564 | From FOMO to COMO: What Compromise Gets You Into the Property Market?

(upbeat music) All right folks, well we're back to the PropertyCounts podcast and we've got an amazing episode for you today. We are talking about Komo. We've talked about FOMO, we've talked about FOPO, but now we're talking about Komo Ben, what even is that? Well I'm not gonna tell you, you'll have to listen to the show, Bryce, but we're gonna give you eight different ideas of how you can use Komo to your advantage. Mate, you've gotta work this out folks. Let's rip into the show. Welcome to the PropertyCounts, where each week you get to listen to two of Australia's leading property and money experts. Bryce Holderway, co-host of location, location, location, Australia on Foxtale's lifestyle channel and co-host of Escape from the City on the ABC and Ben Kingsley, chair of property investors, Council of Australia and a back-to-back winner of the property investment advisor of the year award and both the partners of the multi-award winning and power wealth. Co-creators of more, the free lifestyle design app as well as best-selling authors of the armchair guy to property invested and make money simple again. Stay tuned as they renew the insider's guide to property, finance and money management. All right folks, welcome back to the PropertyCounts podcast and Ben, welcome back to you to literally what is the couch. Great to be on the couch, great to be on another framework today. We're gonna have a little explore, a little fun idea. We are, yeah. I'm looking forward to it. Me too, but before we get there, I just want to remind folks, we're in that time of the year where we're doing our shout-out for our annual shout-out for summer series. And if you kind of rewind the tape back to February of this year, normally we come back from summer band and we decided people, hey, look, put a line in the sand and say, look, really dig in for the year and get your money smarts organized or buy your investment property or really work towards making a transformation. So what we're doing this year for summer series is we're conscious of the fact that people are in summer doing different things and they want different content to consume two lanes. First one is if you've actually landed the plane, you might have been doing it for 20 years, you might have been doing it for 25 years. The longer the better, but that's not a filter to say, I haven't been doing it for a long time, to don't put your hand up. But let us know what you've done and how you've done it and how you're enjoying the last time. And we want to know the story around what you paid for it, what's it worth today and how much is the rent moved up over that time and when did it go from maybe negatively geared to positive again? But that's the story, right? 'Cause this is the stuff we say happens over the decades, it doesn't happen over the minutes or seconds, it happens over a long period of time. - It's like I think about the property, the oldest property I've got in my portfolio is back in 2002 and I paid $191.5 and it's laughable now. - Absolutely laughable. - I've done the same thing. I went back on the more platform and I put the original rent that I got for the Copeland Street property in Sydney. And I've seen all of the rent increases, you know, from, like, I think the original rent I was getting is like $23,000. - Yeah, yeah, yeah. - And now it's up to almost $50,000. - So 23, what are we talking about? 500 bucks a week. - The year was about, I remember, I think from memory was around 4.8, 4.9%. Obviously the property was 3.95 at the time. It's now circa 17. - Yeah, yeah, but it's just, so that's what we're trying to teach you know, that's gonna happen. And when I see it on my more graph and all that, I guess the hardest part for people who haven't been investing for 30 years is to sort of get your head around. - Believe it. - I'm gonna buy a $700,000 property now and at some point in the future it's gonna be over. - Yeah, for me. - Like, correct. - So that's a part of the compute. - So if that's you, we would definitely love to hear from you. And also we're trying to provide an outlet for those folks who, if they've been burnt by a property experience, what happens is they retreat and they suffer in silence. And what we've experienced when we've been chatting to people over the journey on camera and off cameras, just the getting it off their chest is a really cathartic experience and a problem shared is a problem halved. So we wanna help people who may have experienced the negative process and they wanna come and chat and what that looks like. So if that's you, if you've got a feeling you're stomach, I often say that that is the sign that you should reach out on both of those lanes. But if you fall into the latter and you're feeling maybe a little bit ashamed or some other sort of unresourcible emotions around that just know that we're gonna take great care of you. We want you to come and share your story and be of great service to other people and hopefully then I can offer you some insights and some encouragement and a path ahead in the journey. So if that's you go to the propertycouch.com.au you forward slash my story and we would love to hear from you Ben and we're in that season Ben around property and people are out. So we've got some free reports that we wanna talk about. - Yeah, we do. I mean, ultimately it's the spring selling season almost one month in. It's obviously a pretty active time. Certainly I've seen a lot of price pressure. So it is a rising tide lifting all ships. So if you're thinking about entering the market now's not a bad time to be getting one of our free reports or a couple of them after that matter. So just go to the propertycouch.com.au/freereport and you'll be able to get access to those free reports. - Yeah, very good. And folks, it's just not stuff that's been made up on the internet that you can get then scraped. It's there's some algorithms, there's some data, there's some demand supply school. - There's all those sorts of things. - You'll be surprised at how much just gonna have a look. Trust me on that one. It is not just something you can make up on the internet. So no. - Hey, my mind's been a theme today Ben, 'cause I'm thinking about we're doing tomato cameo today. We'll explain what they look like. I've got my little black book from my Warren Buffett quotes that Jasper gave to me, right? So I've had a look at this one and I'm trying to think, does this fall into the theme of today, but Warren said this, most people get interested in stocks whenever anyone else is. The time to get interested is when no one else is, you can't buy what is popular and do well. And the reason I thought that might be something that we could talk about today, 'cause we are talking about trying to help people get into a market that is popular. And particularly in big cities, it's expensive. And so you might need to look a little bit outside the square and I guess that's what the sentiment of what Warren was saying there is that it's easy to ski downhill. You need to be able to zig when others are zagging. And yeah, so there's an art form to obviously the investment strategy talks about, which is effectively value investing. So when he sees value, which is when other people are fearful, he gets in. When he sees excess and irrational exuberance, he's trading that value 'cause he's already bought into those particular markets. But yeah, certainly when I look around all the Australian markets at the moment, is there a lot of value? Well, it's a rising title listing all ship story. So how far this particular price movement runs, but what we don't wanna do is using your downhill skiing analogies, getting in front of our skis. Normally, if you lean forward too far, you can potentially get hurt. And we are definitely seeing a lot of irrational exuberance in that entry level side of the market at the moment. I don't think that's gonna stop anytime soon and we're seeing a lot of buyer's agents and all of that sort of hyper bowled it up. So it's an interesting time. All right, as an introduction to today's episode Ben, I just wanna talk to this here. Have you noticed that the conversation around property is shifted? Not long ago it was all about BOMO. I, the fear of missing out. People were racing into the market, desperate not to miss the boom. But today it's not BOMO, it's COMO. And of course COMO, Ben, means is compromised price. Or miss out. Promise all miss out. So we've got BOMO, we've had BOMO, we've now got BOMO, which is the compromise on miss out. So we wanna talk about a story. We're gonna put it in the show notes that was aired on SPS. So we'll obviously put that in so you can check the link. And you've recently featured it on what's making property news. A few weeks back we had a bit of a chat about it in terms. And I thought, actually there's more here to be talked about in terms of what are some of the ways in which I can compromise as opposed to missing out. Or think that it's beyond me, all right? Is the great Australian dream beyond me? Well, we're gonna give you a couple of ideas about how you can potentially still get on the property ladder and not comp. Well, the great Australian dream is still available to people who are prepared to do something that's either bank and mum and dad inheritance or do something that other people aren't prepared to do. So in that article Tim was 31 and he was a digital marketing professional on a six-figure income, no debt, even owns an investment property. And on paper he was doing everything right. But living in Sydney, which is a tough city to try and break into, paying nearly 600 bucks a week in rent, almost 40 grand a year. He felt like he was running on a treadmill, earning good money, but never actually getting ahead. So what did he do? He packed up at left Sydney, moving almost 600 kilometers inland to the tiny town of, I don't even know if I could say this probably been, Barcaldon. I've looked at that in Central Queen's land. Barcaldon is the only other one I was gonna have to swing at. He calls it his financial gap year, right? So here's a case of compromise on missing out been. His new job on a cattle station came with accommodation, so he's rent gone. His expenses down 75 to 80% no rent. His expenses down 75 to 80%. So last month, his only major cost was $220 on groceries. But here's the kick up. With his savings rate supercharged, he's now on track to bank around $100,000 in a single year. Tick, and he's already mapped out what comes next. He plans to buy a small hobby farm in regional Queen's land, something he would never been able to afford if he'd stayed stuck in the Sydney rental track. Now there's a spin on that. It's not for everyone to do that, but it was for him. - Yes, agree. - Now that's not the forever home, but that's not the forever location, but the decision compromising on location completely changes his financial trajectory, and that's what today's episode is about. So in this market, if you're trying to buy a property, you're not gonna, you are definitely gonna face compromises. Unless you are blessed with a unlimited budget. - I don't think that anyone who bought a house in the 1960s wouldn't say they had to compromise. - All of the 70s at least, but there's no doubt that compromise has to come in. - Yeah, so, you know, affordability ceilings, borrowing limits, tight supply means you can't have it all right. So we're gonna give you at the end of this episode, clear idea of how you can shift from the frustration of waiting for the perfect home, actually taking steps that get you into the market, build wealth and moving you closer to your goal. So stick around folks, we're gonna give you eight ways that we've come up, not an exhaustive list, but it's not the only list. - No, no, I'm sure people could add to that, put it in the comments, share it with us on socials in terms of some other ideas of ways in which you can save or get into the property market. - Well said, so we're gonna do that. But before we get the bend, we're gonna revisit one of our earlier episodes, the Buys Decision Quadrant. Can you talk us through that? - Yeah, so what we're talking about here with the Buys Decision Quadrant, it's in our new book, and it's in our first book as well, that there's four quadrants, naturally, four areas, price, location, land size, and dwelling type quality, slash quality, right? So we believe in terms of all of the work we've done in terms of talking to clients and understanding their needs. In some area here, you will have to compromise, right? There's not really anything such as the perfect home that we can all afford, right? Like if we all wanna live in Point Piper, that's a dream, but none of us can afford it, so it's not a reality. So we have to think about that. So let me start, I'll unpack the first one, which is price. So effectively, this is one of the biggest ones, right? We're usually hit a ceiling when it comes to our budgets. So when we're hitting that ceiling and coming to our budget, we've gotta say, okay, well, that's, you know, can I compromise on price? - For most people. - Really? For not me, yeah, so let's move on to the second. Well, the only space that I see it for people to compromise on price is they've said, I've got a borrowing capacity of 1.1, but I only wanna go to 900. So that's the, for most people, that's your only wriggle room on price, 'cause for us, but what do we know about that, that usual outcome? - I'll look at that anyway. - Either they'll, they'll condition themselves. After they start their own research, they'll move up on price. - Yeah, yeah, yeah. - But no, but it's a fair one. Like, and if you are disciplined, and you can stay to a budget, then maybe, maybe you don't have to compromise on price. The second one is in terms of land, sorry, location. So location for us is around, it obviously has a direct correlation to price, because some locations are more expensive than others. So you've gotta start thinking to yourself, do I have to move out further where affordability becomes the main stay? In terms of, as I start doing my research, do I start to think about location? And so usually, people have aspirations on location. And so we find that, from, you know, dealing with thousands of clients that we do, that some aren't willing to move on location, because they want the lifestyle drivers, the amenity, potentially the status, but also comes with living in those, you know, nicer pockets. Maybe they're also interested in prime rates, schools, those other things. So, you know, they're thinking more medium to longer term about the livability of that location. So maybe that's a harder thing to move from. And then so, the next one, Bryce, is what we talk about in terms of what bang for a buck of land, do I get when I'm thinking about the prices? - Yeah, because it's, if you're fixed on price, and location does 80% of the heavy lifting, it really normally comes down to these two, not always, but normally comes down to these two. Are you going to compromise the size of the land, or are you going to compromise the quality of the dwelling? And it really comes down to, if it's, let's go and rock it by first here, really comes down to what your ego will allow you to have. Isn't it? Because if you're buying, if you want to get onto the property market, and you're wanting, if you're wired in a way, that means that you need to impress people, you're going to go shiny and lower land size before you go higher land size over renovate or detonate. And that, so really you have to do a deal with your ego to work out, which one of those two really matters most? Then clearly for us, the higher land size, you can get the better, not only for your lifestyle needs, but your investment. - Well, technically from a, you know, sort of, the idea around future productive use of that land, and margin of safety if I am wearing, you know, sort of this hat that I want to get a return, but I'm still unknown or occupied. So what will happen there is, especially if you know a relationship, is when you talk about, you know, the price of the ego will afford. If I go out to a new estate, and I can, you know, walk through those new housing estates, the effectively, and I can visualise myself living in a brand new home, and it's got the beautiful kitchen and open area and our fresco area. All of a sudden I can start to have these relationships with how I'll entertain and the memories that I'll create. And the further I go out, the cheaper the land, not so much the cheaper the construction, because the construction is, whether I build that closer in or whether I build that out, it's sort of almost a fixed cost. So, you know, if you get emotionally attached to that story, you're going out there thinking that, you know, I'm going to have all of these great memories that are created. The interesting bit of feedback that we see from a psychology point of view, is that if people have been living closer in, and they like the dynamics of the inner city area, and they go out, but all their friends have compromised on the bigger house and gone for the townhouse or gone for the flat or the villa, those friends don't come out as often, and so they feel isolated out in those out of suburbs. So this comes back to that point, you know, that it's real. And so, you know, they might stay out there for a year and a half two years, but they're just not, you know, if they are real social creatures, they'll want to come back in. Right? If you're a, if you're a, you know, a homebody, and you don't like that and you get that through your work, then, you know, you might satisfy that hunger of, you know, that human psychology of connection. But that's, that's what happens when we are talking to clients. Like, okay, how much value do you put on, you know, that beautiful home and the, the status that it brings you, but if no one's coming to have the dinner parties with you, cause your 45 columns from city, and, you know, they just prefer to be around you and, you know, it doesn't matter if you're in a round table in a villa, you know, too better at that time, you know, that also plays into it. And then obviously growing out, if you've got a growing family, you ought to think about the number of bedrooms and all those types of things coming to play as well. Yeah, so there you have it folks. It's just a revisit of a, a fundamental framework we've written about it in both of our books. And we think when you're all going to search for a property, whether it's an investor or an owner, I can buy that framework. It's going to, and, and doing the work on that framework before you start going out is really where the magic lives because trying to do that on the run when the heart gets invested is, is a challenge. But folks, that's assuming that you can actually get on the property ladder. Some people might be listening to, oh, that's nice that you get to compromise on at least one of those four years. We can't even get in on the, in the first place. So that's really what we want to talk about today. We've revisited the framework. And part of that is the strategies that we're going to talk to you about will address which area that you're compromising on. But before we get there, so how can you apply the fear of all the compromise when we say it smartly right? So there's a few things. One is getting clear on what it is that you want. Rank your priorities. And if you think about, you know, we set it up with Tim's idea earlier, Tim's priorities wasn't to try and find another part of Sydney. Tim's priorities was to actually go and be somewhere else in the country that gave him the best opportunity of saving that big cash balance that allowed him to move forward. So sometimes it's about being strategic first. It's not like which suburb do I want to be. And it's actually, does, if, to use that, does Sydney serve me? Am I better off being in Adelaide? Do I have family that are into state and I've moved away? And the fact that I've moved away is making it more difficult for me, like being super clear on, you know, we sort of call it North Star, your vision, your strategy, whatever you want to call it, getting that up front is super important. You need to put some work in that before you, before you start getting in the arena. Yeah, and I'll bring a really practical way of looking at this is, you know, game would know when I was a lot younger and, you know, I'm a social creature, as you know, I obviously feed off other people. If I hadn't seen anyone on the weekend of my mates and something like that, I was a little bit grumpy, come Sunday night. And so the reality for us is that we wanted to be and need to be close to that because if I'm not going to have happiness, so I might have a nice home, you know, it might be out in the burbs. Yeah, but it's not necessarily filling my bucket from an emotional and connection point of view. So I've got to be thinking about that. And so there's a fair bit of slow thinking in that because a lot of people, for the point I made earlier, if they don't think about that and they just think, well, you know, we'll go and buy and we'll get started in our life out in the burbs. But they've got disconnect with family. That's going to affect them. And property has a lot of entry costs and the costs on both ends. So I really like that one first. Number one is to rank your priorities and start thinking about what's important to you. And then number two is, okay, well, how much can I afford? I go back to that first part of the quadrant in terms of price. What is my boring power? And what is my trap surplus? And what have I got left over? Because if we start with what we want and then we start from where we are, then we can start to get a better idea of where do I need to be? And which part do I need to compromise on? And which of the strategies that we're going to offer up as suggestions that you might need to even consider? Hey folks, Ben here. I hope you're enjoying the podcast. Now, if you want to take your property, finance, and money knowledge, even further, check out the new mind knowledge in more. We've packed mind knowledge with over 120 plus free resources from free reports to educational video series to fact sheets, on-demand courses, and heaps more. Get started today at theprobticouch.com.au/myknowledge. Yeah, and I think that flows well into point number three, which is, if that is my budget and we saw Tim, he's gone and said, "Well, I need a bigger budget. I need a bigger deposit to get into the areas that I want to get into." So I'm going to go off and save that so I can potentially come back into the Sydney market with a realistic deposit that might get me closer to the central business district or closer to where I want to live with the type of property that I want to potentially enter that rein to the market into as well is definitely going to be something like that. So that's when you can start exploring creative ways. And what was Tim's creative way in terms of getting out there? Well, he went and said, "I'm going to go and earn an income but completely removed my need for paying rent." And so every dollar I'm then saving. And if I put myself out in a regional town, I've got no temptations to go to the movies or to go down to the pub and drop $250 on a night out. All of those things are gone. So I think we can think and we've got a couple of creative ways. We're going to get to those in a minute. But I think point number three there is explore those creative ways and think outside of this way. Yeah, and let's play Devils Advocate because the first two get clear on my priorities, the term I'm borrowing capacity is in my cash flow, universal right. But it's the third decision that you just said is actually fork in the road because you can actually go and to your point think of creative ways to get in. Or what seems to be the most common shredded path is to then get into the poor me narrative. Which is property is, you know, your property investors are making it hard for us. We're never going to get in where the younger gen like you and I personally know so many young people who've gone in. So it's actually just not fact and that's the messy. It's actually not fact that you can't get in. Is it difficult? Yeah. Is the deposit saving hard? Yep. Is it impossible to get? No, it's not. And so that's really what we want to say here is there will come a point in time in the future like you when you're in parts of Europe where it is just impossible to get into the property market. But that's not the case in Australia yet. We are moving towards that, but it's not the case yet. I mean, if you were to summarize or define the word compromise, what we're basically saying is what are you prepared to sacrifice? And when do you want to do your hard? Yeah, as part of that story. Good point. Effort and sacrifice and they're not the same. Sacrifice is what do I have to give up that I like doing? I know, effort is what I have to give up that I like doing and what the sacrifice is, what do I have to do that I don't like? Yeah, and it's because you're right. I mean, in some cases, I might still have to give up the frequency of the things that I really love doing because that could be another portion. Because if you can't still get there, but you keep all your non-negotiables, well, then you're not thinking hard enough and you're not making enough sacrifice. So if travel and experiences bring you great joy, but the reality is you only can do them two times a year or one time a year for a couple of years versus the four or five times a year that you were doing it, that's another piece of the equation that you've got to be doing. Yeah, well, just blessed in this country, it has such an amazing lifestyle and but it comes with the flip side. It's expensive to live here. So, record priorities, get a clear picture of your boring person, your cash flow. Open your mind and again, we're talking to people who can't get onto the market. So they've got to compromise on this out. Open your mind to exploring alternate pathways. And I guess then get to work, just decide which one that you actually want to do. Well, I think if the reward is worth the effort and what we are talking about here is the long term outcome of the lifestyle by design you're trying to create, if that moves the dial enough for you, then go after it, get on after it. What we are to your point, Bryce, what we're seeing in some areas of society, where that effort and that hard brings excuses or brings denial and then later in life, they're going to regret that. And in fact, I've got some data in what's making probably news that sort of supports what we're saying here about. So I'll give a little bit of a way of it now, but one of the greatest regrets for people about getting on the property market is that they didn't get on sooner. And so it's about making those comments. Well, for most people, there's regret, there's regret around not getting in at all if they don't. And then if they do, it's not getting in sooner, right? Because we've talked about this so many times in our podcast, but for those who are new to it, it is a world of hurt in retirement if you don't have the basic need of roof over your head. So we understand that there's alternatives. You can go and put your money into ETFs, for example. And you might have a cracking ETF portfolio by the time you retire, but that ETF portfolio is not going to give you our economy and our society and our governance around all of that is preferential to the family home. Now there will be some tweaking to that. I suspect over the next 30 to 50, but still the fundamental reward and financial security comes in owning property. All right, we're going to talk about eight practical ways to compromise. The first one we're going to call hustle and restraint. Now what this means is that you are going to go, all right, I'm, I live in Melbourne. I live in Adelaide. I live in Brisbane, Sydney. I am actually going to do my job and I am actually going to get a side hustle. And the side hustle is going to last as long as it takes for me to achieve the goal. So we've got examples of this. We had Harley on our podcast. He worked two jobs, 70 hours a week, no silver spoon. You can go and check that episode out. And basically, he just said, I am going to let my, so let's talk to those people. You have to get your ego in check because you aren't going to burn money on weekends out. You're going to be working long hours. But if you do it well, you can actually strategically plan catch ups. You can strategically plan going overseas on a shoestring. And keeping the eye on the prize by going, I'm working two jobs and I'm only doing this for as long as it takes for me to get in because once he did that, it then became a snowball effect point. Well, look, I mean, I've got a lived example for my father who for three jobs for 37 years. Now, you know, when he first bought our home in Bandura, you know, 1970, he put a deposit down for the piece of land in 1971, the house was built AV Jennings home. He was working, he's main job and asset, but also a cleaning job. And then picked up a second cleaning job and did some, you know, ad hoc weekend. But did he still do multiple trips to Asia and, you know, do all the travel stuff that he loved and perks that he got from working in an airline? Yes, he did. So that's nothing new, you know, we're talking, we're going back there, you know, what, 50 odd years. So I really think it's really important for people to say, well, you know, Uber driving or whatever it is that I'm going to find to get that second income to get a deposit up and fast tracking myself to my first property makes a lot of sense. Yeah, well, it's normal to us, isn't it, because same, same in my house, bad bodies property back in, we bought the land in 1986, built the house, we moved in in 1987. And he paid off the mortgage at seven years. And he was working Saturdays. I didn't see dad during that time. That was during the recession we had to have. So it wasn't like there wasn't any adversity that he had to overcome. Very high interest rate. Yeah, we were definitely middle Australia. We were probably, you know, if we were being honest, we're probably the lower end of middle Australia too. So, and to the point where my sister, when she first met my brother-in-law, when it was a book at the time, they were going out for dinner and that was foreign to me. Like, we were at the occasional hungry jacks. We never went out. Yeah. Maybe we had a can of meal over something, you know, but the public arrow won't get the thing or something like that. Yeah, absolutely. So it's not something that we're saying, oh, that's nice for you too, on the ivory tower to actually suggest. Like, we've lived and breathed that we've achieved some Thursday night. That was probably our luxury, right? True. Yeah. Yeah. And watch the Henderson kids on Friday night. Yeah. That'll go over the head of most people. But, um, so the first one we think is, um, is the obvious one, which is the hustle and constrict. But what are you compromising on? You're compromising on your lifestyle and your free time. Yeah. Um, and I guess you get to, you, you manufacture your affordability through just a bit of hustle, a bit of discipline. Yeah. And you're bringing forward. Yeah. You're bringing forward that, that opportunity. Yeah. Yeah. Yeah. So it's easier than ever to get a side hustle. I mean, when you're driving to work, just pick up a few people on the way in and the pick up a few people on the way out and do some stuff on the way asking. Let's just over driving. It just didn't exist back when we were doing it, right? Falling some of your, um, you know, stuff. Yeah. You get to find some arbitrage on doing that. Um, you know, we're in an AI pivot where, um, if you go and learn how to, to understand AI and help people, the dinosaurs like us, um, far out. So it is never. So hustle and restraint. What about the second one? Yeah. Number two is rent, investing. Obviously, this has become a, you know, um, if I had to say it was a real niche when we first, you know, and let's credit to Chris Gray. I think he was the one who coined rent, investing. But we did the, but I've been doing it since the, um, my first rent vest was 1999. Yeah. There you go. And, and we did the article for Money Magazine at the time. Where we analyzed, you know, the value of rent, investing versus, um, so which effectively is, live where you want to live. And then ultimately trap that surplus and put it to work, right? But I think now that's even evolved a little bit more where people are also still compromising on where they're living, um, you know, like they're still trying to be budget conscious, but they're still trying to get on the property ladder. And so we're seeing a lot of this through the next generation of bias agents who are teaching people to try and buy two or three affordable properties really quickly and get a quick win on those and start trading property. Now that's not, that's not the rent investing that, you know, and that's not the value investing that we believe in. But we can understand why there's tactics in that, but there's also self interest for those bias agents. They get to buy multiple properties and charge multiple fees. Brokers get to obviously do multiple loans. So it's definitely a different way of of thinking about how rent besting plays itself out, but it's a thing, and it's an opportunity. I guess to your point too, like we're not trying to say rent best to build a big massive portfolio. We're saying rent best to get into the market where you want to go. So yeah, let's go. Let's circle back. You're spending big rent in Sydney. You can't afford to get into Sydney, but you can afford to buy something, you know, you know, a regional town that stacks up right, commutable regional town, and then you, and then you move into a bit of hustle and restraint as well, so you cross those over, and then you ideally would hold that property, but you may have to trade out of it to get the deposit to then buy where you want to get on the ladder closer to where you want to do. So remember the context of what we're discussing here is not to get into rent besting for big portfolio. It's rent besting to get you into compromise so that then you get into where you want to go. And I think, you know, with the rising tide lifting all ships at the moment and this hustle that's going on in that space, that there might be a false dawn here around that there's easy gains to be made. Like the reality is, if too many first-owned buyers get locked out of this market, politically it's going to be challenging. And so we'd expect regulation might come in and sort of sway the problem of, you know, these quick gains. So we support rent besting. We think it's, you know, but it's not for everyone, but it's definitely another opportunity. Okay, the next one we want to talk about is downspot downsizing your expectations. So let's imagine you're a young family, if it's living with mum and dad, so you can save it deposit, you've been doing really, really well, and you have aspiration for a big block, a house on a big block so that your kids can run around. Great. But what compromise might you need to consider there? Well, clearly, if you go back to our framework of size of the land, quality of the dwelling, it's definitely one of those two. So what we're suggesting here for those folks is instead of buying a house, which is the preference we know, and it's what we preach on the podcast, you might go and find something that is to use our term investment word in this investment grade. So a townhouse or a villa unit, and by villa we mean a, maybe a shared driveway. It's got its own land. So that you can actually still give your kids, or your family, that opportunity to have your own space, particularly if you're, if you're currently on some form of compromise to save you deposit by living, still back at home with mum and dad or whatever. But get in closer, get your townhouse, and then just really start to get, go back to hustle and restraint so that you can build the equity, power down some loan, and then either use it as a springboard to buy what you want, or again, trading through that to get you deposit so that you move onto the onto the bigger house and land. So come back to your non-negotiable. If your non-negotiable is I want to be close to the action tonight and we really love that, then the compromise is absolutely on type of dwelling. No doubt, because we're not compromising on the land, so let's start to think about that. And then to your point, if we get into a property that might be, you know, a townhouse that might have been built in 70s or 80s or a villa that might have been built in the 60s, dump into that. And if it's in original condition, you know, potentially a bit of sprucing as well as, you know, as well as blaming the debt, especially before kids. I mean, the kids bring a different variable because you've got other things to think about. You've got to think about schooling, resources, daycare, all of the other resources around that area, availability of schooling, quality of schools, all those types of things. But I think if you're young and you're thinking about getting into the market, get in before your five or seven years before you think about family. You will be really well set up. You're agile. At that point, there's the agility that you lose when you're trying to deal with family. So, okay, so the first one's hustling restraint. Second ones are investing. Third one is downsizing your expectation so you can get in. Another area that people can compromise, Ben, is by teaming up, have some form of co-ownership with ideally blood. But, well, actually, that's a big statement. I think it's a reasonable, it's a reasonable start. Assuming harmony. Yes. Assuming harmony. I think that's the, that would be, it's a lot safer and I think you'll get a lot more buying from your parents. If it is blood-related, agreed. Agreed. I mean that the risk we know with our friends is, you've got to have a contract, like, and you've got to be really clear on that contract is because if you're going to be starting out and you think that this is going to people's situation, it's not going to change or their interest aren't going to change over a 10-year period. You're wrong. So, you've got to have, in my mind, a minimum of a five-year statement. And there's got to be some hurt in terms of if one of them wants to cash out, they're going to lose the game and the other party gets the cash effect. But the point isn't having some form of restraint that grants a disincentive to break. Because everyone's excited, we all want to get on the ladder. And the thing with, the thing with people living under the same roof is it works best when you've got the same agenda. And so, when you even siblings don't have same life agenda, our friends have an agenda that matches at the time of entry. But over time, that agenda can, can, can part, but look, the reason, the reason it's so good is you can pull your deposit. Like, if that's, if that's the hard bit and we acknowledge that maybe our grandparents, like, is affordability has been hard over the generations. We said that poor, but it's the deposit raising, which is a challenge. Absolutely. So if you can pull the deposits and buy together, you will compromise on full control. You will compromise on independence. However, you'll get a fast track into the market, hopefully a better location. Therefore, as a result, maybe one or two percent better growth than if you had a gone your loan. And at some point in time when you need to, to part ways, ideally to place a residence for the both of you and you move on. It's all commercial. So, so let me just explain. So yes, advantages are really strong around double deposit. So that means less debt. These days with loans, you can actually do split loans through your broker. And that will allow you to track the portion that you're paying down. So, it's nice and clean there. You could have both of you initially say, we're going to both move in. We're going to save on rent. So that's a, that's a pro as well. But then maybe what if you did partner up or your partners feeling like they want their own space? So you get to move out. And that's true. The other person is still on a commercial rent. So that's a commercial rent for them. And if they want to place exclusive to themselves, they're still playing the commercial rent. And that goes into a pool. So it's really easy to basically do the numbers around that. So if it's, if it's just all done commercially and everyone knows what the rules of engagement are, you're going to get a good result. Yeah, I like it. Okay. So that was co ownership with friends or siblings at number four. Next time, I'm going to talk about is what we're going to call house hacking. So what does that mean? Well, buying a house that has an alternate way for you to earn an income, right? So think about a granny flat or maybe if you're after a two bedroom house and you get a three bedroom house, which increases the commitment, but you can rent out a room to someone else. So largely thinking, okay, how am I going to afford this by showing it with other people who aren't co ownership like the first one, but they are co-existent. They co-teniting and they will help you with the cash flow around that. Oh, don't have a car. Yeah. Well, it's like we go away to, to Perth regular, you know, we've got the same thing. We've got split families over the nullable. But if you're living in a location that allows you to, you know, take advantage of that now, bring it over. Yeah, the compromise comes from having other people in your place and all that stuff, which I don't personally love, but I'm not trying to compromise on miss out here and try this sacrifice. Yeah, it's about the judgment on sacrifice. 100%. So you will compromise on privacy lifestyle. And part of your principal place of residence exemption will be compromised too if you turn your house into an income-reducing assets, you need to be, you need to be aware of that. But look, we're looking for creative ways for people to get on just to reiterate that we are not in a position where it's impossible for young people or people who are trying to get on the property later to get on. But at some point in the future it will be. So it's time to, and those international students, you know, to that point around compromise on the principal place of residence exemption. There is, read up on this, but there is an opportunity to have them, you know, sort of boarding. And like, that just helps out with the utility bills. You know what I mean? Like, because, you know, when you're running an air conditioner or you're running heating, it's benefiting the whole house. So if you can get $10 or $20 for that, which is covering their cost, but that's going into your back pocket. It means that you're not necessarily paying that. So I like that one there. So that was house hacking. And obviously then we move on to number six, which is the regional hub relocation. And so what we're talking about here is not just necessarily moving right to the outback, like Tim did. But we are sort of talking about, well, you know, if rents a 30% cheaper in a commutable area and all my job, I can even do my job in that regional town and still probably potentially earn 20%. Well, let's say, let's say the premium I get for the job that I do in town has a 30% premium, right? But let's say that the rent in those reasonable communicable areas is at a 30% deduction from the premium that I'm paying in town. But what if I moved my job or I work from home or whatever or I got a local job there and I only compromise 10% on wages or 15% on wages, but I got another 15% uplift in terms of the cheaper rent that I've got to pay. So there's definitely those types of opportunities in terms of people getting out of their comfort zone and having a look at that as a possibility. Yeah, so to your point, so what about Bendigo or Ballarat or Sunshine Coast or Mulan Gong or Newcastle? And I guess for anyone who's living in Victoria, we're actually quite blessed here because from north to south in the state is actually no, like you think about from north to south in Western Australia, north to south in Queensland, even south Australia, like to go to Bendigo or Ballarat or Aubrey. It's not like you're schlepping it a long way to get back to the big smoke if you ever need a big smoke. So the compromise to some of these towns in Victoria is probably easier than like orange, but that's expensive in New South Wales. You go to some of the correct, but also those are really like they're still in the top 50 population centers, but the industry and the job opportunities there are a little more limited, whereas when you're talking about the larger commutable, they're a thriving economy within their own right. And that's probably what you also need to be doing. Yeah, and then when you want to do a U turn and come back, so we're talking about compromising on missing out. So if you go to Bendigo, which is, what is it, three hour and a half? What's three hours from my house? So it's an hour and a half. It's not like at some point in time when you've built up equity and you've saved and hustled and coming back to Melbourne, it's not like you moved from Perth to Melbourne, it's you. Yeah, there's no container ship than all of the big extra cost associated with that. So I think that one is the one where, you know, those people who are really willing that this is so important to them, home ownership is really important, but I would start to think about those regional and treat it like a medium term, you know, experiments and you're going out there and and living in a new location and, you know, just that's just a freshen up for a couple of years. And then, honestly, we'll come back in and Ballarat, for example, is an hour and 15. So like I live, I live an hour and 15 from Melbourne, and I'm in regional Victoria. Like some people commute from a mates place on the the far east of Melbourne to the far, if I'm going to a dinner party down at Port, you know, down in Frank from Mooney Pond, I'm an hour and 15 and 13. So it's not like you're disconnecting from your lifestyle, you can still stay connected to your mates and your networks and your jobs and all that sort of thing. So that's why I think Victorians are more blessed than others in terms of just that the geography of Victoria to be unable to do that. Hey, so that was what we're calling regional hub, regional hub relocation. Next one, Ben that you want to talk to is the ugly duckling. Yeah, I mean, we have it as one of our strategies, you know, our 17 strategies in the book. And it's really important to understand that how, you know, location, location, location, right? So if I want to get into those locations, I've got to compromise on the quality or the condition of the asset. So how, how much am I willing to compromise? Because if I can buy where the land to asset ratio is in my favor, and I can improve the condition of that property to modernize it a bit over two or three years, mate, that, that to me is a no brainer. Like, you know, if people are coming to us and doing planning, and I say, what's the easiest strategy? Well, I'd still like you to buy in a better location, and I'd like you to buy the worst house in the best street. Like that is 101 property that's been taught to anyone. Any real estate agent will tell you that that's how you get, you know, get an accelerated result if you can buy the ugly ducklings and turn them into black people. Agreed. So that was number seven ugly duckling. The last one, this is a good one for a lot of people. We're calling it the caretaking or house sitting arrangement, but there is a ton of people who are doing this. And it is, you know, people that are going away, they might have pets, they want to make sure the security is okay. Surprisingly, how often and how common this is, where you can go and and they're quite, the people who are letting your house sit are happy to pick the utility bills or make a small contribution. It is almost the same cost reduction ratio that we talked about with Tim on that article on SPS, where he's gone out and dropped the expenses by such a dramatic amount. No rent, look after some pets and drop your expenses. There is, there is an app for this sort of, there's several apps for this, but also what if you put on, you know, Facebook or Insta? Because where I think this is a big sleeper opportunity is most of the baby boomer who are now getting access to their, their super, they're off to Europe for three months. And, and I know, you know, when we're, we've got a dog. And so when we want to travel for a long time, like if you can bring someone and they have a staycation and you throw that through your network. And I get a month here or two months there. And I can then also maybe, you know, get back into my parents property because that's the one, that's the obvious one that, you know, people move back home. But if I can then go and do that staycation or look after a dog or whatever for two or three months, I'm saving everything. And I'm also in a nice home, potentially, and I've got a little bit of freedom. Now, I've got to be responsible about it. We won't, you know, can I be parties or do anything stupid like that. But if you're a responsible young person who is reliable in terms of that, I'll, I'll let you looking live in my house for three months. And because what happens if the water thing breaks, like I come home and basically the whole ass is flooded and it's been flooded for three, like it's ruined. The joint is ruined because we've got major flooding that goes on. And I'd prefer to have someone in the home if I'm going away from it. I agree. And so, and here people need to plane to their strengths. If you present, well, if you're clean and neat and tidy. Through your own network, you'll know these trustable and reliable people versus the ones you wouldn't trust. You just need to look at their social media feeds and are they out on a Friday night, tall stream, a block or whatever. We're not going to, maybe they're not the mature ones. Look at that. That's how you make it a weapon. You make it a no-brainer for you, for other people to say yes to you. You have, you've got references. You have demonstrated your clean and tidy, ideally, you know, non-smoker and again, for, be respectful of the asset that you're moving into. And then you'll get a reputation up as being one of those people and then you'll start getting job opportunities to go. That is a great way to say it. I think it's a wonderful way because you're getting on both sides. You're minimising your expenses. You're trading, you're trading old school labour to look after a dog and feed the dog in order to have a roof over your head and your bank balance swelling as a result. And then, and then given these succumbents are usually short term so you can gypsy around if that's your nature and you don't want to be stuck to one place and you want to see new adventures and try different things and see different parts of a city or even going to state that's amazing. So folks, if we bring it back to the context of what today was all about was compromise or miss out. We've just gone through eight examples, not exhaustive, but we'd love to hear from you. What have we missed? What have you done? How have you compromised? Can you send us a little note? We'd love to hear it. Go on social, send us a little direct message. Our team will get that to us and let us know how we can pad that list out onto doing exactly what it is that you're doing. But I think the reframe here is really obvious. You don't need you forever home and you forever at location right now. You just need a smart entry point. The game is, you know, to our point before, you know, the game is not having multiple choices of absolutely being able to be on the property ladder and you go wall as a price location, size of land or quality. Well, no, it's actually how to actually get in on the first place. So there's a couple of things that they're to... Well, the secret here, Bryce, is that the market rewards those who act 100%. Yeah, if you, which compromise are you prepared to make so that you don't miss out? Which compromise are you prepared to do so that you don't miss out? Might be a couple. Yeah. And that's okay, but the delay gratification. When you're up on top of the mountain, you're living your lifestyle by design. I reckon it's worth... There you go folks. Make sure you reach out to us. We would love to know on the ground what you are doing to buck the trend. And so if it's up to me, if it's to be, it's up to me. This is what I'm doing. Well, I've been, today, my life by design hack is one of our team here, Patrick sent this to me, and it's catalyst climbing is the YouTube channel. So we're going to definitely do the resource. Yeah. Have a little listen to the way that they break down a way to hack your inner critic. Working with a friend of mine called John Robertson, who happens to also be a psychotherapist. He and I have worked on this draw together. I'm really excited to show all of you. If you're interested, we put John's website just in the description so you can have a look and book him if you'd like to. Very, very good recommendation. But yeah, today we're going to go through this draw and I'm going to teach it to Sam and we'll see how well it works. Okay, let's properly explain the mindset drill we're going to be using for today's session. We've created a scoring system to use when analysing your inner critic. One point for statements that are untrue and unhelpful. Five points for statements that are true, but unhelpful. And ten points for statements that are true and helpful. To give some examples, a one point statement might be that move is way too scary. There's no way I can do that. I would confidently say that's not true. Could you prove it in corpse level of true? Okay. If you don't have evidence, then you would have to say something like, it felt really scary. You wouldn't want me to say you're never going to be able to do that, so I'd also say it's unhelpful. So if it's untrue and unhelpful, you get one point. With a five point statement might be that move felt really scary and I could chose to come down. I'm going okay, that's true. That's exactly what happens. I don't disagree with that. There's nothing that helpful there though. So if the statement was true but not helpful, I'll give them five points. This is where we can start measuring our improvements in mind. So I'm identifying it. And finally, for a ten point statement. That move felt really scary and I can't change that. On my next go, I'm going to pair to be brave, and I'm going to try hard. And for that, I'll go, okay, that's true. That's exactly what happened. And that's a help-help thing to say. And we're now gently trying to train his inner critics so that ideally, with practice, it does take practice, about the first thing Sam thinks after he falls or whatever happens on a climb is that ten point version. That would be the goal long-term, but I'm not expecting that to be that quick. It will take us some practice. Yeah, as they sound so far. Yeah, good. Well, great. Let's do it then. There you go, Ben. What I really loved about that, and I'm glad that across my desk, is it's a muscle memory process of training your mind to go the statement that I just made. How would I write that with points? And for a lot of us, one points are that out default. But if you can move up to five, and then slowly get to the point where you are getting ten, it's a dopamine here, it's gamifying your own mind in a way that you can go, all right, is this, is it true or false, and is it helpful or unhelpful? It's a pretty straightforward framework, and I thought that it was useful for our listeners. If anyone's got those inner critics given them a hard time, that's a good way for them to try and gamify it. Yeah, I really like it because it built on that useful belief. So through those positive reinforcements, helpful and encouraging and so forth, well, that's they are in themselves useful because it gives you an open mind in terms of what you can achieve. So very good. All right, Ben, what's making property news today? Yeah, well, a couple of things. We're getting to obviously the end of the month. But next week, Bryce, the government's introduced their 5% deposit scheme, so they moved it forward from from lap, sorry, next year to the first of October. So now you can have a 5% deposit. Now, if you want to learn more about it, we've got information in the show notes, but it sort of built on this report that was coming that came out of the Great Southern Bank. And so they do this report that talks to you know, no place like home reporters, what they call them. They bring it out sort of every quarter. It's always an interesting little read. But what was interesting in here, the recent report from the bank revealed that 28% of homeowners consider their home as a source of income. But here's where it gets quite interesting. 58% of Gen Z's think that it's a source of income. So they have a real mindset that the properties meant to grow in value and it's meant to be a wealth creation vehicle for me. So I think from that point of view, that's a really interesting thing in terms of now that they're also going 24% say they turn the home into an investment property is one of their intentions. 19% said they'd rent out a room to our point earlier. So that's where they're being open minded around that and 16% said they'd run a business from their home. So these are all the hacks that we're talking about in terms of Como. So the compromise that they're making, but they're thinking about their property as an asset, which I think is really interesting when you start to look at that. In terms of acceptance for a child living at a home for a long time. They're sobering for you and me to see how long it takes to kind of stay. 41% of Australian parents said they'd let their child live at home until so that's saving that deposit 33% then 2%. The older they are, the less they want them there. And 23% of parents said they're happy for their child to live with them forever, which is quite interesting like that. No, I'm very clear on that like ultimately. I love my kids. They can stay with me as long as they like as long as it's until they've got a two in there. I'm teaching them how to fish, which I mean, I'm teaching them how to live and they've got to go as they're in the tree and they live in that big, the world's competitive. They can't be sitting at home basically living on that. Then one of the other interesting ones was around the unforeseen costs. So 35% saw real cost in getting the keys. 35% around unexpective, especially around insurances and all the other little things that didn't think about. Utility bills. 20% said they need to renovate. 15% said they need to keep uncapped. Sorry. The upkeep was more than expected. More than expected. 10% said they'd learn to be high skills because it's obviously costly to get trades and those types of things these days and 8% said running out of room faster than expected. So that's where we said earlier in the episode around if we are thinking about starting a family sooner rather later, maybe a one bedroom or a two bedroom apartment may not necessarily be something that you'll be staying in for five years. And we always think about should be a five to seven year window when you're starting to think about probably. So there's a little couple of info graphs on that, but I thought we'll also share that report as well as part of that. So that's what's making probably a lot more. So thank you for today. Hopefully we've given some insights into our community. If you are wanting to get on the property letter, our invitation for you is to just say, if it's to be, it's up to me. What am I going to do to compromise so that I don't miss out? What am I going to do to take action? And again, just to shout out to those folks, if you're listening, you know someone, if you're listening, you've done it, please let us know on our socials, reach out via our any one of our socials or give us a note on speak pipe, whatever it takes on our website. We would love to accumulate real life stories of what people are actually doing where they are compromising to make sure they don't miss out, but it's always good, it's good to hang out in the studio here as well, get the energy going between you and me. Absolutely. But until next week. Knowledge is empowering, Bryce, but if you take a co-mower approach to acting, maybe in the next 10 years, I like it when you add some love to it. See you next week, folks. Hey folks, Bryce here again. I just wanted to catch you real quick before you go. If you're new to our community, I want to encourage you to listen to our very first 20 episodes as the concepts we share in EPS1 through 20 are foundational principles, pillars and frameworks that you need to know for you to get the best value from our content week to week on our show. My little tip is to listen to it at one and a half speed. Now for those of you that are time poor and don't have the option to go back to the beginning, don't worry because we've got you covered as well. We've created a binge guide that summarized these foundational episodes into one easy to digest booklet so that you can get up to speed super fast. So go to the show description on whatever device you're listening to now and simply click on the first 20 episodes link to download it straight away. 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