PC National Conference - Mark bouris

[transcript]

Healthy mortgage market means healthy banking sector, which means we get money at the cheapest price in the world, which means the banks in theory can lend you the money at a competitive, reasonable rate that allows you to go and buy something and you're not going to get stormy. They, too, don't want to nail you because they want to keep their mortgage book good quality because they get assessed on their mortgage book by the regulator and the regulator makes them hold capital against their book.

The better the quality of their book, in other words the less stress they have in their book, the less capital they have to hold as a bank. The less capital they have to hold, gives them a greater return on equity. The ROE is the thing that drives banks decision making. The bigger the ROE, the bigger banks will have to lending more money.

There's this fine balance in banks and people like me, between keeping my interest rate at a price that gives me the maximum margin, but also allowing me to have it at a low enough rate to maximize my flow in and to keep the quality of my book without stress. We know that we have stress numbers that we have to maintain and those stress numbers are very important to us. That's about keeping the interest rates, or the margin I should say, we can't determine the interest rates. The Reserve Bank does it, but the margin for risk, that 300 base points I was talking about.

Keeping that at 300 is probably as much as they're ever going to get. It's never going to go beyond that. When I ran Wizard, it was 120 base points. 120 base points above the cash rate. That's a very important graph for Australians to understand how good quality this base. That's across the nation. You might have worse in the Gold Coast and better in Brisbane, or visa versa. Worse in Tasmania than it is in West Australia, worse in Tasmania than it is in Sydney. That's a national number.

Property Club 20th National Conference

Secrets to an Early and Wealthy Retirement - Part 2.

Achieving this wealth, we need to look at price and quality, so diversifying our properties in price range and type. We heard this morning Kevin talk about one bed units, they're a good strategy, as well as different types of properties. Diversifying around the country. When I started in the club in 2003, every time we could buy a property it was Queensland, so we got 8 in Queensland, so we're really well diversified, got the whole coast covered, Gold Coast, Brisbane, Sunshine Coast, Cairns. Bring on the growth up here, so I hope Kevin's right with what he says about south east Queensland.

Mentioned the different stock types, the units, the townhouses, etc. These little speed bumps can be insignificant, it might be a big thing at the time but when you look at your portfolio and over time, it's just a little speed bump. Expect problems. There is a risk in any investment we do and there are going to be problems. We've heard from different people saying, we're dealing with individuals building properties so sometimes there could be a problem with a property and we need to work around that.

Body corporates can add values and at our PMC events Wendy does a fantastic presentation on body corporates. Understanding your body corporates and participating in those, helps you in your wealth creation and your journey. I won't touch too much on that because Kevin bagged them this morning, valuers. There is speed bumps with valuations and we see them everyday. There's a few going on in Melbourne at the moment, huge low valuations coming in. But we work around it, the brokers are now able to work around some of these problems with valuers.

We need to have a long term focus, it's not just short term. Troy and I, we're the complaints department. When there's members who have problems with their properties and their portfolios. "I bought a property last year and it hasn't doubled in one year." They want to know why Kevin's strategies not working. We need to make sure it's a long term process and focus. There's going to be other things that happen along that journey that will be little speed bumps but don't be put off by those.

You need to surround yourself by a team and Gar spoke about Harpel this morning, he's got a fantastic team over in WA and Garths property mentors are leading the way, so we can all learn from those guys. The team you have, sometimes you can't do much about your partner but you have to work around that.

Check -> Secrets to an Early and Wealthy Retirement - Part 3.

To read more about wealthy retirement visit Property Prosper Retire by Kevin Young (founder of Property club)

Jan Parkinson - Branch Manager of Property Club in Adelaide, South Australia

I'm Jan Parkinson and I'm a joint branch manager with my husband Robert. We've got the Parkinson branch in South Australia. We're in the metropolitan area of Adelaide. Property Club, we're a group of people, we've been in existence, we're coming at twenty-one years. We're people who've bought property and we've experienced property, and we can help other people to do the same thing. We provide education, so that's the first thing we really want to do is to educate people so they're making sound decisions. We do that through workshops, whether they be online or in person, we have dinner meetings and advance workshops for those people that are at that stage. 

Educating people so that they can make good decisions. We can put them in touch with brokers. They may have their preferred lender, if they don't then we can put them in touch with a broker who will be able to assist them to go through their finances and work out what capacity they've got. Once they know their capacity then they can access our profiles to know about the properties and then now they've got access to our researcher information, researchers who backup all of their properties with very vast research and very extensive, say, twenty page profiles. We assist members through the whole purchasing process, so we've got credit solicitors who will work with the member. We've got an inspections department who will check a new property out before they settle. 

We've got rent service, is a program that will help if you don't have a tenet within fourteen days then we will help with paying some of the rent for the member and always ongoing assistance. My advice with investments would be due diligence, get yourself educated, don't make a quick decision, and that's where the club can come in. One thing I would say would be to look for something new. In going into an investment, we made the mistake of cross collateralizating our loans and not using a broker. That's something else that I would say, if you're looking at property investment to consider using a broker. They're the ones who know the products that are out there and they know the better strategies of setting up your finances and good research. You can get that research through the club. 

You need to diversify around the country so that you're putting your investment into following the Property Club around and we've been able to do that through the club. A first time investor, the first thing they would need to do is find out their borrowing capacity and the Property Club can do that easily for them by using one of their appraisers or brokers. A form to fill out and it's called a financial wealth check form and we would send that to one of our Property Club brokers who would give them a letter to give them an indication of what their purchasing and borrowing capacity was. As first time investors, you could be well put-off by negative people, so you need mix with positive people, like minded people, and that mean coming to Property Club events and talking to members who have been there, done that, and getting confidence from them.

I think that another thing people do is to do something. Do something. I, myself, would rather take the risk and there's risk in all investments. I'd rather do something to try and change my situation then do nothing. Be motivated, don't procrastinate. Easy to become a member of the Property Club. If you're talking to someone who's a member of the Property Club, all you need to do is give them your name, address, phone number, email address, is all that we need and pass that on to a property mentor or to a branch manager. Kevin Young is our founder and our leader. He came up with a wonderful concept. Kevin does go around the country to speak with members and is always available to answer member questions. 

Robert worked with a gentleman that has no become a property mentor and he worked with this gentlemen, Peter is his name, and he came into Robert at work one day and said, "I'm really disappointed with you" and Robert was surprised and said, "Why would that be?" He said, "You've known about Property Club for eight years," I think it was at the time, "why did you keep it such a secret," because he had discovered the Property Club through us. He had come to meetings and he had discovered what property investment could do for him, how he could minimize his tax, how he could grow wealth, and he wondered why he wasn't told earlier. That man and his wife have now put an expression of interest on their third property, so they're turning their life around through property investment.

Troy Gunasekera - Branch Manager of the Property Club

I'm Troy Gunasekera, a Melbourne-based branch manager and national manager of the Property Club. Today, my role as national manager encompasses assisting, mentoring the Property mentors and branch managers through the process, how we support our members, how we deal with queries that arise, assisting on the marketing side of things. I write a blog every week with Kevin. Kevin writes his blog, I write my blog. I'm an immediate contact, I assist with PR to be put out and work with club members.

The satisfaction I get out of working at Property Club is really the success that many members get, the assistance that my wife and I got through the process. It's so good to see them multiply many times over that many club members through the process, the support and assistance they get towards to getting a better retirement at end. At the end of the day, that level of financial independence down the track is just fantastic.

The future of Property Club, where I see it going along with Kevin Young, Kathy, Phil and the rest of the branch manager team, we're going to continue innovating when we can or really continue to push the boundaries and see how we can assist members and reward them and support them more importantly throughout their investing process. It's really important to us and the ongoing support is something we've been so proud of over the last 21 years and will continue for many, many years to come.

Our Property Profiles that I put together on to a minimum of 20 pages. They cover things like site plans, wall plans, location appraisals, comparison appraisals, we look at comparative sales in the streets, suburban area, comparative rentals in the street suburban area and really give a lot of information so people can be totally comfortable but really understand how close it is to local employment hubs, transport and a lot more things like that.

We've also have implemented a really unique system called the Star Riding System. It's like if someone is to buy a car and the primary thing they wanted to look at when they're purchasing a car is safety. If safety is number 1, then really the looks, the color or the other things, they're sort of secondary to safety. Likewise with that, we've put together a Property Club Star Riding Panel and we write them internally, objectively to look at what it's built and made up, how close it is to local transport and infrastructure, how it compares to other developments, properties in the streets suburban area.

The support the members receive when they're going through the process is really, really important. One of the most important thing is the numbers analysis and understanding how the numbers actually work when you're holding a property. Some people already have one or two properties. It's important to draw a line in the same, understand how much those properties are costing to hold. Then if another was to be added to that, as to what that would do to the numbers, how the numbers would be changed and what they would be. We see a member go through the process until they are able to explain the numbers to us. Once members explain the numbers to us, then we know that you'd get them and we're able to assist you through that process. 

Contact Property Club for more info.