[Podcast] Are property investors really greedy? Q &A day with Belinda Botzolis

Are property investors greedy?

What right have they got your own so many properties when others don’t have shelter?

That’s one of the questions we answer in today’s question-and-answer podcast with Belinda Botzolis, who’s been a valuer for over 16 years and now brings her passion and years of experience to her role as one of the property strategists at Metropole.

She also gives a valuer’s tip that may just save you some money as well as answering the question about which renovations add value and which don’t.

Then, instead of my usual mindset message, I’ll have a short conversation with Tom Corley about how much better you need to be to win.

Are property investors greedy? Today’s Q & A

Question:

"Thomas writes that it seems wrong that some people are worried about buying their third or fourth investment property when the most vulnerable people in society are worried about where they're going to sleep at night.

He was concerned that we are building our economy around what should be seen as essential to human survival, as a shelter." 

For those who choose to rent because they're not ready to buy at present, the government provides large amounts of rental accommodation in many countries, but that doesn't happen in Australia.

There’s just not enough public housing.

The government has chosen to leave a large proportion of rental accommodation provisions to private landlords.

It only provides a small amount of public housing and is not building sufficient for those in financial hardship.

I guess it's like other services where some of them are being provided by the public sector and some by the private sector things such as private hospitals and public hospitals, public transport and private transport.

So, if investors were not providing the accommodation for tenants the situation would be even worse.

In fact, currently, we have a rental crisis because APRA and the regulators restricted lending to investors a number of years ago and that has resulted in a shortage of rental accommodation, and rising rents.

Question

Susan R asks: "I’m a little confused about tax depreciation –is it only available for brand-new properties or can I claim depreciation if I buy an established investment property?"

Tax Depreciation is for older homes too, not just brand new.

Even homes built before the ATO cut-off date (1987) as long as they have been renovated qualify.

Question:

Caroline C asks: "I’m looking at renovating my home – what areas of expenditure will add value and where would I be overcapitalizing?"

Undercapitalisation – doing a cheap renovation or not spending enough on high-end fixtures and fittings can affect your property. i.e. at a particular price point, tenants and also buyers expect a certain level of quality in their fixtures and fittings, and buy not producing a “good enough” quality reno, could turn tenants and buyers off.

Belinda’s valuation tip for listeners

If you have been living in your principal place of residence and then move out to a new home and that PPR becomes an investment, it’s a good idea to get a valuation done on the property because it establishes its market value at that date.

The day you move out triggers a capital gains tax event that you’d need evidence of your property's market value via a professionally prepared valuation report.

Links and Resources:

Michael Yardney

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Some of our favourite quotes from the show:

“And I do agree that there’s always going to be disenfranchised people in our community, and personally, I believe it’s our responsibility as a community to look after them.” – Michael Yardney

“When prices stall or when they fall, spending growth slows.: -- Michael Yardney

“You’ve got to hone some skills, some knowledge in a particular field in your industry, and come up with a slightly better way of doing things.” – Michael Yardney

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