November 6, 2025 • 41 mins
We map the best performing investment suburbs across Australia at three price points, from $500k to $1.5m, showing how leverage and tight supply can turn a modest deposit into meaningful equity.
We provide three suburbs at each price point and measure their performance based on capital gain, rental yield, and potential future growth in the next 12 months.
If you ever need any help with your mortgage or your property inquiries or anything along the lines of that, you can visit us at www.itsimple.com.au. If you are looking to invest in property, we also have a panel of buyers’ agents that we work with, and we can refer you several in the market that specialise in each particular location.
Follow us for more property news and mortgage advice!
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DISCLAIMER This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs before acting on it.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_03 (00:00):
If you do not attempt to get into the property
market, your wage will soon beabsolutely destroyed, where
you'll be renting for the restof your life.
SPEAKER_00 (00:09):
Honestly, by the time you hear this, it's
probably too late.
It's like getting Apple sharesin 2000.
There's no real sign that saysit's gonna slow down.
SPEAKER_03 (00:23):
If you're even looking at return on capital
measures, it's actuallyoutperformed things like
Bitcoin.
That has like hugely volatilemoments where it just shoots up.
No wonder why we're hearing somany whispers and so many rumors
about external American fundspurchasing these lots because
you can't run the stock marketat this rate.
It's just driving investorsthere because why not?
We're talking about the bestinvestment that you could have
(00:46):
bought at the end of 2024.
We're actually tracking the bestinvestment properties across
Australia.
Let's get into the first tier.
SPEAKER_00 (00:55):
And the first one is Welcome to the Finance Show with
Joe.
He's Joe, I'm Michael.
Today we're gonna be talkingabout the best performing
investment suburbs in all ofAustralia.
But first, I just want to do alittle quick catch-up.
What have you been up to?
As you know, Michael, I've got anewborn.
SPEAKER_03 (01:09):
Oh yes.
And he has taken up a lot of mytime.
So what you've been up to is notsleeping.
Uh, we were already doing thatprior to uh the child being
born.
What it is now is I'm notsleeping and my partner's not
sleeping.
Now, it's a bit look, I'll behonest with you, the newborn has
been fantastic.
Having uh a little version ofyourself and your wife tucked up
(01:33):
in this little ball and they'replayful, they're joyful, they
smile, they laugh at you.
Um I can it is an indescribablefeeling that I wish every single
person in this world gets toexperience once in their life.
I know there's a lot of peopleout there that say that they
don't want kids, and that isyour prerogative.
However, if you do want childrenum and uh you know you're
(01:57):
aspiring to have a family oneday, I will say the best is yet
to come.
And um, may God bless you.
And if you are, you know,struggling to have kids, I you
are in my prayers, and I hopethat one day you'll be able to
have children too.
SPEAKER_00 (02:12):
Yeah, I'm on the fence about having kids, but I
guess I'm not just there, I'vegot to get married first.
So yeah.
SPEAKER_03 (02:17):
So see, that's the old WOG household in Michael
talking.
That's he's gonna get marriedand then kids.
He and his girlfriend can livetogether for a period of time,
but married and then kids.
SPEAKER_00 (02:28):
That's although although when I did move in with
uh with Sarah for the very firsttime, my my grandmother, who's
like super Catholic, was like, Idon't know, that's kind of sin.
I'm like, it's 2025, we'removing on from this.
SPEAKER_03 (02:41):
No, look, I do understand where they're coming
from.
No meat on Fridays, you know,there's there's some other
things that yeah, it's 2025,guys.
Like, you know, bacon iseverywhere.
What do you want me to do?
SPEAKER_00 (02:54):
Bacon is everywhere.
Well, there was that dude whohad the bacon on his shoulders
that wouldn't.
SPEAKER_03 (02:59):
Oh man, I saw that, and that was absolutely stupid.
That was absolutely stupid.
But today, guys, we are talkingabout not bacon, um making
bacon.
Um, we're talking about the bestinvestments that you could have
bought at the end of 2024.
We're actually tracking the bestinvestment properties across
Australia uh or the bestsuburbs, the highest performing
(03:23):
suburbs across Australia in2025.
The difference that we have donein this episode is we have
actually segmented the bestproperties to buy at each
particular price point.
SPEAKER_00 (03:36):
Yeah.
SPEAKER_03 (03:37):
So we've got up to $500,000.
We've got up to$750,000.
Do we?
SPEAKER_00 (03:43):
Yes, up to$750,000 and and then up to uh a million
and above.
Because honestly, when I wasdoing the research, I was gonna
split the million and the 1.5and it was just no difference.
Yeah, I'm just one and a millionand above.
SPEAKER_03 (03:57):
So each particular price point has three suburbs.
Yes.
And we track the performancebased on the capital gain, yep,
the rental yield, and thepotential future growth that
that area is hopefully able toachieve over the next 12 months
or so.
(04:17):
Yeah.
Now, before we do go anyfurther, guys, advice on this
channel is general in nature.
Extremely general.
And should you need specificadvice, please contact your
personal personal personalbroker, personal financial
advisor.
All right.
Let's get into the first tier.
SPEAKER_00 (04:39):
So this is properties up to up to 500,000.
And the first one is Rockingham,Western Australia.
This Western Australia's gonnashow up a few times, but
Rockingham.
So medium house price there of$475,000.
That was last October.
That was last October, yes.
14.5% capital gains.
The rent is$550 per week.
(05:01):
That's a 5.6% yield.
Now, this suburb, uh, I don'tknow anything about Perth
because I've never been there.
So I looked into what thissuburb is.
It's a suburb by the beach,which is interesting, and but it
has a reputation of being rough,but it is uh undergoing
gentrification.
SPEAKER_03 (05:16):
Okay.
SPEAKER_00 (05:17):
So it is not as rough as it's used to as it used
to be.
Okay.
So I'm told.
SPEAKER_03 (05:21):
Okay, so this was specifically for the units in
the area.
SPEAKER_00 (05:26):
Yeah, yeah.
SPEAKER_03 (05:27):
This wasn't for the houses in the area, and it's
very contradictory to seebecause quite often, when you
are speaking to either buyers'agents, investment
professionals, or anyone thatfocuses in on property, they
will tell you you target unitsfor rental yield and for the
cash flow, or if you're lookingfor that accessibility or that
(05:50):
amenity, but you don't oftentarget it for capital gain.
This has performed in everyaspect of the market.
So quick maps here:$475,000 lastOctober.
If that has increased by 14.5%,that means that it has gone up
by roughly$70,250.
(06:12):
So you're looking at a mediandwelling price of about$547,000.
Yeah.
Um, to go from$475,000 to$547,000 in the span of 12
months is it's pretty crazy.
It's remarkable.
There's one particular thing Ido want to highlight for our
(06:34):
listeners out there.
To be able to get into aproperty of$475,000, okay, you
need at minimum a 10% deposit.
I'm not gonna go 20% deposits,all that sort of stuff, right?
Um, I'm just gonna talk about a10% deposit.
SPEAKER_01 (06:46):
All right.
SPEAKER_03 (06:47):
So you've put away $47,500 to be able to attain
this property.
SPEAKER_01 (06:52):
Yeah.
SPEAKER_03 (06:52):
If you did make it an investment, there is stamp
duty applicable, it's gonna beroughly$15,000 on a property of
$475k.
SPEAKER_02 (06:59):
Okay.
SPEAKER_03 (07:00):
Okay.
So your upfront costs have been$62,000.
But with a rental yield of 5.6%,$550 per week, your mortgage at
$430,000 with a 6% interestrate.
What are your monthly repaymentson that?
It's going to be about two to$2,500, somewhere around there.
SPEAKER_00 (07:22):
Which is pretty good.
SPEAKER_03 (07:22):
So$550 a week per week rent, that means that you
have your out of pocket.
So$550 times$4.33, you'reroughly going to be receiving
from the property about$2,400 amonth.
You're going to have to pay inmortgage repayments about$2,600
a month.
So you're out of pocket$2,400 or$200 a month, otherwise$2,400
(07:47):
for the year.
Which is pretty damn good.
So$47,500 plus$2,400.
Okay, so that's how much youroutgoings are, which you can
claim back negative gearing ifyou've got a really good
accountant, just putting thatout there.
Okay, plus the$15,000 for stampduty.
So in one year's time, to beable to acquire this property,
you have spent let's call itabout$65k, but your property has
(08:11):
grown by about$72k.
You're I'm not gonna talk aboutreturn on investment because
return on investment is ROI.
How much are you constantlyinvesting?
How what's your your what's yourrate of return on revenue and
all that sort of stuff?
I'm just gonna talk about returnon capital.
Your initial capital injectionis$62,000, and after 12 months'
time, that has increased by uhincreased to 72k.
(08:34):
So that means your return oncapital is over a hundred
percent over the year,especially because you don't
have to make that much in extracontributions towards your
mortgage repayments.
So this has performedexceptionally well.
You've essentially gone to thecasino, like this is the best
(08:54):
way.
I've done I've done the complexmaths, but this is the this is
the best way to put it.
You've gone to the casino andput$65,000 on a sure thing to
double your money in 12 months'time.
All you had to do was wait the12 months, which is I mean,
that's worth it.
So, like you hear about theseproperties in Rockingham and WA
(09:17):
and stuff, no wonder why they'vegone up in value.
Because this is the thing aboutvalue and properties and the
perceived value and everything.
Once once one person finds outthis is a good investment area,
everyone finds out.
SPEAKER_00 (09:30):
Yeah, honestly, by the time you hear this, it's
probably too late.
No, do your research.
No, no, no, no, no.
SPEAKER_03 (09:34):
Stop that, because apparently this one's gonna
still go up in value.
So the projection for this areaby FY26 is for each median unit,
the median unit value to bearound$600,000, which is another
10% increase.
So that means you have increasedyour return on capital by about
(09:58):
180, 190%, and you've got aninvestment paying itself off.
Yeah, you have increased yoursavings, your equity, your
retirement fund, everything.
SPEAKER_00 (10:10):
I mean, it's a it's barely even a risk with the with
after all this math.
SPEAKER_03 (10:13):
Well, it is no no no, it is still a risk.
SPEAKER_00 (10:14):
It's obviously still all of this is still a risk
because you're investing.
Um, but and and the thing is weare even seeing like similar
things in Gosnells as well.
I think it's partly our nextsuburb, by the way.
Uh, so suburb number two, sorry,I was I was harping on for
suburb number one, but suburbnumber two is Gosnells.
In also in Western Australia.
Tell me about that property.
Median price, 490,000.
Okay.
(10:35):
212.4% capital gains.
All right, I'll get the quickmaths on that in a second.
Yeah,$578 per week in rent,that's a 6.2% yield.
That's crazy.
So, and this is another uh placethat is rough and is going up in
value.
I have heard that Gosnells is avery weird suburb, it's kind of
crackhead central, that's whatI've heard.
(10:58):
Um, but it's incrediblyaffordable and hence why like
anyone it's just drivinginvestors there because why not?
It's in it's affordable.
$490,000.
That is extremely cheap.
SPEAKER_03 (11:10):
I'm going to give you the quick maths now.
Okay, so if you bought aproperty last year for$490,000,
that property is now worth six.
Ooh, just under.
Okay, it's now worth$599,800 12months later.
So return on capital for that,let's say$49,000 injection, 15%
(11:32):
stamp duty, whatever it's gonnabe,$15k.
So$64,000.
And then in a year's time, yourproperty is worth$110,000 more.
That's a$200,000 no, it's justunder$200.
$64,000 is your initial rate uhuh capital injection.
That means your return oncapital is 190%.
(11:56):
So like if you the this is thisis the thing, like you hear
about these suburbs.
So Gosn, this is Gosnell's WA.
Yeah, the the rental yields6.2%.
So that's more than coveringyour mortgages.
SPEAKER_00 (12:07):
100%.
Yeah.
SPEAKER_03 (12:08):
The agents are raving about this because the
infrastructure, the populationgrowth, the interest rates uh,
you know, uh by drop theinterest rates dropping are
driving the growth even further.
No wonder why we're hearing somany whispers and so many rumors
about external American fundsinvesting in property in
(12:28):
Australia and purchasing theselots because you you can't you
can't run the stock market atthis rate.
SPEAKER_00 (12:36):
No, when I first when I was doing the research,
what it came when it's when Ifound 212% capital gains, I was
like, that can't be right.
That's this has got to be anerror, but no.
SPEAKER_03 (12:46):
That is um, that is fuck me.
SPEAKER_00 (12:50):
Yeah, like it must have gone from literally rock
bottom and it's just going goingup, just purely because of
affordability, slashed interestrates, all that kind of stuff.
SPEAKER_03 (12:59):
Do you see a mass migration continuing to WA?
Because we've seen it in thesense of no the data has shown a
lot of people are moving to WA.
I don't know anyone personallythat has.
I've got one client that hasdone it in the last 12 months,
but one out of 300, that's a youknow, 0.3% rate.
SPEAKER_00 (13:19):
Yeah.
SPEAKER_03 (13:20):
Have do you have any friends that are moving out that
way?
SPEAKER_00 (13:21):
Not a single person.
I do know people investingthere, but I don't know anyone
moving there.
That's it.
SPEAKER_03 (13:27):
Do you think it's migration?
No, no, we're not gonna get intothat on this one.
Okay, the next suburb for the$500,000 bracket.
SPEAKER_00 (13:34):
The last one.
It's Elizabeth North in SouthAustralia, another median price,
uh unit price of$490,000.
16.7% capital growth in the last12 months,$450 a week uh in
rent, 5.1% yield.
So not as good as Gosnell's onlike just on paper, but
obviously this is still a greatinvestment.
SPEAKER_03 (13:54):
Okay, so let's have a look at the quick maths here.
So that's gonna be about 60.
So let's say the property's goneup by 64k.
The median price is now 554,000.
So your return on capital isgonna be, you know, yet again,
upwards of 100 or 40%.
Yeah.
Um,$450 a week rental yield,5.1%.
(14:17):
That's pretty good.
SPEAKER_00 (14:18):
But it's not as good as Gosnell's, but it's pretty
good.
SPEAKER_03 (14:20):
So this is why I was ranked number three.
SPEAKER_00 (14:22):
Yeah.
SPEAKER_03 (14:23):
So are we seeing a continuous trend of properties
in WA outperforming just therest of the market?
SPEAKER_00 (14:29):
Um, you're actually gonna be surprised as we go.
And don't get me wrong, WA stillshows up a lot of the time
because it's it's been doingwell for like at least a year
now, maybe two.
Two years.
Yeah.
And I think that's gonnacontinue.
I don't think the numbers willbe as crazy.
I'm also not a professional, sodon't take this all with a grain
of salt.
But I think this is like we'renot quite at the plateau yet,
but we're nearing it.
SPEAKER_03 (14:49):
Okay, so another question is gonna be we're
starting to see a flow-oneffect.
So are people choosing to go toSouth Australia more than
they're choosing to go to WA?
And I would like to actuallyhear from other people in the
comments.
Are we seeing more adviceleaning towards South Australia?
Is that is South Australiabecoming more affordable because
(15:10):
WA is becoming less affordable?
SPEAKER_00 (15:12):
Um, I'm not sure which way it goes, but the data
does suggest that in the in2025, um, South Australia is the
best performing state as it asit um in terms of investment in
property and stuff like that.
SPEAKER_03 (15:24):
The city of church is Adelaide.
SPEAKER_00 (15:27):
Yeah, yeah, sorry, that's took me a contest to
figure out what you were saying.
Uh yeah, it's I don't know,maybe it's just because it's a
little closer to Melbourne andstuff.
So maybe if you're fromMelbourne and you've got family
there, going to Adelaide islike, not that big of a deal.
It's a shorter drive thanSydney.
SPEAKER_03 (15:43):
Uh that's this is I I love this data.
I love being able to see theaffordability.
I'm I'm gonna talk from thebroker's point of view right
now.
Okay, go for it.
To be able to afford aninvestment property for about
490K, your salary, and if yourrental income is about$450 a
(16:06):
week, your salary needs to beabout$75,000 to$80,000.
SPEAKER_00 (16:09):
Round about the median.
SPEAKER_03 (16:10):
Correct.
SPEAKER_00 (16:11):
Um, no, the median's higher than that, but let's not
get into it.
I thought the median was$75.
SPEAKER_03 (16:15):
No, the median salary now.
SPEAKER_00 (16:17):
Yeah.
SPEAKER_03 (16:17):
No, median full-time salary is$99,000 for females and
$109,000 for males.
Is that the median?
That's the median.
Hang on, hang on.
This is for adults, by the way.
I'm talking about full-timesalaries.
SPEAKER_00 (16:31):
That makes sense.
That makes sense.
SPEAKER_03 (16:32):
Okay, perfect.
SPEAKER_00 (16:33):
88.
88.
We're still not at 99.
The average is uh the average is104.
There we go.
Yeah.
I was gonna say, I'm like, Ilooked, I looked these numbers
up before because you know, Ihad a panic attack when I saw
the average.
Not knowing how averages work.
SPEAKER_03 (16:49):
Joseph was right again.
SPEAKER_00 (16:50):
Um Joseph was half right.
SPEAKER_03 (16:53):
So a lot of people might be wondering why we're
doing an episode dedicatedtowards investment properties
and um how much they've grown invalue.
The reason why is property hasoutpaced cash uh by triple.
SPEAKER_00 (17:10):
Well, I was gonna say it's not even like it's not
even remotely.
It's not even remotely close.
SPEAKER_03 (17:13):
If you if you if you're even looking at return on
capital measures, it's actuallyoutperformed things like
Bitcoin.
SPEAKER_00 (17:18):
That's crazy because obviously Bitcoin has had that
has like hugely volatile momentswhere it shoots up.
SPEAKER_03 (17:23):
Yeah, it's uh okay.
So let me explain.
To buy a Bitcoin is$160,000Australian dollars, roughly
right now.
Okay, yeah.
When you purchase a Bitcoin,number one, you can't borrow
from the bank to buy Bitcoinunless you've got a I'm not even
gonna get into it.
Don't go to those brokers.
Um but the other thing is yourbrokers rec recommended.
(17:45):
Don't don't don't don't don'tdon't, man, you're gonna get me
cancelled again.
Okay, okay.
Okay.
But let me let me let me somehowexplain this to you.
So once you own a Bitcoin, youcan't, you're not getting a
rental return.
You're actually not getting anytax benefits from it.
And if Bitcoin goes up 20% andyou own one Bitcoin, that means
your 160,000 turns into, youknow, it's gone up 20%, it's
(18:08):
gone up to 192,000, right?
SPEAKER_01 (18:10):
Right.
SPEAKER_03 (18:10):
So you've had to invest 160,000 to make that
$32,000 back.
Not the same with propertybecause property, you need a 10%
deposit, you're borrowing therest from the bank, you're
getting all these tax exemptionsas an investor to make things
easier, yeah.
To make things easier, and thenyou are actually being rewarded
on the sale price because thesale price doesn't actually go
(18:31):
to the bank, like the remainingsale price, unless, of course,
you make a loss, but youactually can declare that as a
profit.
So essentially, you'll you areproviding$70,000 to make$70,000
if the property goes up by$70k,for instance.
Does that make sense?
Yeah.
So your return on capital is faroutpacing.
The reason why we're doing aninvestment episode or an episode
(18:53):
based on the best performingproperties in Australia is if
you want to be able to buy aproperty in Sydney, New South
Wales, eventually, you're notgoing to get there by saving.
No, no, no, no, no, no.
Unless you're in a very, veryhigh-income job, you're actually
going to get the best way to getthere is through property
because the property that youpurchase, limited supply, that
(19:16):
property goes up by 300%.
Okay, and all of a sudden yousell that property and you are
then able to draw down, let'ssay 160k.
You can then use that 160k tomaybe purchase a 1.6 million
dollar property in New SouthWales or Sydney, New South
Wales, and that is the point ofthis episode.
(19:39):
But I think it is very importantfor people to understand that.
And here are three suburbs whereI know we have assisted in
funding with clients, okay, thathave purchased in WA, purchased
in South Australia, that havemade this money, and now they
are able to purchase in NewSouth Wales, purchase the
(19:59):
property of their Jeeps.
In saying that, you know, youcan go the full other route and
say, I want to rent vest, allthat kind of stuff.
I'm not gonna get into that.
I am just saying this is whatproperty is used for in these
regional states and theseregional suburbs.
Yeah.
Okay.
This is how you can climb intothe market.
This is how you can build up foryour retirement.
(20:20):
This is actually how you justbecome wealthy.
SPEAKER_00 (20:22):
Yeah.
And this is just one strategy.
There are there are others, butyou know, obviously, we don't
have time to get into all thatshit today.
SPEAKER_03 (20:28):
Best suburbs to invest in for 750k.
SPEAKER_00 (20:30):
All right, first one up.
We're back in South Australia,Salisbury East.
This is in Adelaide's Northeast,which is a little confusing.
That's a median price of$705,000, median rent,$580 a
week.
The 12-month growth is 16.5%.
Jesus! Adelaide is the topperformer in 2025, thanks to a
very tight supply and fastleasing, often less than three
(20:52):
weeks.
So it's doing pretty well.
Specifically, investor activityin South Australia is just doing
great.
This is double-digit suburbgains, which is above city
yields in any of the affordablebands, which is pretty crazy.
SPEAKER_03 (21:05):
So 70k deposit, okay, 16.5% growth.
Okay, what's 16.5% of that?
That's gonna be 42,000, 42,000plus 70k.
It's a so your 705,000 propertyis now worth 820k a year later.
That's crazy.
SPEAKER_00 (21:21):
That's actually insane.
Like when you actually thinkabout that.
So just film fill me in on this,just because uh if I'm not
clear, maybe someone else isn't.
I bought this for 705,000.
Yeah, it's now 820, did you say?
SPEAKER_03 (21:34):
Yeah, roughly 820k.
SPEAKER_00 (21:35):
Okay, let's just say 820 for the sake of argument.
I sell.
After that, how much money howmuch of that do I get?
Because I know there's capitalgains and there's all that sort
of stuff.
So how does this work?
SPEAKER_03 (21:44):
So let's take out 2% um of your uh sale price,
agents, agents, fees,commissions, marketing.
SPEAKER_00 (21:53):
Okay.
SPEAKER_03 (21:53):
So you're losing 16k automatically because somebody
that yeah, the agents.
Yeah, the the agents are gonnacharge you an arm and a leg for
that.
SPEAKER_00 (22:01):
Okay.
Okay.
SPEAKER_03 (22:02):
So automatically you've got 16,400, that's gone.
Then you the remainder of it isfrom the you pay tax not on the
sales price, but the profit madefrom the sales.
SPEAKER_00 (22:14):
So the capital gains, right?
SPEAKER_03 (22:15):
So the capital gains.
So let's say you sell for$820,000, you purchase for
$700,000.
There's still a deduction fromthere.
The interest repayments that youmade in the last year, you can
also deduct those from yourcapital gains and any
improvements that you've made inthe last 12 months as well.
SPEAKER_00 (22:33):
So you don't quite get$120,000, but you you get
like$100,000 maybe, maybe less.
SPEAKER_03 (22:38):
So let's let's go from the base rate.
Uh, capital gains tax is at 30%at the moment.
Okay.
Rough ballpark.
30% of$120,000 is going to be$36,000.
So$120 minus$36,000 is going tobe$84,000.
Okay.
That is how much theoreticallyyou are going to end up with in
(23:01):
your back pocket.
Okay, okay.
Now$84,000, what can that whatcan that buy you across New
South Wales?
New South Wales.
Well, a number of properties ifyou use it as a 10% deposit.
SPEAKER_00 (23:12):
Yeah.
Or 20% on an apartment somewherethat's around 800,000, something
like that.
SPEAKER_03 (23:17):
No, 84,000.
Not quite there.
No, no, no, no, no, no.
That's not a 20% deposit.
That's that's a 20% deposit on$400,000.
SPEAKER_00 (23:24):
No, you're right.
Yes, I am right.
I can't math.
This is why I'm in marketing.
SPEAKER_03 (23:28):
And this is why I'm the numbers guy.
SPEAKER_00 (23:29):
He's exactly right.
SPEAKER_03 (23:31):
But uh, but in saying that, you do get your
deposit back.
So it's you're not how much isin your hand at the end of it,
it's also your deposit.
So let's say you put in$70,000for your deposit.
Okay, so that$70K goes returnsto you plus that an$84,000
profit,$154,000.
(23:51):
You might be able to get anapartment for$750k somewhere in
Sydney.
My rule of thumb, Tom Panos'srule of thumb, who's a fantastic
buyer's agent and a number of uhpeople out there, they often say
for your owner-occupiedproperty, you should not have
more than$800,000 in debt.
And the reason for that is$800,000 in debt with interest
(24:15):
rates at about five and a half,six and a half percent.
You're you're you're payingroughly five and a half thousand
dollars in principal andinterest repayments post-tax
income.
SPEAKER_01 (24:24):
Yeah, okay.
SPEAKER_03 (24:24):
So let's say, for instance, you're earning 100k a
year.
Okay.
After tax, that's gonna be what,78?
Okay.
78, spread that across 12months.
That's gonna be about$7,000 amonth.
SPEAKER_01 (24:36):
Yeah.
SPEAKER_03 (24:36):
Imagine$5,500 of that goes towards principal and
interest repayments on yourmortgage.
SPEAKER_00 (24:40):
Yeah, I mean, I live in that reality.
But you see, but you see, no, Itotally get it.
Yeah.
SPEAKER_03 (24:45):
But like at least you have your family around you
who are also contributingtowards the home loan repayments
and everything.
Yeah, not everyone has that.
SPEAKER_01 (24:52):
No, no, no, no.
Far, far from it.
SPEAKER_03 (24:54):
So you really have to speak with a broker uh prior
to making that sort of decision.
Okay, but that is the reason whya lot of people say, hey, maybe
look at rent vesting becausethat's not living beyond your
means.
I never used to agree with rentvesting, and you know this.
SPEAKER_00 (25:09):
I remember we've had several conversations about
this.
SPEAKER_03 (25:11):
But property has gone up so much in price that it
is looking as like I'm thinkingabout it.
SPEAKER_00 (25:16):
Yeah, you're like, oh, bro, what else am I supposed
to do?
SPEAKER_03 (25:19):
Why am I spending so much on my mortgage when I could
just go rent something that Ilike in Sydney?
Now, the issues with that ismaybe they want to cancel the
lease, they want to move backin.
I'm at the you know, landlord'sdiscretion.
What am I looking for?
SPEAKER_00 (25:32):
Wim, back and call.
Uh, you're his bitch.
If you want to put it that way.
SPEAKER_03 (25:38):
I don't want to be someone's bitch.
Yeah, but like that's the reasonwhy I wouldn't run best.
But then I also understand otherpeople.
Hey, maybe I don't want to spendfive and a half thousand dollars
a month just to pay off my home.
That's not tax-deductibleinterest.
That's not something stuff youhave to pay.
Yeah, it's just stuff that youhave to pay that's adding to
your bill.
(25:59):
So, business owner me,transaction me, tax me, mortgage
me, everything is saying, hey,maybe rent vesting is a good
idea.
Leb me, Lebanese, Lebaneseingrained, own your house, bro.
Like, you know, it's true, yeah.
And that that is a that it I Ithink a lot of cultures are like
that.
Yeah, but in saying that, thatwas a great question that you
(26:20):
asked.
How much is gonna end up in myback pocket after capital gains
tax after everything?
You might end up with that 150kon our next property.
That's 765 to 775,000 for MortonBay.
So that's Morayfield,Queensland, that's in the Morton
Bay area.
Yeah, I actually know that areaquite well.
I do not.
unknown (26:39):
Okay.
SPEAKER_03 (26:40):
So 12.5% year-on-year growth.
Um, the houses in Brisbane thatuh a million dollars plus have
pushed people towards this area,yeah.
Um, which has lifted the pricessignificantly.
Um, I'm not gonna do the quickmaths on this one.
I can if you want me to, but Ithink I've done enough this
year.
SPEAKER_00 (27:00):
No, no, I think I think everyone's got the juice.
Let's let's get them the thehard facts.
SPEAKER_03 (27:05):
And the next one is more lay.
So the median price is 820,000.
SPEAKER_00 (27:10):
To 854, yeah.
SPEAKER_03 (27:11):
The rental yield, the rent uh rental income per
week is$700, and then 18%year-on-year growth.
And yeah, you tell me thereasons why.
SPEAKER_00 (27:22):
Well, I mean, it's just the affordable mid-price
stuff is just going nuts becausethat's what people can afford.
You know, there's only so manypeople with with you know fat
stacks, so to speak.
SPEAKER_03 (27:30):
So, what happens when these people like the way
that I'm looking at it outsidelooking in?
It seems like Sydney has kind ofturned itself into this like
crystal ball that only the ultrawealthy can enter into.
SPEAKER_00 (27:43):
Well, I guess it's kind of like like LA and New
York, right?
Like they're super expensive,depending on which part.
Well, New York specifically,like Manhattan Island.
Like you're that's you know,you're you're paying a
ridiculous amount for Sydney asa city.
SPEAKER_03 (27:56):
Sydney CBD as a city, stretching out all the way
to Penrith, I know, is a lotbigger than Manhattan Island.
I will tell you that.
SPEAKER_00 (28:05):
Yeah, no, I I don't disagree, but like they do stuff
like that, right?
And I don't I I guess once itfalls, like once you get to that
point where no one can reallylike newer people can't afford
to get in, that's when thebubble pops, right?
Is that not what just happens?
SPEAKER_03 (28:19):
It it is, and this is the issue, and we always
bring it up they're not allowingany more high-rises.
And we're also so this is a neatstatistic I found recently.
Our good friend Emmanuel from uhInvestorMate posted this one.
New South Wales is 30,000properties short of its target
for 2025.
SPEAKER_00 (28:40):
Yeah, I mean, we talked about it week after week,
like but but but we're makingthe bubble worse.
SPEAKER_03 (28:46):
Like me, naked eye investor.
Am I looking at Perth or am Ilooking at New South Wales as
where I can go put dump somemoney and think to myself,
what's gonna grow faster?
And you know, I always say checkwith your broker, borrowing
capacity, rental incomes, allthat sort of stuff.
But I think this is somethingheavy I need to consider.
SPEAKER_00 (29:07):
Welcome back.
Now we're gonna talk about thesuburbs that are a million and
above, because that's the funsection.
Also, this section was so fun, Ialmost peed myself.
Almost.
Also, I have a question aboutthis.
Is it really like investing amillion and above?
Is that worth it?
I guess it would depend on likewhat kind of money you make,
(29:29):
right?
SPEAKER_03 (29:29):
It really depends on what you're looking for, what
you're seeking from yourproperty.
Often when I look at propertiesthat are a million and above to
invest in, um, you're looking atland development construction.
That makes more sense, right?
It does.
And then on the other side ofit, so like I'm gonna look at
the properties that are here.
Yeah, yeah, go.
Okay, so we've got uh one in WA,one in Queensland, and one in
(29:50):
South Australia.
So there's spread.
Yeah, we don't even have asuburb from New South Wales on
this list.
SPEAKER_00 (29:55):
No, or Victoria.
None of them are showing up.
SPEAKER_03 (29:58):
But what If you're looking to invest upwards of a
million dollars, it is usuallyfor the sake of I'm planning to
live in that property later on.
That's kind of what I thought.
And I'm hoping the rental incomecan pay off a large portion of
the mortgage within the firstfive years by the time I get in.
(30:19):
Or you are expecting someserious capital growth in that
location that not many peoplecan foresee.
So, you know, um Auburn.
Oh yeah, yeah.
Auburn, great location to choosefrom.
Um the owner-occupied propertiesthere two years ago were worth
about a million dollars.
(30:39):
Now they're worth about 1.5,1.6, 1.7, 1.8 even.
SPEAKER_00 (30:43):
I can't believe that's happened in Auburn.
Also, just in and around thetrain station, all the massive
the massive apartment buildingsthere.
Like I remember Auburn as a kid.
It wasn't flash.
Yeah, you didn't really want to.
Well, it still isn't flash, butbut it's but the but the value
in the property is worth a lot.
SPEAKER_03 (30:59):
So let me give you a return on capital example.
Okay, so let's say I bought aproperty, Mount Druid.
Yep.
Let's go with Mount Druid.
That's classic.
Okay.
So Mount Druid, start of 2020,end of 2019, you could have
bought a property in one ofthose locations for about
$500,000 to$600,000.
I'm talking a house.
Yeah.
Okay.
Freestanding.
(31:19):
Freestanding house.
Let's say I use a 10% deposit,$50,000.
Yep.
That property is now worthmedian value,$1.1,$1.2 million.
Okay.
SPEAKER_01 (31:30):
Yeah, something like that.
SPEAKER_03 (31:32):
So my initial return of my initial capital investment
was$50,000 plus stamp duty.
So$70,000.
If I was to sell that propertytomorrow, or my return on
capital so is$700,000.
So I have actually 10X myinitial capital investment.
SPEAKER_00 (31:49):
It's actually crazy.
SPEAKER_03 (31:50):
And then when you think about rental yields and
everything and the cost of mymortgage, because that is a
suburb that a lot of people rentin.
SPEAKER_00 (31:56):
Yeah, that's true.
SPEAKER_03 (31:57):
That is the reason why people will choose to invest
in a place where investments area million dollars plus.
So if I take a similar propertythat was a million dollars when
I first purchased it, put$100,000 in for my initial
capital injection, good rentalyield, let's say, for example,
negative gearing, all that sortof stuff.
I'm not even considering that.
But then I sold it two or threeyears later for two million
(32:19):
dollars, which we are seeing allover the place now.
This is not something out of theordinary.
SPEAKER_01 (32:23):
Okay.
SPEAKER_03 (32:23):
Initial capital injection was$100,000.
Return on capital is a milliondollars.
SPEAKER_01 (32:29):
Yeah.
Okay.
SPEAKER_03 (32:30):
So the reason why people invest in properties that
are upwards of a million dollarsis either for land development
improvements, they see somethingin the area, infrastructure
projects, and they expect amassive spike.
Or they are able to take ahigher risk and expect a higher
return on capital.
Okay.
Because sometimes areas don'tgrow by that by that much.
SPEAKER_00 (32:50):
No, no.
And usually, yeah, no, that'strue.
Well, our first suburb isScarborough in Perth's North
Coast.
Scarborough.
Scarborough.
$1.28 million dollar uh medianhouse price.
The rent is$910 to$950 a week.
That's for houses, not units.
The capital gains is anywherefrom 8.3 to 12.7%, depending on
(33:11):
your source.
But let's just say, like a firm,10%.
Okay.
So this is actually like a nicebeachy cafe style suburb.
And it's getting bothowner-occupiers and investors
involved.
SPEAKER_03 (33:26):
That example right there is the perfect example of
what I was just talking about.
You've got enough money that'sgoing to be covering off your
mortgage plus the negative gearand da-da-da-da-da.
Okay.
And then$1.28 million.
If it's gone up by 10%, you'veput$128,000 in and you're
receiving$128,000 back.
The thing about these types ofproperties is you're not
spreading your risk at, let'ssay, buying two apartments in
(33:49):
one location.
Because that's also double thestamp duty cost.
SPEAKER_01 (33:52):
Ah, yes, yes, yes.
SPEAKER_03 (33:53):
Okay, because you're buying and you know, you have to
pay stamp duty twice.
Stamp duty is not something thatyou can claim back, it's just a
transaction.
So that is the reason why peoplewould look at suburbs like this,
and also they're more desirablesuburbs.
Yeah.
So let's say you go put a CDC oryou do a development approval or
something like that.
(34:14):
Logs.
Okay.
Let's say I bought a$1.28million property and I want and
got a development applicationdone on it.
SPEAKER_02 (34:21):
Yeah.
SPEAKER_03 (34:21):
And I sell it with a set of plants.
Just by putting the developmentapplication and taking the time
and all those things, I might beable to sell that property for
even more.
Even more.
And then that way, because I'vemade those improvements, the
builder that's coming in,they're going to make their
profit because they're going tosell two dwellings for you know
$1.28 million.
I'm going to make my profitbecause I spent the time with
the architect with everythinggetting improved.
(34:43):
So that's the reason why peoplelook at or say, look at these
properties.
Anyways, property number two,Karina.
SPEAKER_00 (34:48):
Queensland, inner east Brisbane.
SPEAKER_03 (34:50):
So$1.265 million.
And it has grown by 10% year onyear.
So it's done multiple times.
And then we've also got, lastbut not least, Prospect in South
Australia, which has a medianhouse price, well, had a median
house price of$1.28 million anda capital gain of 14.3%.
SPEAKER_00 (35:13):
It seems like the cap on a good investment right
now seems to be 1.28 million.
Anything above that, you'relike, all right, maybe maybe I
should consider living in this.
SPEAKER_03 (35:23):
But like you're going to ask me a question soon
of is property still a goodthing to purchase or is it still
worth investing in property inAustralia?
The answer is yes.
And the reason I say this is weare living in a country that
rewards you through taxconcessions by owning an
(35:44):
investment property, especiallyif you're self-employed.
Especially if you'reself-employed.
Okay.
If you are self-employed and youare investing in property, you
are essentially putting moneyaway, reducing your tax, your ta
any money that you're going tospend on tax, you may as well
put it in a property that'sgoing to grow in value.
(36:05):
You're being rewarded for owningbusiness and essentially the
government saying, here, there'sa property that's going to grow
in value.
It's like getting Apple sharesin 2000.
Yeah, right.
It's growing at an exponentialrate that is uh indescribable to
people outside of Australia.
(36:25):
And the reason why is becausethey have governments that
actually build properties.
Like we're in a massive housingshortage and we've got a lot of
people moving to Australia.
We saw the riots the other week.
Oh, don't stop letting migrationin and all this kind of stuff.
I think you and I even arguedabout it.
We didn't argue, but wediscussed it on a podcast.
And I was there in the middle,and I'm like, hey, just approve
(36:47):
more dwellings.
SPEAKER_00 (36:48):
Yeah.
SPEAKER_03 (36:48):
That's it.
But is it a good idea to stillpurchase in Australia?
It looks like at every singleprice point, we've given you
nine properties, nine differentprice points, nine different
markets, nine different suburbs,three different states.
We didn't include anything fromNew South Wales and Melbourne,
which we know still grow.
SPEAKER_00 (37:05):
Yeah.
Okay.
And Tasmania, but who gets it?
Yeah, that's the thing.
Or even the stuff that we leftoff the list is still growing.
It's still growing.
SPEAKER_03 (37:12):
It's still growing at a rapid rate.
So my answer to myself.
My gift from me to me is my giftfrom me to me is property is
still a good investment inAustralia.
SPEAKER_00 (37:25):
Yeah.
SPEAKER_03 (37:26):
You need to speak with a good broker.
And you need to understand yourborrowing capabilities.
Because if you don't get intothe market soon, and I am, I am
creating that FOMO element assomeone who owns multiple
properties.
And I've never said that on thispodcast.
As someone who pays principaland interest repayments, who has
to tries to be an ethicallandlord in the sense that my
(37:51):
tenants contact me and they go,We need fly screens to be put
in, and we also want thesethings to be repaired.
And I say automatically, withouthesitation, yes.
Why?
Because these are also peopletrying to make it in this world.
Yeah.
With all of those things inconsideration, I am saying to
you now, if you do not attempt,and I'm using the word attempt,
(38:12):
attempt to get into the propertymarket, your wage will soon be
absolutely distraught, where youwill be renting for the rest of
your life, and you will be atthe be at a disadvantage.
SPEAKER_00 (38:26):
You're doing yourself a disservice by not
trying.
SPEAKER_03 (38:28):
Massive disservice, but you will also be at the
landlord's um will.
SPEAKER_00 (38:32):
Yeah.
SPEAKER_03 (38:32):
Fuck.
We've got to find that wordthough.
SPEAKER_00 (38:34):
Prerogative.
SPEAKER_03 (38:36):
Man, we're going too far left of field.
SPEAKER_00 (38:40):
But yeah, no, you don't get a you don't get a say
in your own house and all andall that sort of stuff.
You know, honestly, like thereare exceptions to that rule.
You might have a really goodrelationship with your landlord
and all that sort of stuff, butyou know, you can never say.
Like, just you don't know.
SPEAKER_03 (38:52):
Just try and get into the market, speak to a
professional who works in thatmarket, do some research.
People say it's too hard.
The people that are often heresay it's too hard are people
that have never gotten on thephone with the broker.
They're also people that havenever gone on realestate.com.au
after they've gotten on thephone with a broker and seen
what they can afford.
They've also never just gone onrealestate.com.au and seen how
(39:15):
houses or units perform in thoselocations.
Yeah.
They're people that just say,ah, it's too hard to throw their
heads in there.
SPEAKER_00 (39:24):
Smash it out.
All right.
Rapid fire questions.
Joey, number one, what is thesix-year rule for investment
properties?
SPEAKER_03 (39:31):
So the six-year rule for investment properties is
when a property has previouslybeen your main residence, and
then afterwards you elect tomake it an investment property
or to receive investment incomefrom that property.
The six-year rule is how long aproperty cannot be your main
residence prior to thegovernment treating it as a main
(39:52):
residence when it comes time fortaxes when you are going to sell
that property.
So let's say, for instance, I'velived in my property for 12
months' time.
I then turn it into aninvestment, and then in six
years' time I choose to sell theproperty, I won't be charged a
capital gains tax because thatwas my previous place of
residency.
Okay, well, that's good.
SPEAKER_00 (40:13):
All right, next.
That is good.
Uh, is it worth investing inproperty anymore?
We've kind of answered that,yeah.
All right, should I buy a housenow or wait until 2026?
Yeah, get into the market.
SPEAKER_03 (40:23):
Yeah.
Just get into the fuckingmarket.
Just do it.
SPEAKER_00 (40:24):
Yeah.
How to avoid how do I avoidcapital gains tax on an
investment property?
SPEAKER_03 (40:28):
I am not a dodgy accountant.
I refuse to answer thatquestion.
SPEAKER_00 (40:31):
All right.
What is a good rate of return ona rental property?
SPEAKER_03 (40:33):
It really depends on what you're looking for, but the
actual you're speaking to a lotof buyers' agents, they're often
looking for about two and a halfto three and a half percent
rental yield.
Anything above that tells themquite often.
I know we've had propertieslisted in this segment that were
that were allies, but two and ahalf to three and a half
percent.
Why?
Because that means that thereisn't an oversupply in the
(40:54):
market.
And at the exact same time, italso means that the properties
have a more conditioned tocapital gain, which is why most
people invest in property inAustralia.
SPEAKER_01 (41:04):
Okay.
SPEAKER_00 (41:05):
Well, that's all we have time for today.
It's been a long one, but it'shonestly it's been a good one.
I feel like I've learned a lot.
SPEAKER_03 (41:11):
Guys, if you ever need any help with your mortgage
or your property inquiries oranything along the lines of
that, you can visit us atwww.itsimple.com.au.
If you are looking to invest inproperty, we also have a panel
of buyers' agents that we workwith, and we can refer you
several in the market thatspecialize in each particular
location.
For anything else, there'sMasterCard.
(41:34):
I've been Joe.
I've been Michael, and we'll seeyou on the next episode of the
Finance Show with Joe.
If you do not attempt to get into the property
market, your wage will soon beabsolutely destroyed, where
you'll be renting for the restof your life.
SPEAKER_00 (00:09):
Honestly, by the time you hear this, it's
probably too late.
It's like getting Apple sharesin 2000.
There's no real sign that saysit's gonna slow down.
SPEAKER_03 (00:23):
If you're even looking at return on capital
measures, it's actuallyoutperformed things like
Bitcoin.
That has like hugely volatilemoments where it just shoots up.
No wonder why we're hearing somany whispers and so many rumors
about external American fundspurchasing these lots because
you can't run the stock marketat this rate.
It's just driving investorsthere because why not?
We're talking about the bestinvestment that you could have
(00:46):
bought at the end of 2024.
We're actually tracking the bestinvestment properties across
Australia.
Let's get into the first tier.
SPEAKER_00 (00:55):
And the first one is Welcome to the Finance Show with
Joe.
He's Joe, I'm Michael.
Today we're gonna be talkingabout the best performing
investment suburbs in all ofAustralia.
But first, I just want to do alittle quick catch-up.
What have you been up to?
As you know, Michael, I've got anewborn.
SPEAKER_03 (01:09):
Oh yes.
And he has taken up a lot of mytime.
So what you've been up to is notsleeping.
Uh, we were already doing thatprior to uh the child being
born.
What it is now is I'm notsleeping and my partner's not
sleeping.
Now, it's a bit look, I'll behonest with you, the newborn has
been fantastic.
Having uh a little version ofyourself and your wife tucked up
(01:33):
in this little ball and they'replayful, they're joyful, they
smile, they laugh at you.
Um I can it is an indescribablefeeling that I wish every single
person in this world gets toexperience once in their life.
I know there's a lot of peopleout there that say that they
don't want kids, and that isyour prerogative.
However, if you do want childrenum and uh you know you're
(01:57):
aspiring to have a family oneday, I will say the best is yet
to come.
And um, may God bless you.
And if you are, you know,struggling to have kids, I you
are in my prayers, and I hopethat one day you'll be able to
have children too.
SPEAKER_00 (02:12):
Yeah, I'm on the fence about having kids, but I
guess I'm not just there, I'vegot to get married first.
So yeah.
SPEAKER_03 (02:17):
So see, that's the old WOG household in Michael
talking.
That's he's gonna get marriedand then kids.
He and his girlfriend can livetogether for a period of time,
but married and then kids.
SPEAKER_00 (02:28):
That's although although when I did move in with
uh with Sarah for the very firsttime, my my grandmother, who's
like super Catholic, was like, Idon't know, that's kind of sin.
I'm like, it's 2025, we'removing on from this.
SPEAKER_03 (02:41):
No, look, I do understand where they're coming
from.
No meat on Fridays, you know,there's there's some other
things that yeah, it's 2025,guys.
Like, you know, bacon iseverywhere.
What do you want me to do?
SPEAKER_00 (02:54):
Bacon is everywhere.
Well, there was that dude whohad the bacon on his shoulders
that wouldn't.
SPEAKER_03 (02:59):
Oh man, I saw that, and that was absolutely stupid.
That was absolutely stupid.
But today, guys, we are talkingabout not bacon, um making
bacon.
Um, we're talking about the bestinvestments that you could have
bought at the end of 2024.
We're actually tracking the bestinvestment properties across
Australia uh or the bestsuburbs, the highest performing
(03:23):
suburbs across Australia in2025.
The difference that we have donein this episode is we have
actually segmented the bestproperties to buy at each
particular price point.
SPEAKER_00 (03:36):
Yeah.
SPEAKER_03 (03:37):
So we've got up to $500,000.
We've got up to$750,000.
Do we?
SPEAKER_00 (03:43):
Yes, up to$750,000 and and then up to uh a million
and above.
Because honestly, when I wasdoing the research, I was gonna
split the million and the 1.5and it was just no difference.
Yeah, I'm just one and a millionand above.
SPEAKER_03 (03:57):
So each particular price point has three suburbs.
Yes.
And we track the performancebased on the capital gain, yep,
the rental yield, and thepotential future growth that
that area is hopefully able toachieve over the next 12 months
or so.
(04:17):
Yeah.
Now, before we do go anyfurther, guys, advice on this
channel is general in nature.
Extremely general.
And should you need specificadvice, please contact your
personal personal personalbroker, personal financial
advisor.
All right.
Let's get into the first tier.
SPEAKER_00 (04:39):
So this is properties up to up to 500,000.
And the first one is Rockingham,Western Australia.
This Western Australia's gonnashow up a few times, but
Rockingham.
So medium house price there of$475,000.
That was last October.
That was last October, yes.
14.5% capital gains.
The rent is$550 per week.
(05:01):
That's a 5.6% yield.
Now, this suburb, uh, I don'tknow anything about Perth
because I've never been there.
So I looked into what thissuburb is.
It's a suburb by the beach,which is interesting, and but it
has a reputation of being rough,but it is uh undergoing
gentrification.
SPEAKER_03 (05:16):
Okay.
SPEAKER_00 (05:17):
So it is not as rough as it's used to as it used
to be.
Okay.
So I'm told.
SPEAKER_03 (05:21):
Okay, so this was specifically for the units in
the area.
SPEAKER_00 (05:26):
Yeah, yeah.
SPEAKER_03 (05:27):
This wasn't for the houses in the area, and it's
very contradictory to seebecause quite often, when you
are speaking to either buyers'agents, investment
professionals, or anyone thatfocuses in on property, they
will tell you you target unitsfor rental yield and for the
cash flow, or if you're lookingfor that accessibility or that
(05:50):
amenity, but you don't oftentarget it for capital gain.
This has performed in everyaspect of the market.
So quick maps here:$475,000 lastOctober.
If that has increased by 14.5%,that means that it has gone up
by roughly$70,250.
(06:12):
So you're looking at a mediandwelling price of about$547,000.
Yeah.
Um, to go from$475,000 to$547,000 in the span of 12
months is it's pretty crazy.
It's remarkable.
There's one particular thing Ido want to highlight for our
(06:34):
listeners out there.
To be able to get into aproperty of$475,000, okay, you
need at minimum a 10% deposit.
I'm not gonna go 20% deposits,all that sort of stuff, right?
Um, I'm just gonna talk about a10% deposit.
SPEAKER_01 (06:46):
All right.
SPEAKER_03 (06:47):
So you've put away $47,500 to be able to attain
this property.
SPEAKER_01 (06:52):
Yeah.
SPEAKER_03 (06:52):
If you did make it an investment, there is stamp
duty applicable, it's gonna beroughly$15,000 on a property of
$475k.
SPEAKER_02 (06:59):
Okay.
SPEAKER_03 (07:00):
Okay.
So your upfront costs have been$62,000.
But with a rental yield of 5.6%,$550 per week, your mortgage at
$430,000 with a 6% interestrate.
What are your monthly repaymentson that?
It's going to be about two to$2,500, somewhere around there.
SPEAKER_00 (07:22):
Which is pretty good.
SPEAKER_03 (07:22):
So$550 a week per week rent, that means that you
have your out of pocket.
So$550 times$4.33, you'reroughly going to be receiving
from the property about$2,400 amonth.
You're going to have to pay inmortgage repayments about$2,600
a month.
So you're out of pocket$2,400 or$200 a month, otherwise$2,400
(07:47):
for the year.
Which is pretty damn good.
So$47,500 plus$2,400.
Okay, so that's how much youroutgoings are, which you can
claim back negative gearing ifyou've got a really good
accountant, just putting thatout there.
Okay, plus the$15,000 for stampduty.
So in one year's time, to beable to acquire this property,
you have spent let's call itabout$65k, but your property has
(08:11):
grown by about$72k.
You're I'm not gonna talk aboutreturn on investment because
return on investment is ROI.
How much are you constantlyinvesting?
How what's your your what's yourrate of return on revenue and
all that sort of stuff?
I'm just gonna talk about returnon capital.
Your initial capital injectionis$62,000, and after 12 months'
time, that has increased by uhincreased to 72k.
(08:34):
So that means your return oncapital is over a hundred
percent over the year,especially because you don't
have to make that much in extracontributions towards your
mortgage repayments.
So this has performedexceptionally well.
You've essentially gone to thecasino, like this is the best
(08:54):
way.
I've done I've done the complexmaths, but this is the this is
the best way to put it.
You've gone to the casino andput$65,000 on a sure thing to
double your money in 12 months'time.
All you had to do was wait the12 months, which is I mean,
that's worth it.
So, like you hear about theseproperties in Rockingham and WA
(09:17):
and stuff, no wonder why they'vegone up in value.
Because this is the thing aboutvalue and properties and the
perceived value and everything.
Once once one person finds outthis is a good investment area,
everyone finds out.
SPEAKER_00 (09:30):
Yeah, honestly, by the time you hear this, it's
probably too late.
No, do your research.
No, no, no, no, no.
SPEAKER_03 (09:34):
Stop that, because apparently this one's gonna
still go up in value.
So the projection for this areaby FY26 is for each median unit,
the median unit value to bearound$600,000, which is another
10% increase.
So that means you have increasedyour return on capital by about
(09:58):
180, 190%, and you've got aninvestment paying itself off.
Yeah, you have increased yoursavings, your equity, your
retirement fund, everything.
SPEAKER_00 (10:10):
I mean, it's a it's barely even a risk with the with
after all this math.
SPEAKER_03 (10:13):
Well, it is no no no, it is still a risk.
SPEAKER_00 (10:14):
It's obviously still all of this is still a risk
because you're investing.
Um, but and and the thing is weare even seeing like similar
things in Gosnells as well.
I think it's partly our nextsuburb, by the way.
Uh, so suburb number two, sorry,I was I was harping on for
suburb number one, but suburbnumber two is Gosnells.
In also in Western Australia.
Tell me about that property.
Median price, 490,000.
Okay.
(10:35):
212.4% capital gains.
All right, I'll get the quickmaths on that in a second.
Yeah,$578 per week in rent,that's a 6.2% yield.
That's crazy.
So, and this is another uh placethat is rough and is going up in
value.
I have heard that Gosnells is avery weird suburb, it's kind of
crackhead central, that's whatI've heard.
(10:58):
Um, but it's incrediblyaffordable and hence why like
anyone it's just drivinginvestors there because why not?
It's in it's affordable.
$490,000.
That is extremely cheap.
SPEAKER_03 (11:10):
I'm going to give you the quick maths now.
Okay, so if you bought aproperty last year for$490,000,
that property is now worth six.
Ooh, just under.
Okay, it's now worth$599,800 12months later.
So return on capital for that,let's say$49,000 injection, 15%
(11:32):
stamp duty, whatever it's gonnabe,$15k.
So$64,000.
And then in a year's time, yourproperty is worth$110,000 more.
That's a$200,000 no, it's justunder$200.
$64,000 is your initial rate uhuh capital injection.
That means your return oncapital is 190%.
(11:56):
So like if you the this is thisis the thing, like you hear
about these suburbs.
So Gosn, this is Gosnell's WA.
Yeah, the the rental yields6.2%.
So that's more than coveringyour mortgages.
SPEAKER_00 (12:07):
100%.
Yeah.
SPEAKER_03 (12:08):
The agents are raving about this because the
infrastructure, the populationgrowth, the interest rates uh,
you know, uh by drop theinterest rates dropping are
driving the growth even further.
No wonder why we're hearing somany whispers and so many rumors
about external American fundsinvesting in property in
(12:28):
Australia and purchasing theselots because you you can't you
can't run the stock market atthis rate.
SPEAKER_00 (12:36):
No, when I first when I was doing the research,
what it came when it's when Ifound 212% capital gains, I was
like, that can't be right.
That's this has got to be anerror, but no.
SPEAKER_03 (12:46):
That is um, that is fuck me.
SPEAKER_00 (12:50):
Yeah, like it must have gone from literally rock
bottom and it's just going goingup, just purely because of
affordability, slashed interestrates, all that kind of stuff.
SPEAKER_03 (12:59):
Do you see a mass migration continuing to WA?
Because we've seen it in thesense of no the data has shown a
lot of people are moving to WA.
I don't know anyone personallythat has.
I've got one client that hasdone it in the last 12 months,
but one out of 300, that's a youknow, 0.3% rate.
SPEAKER_00 (13:19):
Yeah.
SPEAKER_03 (13:20):
Have do you have any friends that are moving out that
way?
SPEAKER_00 (13:21):
Not a single person.
I do know people investingthere, but I don't know anyone
moving there.
That's it.
SPEAKER_03 (13:27):
Do you think it's migration?
No, no, we're not gonna get intothat on this one.
Okay, the next suburb for the$500,000 bracket.
SPEAKER_00 (13:34):
The last one.
It's Elizabeth North in SouthAustralia, another median price,
uh unit price of$490,000.
16.7% capital growth in the last12 months,$450 a week uh in
rent, 5.1% yield.
So not as good as Gosnell's onlike just on paper, but
obviously this is still a greatinvestment.
SPEAKER_03 (13:54):
Okay, so let's have a look at the quick maths here.
So that's gonna be about 60.
So let's say the property's goneup by 64k.
The median price is now 554,000.
So your return on capital isgonna be, you know, yet again,
upwards of 100 or 40%.
Yeah.
Um,$450 a week rental yield,5.1%.
(14:17):
That's pretty good.
SPEAKER_00 (14:18):
But it's not as good as Gosnell's, but it's pretty
good.
SPEAKER_03 (14:20):
So this is why I was ranked number three.
SPEAKER_00 (14:22):
Yeah.
SPEAKER_03 (14:23):
So are we seeing a continuous trend of properties
in WA outperforming just therest of the market?
SPEAKER_00 (14:29):
Um, you're actually gonna be surprised as we go.
And don't get me wrong, WA stillshows up a lot of the time
because it's it's been doingwell for like at least a year
now, maybe two.
Two years.
Yeah.
And I think that's gonnacontinue.
I don't think the numbers willbe as crazy.
I'm also not a professional, sodon't take this all with a grain
of salt.
But I think this is like we'renot quite at the plateau yet,
but we're nearing it.
SPEAKER_03 (14:49):
Okay, so another question is gonna be we're
starting to see a flow-oneffect.
So are people choosing to go toSouth Australia more than
they're choosing to go to WA?
And I would like to actuallyhear from other people in the
comments.
Are we seeing more adviceleaning towards South Australia?
Is that is South Australiabecoming more affordable because
(15:10):
WA is becoming less affordable?
SPEAKER_00 (15:12):
Um, I'm not sure which way it goes, but the data
does suggest that in the in2025, um, South Australia is the
best performing state as it asit um in terms of investment in
property and stuff like that.
SPEAKER_03 (15:24):
The city of church is Adelaide.
SPEAKER_00 (15:27):
Yeah, yeah, sorry, that's took me a contest to
figure out what you were saying.
Uh yeah, it's I don't know,maybe it's just because it's a
little closer to Melbourne andstuff.
So maybe if you're fromMelbourne and you've got family
there, going to Adelaide islike, not that big of a deal.
It's a shorter drive thanSydney.
SPEAKER_03 (15:43):
Uh that's this is I I love this data.
I love being able to see theaffordability.
I'm I'm gonna talk from thebroker's point of view right
now.
Okay, go for it.
To be able to afford aninvestment property for about
490K, your salary, and if yourrental income is about$450 a
(16:06):
week, your salary needs to beabout$75,000 to$80,000.
SPEAKER_00 (16:09):
Round about the median.
SPEAKER_03 (16:10):
Correct.
SPEAKER_00 (16:11):
Um, no, the median's higher than that, but let's not
get into it.
I thought the median was$75.
SPEAKER_03 (16:15):
No, the median salary now.
SPEAKER_00 (16:17):
Yeah.
SPEAKER_03 (16:17):
No, median full-time salary is$99,000 for females and
$109,000 for males.
Is that the median?
That's the median.
Hang on, hang on.
This is for adults, by the way.
I'm talking about full-timesalaries.
SPEAKER_00 (16:31):
That makes sense.
That makes sense.
SPEAKER_03 (16:32):
Okay, perfect.
SPEAKER_00 (16:33):
88.
88.
We're still not at 99.
The average is uh the average is104.
There we go.
Yeah.
I was gonna say, I'm like, Ilooked, I looked these numbers
up before because you know, Ihad a panic attack when I saw
the average.
Not knowing how averages work.
SPEAKER_03 (16:49):
Joseph was right again.
SPEAKER_00 (16:50):
Um Joseph was half right.
SPEAKER_03 (16:53):
So a lot of people might be wondering why we're
doing an episode dedicatedtowards investment properties
and um how much they've grown invalue.
The reason why is property hasoutpaced cash uh by triple.
SPEAKER_00 (17:10):
Well, I was gonna say it's not even like it's not
even remotely.
It's not even remotely close.
SPEAKER_03 (17:13):
If you if you if you're even looking at return on
capital measures, it's actuallyoutperformed things like
Bitcoin.
SPEAKER_00 (17:18):
That's crazy because obviously Bitcoin has had that
has like hugely volatile momentswhere it shoots up.
SPEAKER_03 (17:23):
Yeah, it's uh okay.
So let me explain.
To buy a Bitcoin is$160,000Australian dollars, roughly
right now.
Okay, yeah.
When you purchase a Bitcoin,number one, you can't borrow
from the bank to buy Bitcoinunless you've got a I'm not even
gonna get into it.
Don't go to those brokers.
Um but the other thing is yourbrokers rec recommended.
(17:45):
Don't don't don't don't don'tdon't, man, you're gonna get me
cancelled again.
Okay, okay.
Okay.
But let me let me let me somehowexplain this to you.
So once you own a Bitcoin, youcan't, you're not getting a
rental return.
You're actually not getting anytax benefits from it.
And if Bitcoin goes up 20% andyou own one Bitcoin, that means
your 160,000 turns into, youknow, it's gone up 20%, it's
(18:08):
gone up to 192,000, right?
SPEAKER_01 (18:10):
Right.
SPEAKER_03 (18:10):
So you've had to invest 160,000 to make that
$32,000 back.
Not the same with propertybecause property, you need a 10%
deposit, you're borrowing therest from the bank, you're
getting all these tax exemptionsas an investor to make things
easier, yeah.
To make things easier, and thenyou are actually being rewarded
on the sale price because thesale price doesn't actually go
(18:31):
to the bank, like the remainingsale price, unless, of course,
you make a loss, but youactually can declare that as a
profit.
So essentially, you'll you areproviding$70,000 to make$70,000
if the property goes up by$70k,for instance.
Does that make sense?
Yeah.
So your return on capital is faroutpacing.
The reason why we're doing aninvestment episode or an episode
(18:53):
based on the best performingproperties in Australia is if
you want to be able to buy aproperty in Sydney, New South
Wales, eventually, you're notgoing to get there by saving.
No, no, no, no, no, no.
Unless you're in a very, veryhigh-income job, you're actually
going to get the best way to getthere is through property
because the property that youpurchase, limited supply, that
(19:16):
property goes up by 300%.
Okay, and all of a sudden yousell that property and you are
then able to draw down, let'ssay 160k.
You can then use that 160k tomaybe purchase a 1.6 million
dollar property in New SouthWales or Sydney, New South
Wales, and that is the point ofthis episode.
(19:39):
But I think it is very importantfor people to understand that.
And here are three suburbs whereI know we have assisted in
funding with clients, okay, thathave purchased in WA, purchased
in South Australia, that havemade this money, and now they
are able to purchase in NewSouth Wales, purchase the
(19:59):
property of their Jeeps.
In saying that, you know, youcan go the full other route and
say, I want to rent vest, allthat kind of stuff.
I'm not gonna get into that.
I am just saying this is whatproperty is used for in these
regional states and theseregional suburbs.
Yeah.
Okay.
This is how you can climb intothe market.
This is how you can build up foryour retirement.
(20:20):
This is actually how you justbecome wealthy.
SPEAKER_00 (20:22):
Yeah.
And this is just one strategy.
There are there are others, butyou know, obviously, we don't
have time to get into all thatshit today.
SPEAKER_03 (20:28):
Best suburbs to invest in for 750k.
SPEAKER_00 (20:30):
All right, first one up.
We're back in South Australia,Salisbury East.
This is in Adelaide's Northeast,which is a little confusing.
That's a median price of$705,000, median rent,$580 a
week.
The 12-month growth is 16.5%.
Jesus! Adelaide is the topperformer in 2025, thanks to a
very tight supply and fastleasing, often less than three
(20:52):
weeks.
So it's doing pretty well.
Specifically, investor activityin South Australia is just doing
great.
This is double-digit suburbgains, which is above city
yields in any of the affordablebands, which is pretty crazy.
SPEAKER_03 (21:05):
So 70k deposit, okay, 16.5% growth.
Okay, what's 16.5% of that?
That's gonna be 42,000, 42,000plus 70k.
It's a so your 705,000 propertyis now worth 820k a year later.
That's crazy.
SPEAKER_00 (21:21):
That's actually insane.
Like when you actually thinkabout that.
So just film fill me in on this,just because uh if I'm not
clear, maybe someone else isn't.
I bought this for 705,000.
Yeah, it's now 820, did you say?
SPEAKER_03 (21:34):
Yeah, roughly 820k.
SPEAKER_00 (21:35):
Okay, let's just say 820 for the sake of argument.
I sell.
After that, how much money howmuch of that do I get?
Because I know there's capitalgains and there's all that sort
of stuff.
So how does this work?
SPEAKER_03 (21:44):
So let's take out 2% um of your uh sale price,
agents, agents, fees,commissions, marketing.
SPEAKER_00 (21:53):
Okay.
SPEAKER_03 (21:53):
So you're losing 16k automatically because somebody
that yeah, the agents.
Yeah, the the agents are gonnacharge you an arm and a leg for
that.
SPEAKER_00 (22:01):
Okay.
Okay.
SPEAKER_03 (22:02):
So automatically you've got 16,400, that's gone.
Then you the remainder of it isfrom the you pay tax not on the
sales price, but the profit madefrom the sales.
SPEAKER_00 (22:14):
So the capital gains, right?
SPEAKER_03 (22:15):
So the capital gains.
So let's say you sell for$820,000, you purchase for
$700,000.
There's still a deduction fromthere.
The interest repayments that youmade in the last year, you can
also deduct those from yourcapital gains and any
improvements that you've made inthe last 12 months as well.
SPEAKER_00 (22:33):
So you don't quite get$120,000, but you you get
like$100,000 maybe, maybe less.
SPEAKER_03 (22:38):
So let's let's go from the base rate.
Uh, capital gains tax is at 30%at the moment.
Okay.
Rough ballpark.
30% of$120,000 is going to be$36,000.
So$120 minus$36,000 is going tobe$84,000.
Okay.
That is how much theoreticallyyou are going to end up with in
(23:01):
your back pocket.
Okay, okay.
Now$84,000, what can that whatcan that buy you across New
South Wales?
New South Wales.
Well, a number of properties ifyou use it as a 10% deposit.
SPEAKER_00 (23:12):
Yeah.
Or 20% on an apartment somewherethat's around 800,000, something
like that.
SPEAKER_03 (23:17):
No, 84,000.
Not quite there.
No, no, no, no, no, no.
That's not a 20% deposit.
That's that's a 20% deposit on$400,000.
SPEAKER_00 (23:24):
No, you're right.
Yes, I am right.
I can't math.
This is why I'm in marketing.
SPEAKER_03 (23:28):
And this is why I'm the numbers guy.
SPEAKER_00 (23:29):
He's exactly right.
SPEAKER_03 (23:31):
But uh, but in saying that, you do get your
deposit back.
So it's you're not how much isin your hand at the end of it,
it's also your deposit.
So let's say you put in$70,000for your deposit.
Okay, so that$70K goes returnsto you plus that an$84,000
profit,$154,000.
(23:51):
You might be able to get anapartment for$750k somewhere in
Sydney.
My rule of thumb, Tom Panos'srule of thumb, who's a fantastic
buyer's agent and a number of uhpeople out there, they often say
for your owner-occupiedproperty, you should not have
more than$800,000 in debt.
And the reason for that is$800,000 in debt with interest
(24:15):
rates at about five and a half,six and a half percent.
You're you're you're payingroughly five and a half thousand
dollars in principal andinterest repayments post-tax
income.
SPEAKER_01 (24:24):
Yeah, okay.
SPEAKER_03 (24:24):
So let's say, for instance, you're earning 100k a
year.
Okay.
After tax, that's gonna be what,78?
Okay.
78, spread that across 12months.
That's gonna be about$7,000 amonth.
SPEAKER_01 (24:36):
Yeah.
SPEAKER_03 (24:36):
Imagine$5,500 of that goes towards principal and
interest repayments on yourmortgage.
SPEAKER_00 (24:40):
Yeah, I mean, I live in that reality.
But you see, but you see, no, Itotally get it.
Yeah.
SPEAKER_03 (24:45):
But like at least you have your family around you
who are also contributingtowards the home loan repayments
and everything.
Yeah, not everyone has that.
SPEAKER_01 (24:52):
No, no, no, no.
Far, far from it.
SPEAKER_03 (24:54):
So you really have to speak with a broker uh prior
to making that sort of decision.
Okay, but that is the reason whya lot of people say, hey, maybe
look at rent vesting becausethat's not living beyond your
means.
I never used to agree with rentvesting, and you know this.
SPEAKER_00 (25:09):
I remember we've had several conversations about
this.
SPEAKER_03 (25:11):
But property has gone up so much in price that it
is looking as like I'm thinkingabout it.
SPEAKER_00 (25:16):
Yeah, you're like, oh, bro, what else am I supposed
to do?
SPEAKER_03 (25:19):
Why am I spending so much on my mortgage when I could
just go rent something that Ilike in Sydney?
Now, the issues with that ismaybe they want to cancel the
lease, they want to move backin.
I'm at the you know, landlord'sdiscretion.
What am I looking for?
SPEAKER_00 (25:32):
Wim, back and call.
Uh, you're his bitch.
If you want to put it that way.
SPEAKER_03 (25:38):
I don't want to be someone's bitch.
Yeah, but like that's the reasonwhy I wouldn't run best.
But then I also understand otherpeople.
Hey, maybe I don't want to spendfive and a half thousand dollars
a month just to pay off my home.
That's not tax-deductibleinterest.
That's not something stuff youhave to pay.
Yeah, it's just stuff that youhave to pay that's adding to
your bill.
(25:59):
So, business owner me,transaction me, tax me, mortgage
me, everything is saying, hey,maybe rent vesting is a good
idea.
Leb me, Lebanese, Lebaneseingrained, own your house, bro.
Like, you know, it's true, yeah.
And that that is a that it I Ithink a lot of cultures are like
that.
Yeah, but in saying that, thatwas a great question that you
(26:20):
asked.
How much is gonna end up in myback pocket after capital gains
tax after everything?
You might end up with that 150kon our next property.
That's 765 to 775,000 for MortonBay.
So that's Morayfield,Queensland, that's in the Morton
Bay area.
Yeah, I actually know that areaquite well.
I do not.
unknown (26:39):
Okay.
SPEAKER_03 (26:40):
So 12.5% year-on-year growth.
Um, the houses in Brisbane thatuh a million dollars plus have
pushed people towards this area,yeah.
Um, which has lifted the pricessignificantly.
Um, I'm not gonna do the quickmaths on this one.
I can if you want me to, but Ithink I've done enough this
year.
SPEAKER_00 (27:00):
No, no, I think I think everyone's got the juice.
Let's let's get them the thehard facts.
SPEAKER_03 (27:05):
And the next one is more lay.
So the median price is 820,000.
SPEAKER_00 (27:10):
To 854, yeah.
SPEAKER_03 (27:11):
The rental yield, the rent uh rental income per
week is$700, and then 18%year-on-year growth.
And yeah, you tell me thereasons why.
SPEAKER_00 (27:22):
Well, I mean, it's just the affordable mid-price
stuff is just going nuts becausethat's what people can afford.
You know, there's only so manypeople with with you know fat
stacks, so to speak.
SPEAKER_03 (27:30):
So, what happens when these people like the way
that I'm looking at it outsidelooking in?
It seems like Sydney has kind ofturned itself into this like
crystal ball that only the ultrawealthy can enter into.
SPEAKER_00 (27:43):
Well, I guess it's kind of like like LA and New
York, right?
Like they're super expensive,depending on which part.
Well, New York specifically,like Manhattan Island.
Like you're that's you know,you're you're paying a
ridiculous amount for Sydney asa city.
SPEAKER_03 (27:56):
Sydney CBD as a city, stretching out all the way
to Penrith, I know, is a lotbigger than Manhattan Island.
I will tell you that.
SPEAKER_00 (28:05):
Yeah, no, I I don't disagree, but like they do stuff
like that, right?
And I don't I I guess once itfalls, like once you get to that
point where no one can reallylike newer people can't afford
to get in, that's when thebubble pops, right?
Is that not what just happens?
SPEAKER_03 (28:19):
It it is, and this is the issue, and we always
bring it up they're not allowingany more high-rises.
And we're also so this is a neatstatistic I found recently.
Our good friend Emmanuel from uhInvestorMate posted this one.
New South Wales is 30,000properties short of its target
for 2025.
SPEAKER_00 (28:40):
Yeah, I mean, we talked about it week after week,
like but but but we're makingthe bubble worse.
SPEAKER_03 (28:46):
Like me, naked eye investor.
Am I looking at Perth or am Ilooking at New South Wales as
where I can go put dump somemoney and think to myself,
what's gonna grow faster?
And you know, I always say checkwith your broker, borrowing
capacity, rental incomes, allthat sort of stuff.
But I think this is somethingheavy I need to consider.
SPEAKER_00 (29:07):
Welcome back.
Now we're gonna talk about thesuburbs that are a million and
above, because that's the funsection.
Also, this section was so fun, Ialmost peed myself.
Almost.
Also, I have a question aboutthis.
Is it really like investing amillion and above?
Is that worth it?
I guess it would depend on likewhat kind of money you make,
(29:29):
right?
SPEAKER_03 (29:29):
It really depends on what you're looking for, what
you're seeking from yourproperty.
Often when I look at propertiesthat are a million and above to
invest in, um, you're looking atland development construction.
That makes more sense, right?
It does.
And then on the other side ofit, so like I'm gonna look at
the properties that are here.
Yeah, yeah, go.
Okay, so we've got uh one in WA,one in Queensland, and one in
(29:50):
South Australia.
So there's spread.
Yeah, we don't even have asuburb from New South Wales on
this list.
SPEAKER_00 (29:55):
No, or Victoria.
None of them are showing up.
SPEAKER_03 (29:58):
But what If you're looking to invest upwards of a
million dollars, it is usuallyfor the sake of I'm planning to
live in that property later on.
That's kind of what I thought.
And I'm hoping the rental incomecan pay off a large portion of
the mortgage within the firstfive years by the time I get in.
(30:19):
Or you are expecting someserious capital growth in that
location that not many peoplecan foresee.
So, you know, um Auburn.
Oh yeah, yeah.
Auburn, great location to choosefrom.
Um the owner-occupied propertiesthere two years ago were worth
about a million dollars.
(30:39):
Now they're worth about 1.5,1.6, 1.7, 1.8 even.
SPEAKER_00 (30:43):
I can't believe that's happened in Auburn.
Also, just in and around thetrain station, all the massive
the massive apartment buildingsthere.
Like I remember Auburn as a kid.
It wasn't flash.
Yeah, you didn't really want to.
Well, it still isn't flash, butbut it's but the but the value
in the property is worth a lot.
SPEAKER_03 (30:59):
So let me give you a return on capital example.
Okay, so let's say I bought aproperty, Mount Druid.
Yep.
Let's go with Mount Druid.
That's classic.
Okay.
So Mount Druid, start of 2020,end of 2019, you could have
bought a property in one ofthose locations for about
$500,000 to$600,000.
I'm talking a house.
Yeah.
Okay.
Freestanding.
(31:19):
Freestanding house.
Let's say I use a 10% deposit,$50,000.
Yep.
That property is now worthmedian value,$1.1,$1.2 million.
Okay.
SPEAKER_01 (31:30):
Yeah, something like that.
SPEAKER_03 (31:32):
So my initial return of my initial capital investment
was$50,000 plus stamp duty.
So$70,000.
If I was to sell that propertytomorrow, or my return on
capital so is$700,000.
So I have actually 10X myinitial capital investment.
SPEAKER_00 (31:49):
It's actually crazy.
SPEAKER_03 (31:50):
And then when you think about rental yields and
everything and the cost of mymortgage, because that is a
suburb that a lot of people rentin.
SPEAKER_00 (31:56):
Yeah, that's true.
SPEAKER_03 (31:57):
That is the reason why people will choose to invest
in a place where investments area million dollars plus.
So if I take a similar propertythat was a million dollars when
I first purchased it, put$100,000 in for my initial
capital injection, good rentalyield, let's say, for example,
negative gearing, all that sortof stuff.
I'm not even considering that.
But then I sold it two or threeyears later for two million
(32:19):
dollars, which we are seeing allover the place now.
This is not something out of theordinary.
SPEAKER_01 (32:23):
Okay.
SPEAKER_03 (32:23):
Initial capital injection was$100,000.
Return on capital is a milliondollars.
SPEAKER_01 (32:29):
Yeah.
Okay.
SPEAKER_03 (32:30):
So the reason why people invest in properties that
are upwards of a million dollarsis either for land development
improvements, they see somethingin the area, infrastructure
projects, and they expect amassive spike.
Or they are able to take ahigher risk and expect a higher
return on capital.
Okay.
Because sometimes areas don'tgrow by that by that much.
SPEAKER_00 (32:50):
No, no.
And usually, yeah, no, that'strue.
Well, our first suburb isScarborough in Perth's North
Coast.
Scarborough.
Scarborough.
$1.28 million dollar uh medianhouse price.
The rent is$910 to$950 a week.
That's for houses, not units.
The capital gains is anywherefrom 8.3 to 12.7%, depending on
(33:11):
your source.
But let's just say, like a firm,10%.
Okay.
So this is actually like a nicebeachy cafe style suburb.
And it's getting bothowner-occupiers and investors
involved.
SPEAKER_03 (33:26):
That example right there is the perfect example of
what I was just talking about.
You've got enough money that'sgoing to be covering off your
mortgage plus the negative gearand da-da-da-da-da.
Okay.
And then$1.28 million.
If it's gone up by 10%, you'veput$128,000 in and you're
receiving$128,000 back.
The thing about these types ofproperties is you're not
spreading your risk at, let'ssay, buying two apartments in
(33:49):
one location.
Because that's also double thestamp duty cost.
SPEAKER_01 (33:52):
Ah, yes, yes, yes.
SPEAKER_03 (33:53):
Okay, because you're buying and you know, you have to
pay stamp duty twice.
Stamp duty is not something thatyou can claim back, it's just a
transaction.
So that is the reason why peoplewould look at suburbs like this,
and also they're more desirablesuburbs.
Yeah.
So let's say you go put a CDC oryou do a development approval or
something like that.
(34:14):
Logs.
Okay.
Let's say I bought a$1.28million property and I want and
got a development applicationdone on it.
SPEAKER_02 (34:21):
Yeah.
SPEAKER_03 (34:21):
And I sell it with a set of plants.
Just by putting the developmentapplication and taking the time
and all those things, I might beable to sell that property for
even more.
Even more.
And then that way, because I'vemade those improvements, the
builder that's coming in,they're going to make their
profit because they're going tosell two dwellings for you know
$1.28 million.
I'm going to make my profitbecause I spent the time with
the architect with everythinggetting improved.
(34:43):
So that's the reason why peoplelook at or say, look at these
properties.
Anyways, property number two,Karina.
SPEAKER_00 (34:48):
Queensland, inner east Brisbane.
SPEAKER_03 (34:50):
So$1.265 million.
And it has grown by 10% year onyear.
So it's done multiple times.
And then we've also got, lastbut not least, Prospect in South
Australia, which has a medianhouse price, well, had a median
house price of$1.28 million anda capital gain of 14.3%.
SPEAKER_00 (35:13):
It seems like the cap on a good investment right
now seems to be 1.28 million.
Anything above that, you'relike, all right, maybe maybe I
should consider living in this.
SPEAKER_03 (35:23):
But like you're going to ask me a question soon
of is property still a goodthing to purchase or is it still
worth investing in property inAustralia?
The answer is yes.
And the reason I say this is weare living in a country that
rewards you through taxconcessions by owning an
(35:44):
investment property, especiallyif you're self-employed.
Especially if you'reself-employed.
Okay.
If you are self-employed and youare investing in property, you
are essentially putting moneyaway, reducing your tax, your ta
any money that you're going tospend on tax, you may as well
put it in a property that'sgoing to grow in value.
(36:05):
You're being rewarded for owningbusiness and essentially the
government saying, here, there'sa property that's going to grow
in value.
It's like getting Apple sharesin 2000.
Yeah, right.
It's growing at an exponentialrate that is uh indescribable to
people outside of Australia.
(36:25):
And the reason why is becausethey have governments that
actually build properties.
Like we're in a massive housingshortage and we've got a lot of
people moving to Australia.
We saw the riots the other week.
Oh, don't stop letting migrationin and all this kind of stuff.
I think you and I even arguedabout it.
We didn't argue, but wediscussed it on a podcast.
And I was there in the middle,and I'm like, hey, just approve
(36:47):
more dwellings.
SPEAKER_00 (36:48):
Yeah.
SPEAKER_03 (36:48):
That's it.
But is it a good idea to stillpurchase in Australia?
It looks like at every singleprice point, we've given you
nine properties, nine differentprice points, nine different
markets, nine different suburbs,three different states.
We didn't include anything fromNew South Wales and Melbourne,
which we know still grow.
SPEAKER_00 (37:05):
Yeah.
Okay.
And Tasmania, but who gets it?
Yeah, that's the thing.
Or even the stuff that we leftoff the list is still growing.
It's still growing.
SPEAKER_03 (37:12):
It's still growing at a rapid rate.
So my answer to myself.
My gift from me to me is my giftfrom me to me is property is
still a good investment inAustralia.
SPEAKER_00 (37:25):
Yeah.
SPEAKER_03 (37:26):
You need to speak with a good broker.
And you need to understand yourborrowing capabilities.
Because if you don't get intothe market soon, and I am, I am
creating that FOMO element assomeone who owns multiple
properties.
And I've never said that on thispodcast.
As someone who pays principaland interest repayments, who has
to tries to be an ethicallandlord in the sense that my
(37:51):
tenants contact me and they go,We need fly screens to be put
in, and we also want thesethings to be repaired.
And I say automatically, withouthesitation, yes.
Why?
Because these are also peopletrying to make it in this world.
Yeah.
With all of those things inconsideration, I am saying to
you now, if you do not attempt,and I'm using the word attempt,
(38:12):
attempt to get into the propertymarket, your wage will soon be
absolutely distraught, where youwill be renting for the rest of
your life, and you will be atthe be at a disadvantage.
SPEAKER_00 (38:26):
You're doing yourself a disservice by not
trying.
SPEAKER_03 (38:28):
Massive disservice, but you will also be at the
landlord's um will.
SPEAKER_00 (38:32):
Yeah.
SPEAKER_03 (38:32):
Fuck.
We've got to find that wordthough.
SPEAKER_00 (38:34):
Prerogative.
SPEAKER_03 (38:36):
Man, we're going too far left of field.
SPEAKER_00 (38:40):
But yeah, no, you don't get a you don't get a say
in your own house and all andall that sort of stuff.
You know, honestly, like thereare exceptions to that rule.
You might have a really goodrelationship with your landlord
and all that sort of stuff, butyou know, you can never say.
Like, just you don't know.
SPEAKER_03 (38:52):
Just try and get into the market, speak to a
professional who works in thatmarket, do some research.
People say it's too hard.
The people that are often heresay it's too hard are people
that have never gotten on thephone with the broker.
They're also people that havenever gone on realestate.com.au
after they've gotten on thephone with a broker and seen
what they can afford.
They've also never just gone onrealestate.com.au and seen how
(39:15):
houses or units perform in thoselocations.
Yeah.
They're people that just say,ah, it's too hard to throw their
heads in there.
SPEAKER_00 (39:24):
Smash it out.
All right.
Rapid fire questions.
Joey, number one, what is thesix-year rule for investment
properties?
SPEAKER_03 (39:31):
So the six-year rule for investment properties is
when a property has previouslybeen your main residence, and
then afterwards you elect tomake it an investment property
or to receive investment incomefrom that property.
The six-year rule is how long aproperty cannot be your main
residence prior to thegovernment treating it as a main
(39:52):
residence when it comes time fortaxes when you are going to sell
that property.
So let's say, for instance, I'velived in my property for 12
months' time.
I then turn it into aninvestment, and then in six
years' time I choose to sell theproperty, I won't be charged a
capital gains tax because thatwas my previous place of
residency.
Okay, well, that's good.
SPEAKER_00 (40:13):
All right, next.
That is good.
Uh, is it worth investing inproperty anymore?
We've kind of answered that,yeah.
All right, should I buy a housenow or wait until 2026?
Yeah, get into the market.
SPEAKER_03 (40:23):
Yeah.
Just get into the fuckingmarket.
Just do it.
SPEAKER_00 (40:24):
Yeah.
How to avoid how do I avoidcapital gains tax on an
investment property?
SPEAKER_03 (40:28):
I am not a dodgy accountant.
I refuse to answer thatquestion.
SPEAKER_00 (40:31):
All right.
What is a good rate of return ona rental property?
SPEAKER_03 (40:33):
It really depends on what you're looking for, but the
actual you're speaking to a lotof buyers' agents, they're often
looking for about two and a halfto three and a half percent
rental yield.
Anything above that tells themquite often.
I know we've had propertieslisted in this segment that were
that were allies, but two and ahalf to three and a half
percent.
Why?
Because that means that thereisn't an oversupply in the
(40:54):
market.
And at the exact same time, italso means that the properties
have a more conditioned tocapital gain, which is why most
people invest in property inAustralia.
SPEAKER_01 (41:04):
Okay.
SPEAKER_00 (41:05):
Well, that's all we have time for today.
It's been a long one, but it'shonestly it's been a good one.
I feel like I've learned a lot.
SPEAKER_03 (41:11):
Guys, if you ever need any help with your mortgage
or your property inquiries oranything along the lines of
that, you can visit us atwww.itsimple.com.au.
If you are looking to invest inproperty, we also have a panel
of buyers' agents that we workwith, and we can refer you
several in the market thatspecialize in each particular
location.
For anything else, there'sMasterCard.
(41:34):
I've been Joe.
I've been Michael, and we'll seeyou on the next episode of the
Finance Show with Joe.
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