appeal in that sense.

SPEAKER_02 8:46

Correct. Yeah, and those are things like you know, stone bench tops, overhead cabinet, cabinets in the kitchen, you know, obviously heating and cooling, um, you know, nice fixtures throughout the home in terms of the mixers and the tapware. Um, and then just little things, you know, tall uh tall shower bases, nice, even the nice little uh drip grape drain we do in our showers as well. So, you know, we've worked out what people want uh in houses they live in and houses that they buy. Um, but we're also economical as well. There's other things you can like, you know, you can build a full custom home with Mickey Mouse, but you're gonna be paying a lot more, you're not gonna get a lot more rent. Um, and you know, it doesn't move the needle as as much in the long term when you go to sell it five or ten years from now. So yeah, we've really learned on what to focus on to really maximize, you know, the rentability and resale without you know breaking the wallet.

SPEAKER_01 9:31

We've got also understand like, and it's always a refining process, there's no exact formula because things change. So it's important, even with the design that we've got neutral colours because that's what's most appealing. You've got to remember that you've got to build a house which is appealing to people and you've got to put good fittings. But I'm I know that you've had a lot of your clients, George, and we talk about this regularly, that I always use the saying, we'll ask you for your trust once, we'll never ask you second, third time. Because they're gonna see that in action. Now, when we're advising some of our clients to go into state sometimes, it's a daunting proposition. But when they see the growth, now you've in 10 years, you've seen multiple states that we've entered, you've been on the ground, you've seen the growth, and you've seen many returning clients uh going to different areas and different locations. Give us a couple of examples.

SPEAKER_00 10:20

Well, yeah, initially, initially when we first started, I was selling Victoria, which was a little bit easier because people were more locally, uh, clients were locally and all that kind of stuff. But as as the company evolved and Zoom came out and all that kind of stuff, we started getting more and more interstate. Um, and the first one is always the most difficult um with my clients, but you know, we can because we've been doing this for a long time, we can actually visualize what's gonna happen there. Conveying that information to a client was very difficult. Um, but once once you gain that first trust and they can see, oh yeah, look at this, become a new talent center, new, you know, all this infrastructure, what they said's gonna go in, that's going in, and all these jobs have been created. Vacancy rates good, rent's good, capital growth's been amazing. Every time I go to the next property, they say, George, where's the next best area? Let's go to Perth. You know, so much easier to pass on that. There, the trust is there. So, and but in saying that, we do provide all the evidence, the research, the data, we provide them so much information that we pay, you know, good money for to make sure that we are selecting that right area. Because, as Rochland said, 80% of selecting the right areas where you're successful. The heavy lifting, the heavy lifting, and you know, and finding the areas where it's affordable. So we do negotiate on the price as well once we've designed the plan to make sure it's affordable for the clients and making sure the rental yields are up there so they're not actually affecting them cash flow-wise in the future because it's you know, basically when you purchase a property, it's about holding on to it as long as you can. Um, you know, you want to be able to afford to hold on to that property to be able to go keep on going, and I think that's very important as well.

SPEAKER_01 11:51

So, you know, and we say a lot of people say you make money when you're selling your property, and I think Loughlin, I've heard Loughlin say this, which I I've said many times too. You make money when you buy your property and when you sell your property. So why not maximize both areas of this? Now, it's very, very important that you know who's buying the negotiating good things. People go, can I do it myself? Sure, you can always buy a property yourself. Yeah, will you know the builders to go to, what bank to get, what loan to go, and how to structure that? And will you hold yourself accountable to come in every six months to review that to buy second, third, and fourth property? And also, to you look at so many things like buy this property from, and you see that from it doesn't include all the side costs, doesn't include all these other things. When we've had clients go, you know what, I can do this, in almost all cases, a few years later they've come back or they've sold their property and say, can you do it for us? Because you're not buying the they're buying one property, we're going in there with buying power. Now, I know you you speak a lot about that.

SPEAKER_02 12:49

Yeah, I think um, as I said, for us, the area does 80% of the lifting, right? So a lot of my clients, you know, one of the things that they come and speak to us about is basically saying thank you for giving us the confidence to invest interstate. Now, naturally, as a Melbourne-based business, a lot of our clients are based here in Melbourne. Anyone that's been following the property market would know that Melbourne and Victoria hasn't had the greatest run over the last three or four years. Um, and a lot of those clients that came to us have admitted that they would have likely bought here in Melbourne and Victoria as an investment property if they hadn't have come and got the guidance from a business like us. And they're very thankful that we're able to give them the confidence to invest in places like Adelaide and Perth and Brisbane and Sunshine Coast. These these areas that have doubled in value over that four, five year period. Um, because you know, that's something that's very hard for someone who's living here in Melbourne, someone to go and do the research, find out, you know, which area, what suburb, you know, find the right type of property, negotiate the property, put it all together. The build of the land. Yeah, it's very hard for someone to do in a in a foreign location. Um so I think you know that's one of the big things that we offer people is the ability for them to take emotion out of the purchase, um, to stop them getting into sort of that analysis by paralysis thing that we've talked about and helping them make these decisions quicker um with confidence.

SPEAKER_01 14:04

I guess it's an informed decision because we I always say confused mind doesn't act, confused mind doesn't bind, it doesn't go from A to B. So it's been giving the right information in this sealed format where people can understand. And you know, where do you start? So a lot of people don't start, and even if you buy in your own area, how up to date are you with the current builders? How long it takes for the builder to complete that project, what are they, what are they, their reports like? Are they financially strong? Are they gonna actually complete this build? So there's a lot of things you've got to do in the back of that process, which I think is invaluable, and you can go on with working or doing your own life, you can focus on that and leave it to professionals. I will say this though, and I uh employ that everyone who's listening, make sure you go to a business that has a proven track record that has a proven track record with success for their clients that has helped thousands of clients in the industry. We're fortunate, we've got over we're almost close to 12,000 clients now, done over 3,600 property sales. So we've been doing this for 21 years at Revanton, but you need those runs on the board to talk about areas. So you mentioned areas in confidence that we that we go to. I remember Regional Victoria, Adelaide, uh, Tasmania in no particular order, Southeast Queensland, Perth. Now we're looking at other areas. Now we're always two years ahead of the curve because if you're looking at an area that's already boomed, you're probably too late. We always refer to nine o'clock on the property clock, which is an emerging market, which has those forward indicators where the infrastructure is about to go, where the jobs are about to be created, where the schools, the shopping centers, because that is a big, big key driver in the potential growth of properties.

SPEAKER_00 15:48

Yeah.

SPEAKER_01 15:48

Now I know we spoke a lot about there's a lot of talk about at the moment what what's going on globally, interest rates. So I want to touch on that. I know it would be remiss of us to not discuss it. What would you what do you what would you say? And specifically with the property that we're dealing in.

SPEAKER_02 16:04

Yeah, well, I guess what we're seeing in the market at the moment is the higher segment of the market, there's a real hesitation for people to spend that sort of money, sort of a million dollars plus. Um, you know, if we've seen auctions clearance rates drop uh at that level of the market, um, and we are hearing that you know it it is cooling a little bit. Um, however, on the price point we focus on, that sort of $500 to $750,000 price point, um demand is just so strong. Um, it's so affordable with all these first homeowner grants, um, it's still so popular. And the data is showing that that our our price point, that lower segment of the market, has been outperforming the higher segment of the market quite considerably for a while now.

SPEAKER_01 16:43

It's bulletproof, and I always say this I think what we deal in is the czarine real estate. Everyone needs it, it's always reliable, has a low uh vacancy rate, it's got a high potential outcome of renters, young families, first, you know, people looking at their first home can buy one of these or rent one of these properties. It's got so much of appeal, high rental yield as well. And if you're buying a new build, maximum tax efficiencies. So everything's a case by case, and it's not a one property fits all. And I think the most important part of our process is that first discovery session because we're there to unpack why you're looking at buying property, why it's important for you, what your goals and aspirations are. And I guess the second part we do our six and 12 month reviews. You might not be ready to buy another property, but it's very, very important that you hold yourself accountable to what was said and agreed on. The revenon is very, very good with your interest rates, making sure your tenants are paying the rent that they should, the property's up to date, and all the above. And it's you're stepping stone to your second and third property.

SPEAKER_02 17:45

Well, as as George mentioned, you know, property's a long-term um game. Um, and you know, we want to make sure whatever property we put our clients into that they've got the ability to hold that property long term. Okay, because if you look back historically at the property, as long as it's the right type of asset, of course, um if you hold that property for a considerable period of time, um, you're gonna make a really strong return, right? The only people who buy the right type of asset but don't seem to get a strong return are the people that are forced into selling at the wrong time. Okay. Um so for us, we want to make sure that when we're running our numbers and we're doing our research, the property that we put you into, you're gonna be able to hold until it's the perfect time for you to sell.

SPEAKER_01 18:23

Yeah, it's we always say it's not uh timing the market, it's time in the market. So we look at all these elements and we put them together. And I know you mentioned, George, if they've you've had clients that if they've got an 800,000 BC, we're never gonna show them something at 800,000.

SPEAKER_00 18:38

No, never. Yeah, a lot of the active investors right now are just investing. This is the perfect time for them, and they've seen it all happen before. I've been here for like 10 years, like I said, and every time something goes, uh you know, interest rates go up, or you know, the media mentions something, everyone panics and they sit on the line waiting and waiting and waiting. But all these active investors who have made so much money are these people that jump on that uh specific timing. Um, and they've made so much money doing that. And we as a as a company, we're there to guide you to make sure that you know you pick the right area to make that money. And the last couple of years where interest rates were going up constantly, all our clients purchased in Perth. Yeah, and they made over like 250, 300 grand.

SPEAKER_01 19:19

And people say what was the purchase price though? It was 550. So you've got to look at the what you are saying on that amount of money represents a huge percentage. So when you say 250, it doesn't sound as good on two million. But when you're saying they made that money in a 5550 purchase, that represents a massive amount of money, close to 50%. Now, and we say it all the time, and it's the famous quote by Warren Buffett when be fearful when people are greedy, so be fearful when everyone's jumping in, yeah. Be greedy when people are fearful. So when everyone's freaking out and by sentiment, that's when you see smart money active. That's when you see smart money working. Now, once you get the client for the first ability to buy that first purchase and you overcome that barrier of trust and should is this the right company? Second, third time it's easy. They've made 200,000 on an investment. Now they're going, where can I go again? Where can I go again?

SPEAKER_02 20:10

So it's very, very important you take action. You can't brand the whole property market with the same brush, right? No, you can't. You can't say it's a good time or it's a bad time because there's always areas that are going to go up and there's always areas that are going to go down. So it's not so much, is it a good time to buy now? It's more, where is it a good time to buy now?

SPEAKER_00 20:25

Yeah, exactly. And we get clients bringing me up saying, George, where's the next place to buy? And I say, listen, we're we're monitoring about two, three places. We're just waiting and waiting and waiting because it's all about timing. Like Chris said, the property clock matters the most. It's about when they start approving all that infrastructure and you know putting it into place. That's when we'll recommend it. Um, and that's why my clients keep on coming back. Like averaging about my clients averaging about four to five properties. Some of them I've seen them sell, buy, pay off their homes. You know, it's it's it's a really proud moment for me because I see them their families comes, their kids come. Kids, I'm selling to their kids now, I'm selling to my kids now. Um, so you know, we we don't just recommend these areas, we actually sell to our own staff. We buy, our kids are buying. Two of my kids are just bought.

SPEAKER_01 21:10

That's the third point I never mentioned when I talked about our research, or Reventon and Proof of Independent Research. But the third, you just reminded me of that most important check and balance that we always use when listing a property. Yeah, would we buy there? I wouldn't sell anything unless my family or friends or team would buy. And where we're all these areas that we're researching and going on the ground looking at, we're personally buying from these builders and developers. So when the clients are investing, they're investing with confidence, knowing George bought there, his kids bought there, Chris bought there, Laughlin bought there. Yeah. So for me, it needs to pass that three stage process. And I need to know that the the planning of all these things that are imminent, which means they're happening soon. I've been in this game way too long to hear all these things that infrastructure is coming. And you wait for all these years and nothing happens because there's a lot of key factors the way it's gonna happen. We ask a lot more. Questions and go deeper with these topics because you need to.

SPEAKER_02 22:03

I was speaking to one of my clients earlier in the week, and he came to me that had an owner-occupied property here in Melbourne, had a fair mortgage still left on it. We helped him initially buy about four or odd years ago in Brisbane. A year after that, we helped him buy in Adelaide. And just recently, he's actually sold both of those properties and he's been able to knock off his whole mortgage. And he's only early 40s. It's amazing. Young family, all his kids are sort of five to ten years old. And he's now got a really nice house in Melbourne with no mortgage. And he's in a really big, he's in a really strong position to now start investing again with no owner-occupied debt.

SPEAKER_01 22:36

You know the big advantage to that as well. When you actually pay off your own occupied debt, for those you don't know, and you can use a line of credit facility and you can put a deposit on an investment property, you can claim an interest on that because it's for investment purposes.

SPEAKER_00 22:50

Yeah, of course.

SPEAKER_01 22:51

So you can effectively use your equity in a maximum tax-efficient way. So when you speak to a finance consultant or finance broker, I should say, it's very, very important you speak to licensed people that have done this, they can give you the right advice on how to maximize your position. And people's situation changes. And we refer to that as the stepping stone project here at Revanta. Some people come in, they want to pay off their mortgage, they buy a few properties, sell them down, they pay off their mortgage, and they go again. I know you've got a a lot of clients. Funny enough, I was at Motor Mule last night. I saw one of them.

SPEAKER_00 23:24

Oh, did you?

SPEAKER_01 23:25

Yep. It was uh Vanessa Bork, she's always there. She texts me to say hello. I always say hello, she's there. And we've helped many of these clients pay off their mortgage and buy multiple properties.

SPEAKER_00 23:34

Oh, and my clients, those clients have referred me, I can't imagine how many over 30, 40 clients. Um, I think it's I think it's very important to make clear that these days the mortgage is like tripled to compared to what it was 10 years ago. Like the average mortgage now, what, six, seven hundred grand? What is it? Yeah. Um, so I think the major priority for clients these days is to get rid of that debt. Um, and by sitting there doing nothing, you're not gonna be able to achieve anything. So investing into property in a good area with a good cash flow, you know, right team with you know, you know, with the research, you know, and a team to back you up as well. I think it's so important in the next 10 years for you because paying off five, six hundred grand is not is not gonna be an easy thing. Living expenses are getting higher, it's just very important for you to do something. And I tell all the new clients that I speak to, I'll go, you've got to jump on it now. You know, you're gonna have a mortgage for the rest of your life.

SPEAKER_02 24:26

You gotta look like an $800,000 owner-occupied mortgage, over $5,000 a month in repayments. Yeah, I know. It's a real big restrictor for people. Like it's what is that, like close to almost $1,500 um a week, right? It's a lot of money for people.

SPEAKER_01 24:38

But besides that, you've got to look at the components of it.

SPEAKER_02 24:40

That's what I mean. Most of it's interest to the bank. So it's not actually coming off the principle of their loan. They're just paying that to the bank. And obviously, as an owner-occupied property, that's not even tax deductible. Obviously, as an investment property, you've got the benefit of taking that, you know, off your taxable income and getting a a chunk of that back.

SPEAKER_01 24:54

A good formula to use to put in people's heads if your mortgage is $800,000, you usually need to pay to the bank more than double. So we use $1.6 million for the sake of this conversation to the bank with interest over a 30-year period. Now, you need to work and pay tax. You need to earn about $2.4 million before tax to pay $1.6 million with interest to the bank to pay an $800,000 mortgage. Usually it's more than three to one when you consider your interest component and you consider your tax component. Now, what people do within three, four years, hey, I'm having another kid, I need to buy a bigger home. I'm going to school, I'm traveling, I want to borrow more money off my mortgage. And the mortgage traditionally is 30 years. The mortgage line usually goes like this, year nine, then the interest is paid and it's paid off. So what happens in those first nine years? People refinance and they borrow more money. And people don't understand all these things. So a bank understands this very, very well. So a bank wants to keep you borrowing more money in your own or occupied home. Companies like Reventon, that have been around for a long time, want you to get as much good debt as possible to get to that nine-year period to pay down your mortgage. When you pay down your mortgage and use tax efficient debt, you're going to be able to build your wealth much faster. That's why when you come and see someone like us, which is free and no obligation consultation for the discovery session, they're going to unpack all these things for you. And they're going to make sure that you're looking in the right area. You're not over-leveraging. The first property is super important. It's 10%, your second, third. And you might end up like a lot of our clients that have a national portfolio.

SPEAKER_02 26:27

Probably a good question for you, Chris. Obviously, rent vesting is a very popular topic these days. I think a lot of people entering the market are seeing the value in continuing to rent where they live and invest in areas where they can afford good assets and focus on building wealth for later in life. Um, but obviously, you know, you're someone who obviously has- Still rent vesting? Yeah, well, you've you you've you've obviously had the ability to go and buy your own home and buy probably a very, very nice home, but you've decided always to go down the rent vesting strategy. I mean, what was your reasoning behind that?

SPEAKER_01 26:58

Well, I was 19 when I got my first property. I'm now almost 47. So I was a rent vestor before it was a term, before it was popular. Now the reason I did it is um, and now the reasons have become popular. I wanted to live where I wanted to, was in Taylor's Lakes near my parents. I didn't want to invest, it was a great area. I invested in New South Wales Tweed. I bought a three-bedroom double-story turnhouse for $183,900. Sold it six years later for $328. My initial $30,000 deposit, I made a 480% return on that. Now, I use that equity to buy more property. So it's very, very important to understand to put your money into an active area. Now, why we're investing has become so prevalent and common now is because it's super expensive to live where you want to live. So a lot of younger generational professionals, they want to live near the city, near their friends, near where their lifestyle is and enjoy themselves, but they can't afford that area. So they've been forced to reinvest and to buy in regional Victoria or regional Australia or interstate. So reinvesting now has become a popular term. But ironically, it is a much better and safer way to build wealth. Because the reason I did it is if I live in my own home, I have zero tax deductions, maximum tax deductions. Now, rent money is dead money, but I say rent money is extremely smart money if you invest provided you're in the market. As long as you invest. So this rent counts as this rent. Would you agree? Because $220 I was receiving, $190 I was paying. I was getting $6,800 in tax deductions, zero in your own home. I bought an area for maximum growth. This was an emotional perk, an emotional now. So when you're renting, it's a lot more nimble. I can move wherever I want. Now there's a disadvantages to renting, which I understand it's not your own home. They can ask you to leave. Secure longer leases if possible, which is I always do a two by two, but I rent vest because I have all my money active. So I had over, you know, over 23 personal properties, which I bought over a very short period, and I was still renting.

SPEAKER_02 29:10

I think it's really important for you know our clients to see that this strategy that we're recommending of rent vesting is that you know our CEO actually actively does that himself by choice.

SPEAKER_00 29:18

Oh, definitely, yeah.

SPEAKER_02 29:19

I mean, I spoke to our mortgage brokers and you know, the average first home buyer that we've seen coming through has a budget of around 600,000, 650,000. If you think about here in Melbourne, like what is 600, 650 get a caravan, maybe. Exactly. So I mean, I think we're and and how many clients have we met, George, that come to us um that did go and buy themselves, you know, and and they tried to do the right thing. They had the 600, 650 budget, they wanted to live in, as you said, a certain area. What can I buy in that area? I'll buy a one or two bedroom apartment. Um, and then they come to us, you know, five, six years down the line, some of them even 10 years down the line, and it's not even hasn't moved. A lot of them have actually gone backwards. And you think about what they could have done over that five or 10 year period if they were investing in interstate markets that have obviously performed so well. Um, but I think the good news is that I mean this messaging is getting out there and and rent vesting is becoming a lot more popular. I mean, I was a rent investor, my first property was an investment property. Um, so you know, and we're seeing a lot of our clients come in now a lot more open to the concept.

SPEAKER_01 30:14

I remember I got my first homeowners grant on my sixth property, and the finance company said it's not possible. And I called the state revenue office and I asked them. They said, Chris, can you confirm you've never lived in the five properties? Yes, they're interstate, here's the addresses. Can you confirm you bought after that that date? I said, Yes. So I told the guy and he goes, No way. So I actually got my first homeowners grant back then on my fifth or sixth property. So two times I out of all my time living, I've had in real estate since 19, since I moved out of home. I've had two homes which I bought at a steal, which I wanted to own or occupy. And obviously I sold them after a year with no capital gains. But I've always been a re-investor. So as I mentioned before, if you are one of these people that Lochland mentioned that you bought your property hasn't gone forward, I still say well done for taking action. But come in, speak to us and see if we can help you expedite that process. We've had clients sell the property and get into the market. I still say well done for taking action.

SPEAKER_02 31:14

It's a really good point because some of these guys come in and they say, Look, you know, I know I did the wrong thing, but I'm not willing to sell it until I get all my money back, right? And that's the wrong concept. Sometimes you've just got to take your losses and change the path elsewhere and change the path that you're on, okay? Because you hanging around for another three years to get the 50 grand back that you've lost is gonna be far outweighed by taking that 50 grand loss and investing in an area that's gonna see in 150, 200 grand over that period of time.

SPEAKER_01 31:42

So it's the cost of waiting, but you've you've got to not even, you don't just look at the $50,000, you look at the opportunity cost of not taking action. Now, you've got to look at sometimes you've got to say it's an investment, I've got to move forward. And we've you know, we've come, clients have come to us with properties that haven't grown and said we just need to sell them. And we've, you know, you it's a it's your course correct.

SPEAKER_02 32:04

And to be clear, like we we don't have an issue with owner-occupied properties, but it's about when you do buy an owner occupied property, you want to know it's something you can live in long term. Don't have a line. It's not something you're gonna outgrow quickly. Uh, and you also want to make sure you can buy it with a pretty hefty deposit. You do not want to buy an owner-occupied home with an 80 or 90% L VR. Um, because as you said, the amount of interest you're gonna pay off over the next 20, 30 years um is gonna be a hell of a lot. So we'd prefer you to invest early, um, build your wealth so that when you're later in life you actually have the affordability to buy something, you can live in long term, and you've got a really strong deposit behind you.

SPEAKER_01 32:38

And obviously, if you've got an 80% plus, you've got to pay Alan Way, which you lend as mortgage insurance. If it's on your own home, you can't claim the interest. If it's on an investment property, we try to avoid that at all costs, but at least you can capitalize that, which means borrow the money, and you can also claim interest on it over the period. So it's a tax efficient uh thing that you're using alone, so to speak. Now, guys, as it's come time, I always ask for my quick fire questions. We can talk real state all day. I hope you've enjoyed uh the bit of the QA that we received with George and Lachlan. Now, quickfire questions. What do you think is more important, capital growth or cash flow?

SPEAKER_02 33:17

For me, capital growth. So we we've touched about we want to have a good rental yield so it's manageable for you to hold long term. But really, where you're gonna make the majority of money is that growth that you're gonna see in the value of the asset over the period of time.

SPEAKER_00 33:29

Well, it's definitely definitely capital growth over a period of time. So cash flow is very important as well, being able to hold it until you get that capital growth. But the amount of research we provide, um, you're gonna get into a good area where you're gonna get the capital growth.

SPEAKER_01 33:42

So for me, I I I agree, but both both are super, super important. Don't over-leverage and borrow too much money, which means you can't afford it. Cash flow is important, but where you see a lot of the heavy lifting, as Loxton mentioned a few times, is the capital growth, which you can use to path your mortgage and buy a lot more properties.

SPEAKER_02 33:59

Houses or apartments? Houses, definitely. So obviously a lot of the growth coming out of the dirt, as we know. Um there is a real oversupply of apartments in most areas. But just to quickly touch, I mean, we did say at the start of this meeting, not every area is the same though. So there are some areas where there's not a lot of apartments where it may make sense, but from the majority of areas in Australia, there is an oversupply of apartments. They lack an element of uniqueness and scarcity, so we'd always recommend houses.

SPEAKER_00 34:24

Definitely houses, um, exactly what Lotus said. There are apartments that have my clients that purchase in the past in Queensland where they've made a lot of money, doubled their money, um, but say that the body corporates doubled as well. So I think houses is is a must to start off with anyway.

SPEAKER_01 34:39

I've been doing this for a very, very long time. I think apartments are fantastic to live in, and I think apartments are renters' propositions, which is why I'm always renting them. Because even if they do make money, like George said, you've got to consider the holding cost of the body corporates, and you've got to look at the net return. So after you minus expenses, there is some apartments that have a unique appeal. They're not a cook and cut approach with all investors where you can make money. But I do think, and my experience will lead to say house and land will always outperform an apartment, and especially in the Australian market where there's a lot of land. It's not like overseas where it's a London market or Hong Kong where it's very matured in that in that field. Um buy now or wait.

SPEAKER_02 35:22

Always buy now. So um you know, you can get the best property you want, um, but it's never gonna be able to get you the same growth as if you'd got in earlier. Um, so I think you know, getting into the market quicker is really important.

SPEAKER_00 35:35

Yeah, the best time to buy is yesterday, so we've all heard that.

SPEAKER_01 35:39

Uh there's a there's a picture on it if you look online, the man who waited to for the right time and obviously there's got a guy who's about uh 80 to 100 years old, he's all frail. Take action, don't overleverage, get into the market as soon as possible. The first time it will be the hardest, the second, third will get easier, every subsequent property easier and easier, especially if you've got a good team behind you. Blue chip or high yield.

SPEAKER_02 36:04

Um, I mean they're they're they're both good. I mean, if you have the affordability to get into a blue chip area and it's going to be something that's gonna be manageable for you to hold, then that's obviously a good proposition. But we as we touch on, we really want a high yield property because we want to make sure it's all well and good to buy into a blue chip location, but if you're forced to sell in six or twelve months at a bad time because you can't hold it, then that's not a good proposition. So you know, having a strong yield is really important.

SPEAKER_00 36:29

Yeah, I I agree. The blue chip location will be someone who's got a big deposit they can put down, so you know, because the cat so the yield's there, but um, I always go for high yield.

SPEAKER_01 36:39

For me, high yield is blue chip because you can afford to get the property and you're buying in the right areas. That's blue chip. When you get emotional about real estate, that's when you start to make decisions. If you've got to sell under a hammer, you're always gonna sell under the hammer, which means forced or quick because you need to or the bank's selling it, it's gonna sell for under what it's worth as well. So high yield means you can afford it. I'll say high yield in good areas would be blue chip. Long-term hold or value add.

SPEAKER_02 37:09

Uh long-term hold. Um, obviously, you know, property is a long-term proposition of what we said. Um, you know, the longer you hold the property, the more money you're gonna make.

SPEAKER_00 37:17

Yeah, I agree. Long term. Um, but there are clients that we do have that have got a they're highly cash-based and they can put value on the property so they can make a quick return and keep on going, especially one of Lochman's clients. But um, yeah, I think um long term is average the best of the.

SPEAKER_01 37:33

I was about to say it's funny because you value add to your property properties because you're very, very good at that, as we mentioned in this podcast. I know you've helped a few clients as well when they're value added because they've bought and you're very meticulous with looking at where they add and how they add value.

SPEAKER_02 37:48

Well, I think obviously with the construction costs today, go going in and just replacing a kitchen and bathroom and thinking you're gonna make money, it's just not gonna happen. Um, you know, you need to be able to add a bedroom or add a bathroom if you're gonna make money out of a renovation. So it's really important when you buy the house that you look at the floor plan and see whether you have the ability to add bedrooms and bathrooms. So it has to be under the existing roof line because extensions are where the the you know the money really goes up. So when we do have clients that want to come to us for the value add, um, it's about looking for a property that um, you know, within the existing roof line, we have the ability to add a bedroom or bathroom.

SPEAKER_01 38:22

And I mentioned this before, and it's very, very important note to add to what Loughlin's saying. Look at the medium house price in the area. You should always be well under that. Because as long as the medium house price is over what you're looking at spending, you've got a very, very high opportunity for your property to be worth more. And yeah, rising ship lifts all types.

SPEAKER_02 38:42

And and don't be scared to buy a property that's very original and worn down because it's no point if you're gonna renovate a property, right? There's no point, you know, having buying something that someone else renovated 20 or 30 years ago because it looks a little bit nicer. Find the really original property because you're knocking it all out anyway, right? Now, as long as the property is structurally sound, yeah, you know, don't don't worry about the cosmetic stuff inside because that's where you can knock a bit off the price, which isn't actually gonna affect you in the long run.

SPEAKER_01 39:06

Great opportunity leads me to my last question. Off market or on market?

SPEAKER_02 39:11

Oh, either. So, I mean, a good off-market is great. You know, we get a lot of off-markets here and we feel like they offer a lot of value to our clients, but just because it's off-market doesn't automatically make it a good property. We get a lot of shocking off markets. But a good off-market that's a good quality property, fairly priced, if we're able to help our clients acquire that without competition, um, usually we're able to get it for a pretty sharp price.

SPEAKER_00 39:32

Yeah, I agree with the off-market. You can get both um majority of the off-markets, we get if we can organize, negotiate a quick settlement and all that, we get a really good price for them, undervalued and all that kind of stuff. So when we do valuations, they're a lot higher. So it can become very um attractive to a client. But you can get some um off-markets with a ridiculous price.

SPEAKER_01 39:50

So I guess it it comes down to the relationships that the the company has with the sellers because if they understand the information, they can negotiate very, very well. And sometimes a quick settlement is even more important, and that's where you've got you. You can negotiate.

SPEAKER_02 40:06

Typically, the good off-markets are going to be tenanted properties, right? Which works in our favor because we predominantly work with investors, so we don't mind that there's tenants in there. But the reason they're selling them off market is it's hard to you know touch the property up, it's hard to do open homes, it's hard to get photos, it's hard to have an auction if there's a tenant in there for the next six, nine months. So it's opportunity. Yeah, so I think they're the best off markets, is if the only reason they're selling off market is because it's tenanted, which actually is in our favor anyway. Um, and then we can you know utilize the benefits of the off-market environment.

SPEAKER_01 40:36

Yeah, there's a popular question, obviously, it's accustomed to all of our podcasts on a scale of one to ten, Mr. Locke. How much have you enjoyed the podcast, Lou? Uh I'm running out of numbers, but uh my favorite number's 11, so let's go with 11.

SPEAKER_00 40:47

I think last time you used 12, didn't it? You did, yeah. I'll I'll 10 out of 10, huh?

SPEAKER_01 40:50

I always love sharing property news with our with our audience. Remember, if you like the Reventon property podcast, like, share, and subscribe. Uh well for our new episodes and we see a lot more features of Laughlin, we'll get George back as well. Thank you very much for your time.

SPEAKER_00 41:06

Thank you, I'm gonna go to the city.