Property Couch feedback/question

The Property Couch has been recommended as a good podcast to listen to - I've listened to 6-7 episodes (a few from the beginning and a couple recent) and one thing sticks out. While there is a ton of good info, they started their podcast at the beginning of 2015 and go on the record saying that they think Sydney/Melb are not going to perform in the coming months.

We all know that the reality of the situation is that Sydney and Melbourne did very well up until the beginning of this year. The more recent episodes talk about how winter will cool off both the markets, but it sounds like what they were saying 16-18 months ago. A bit concerning.

I mean no offense, especially for such an informative podcast, but I thought I'd get feedback from other members on their thoughts. As someone who is considering hiring a BA, what's in the back of my head is - why would I hire a company that made such a big mistake?

 

Interesting but i think many were saying similar here, check the sydney thread. The thing is that Sydney was roughly at 80%ish and had "doubled" in many areas so jumping in at the peak isn't ideal. Plus winter being a time that sales slow and also given changes with apra, the economy, elections etc there are many variables that point to steer clear and let the fomo's jump in

There would have been few people here recommending to buy in Sydney over the last 18mths too. You wanted to buy in 2011. So the couch surfers like many here have been focusing on finding "Sydney 2011" places to buy and happy to take any small increases in Sydney that come their way.

 

I would like to think a BA would provide supporting information as to why they are suggesting their opinion and details of why not to do any of the alternatives so that you can make an informed decision.
Maybe worth you having a conversation with them first and asking them for their process and what they will provide at each step to allow you to understand their recommendations.
Else it would be like you giving them your credit card, signing your finances away and then checking in a few years later to see if what they've done has met your goals or otherwise.
I'm all for Buyers Agents, but you're still a part of the equation and need to be happy with the purchases and decisions made. If you don't feel in control enough, try a different BA.

 

It's very hard to predict the Sydney market at the moment. I've gone to a few open homes with friends looking to buy. There seems to be more first home buyers in the market and less investors at the moment. If you are buying now you are really buying for long term growth unless subdivision or development's are part of your planned strategy? As others have suggested just have a chat to some BA about your goals and plans. Hopefully they are compatible. Have you looked outside the Sydney market?

 

I'm looking in the Melbourne market. I also get that markets are unpredictable and that not many people expected Sydney/Melb to do well over the past 18 months. However, if I'm going to pay $10k+ for an expert to help me find a place, track record is important.

 

Ie. Those for whom the fundamentals don't matter ie ppor.

 

A buyers agent's job is to purchase property within your criteria. Buyers agents don't have a job of predicting the market.

Yes they run a podcast and provide information on the market. Predictions are only as good as the indicators available within the research parameters they conducted. It is only a view point and can only ever be a view point.

Why would you hire them? Because they resonate with what you want and if not then hire someone who does.

 

I've never used one, but do they only work in one market or do they recommend different areas?

 

Both types are available, depending on your needs.

 

I've listened to this podcast series also.

My view is that their audience speaks to the everyday investor (borderline 'newbie' investor). As such, they could be earmarking trends/predictions (gosh I despise that word!) based on a rational, conservative, basic buy-and-hold investor.

To a rational b&h investor, the advice to cease buying in Sydney back in early 2015 was probably correct. It would have been more risky for them to suggest continued growth based on the circulating evidence of the time (early 2015). The evidence at the time suggested that Sydney had largely peaked. Clearly, everyone was wrong, since Sydney has a big push through to October 2015, and continues in dribs and drabs to post incremental, minor gain numbers.

When speaking to the masses, a conservative view is always safest. If the podcast were geared to higher risk-profile audiences only; perhaps they would have spoken differently about Sydney?

 

True dat. Also if you were after a specific product /strategy in sydney they could advise in more detail

 

Good point - I hadn't thought it through from that perspective.

 

Isn't that like saying, "it isn't the job of my fund manager to pick stocks that are going to go up"?

One of the major selling points of using a BA is that they're better suited at finding a property with greater potential than a novice is. Especially for an IP. If I buy a property that grows at 8% and they instead would have directed me to one that will grow at 10%, they will pay for their cost many times over.

Do you see it differently?

 

True. I've got heaps of equity from the Sydney boom so I can take a risk. But I won't go for a mining town.

I downloaded the Acorns investing app and decided to go for the super aggressive option. Told my family last night about the app and the choice I made and my sister said "I always go for the aggressive/risky option". Lol. Even leaping into Airbnbing, I could have just gone for the safe normal rental route. But I took a gamble, bought furniture to fit the place out and it has paid off handsomely to the extent of approximately taking near double rent.

But my advice of anybody asking about buying in Sydney in early 2015 would have been the same as the podcast, we'd been through a lot of growth already.
Mind you, I bought October 2014 (Sydney was considered as possibly peaking... nope!) and again in December 2015 in Sydney. December 2015 purchase... we/I could not resist. I think it is worth at least 400k+ more than I bought it for right now judging by other recent sales and its only been half a year since purchase... then again, it is a super special property. Luckily I have my portfolio and loads of equity that I can fall back on if any problem (unemployment etc) was to come up.

My actions to buy, run airbnbs, go aggressive on the Acorns app could have been the wrong ones but I have no one to blame but myself if anything goes wrong.

But I possibly would err on the side of caution to the masses lest they take up my recommendations or thoughts and it doesnt work out for them...

 

What?
You hire them because they have networks to source properties that you may not find online etc. plus they negotiate on a day to day basis.

 

I tend to see it like Xenia sees it. You are not paying for investment advice with a buyers agent but the sourcing of a property.

It may depend on what services the buyer's agent offers though.

 

Thanks for sharing this @Gockie. I just downloaded the app on my phone. However, I'm abit unsure about what is the app all about. Could you please help me to understand:
1. It's a free app. If I link my savings account with $5.50 balance, will it take out the $0.50 and invest the money for me?
2. If yes to #1, is it visible to us (users) where the money get invested in? or can we choose where to direct the money to?
3. or is this an app to only monitor/link all of my bank accounts into one platform?

This is what I got from the FAQ page:
"Is there a minimum investment amount required to open an account?
No, Acorns has no minimum account balance requirement to open an account, but in order for you to start investing your funds into your chosen portfolio your round-ups/lump sums must amount to more than $5. This is conveniently done through our round-ups process; each time you make a purchase, those rounds-ups accumulate towards the $5 threshold."

Cheers
IBP

 

Hi IBP,
I dont know that much about the app... I only just downloaded it myself.
But from what I uderstand it costs $1.25 per month (more if you have invested over $5000).

For the investment options, there's about 5 options from memory. You can click into each one and get an idea of what it is investing in and what % it is investing of your money into that kind of investment (eg. Bonds, Aust Shares, Asian Shares, cash etc). The mix is different depending on how "aggressive" you want to be, but you can't change the % spilts within the type of investment choice you make. Yoy can always withdraw all your money though (I havent tried that).

So... I figure the money in there pales into insignificance compared to the money I have elsewhere... i'll just see what happens.

 

You can choose an amount to transfer into your Acorns account at any time, otherwise whenever you make a purchase it will round up that transaction to whatever limit you set, and put those funds in your account.

Whenever your account hits $5+ (I think) it then 'invests' this amount into ETFs.

You get to choose what asset allocation you want from a range of pre-set options. Last I checked they are all ETFs, just different % in different things which changes how aggressive they are.

I used Acorns briefly, but then decided the calculation of CGT was going to be too much of a pain in the ass and especially now that we've purchased a PPOR and every dollar can offset non-deductible debt.

Good concept though.