[Podcast] Investing is getting harder – here’s what other investors are doing with Mike Mortlock

Mike Mortlock joins the show today, and he and I will explore the patterns and trends of property investments - how far away from home do people really invest?

We’ll also look at what the latest data from the Australian Tax Office tell us about the landscape of property ownership.

If you've ever wondered about how many Australians actually own an investment property, or how much Australians really earn you'll enjoy my chat with Mike.

We'll also be delving into a crucial aspect of property investment that often goes misunderstood - depreciation.

Many property investors make common mistakes when it comes to depreciation, and we're here to help you steer clear of these pitfalls.

How do you decide where to invest in property?

My guest today, Mike Mortlock, is the director of MCG Quantity Surveyors.

He’s worked with thousands of property investors to help them maximize their depreciation benefits.

He’s tracked investments pre during and post-Covid and the numbers are very interesting.

Today I also ask him about the mistakes he’s seen investors make so that you can learn to avoid them.

Highlights of today’s chat with Mike

• Exploration of patterns and trends in property investment, including the average distance investors buy properties from their homes
  • How far people live from where they invest – We tracked this pre, during, and post covid and the numbers are very interesting.
  • 60% of people were buying within 50 km and only 29.5% were buying more than 200 km pre-Covid.
  • During Covid, the average distance exploded to 599 km
• Dissection of the 'ugly greedy landlord' stereotype with data from the Australian Taxation Office (ATO) revealing the majority of property investors own just one property
• How many Australians invest in property? According to CoreLogic and ABS:
  • The number of residential dwellings in Australia has boomed to 10.9 million
  • The total value of Australia’s residential market rose to $9.6 trillion at the end of May 2023, up from $9.5 trillion at the end of April and $9.4 trillion at the end of March 2023.
  • There is a total of $2.2 trillion in outstanding mortgage debt for these properties,
  • And 56% of Australian household wealth is held in housing
  • The latest data from the Australian Taxation Office (ATO) reveals that over 20% of Australia’s 11.4 million taxpayers owned an investment property in 2019-20 – this is the latest data available at the time of writing.
  • That figure is 14.9% if 3.6 million non-taxable individuals are included.
  • That means that around 2.22 million taxpayers in Australia are property investors, and collectively they own 3.25 million investment properties.
  • While the number of property investors actually fell for 2019-20 for the first time since the 2007-08 financial crisis, it was by only 333 individuals.
• Here’s how many properties investors hold in Australia:
  • 5% of investors hold 1 investment property
  • 18% of investors hold 2 investment properties
  • 7% of investors hold 3, 4, or 5 investment properties
  • 8% (or 19,895) of investors hold 6 or more investment properties
• The data also shows that, while older Australians used to own the majority of investment properties, that has now shifted - today, ‘working age’ Australians dominate when it comes to property investment. The top investor age groups are:
  • 5% are aged between 55 and 64 years old
  • 5% are aged between 45 to 54 years old
  • 5% are aged between 35 to 44 years old
  • 5% are aged between 25 to 34 years old
  • 12% are aged between 65 to 74 years old
  • 5% are aged 75 years old or more
  • 5% are aged between 15 to 24 years old
• Analysis of potential government policies and their potential influence on investor decisions
• Discussion on the mistakes investors make regarding depreciation and the tax deductions they often miss. Common investor mistakes include
  • Not understanding the eligibility of the investment property tax deductions
  • Not clarifying repairs and maintenance from depreciable improvements
  • Not engaging a suitably qualified expert
  • Not keeping adequate records of improvements made to the property
  • Not getting a tax depreciation schedule where there's a benefit

Links and Resources:

Michael Yardney

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Mike Mortlock – MCG Quantity Surveyors

Some of our favourite quotes from the show:

“I don’t think we should invest in our own backyards, I think there are opportunities everywhere, but just be careful how you do it.” – Michael Yardney

“Our clients were 7.3 times more likely to be in that top 1% of investors who own 6 or more properties.” – Michael Yardney

“Property investment – you’ve heard me say it before – is a process, not an event. You can’t just buy any property and hope to be successful.” – Michael Yardney

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