Alright , folks , welcome back to the Property Couch podcast , and we've got an exciting episode of Winter Series today . Ben , it is someone who's migrated to this country , taken up the opportunity that exists to invest in property and created a very sizeable amount of equity in a small amount of time . Ben , what else ?
Brice , this is a story of . Anything is possible , so I can't wait for everyone to learn about Miele's and Brayden's journey .
This is a great episode of the Winter Series . Folks , let's rip into it now .
Welcome to the Property Couch where , each week , you get to listen to two of Australia's leading property and money experts Brice Holdaway , co-host of Location Location , location Australia on Foxtel'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 are partners of the multi-award winning Empower wealth , co-creators of more , the Freelife Style Design app , as well as bestselling authors of the armchair guide to Property Investor and make money simple again .
Stay tuned as they bring you the Insiders Guide to Property Finance and Money Management .
Hi Ben , very exciting day today as we talk to a very special TPC listener . Her name is Miele Holmes . Welcome to the Property Couch , Miele .
Hi Brice , hi Ben Good to be here .
Welcome . We're excited to chat to you , but we're going to kick off today's proceedings by just talking about money . When you were growing up , over the dinner table , what were the conversations like for you ?
Well , in fact there were no conversations about money in my household at the dinner table , so I'm going to give you a bit of backstory here . So I was born in the country that doesn't exist anymore . They form a USSR .
So I was born in the 80s and kind of my early childhood coincided with the early 90s when then the kind of the USSR crumbled and the money was a very stressful topic because , as well , some people do know that , but in the USSR all banks where all my parents money were owned by the state and kind of overnight it disappeared pretty much .
So a few million people were poor without having their savings . So , yeah , so there was no conversations around that . And my family , so both my parents , are engineers , so I come from that kind of educated background .
But yeah , at some point in the early 90s my dad lost his job when kind of the whole kind of system started shutting down and the country reconfigured itself .
Yes , so and yeah , the money was a stressful topic .
So I have such a great respect for my parents to bringing us up in that environment , with such uncertainty , with such challenges . Yeah , because what do you do when you lose your job and your wife is a stay at home mom with two kids ? At some point , dad , I think , borrowed money from I don't know cash converters , some shady characters or whatever .
Grew up there in that kind of when .
Yeah , after the collapse of the Soviet Union , whatever systems appeared , so we also have the had like kind of negative outlook on borrowing when we were growing up , because when I think I was in my early teens when I realized that dad had some kind of bad debts and people were knocking on the doors and you know , threatening phone calls , all that sort of
things , that yeah .
It sounds obviously horrible , right ? So when a nation like that crumbles and to your point that you know , everything evaporates , there's no form of value . There's so much to sort of plug into here from a psychological and behavioral point of view . Tell us about the sort of living arrangements and what was happening .
So when there's no money coming in , you know , is the housing supply supplied by the state ? Or , you know , did you own the property ? Tell us a little bit about you know the sort of housing story .
Oh yeah , that's very different to what kind of you know here in Australia . So the housing was formerly owned by the state in the Soviet Union . So we didn't have mortgages , we didn't have to pay , we just have to pay , like you know , the bills , electricity and like the rates the council rates basically .
But I grew up in what is a share house , so in like historical center of St Petersburg and like a one big apartment that was divided into five sections and each room was like for a family with a communal bathroom and kitchen , and we lived there until I probably was about five and then my mom was pregnant with my brother and dad got like from the state .
He's been allocated two rooms in another shared apartment . So we just moved into another like kind of building in historic St Petersburg , historical center of St Petersburg , where we now had two rooms and the other family had one room and yeah , but the same story with bathroom and kitchen , like yeah so it's .
So what sort of numbers are we talking about here ? So , if you've got one room in an apartment , which is which is effectively a sort of sub house of a building , are we talking about seven to ten people using one bathroom , one kitchen facility ? Tell me , tell us about what that would typically look like yeah , so in them .
I don't remember how many people were there in that five room one , but well , me , mom and dad , three , and then other family they had two daughters , so that's seven plus I think the other three rooms were occupied by singles . So , yeah , ten people actually using the same facilities .
Yeah , and they're not family to each other , so that's a pretty one Strangers yeah , yeah . And then when we moved to that two two rooms so we had one other family with one child , there's seven people , four adults , three kids , yeah , and the square footage I think was about 90 square meters there .
Yeah , my family still owns that , those two rooms , because at some point in mid 90s they were like privatized , so they were processes applied when families who lived there can actually own the place . So , yeah , so that was the win and they rented , they rented this rooms out now .
Can you tell us what sort of impressions and what that meant for you when you were , when you were growing up and you were navigating what you've just described there , with different people with different agendas , all in a 90 square meter apartment ? How did you feel safe as a five year old or younger ?
How did your parents ensure that the people who you were co-living with were of a character that could be around young children like what ? So these are things that we don't have to think about here , right ? So can you help us better understand what , what that was , what that was like ?
Look , I think , because I didn't know anything different , so that kind of felt normal for me , so that like that's well , that's how people live . And then I know that my cousins didn't live in the same kind of arrangements , so when we went visit them it was like , oh wow , some people just actually have the whole place to themselves . This is amazing .
But I think we kind of adjusted to it pretty different , pretty easily .
Kids are resilient and we were friends with , like that other boy that was growing up next to us in the other room and yeah , and well , my parents , well , had obviously civil , like good relationships or try to maintain good relationships with the neighbors and share stuff you know and help each other out .
There were issues when , like they were having a party because , yeah , I think they were like on the music scene and then their father , there was a composer and they were like some bohemian characters coming in . Yeah , when mum told us like stay in your room , kind of don't go out .
If you need to go out , just come get dad , and that type of thing , so yeah , fascinating .
So I mean , yeah , I'm digesting all of this because it sounds like fantasy . Well , look , it's just a game for our community , or listening to this , this is , this is what it's like in other parts of the world . I mean , we do live in one of the great countries on the planet in terms of , you know , having that government in place .
Even though they're not great , they still make mistakes , but you know that's stability of governance and then , obviously , not having a country imploding in on itself , which is what we've seen happen over in the USSR and the ramifications of that .
So take us into your teenage years and then ultimately tell us about the story moving across and and migrating to Australia . How did that play itself out ?
Yeah , well , in my teenage years we actually moved into like a separate place where I was finally able to live here and to realize what it is to live like when we own the whole thing , which was really nice , and so I graduated from school in 2001 and started uni .
My parents drummed up , drummed it into both of us me and my brother that education is the most important thing for you . This is what they could give us . And , yeah , so uni was free . Back then there was kind of this process is starting when the amount of place uni placements subsidized by state were going down .
But because I was always a good study , I got in and I got a business management degree in 2006 , started working . Well , I've actually worked through uni , which was not very typical for Russia at that . Yeah , that at that time it kind of was the parents supported kids throughout uni , but I supported myself and my brother too .
So , yeah , so I've started in , finished uni in 2006 , worked in retail management sales , and then I moved into government administration and , yeah , there's kind of a failed marriage there in the mixtures . So a few things happened before I turned 28 and moved to Australia .
So I've started Australia immigration process in about 2011 , I think , applied for permanent residency and I got a state sponsored permanent residency in South Australia so saved up . I was always a good kind of good with saving because , remember , that was bad . I didn't want to have any dad no consumer credit , nothing like that , no buying cars , nothing .
So I saved up $20,000 and I moved to Adelaide in July 2013 , just by myself .
So it was like a huge leap of faith , but I always wanted to be in a society that looks after its citizens , that kind of has a more positive vibe around it , and and that's yeah , that's what Australia represents to me , and I'm so lucky and so grateful that I'm here and I've been working with you around that , when you were deciding whether to immigrate to
Australia or you know , it was Canada or the US , or what were some of the things you were thinking ? I was actually thinking Europe , like Spain or Italy or Argentina . I was studying Spanish at the time and I was quite languages do come easily initially to me , so I was studying Spanish . I thought , oh , maybe you know I go to Argentina .
But then it just was , by chance , I just I just chose Australia . Let's say that , oh , life chose it for me .
But so you mentioned so . So if we just do a tiny rewind , if so , if there was no conversations around money and there was some of this stuff that was happening around living and the USSR , what were the observations that you were making about money then ? What did you see your parents doing ?
What were the things that they had to do to be able to navigate money in an environment and a government system that you were exposed to ?
I had that . Well , the observations that I made when I was growing up was that money was scarce and the resources were scarce , so , and that there's all that negativity around people who have money , they likely like stolen it , you know , acquired it through some improper means .
Yeah , so , and it was hard for me to start believing that if you actually apply yourself , you study , you work , you're driven , you have the drive you want to succeed , you will , and I just didn't see it happening in Russia for me , yeah . So that was such a strong belief and I started traveling from a very young age .
I started traveling when I was 19 or 20 , I went to Europe and I saw that people can live differently . You know you can , like the ordinary citizens who work through all their life . They can have a good life , you know , stable life , that they yeah , both the house going holidays and yeah .
There must have been a real trust issue with money as well , Like , ultimately , when a society collapses and your parents' money is basically evaporated through a banking system that doesn't exist anymore . You know so did you find that your parents were not putting money into banking institutions ? They were putting money under their mattress and all of that sort of ?
Was that a very common thing ?
Yes , that's right . That was a very common thing . When there was something to put aside , it was always cash . We were paying cash because it still exists in Russia that people official salaries are like tiny and then the rest of the money they get under the table in the form of like an envelope , so the businesses pay less taxes .
You know , that's a whole big bubble there .
So there's a lot of black money in that country . There's a lot of corruption . You know it's a very we know it's a very authoritarian state . You know , we know who it's led by . We don't need to go into that . You know difficult political story that we hear and we're dealing with right across the world at the moment .
But it's this breaking this belief , this pattern of that that that's really interesting for us . That I mean one you've educated yourself , which is really , really wonderful and that's opened up the doors of opportunity for you . So that's got to be a massive takeaway for anyone out there . Education is , you know , is the way you break through in life .
Get educated , get you know . Education up brings out opportunity and then you're able to then start to break those habits . So you're still very careful with your money . A great saver from the origin story . You know you've got there .
When did the transition move from money controlling you , you know , in terms of this whole idea of protect , protect , protect , into basically starting to think that money could be something that you could make work for you in a more advantageous way ?
That actually happened in Australia , probably a couple of years into my relationship with Braden . I met him in Adelaide in 2013 and we moved around the country , like Newcastle and Townsville and I think , around 2016, .
When we've purchased our first property that we've sold since , I realized that that can be something that you know money can bring pay by no yellow brick road into the bright future .
Yeah , through like through them , through the good debt , through acquiring properties and assets , and yeah , so I owe like a lot of that education , shifting my mindset to my partner , who showed me the way that this is how it is , because he's always been a great saver and obviously grew up in a different environment and yeah , and he always knew that money is
not fickle . So if you have it , you will always have it . If you have your spending habits under control , you kind of have your priorities set right and you work for your goals . So and I got on board with that because I just saw how amazing it can be- and how did you build that knowledge story out ?
Well , like , were you doing reading on that ? So obviously the podcast , like , tell us some of the , some of the avenues . As someone who obviously is big on educating themselves , what sort of content were you consuming that helped you know ? Build up that knowledge base to give you the confidence to act .
Podcasts and books . I've read your books , both of your books the Amjai Guide and the Money Smart , implementing Money Smart which really put us as a family unit on the way to where we are now .
Yeah , so just just reading and listening and taking taking on what we're trying things out , like what works for me , what doesn't work for me , what I'm ready to sacrifice and what I'm not ready to sacrifice , like , say , travel with families , not something that I can sacrifice or save on , but other things like buying a new car or easily of course .
So just really sensible . Yeah you know common sense approaches and running systems and frameworks by the sound of things .
Yeah , well , basically what I like to think , that my life is my biggest project . So , yeah , playing my project management skills to my life and tracking , constantly tracking where you're at .
You gave us a bit of a hit there regarding Braden , your husband , but in terms of his background . But how much have you ? Is your money management now in alignment ? Was there , was there times in the past when they weren't in alignment ? What ? How are your two money personalities merging ?
Yeah , we've , through conversations , through discussion . It was a long process for us because I I'd first wasn't on board with like having a joint account and I didn't like , why do I need that ? Maybe if I want to just spend my money freely . But then I realized if I keep spending my money freely , I'm not going to get to where we both want to be .
We had this chat about like hey , we were both growing up with , you know , like minus scarcity , say yeah , or like very modest lifestyles , and and we talked about like look , we never want to be poor again , we want to be abundant , we want to have that abundance available to us and our kids .
And and I went obviously when we were when we retire as well , we want to have passive income . So let's get , let's get going . And the first step was to have the joint bank account and yeah , and from then on , we started implementing the Money Smart system .
So can you tell us a little bit more ? Can we double click on that story Prior to that , like , did you have lots of bank accounts , was the money sort of everywhere , or was it quite disciplined , and then Money Smart just gave you that extra five or 10% ? Or tell us that transition and and what's been the benefit of that story ?
I have always had one bank account , same for my husband , so it was always very disciplined in terms of where money is , where super is like . One of the first things Braden told me , like is your super in one account , like when I started working . Well , he met me when I was already working . He's like just double check that it's all in one place .
I'm like , okay , and I had two accounts at the time because I was none the wiser . You know how the system worked . So , yeah , so one super , one bank account , and we just had to pick a bank and obviously put that one . Yeah , when we I think when we borrowed for Townsville , all the money was in one bank account already by then , maybe not .
And were you spread cheaters before you then got onto the , to the more platform , or no ? It was just sort of just a very loose idea of where the money is going , but no spreadsheets .
Or spreadsheets appeared when the money smarts , yeah , yeah .
Is Braden from Europe , like you , or is he Australian ?
He grew up in what's on air , in the same house where we're leaving now .
So well , what's interesting is where you are now . Before we start recording , ben said and I just saw the little cookies facing us and effectively you're 400 meters away from where he grew up . My wife grew up in what's on here , so this is all all tying on . Do you ?
Do you think that the migrant mentality that you have has given you a bit of a strategic edge ?
And the story on that is that when we interviewed the CEOs of Judo Bank , joseph Healy talked about strongly about the migrant mentality being something that they look for in people because of the fact that there's this paradigm and there's this , I guess , this lived experience where , coming over here , they come for an opportunity .
Do you see that as a strategic advantage ? Now that you and Braden are on the same page with money and also you've renewed trust with money again in this country , is that an advantage for you ?
100% . Why ? Yeah , once again , for the drive , for the desire to be prosperous , for the desire to be abundant , for seeing opportunities everywhere around me . Yeah , I can't explain it , I just feel it . It's there .
It's difficult for you when you observe Australian nationals , for example , who you know . I haven't had too much adversity in my life , miller . I've got to be honest . I grew up in Perth to two wonderful parents who remain married .
I've got traditional upbringing so I'm one of the very blessed and lucky folks who don't have a worldview that's been challenged from what I currently exist .
But I guess when you observe Australians coming through life who don't actually take action like you have , does that sort of puzzle you or do you just clearly delineate the fact that they might not have the perspective that you have that creates the action that you've taken ?
It's a hard question . I don't want to sound judgmental at all and don't want any controversy here , because I work with a lot of Australians and their amazing people . Yes , we're just different in that way . I just realised that we're all different Some qualities that I have they don't have , and other ways around .
There's great qualities in Australians that I work and I'm friends with .
I probably didn't set that up well because I didn't want you to create a division . I guess for Ben and I , the whole thing of this podcast is it's the last statement that comes out of Ben's mouth every single week now for over 400 episodes . Knowledge is empowering , but only if you act on it right .
We are spending a whole career trying to find reasons why people act and other reasons why people don't act . You just have this unique perspective to go . Isn't that interesting ? I've got this background that's causing me to take action and observation .
I probably set that up in a way that was a little unfair for you if you thought they had to compare against Australians . It's just more of an observational thing around that migrant mentality . You've said , yes , that actually is an advantage . Thank you for that . The next question is then you make a choice around investing and you have some choices to make .
You could go down a whole range of paths , and the most obvious ones are shares and property . You've chosen property . Why was property something that you felt strongly about ?
Because of the liquidity of it . It's something you can touch , it's something you can have , you can look at it , you can live in it , you can sell it . I didn't have a good understanding of shares around when we started investing in property . Property seems like in Australia the market is always booming .
I didn't know that it really depends on the asset that you choose and the area and the state and everything . It's partly because of my background and the way I grew up . I just wanted to have a tangible asset . That is right there for me .
Let's start to unpack the story . You've given us a little clue earlier that you had a property that you bought and sold . Tell us how that went from a numbers point of view . How long did you hold it for ? Was there a gain that was realized , and did that allow you to take the next step in terms of your property journey ?
You're going to love this guy . It's a classic story . We bought an apartment in a multi-level , very fancy apartment building in Townsville on the riverfront , with a pool , a sauna , secure car park , you name it . It's all there . It has Concerts , concerts , yeah , you name it .
You've clicked there before .
No .
Concerts , but the manager who looks up to the building Just there on the premises , so GM as well . I think the spa , everything that you can possibly have , great lifestyle , amazing . We were very happy there , but from a property management , from a property investing point of view , that was not the sound decision .
Townsville market was pretty low when we bought it in 2016 . April 2016 , we bought it for 350,000 . We thought the market bottomed out . We were wrong when we sold it in 2020 , I think we sold it for less than we bought it for . So there's a loss there , yeah , but there's a learning experience .
Very , yeah , learning experience and the memories , the wonderful memories that you had , because that whole sort of foreshore area there on the Strand and I it is on its day , it's magical looking out over Maggie Island .
We were on the other side , on Flinders Street , near the CBD . My walk to work took two minutes , beautiful .
So you got that value out of it . You just didn't get the capital appreciation value out ?
Absolutely not . We did not get the capital gains .
So here we are . We're one down and a little bit of an experience there . What happens next ? Do we start thinking there's actually a science to this , there's an approach that we need to take ? We're starting to get educated because we know you went and did a plan with our team , but tell us about that process and the sequence of how all that came together .
Yeah . So after we've acquired Townsville , we started thinking that , hey , maybe that's the way we're going to go , because both our careers were going up and double income , no kids , perfect situation to kind of start saving even more .
Braden got deployed to Iraq for six months with the Defence Force , so , yeah , we just got the savings really kind of booming from that when we moved to Melbourne in 2018 , so we kept the Townsville property , rented it out and , yeah , in Melbourne I made another kind of step up in my career , so it all was going well for us and we've got money for another
deposit . So , yeah , I got pregnant with Audora and that's when we kind of got the team of professionals involved made a property plan , as you mentioned before . Yeah , and we got our Brisbane house in August of 2019 , that was our second purchase . Sasha was six months , then I was on parental leave and the price was 450,000 in Brisbane .
The thing we did differently this time we realized that we need to really have this scientific approach and get a team behind us , like have a mortgage broker and have a buyer's agent as well work for us to select the property . So we've been listening to the TPC for well over a year maybe about two years and just getting the knowledge .
Getting the knowledge , knowledge is power . Yeah , and we acted on it .
So 450 purchase price . I'm looking at your platform on more now and I can see current valuation around 723,000 . So that certainly is paying the bills . That's gone , all right .
Absolutely , and that's the thing about selecting that asset . Yeah , I love having this conversations with my colleagues like oh , how did you do that ? Did you just buy whatever ? I'm like you have to be really scientific here , guys . You just can't buy whatever . Well , you can , but it's not going to get the same results .
So then , what did you do next ? So you've got . You had Townsville in and out , you've now got Brisbane . What was the next purchase ?
you had .
We sold Townsville after we got Brisbane , so we had two properties , townsville and Brisbane and then we realized that we needed diverse Townsville , thanks to all the knowledge that we've been acquiring , and that the cost of opportunities to grade there Townsville was actually costing us money because of the huge body copper bills , and we ended up selling it to the
tenants that were occupying it about I think , about 10% loss . We got on that from the purchase price , but it is what it is . So lesson learned . So , yeah , we sold Townsville and then we got Adelaide , another selective purchase too February 2021 , we got it . Covid was raging . We were saving , not spending .
So , I was pregnant with my second child by then too , so it's all kind of happening in that really compressed four years , four or five years for us . Yeah , so we got Adelaide in February 2021 for 482,000 , I think , ben , you're looking at that platform .
I am . I am 482,500 . Yes , and current value on that is 731,000 . So your short term , because it won't be as good as this , but that's an 18% , 18% compounding return per annum here to date . So there's definitely a .
It sounds ridiculous , doesn't it ? But it is true .
Yeah well , I mean , even the Queensland property is still running at sort of 13% compounding return . Now , again , that will settle down . I don't want anyone in the community to think that , wow , this game's easy in terms of that particular story . But they both have been pretty terrific purchases through your buyer's agent as part of that particular story .
Yeah , they run down sides because both are older properties , lots of maintenance . So we would love to have that story of set and forget , but it's not happening for this too , because things just come up there .
We had , like , tenant issue in Brisbane House so , yeah , the property was left , run down and thrashed pretty much , so we had to invest a bit to get it up to living standards again which is not rented again .
Not all smooth sailing isn't like an old ?
No , it is not at all . You have to work for it .
Yeah , those particular marketplaces that we're talking about . There are the sort of lower entry level areas and so , even though some of them are gentrifying , you are definitely seeing . You know that is always the risk when you're sort of in that entry level market , because most people who want to buy in those locations will buy .
The first home buyers will buy and they will take care of their properties . And the ones who may not be in a position to buy may not necessarily have the same sort of feelings around protecting the asset and they just think it's a means to an end and sometimes that can happen .
So tenant selection is always difficult when you're in that sort of mid to lower socio demographic area .
There's a couple of things you can do to mitigate that too , can't you , milla ? Because you've got landlord insurance for one , so that you get that protect . And then the other part is we've been on record as saying we prefer established over new properties , right ?
So new properties give you the sleep at night factor of , generally speaking , at a headline level , you can set and forget a lot easier . But ultimately we're trying to chase the land value and so what you've done is chased the right land to asset ratio , which is great . So the way that we mitigate that is one having landlord insurance .
But the other way is to factor in maintenance , and I've told the story on this podcast a couple of times where one of the property managers that I caught up recently when I was in Queensland said we love your clients , which clearly struck to my ego . But I leaned in and said why is that ?
And they said because they're educated and they understand that when we come to them we say there's a few things that we're going to do proactively look after these properties . They go , sure , not problem . I factored that in .
Let me know what we need versus some other investor groups who go in thinking that it's an event that they do once and over the journey . There's nothing else that they need to come back to .
So I've had properties that have flooded , I've had issues with tenants , I've had maintenance that I've needed to address , and that's part of it , and I guess for me it's the game of knowing that holding a property portfolio is constant whitewater and the idea that you think it's going to be clear water is a fallacy .
But the whole game is to make sure you stay out of the heavy surf and just stay in that whitewater . So there's some things you can do there . So how did you navigate those things , mila ? Was that something that you took in your stride ? Probably some levels of anxiety at the time , but is that ? What's your perspective on those things now ?
And how do you maintain this ?
Might not issues tenanting stuff , all future things that might pop up for you .
I kind of got used to it . I realized that that's part of it , that's part of the package . You get it if you get , like that , as you said , an older property , established asset in a high growth potential . Yeah , you do have to .
It took me a while to adjust to the idea because when things just kept coming up like , oh , can they just kind of just stop please ? We had like a couple of really rough periods where we were buying a condition and spending like $1,000 on this and on that and it all usually comes like from all three of them like boom and you're like , oh , another email .
But well , we work as a team so we've kind of divvied it up so we try to kind of look at the one property and the other and definitely respond to most of the maintenance requests straight away .
Yeah , Like a good , like a terrific landlord's shield in terms of making sure that there's lovely , safe , quiet enjoyment of the property that you're building . And again , you know , over such a short period of time there's been hundreds of thousands of dollars of book value gain , so that's looking really good .
Let's now talk to the third property , and then I want to sort of talk about a whole idea of rent besting , which is what you guys have been doing , because I think that's going to be an interesting part of the next part of your chapter on your journey .
Absolutely .
So tell us about number three .
Yeah , number three , so pandemic savings . Obviously here for the number three , october 2021 . We use the same by his agent again and we've got a Gold Coast unit for 425,000 . I think that's the lowest price purchase for us , which provides us with a higher strength . Surprisingly , because of the area surface paradise , everyone wants to be there .
Yeah , hopefully we've got the long term clients there locked in now . We did a bit of work there at the end of last year when the lease ran out or whatever happened , so we did it a bit up and it's much nicer now than when we bought it for .
So , yeah , we also were very lucky with timing because we got the fixed rate on that one for another three and a half years , so really really lucky . Yeah , very grateful to our mortgage broken team .
So let's build the scene here , right . So you think surface paradise unit and you think whoa , whoa , whoa , but the first thing that comes to mind is a big , high rise on the beach , which is kind of revisiting the challenges that we had in the town property .
Right , but to really set the theme for everyone , this is a well , you'll tell me if I've got the vintage wrong , but it's a 70 style very low boutique property that's walking distance .
So it actually gets all the benefits of all the attractions that are in that area , but it's a stone throw back away in a low walkup building that doesn't have all of the pools and the gyms and the caretakers and all that stuff .
Yeah , it still has the body copper but very kind of it's much lower . The fees are much lower because it's only four units in the block there and yeah .
And the timing was good too , because there was a real opportunity at the time that you did it as well , because since then there's been a you know , a more growth for your portfolio and people would be absolutely killing to get units like this for the prices that we were able to get it for back then .
But clearly there is a land value component here of being one of four that's in a very highly desirable part of the Gold Coast , without being caught up in the traditional postcard view of what you would think around surface paradise , because it's not a markstep .
So let's summarize the story here . So first purchase in this sort of investment , so Petrie was sorry back in 2018 .
2019 .
2019 , my bad 2019 . And so since that time , since 2019 , I'm looking at your numbers here over $2 million worth of property value and an equity total property equity story , as it currently sits , of $814,776 . Since 2019 .
I'm hearing that it's happening to me .
Pretty interesting . It's not four years , yeah , now again , it doesn't always go like that . So we need to . You know , we've obviously been through a very , very nice sort of property period during that time and we're playing the long game here . But we now I'm looking at , you know , your wealth clock and your wealth speeds in good shape .
Your net income speed sort of going quite well . You've got a good saving speed . You're very diligent around your spending . So it's just a story for me around optimization plan to become what you're planning to become , and you've really been able to sort of again hit those notes when we've asked you to hit the notes based on your plan .
So we've been able to build that out and to your point . You know , with Hayden in the sorry Braden in the in the Army , that's obviously moved you around a little bit there .
But now you're now you've got to start thinking about are you going to continually going to be this rent Vesta indefinitely , or what's the next chapter for you in terms of what you're thinking about for your situation ? Mila ?
Yeah , we're a bit of a crossroads now because when we originally planned it over five years ago , yes , we thought we would be rent vests for life . This is what we want .
But come kids , and we really want to give them the home , like the permanency , yeah , so we started thinking , like about purchasing our PPI and we recently talked to a mortgage broken team and well , we can borrow 390,000 with our existing levels of income and our existing borrowing . So not not what we want .
So we're asking ourselves what , what next , how we can get to where we want to be . Well , obviously we need to grow our income quite considerably to be able to purchase , like in Melbourne or even Geelong . Yeah , or we just adapt our plan , and maybe we adapt our plan and maybe we divest up .
We don't know yet I don't know why I haven't answered that question . So if you can offer us any insights , we'd be very grateful . Well , we well the .
The insight is that you know you walk a mile and you've seen a mile and so as much as the original plan was to rent , vest and this idea of flexibility because you were transient in the different areas , you've been able to accommodate your lifestyle in the different locations you've had to move for work .
Now that sounds like those opportunities and that desire to move around more is getting less Now that the families come along . That also you know that nesting elements of life starts to play a role .
So you know these are difficult decisions because you know , we do know that when we sell a property , that there is going to be a you know , a recycle cost associated with that and there's going to be a capital gain event and and so some of those you know paper gains will be will be passed on to the government coffers in terms of the tax we have to pay .
So it really then , from my point of view , is , if I was guiding you , I'd be really stress testing around . You know how strong is that desire and how much determination do you have about that outcome in in what timeframe ?
So if we could extrapolate the timeframe for , say , three years , then you know what does that situation look like and then we just get into the models , we'd make the numbers adjust accordingly and we'd show a buy and a sell scenario , or just a buy scenario where we might sort of consider , say , buying something that you know is a renovator's delight , so at
least we get the asset , we hold on to that and we you know we haven't had to sell any of the others and then we effectively plan an arrival into that property at some point .
So if we can get , say , some tenants in there in the earlier stages and then start to think about or leave them in for 12 months as we keep building up our buffers and as interest rates will eventually start to come down in 2024 , your borrowing power I suspect APRA will hopefully tweak their 3% buffer rate and so that will give us a little bit more borrowing
power . So those things will play out over the course of the next two or three years and then you know there might be an allocation of 100 , 150,000 to renovate that property and then have something that feels new , feels like it's going to be a place that you can move into .
They would be the types of scenarios that I would want you and Braden to be thinking about and feeling comfortable about . You know sort of what those stories look like .
But , like anything , some people can use the acquisition of property to go up the property ladder and they may liquidate a couple of those to get a more significant printable place of residence asset .
That is also , you know , from an investment point of view , that can also be very meaningful because our principal place of residence is also capital gains exempt , free . So we then hold on to that asset for the next 20 , 25 years and then we downsize and then we're able to then allocate some of that to a large lump , some super allocation as well .
So the good news that you've given yourself , mila , is you have choices right , and none of them are necessarily because you've done so well over the course of executing and taking action . This is not a difficult conversation .
This is just a conversation of opportunities and I really like that about what you've done and that's a credit to you and obviously to Braden in terms of there's been some delay gratification in there . There's been some sensible money management , there's been some knowledge building and education that you've been doing .
So all of that , you know , when you put the sum of the parts together , it becomes a pretty good , pretty good outcome . Thanks .
And it definitely circles back to part of the early conversation too , around investing in our education , because the more that you can actually invest in your ability for borrowing capacity , the better you are able to fulfill your asset goals .
Because I think there's a real learning opportunity here in your story Miller , because a lot of people want to be rent vesters , which is fine and it's wonderful , but it's also a really timely reminder that when you then want to pivot , it's like the Titanic it takes a while for the Titanic to tack and shift right , because we've got LVR .
LVR won't sink .
No , you won't sink . You definitely won't sink .
Sorry , Bruce .
Well , we've got to remember LVR right and LVR wise , you're fine , you've got equity . But the other part is the DTI , the debt to income , and it's the ability for the bank to go okay , do you have enough income to service that ?
And that's the challenge when you do a rent vesting model and then you go well , okay , no problem , that's fine , you've got to pay for the last five years .
But now having thought processes like what you're having , miller , means that if you then want to put another asset in , usually at a bigger price , without the benefit of having rent attached to it , without the benefit of having any taxation rebates that are attached to it , it takes a big chunk of the percentage of your overall income that needs to be allocated to
that asset . And , as you've found , I think you said 350 . Was that right ? 390 .
Yeah yeah .
Much better .
Yeah .
So I would encourage the community to and you , miller , just to listen to that last bit again , what Ben said , because it was a very , very prudent plan that allows you to pivot from the plan that you're doing with rent vesting , but also keep an eye on the North Star around , wanting to touch and feel your own walls and establish that as part of your plan
too . But I'm with Ben Well done . This is a remarkable story and , again , we don't want to sit here and go . You know it's easy to make 800,000 in four years .
You had the benefit of taking action , teaching yourself in a part of the cycle , which was well , but the thing for you is , if you keep playing the decades game , this story is only going to get exponentially better over the journey . I'm interested in to understand how you've navigated the last 14 months with 12 interest rate rises in the 14 months .
What does that meant for you and Braden as a conversation topic around having a portfolio like you do have ?
Look , we definitely saw everything increase in price . Like you know , the insurance is landlord , insurance is maintenance went up , like everything . Yeah , interest rates , well , we're not stressing . Like I say , we're just steady , we need to weather the storm . We have the buffers to weather the storm .
Our incomes kind of still is more than our expenditure , so we're in good position , we're prepared to weather it out . I feel for those in community who are maybe in less privileged , lucky prepared position , yeah , but yeah , we're not . We're not running and jumping up and down about it . It is happening , it is what it is . We just need to adjust .
We've always been very diligent , very kind of disciplined about our spending . It's about discipline . Like my probably biggest money advice is discipline your mind , discipline your spending and you'll be fine . Yeah , and you created a buffer and you know what the buffer does .
The buffer buys your time and if you can buy time , you can stay in the game longer . If you stay game , longer you get better results . So it's just , there's no secret . It's just applying the basics regularly and routinely . Do you do you ? Do you have conversations with friends about this , miller ?
Is there networks in Australia that you have conversations about money and investing , or is it ? It's largely a private thing with your brain ?
It is a private thing . I would really love to have a community of like-minded people who I can call friends , close acquaintances , who I can bounce ideas off . You know , I have one friend who's kind of a bit ahead of me in like age and properties , but and where , where they are at . But I really miss that bit .
And do you guys plan to organize like an event for maybe your clients or something where we all can come together and chat about that ? I would love to come . I just I really it's really the missing piece for us is having them , the group of like-minded individuals who would be close with them .
Yeah , because people around us and our social circle , families , are just not on the same path .
Yeah , yeah . So in the context , I mean I'm not going to disclose your incomes , but your incomes are typical . They're not . They're not sort of you know they're slightly above average but they're not over .
You know they're not six figure salaries or anything along those lines , but because you've got the three properties there's also just doing some rough numbers on that , so sort of in that sort of 72 to $75,000 of gross rental income coming off that . So when I look at your overall income number , it looks , looks , pretty , pretty reasonable to be able to do that .
But it never started as that . And so the point we're making is we all get it for our communities . Well , you know , getting that equity position or getting that deposit saved up to get started .
And we also know that you know the next generation of millennials who are coming through , they're going to have to start looking at properties in that sort of sub 500 or around the 500 mark , right , in terms of , you know , for those more fortunate , or you know those people who are on the other side of kids and in their mid 30s to , to say , mid 40s ,
they've got equity , they've got the income , the kids are all sorted and so their likelihood to buy in that 752 , 1.5 million range is a lot higher and that's , that's the truth .
So we've got to start thinking about them and Bryce and I will do more conversations to our community Because obviously , you know , if you listen to our first hundred episodes , it's all about , you know , I'm not occupier appeal and and investing closer to town and all of those types of things .
But remember , that was that was , you know , sort of coming up to almost 10 years ago , that that that strategy happens . So you've got to also think about how you solve problems .
I mean from our point of view as an advisors and also helping the next generation coming into our community is the reality is for those people they are going to have to look at , you know , the sort of city fringe markets and commutable markets to major centers .
They're going to have to look at a little bit more income to get them along on that journey , because interest rates are a little bit higher . But but it's still not a . It's still not a barrier of entry . It's the mindset that stops people thinking , oh , that's why it's too hard for us , you know .
So when I ever hear about millennials , you know sort of talking about that and even you know the next generation coming through . They're sort of like this is impossible for us . Well , if you take that type of mindset into this story , tap absolutely because that's your belief . Your belief is it's impossible , so always remain impossible .
But you know that's the best part about doing these winter series shows is that we're just showcasing people that we've that . You went off and tried something yourself . You then got some professional advice . There's been an accelerant put onto your story as part of getting that professional advice .
So I think the money , you know , has certainly the juice has been worth the squeeze , as we say . So you know , congratulations to you . My final question , because I'm conscious of time , I want to give you the mic and I want you know . Obviously you knew you were coming on to the winter series .
What's some of the key things that you would say to others who were sitting on the fence or thinking this is not possible for us , irrespective of their upbringing ? You know , because yours has been one of clear drive and motivation , that you never want to be in that situation again and that's completely understandable .
But what are some of the takeaways you'd love to share with our community ?
Mila . My biggest one is anything is possible and you become what you believe in . So if you believe in yourself and you can do it , you absolutely can . Well , look at me it's just been 10 years since I've come to Australia . I didn't know anyone , I didn't have local education , no friends , nothing . I just came .
I worked as a waitress to start with and now I'm managed projects . So you can do it . You just need a clear belief and a plan . Really , that's all you do . Use your brain , use your brain . It's all in the mind . So I've spent considerable time training my mind to be abundant , to think abundant , yeah , and just around the habits .
Implement good habits in terms of your spending , plan your spending with discipline and you can get there . Yeah , obviously , educate yourself , because education brings it power . Your earning capacity grows with your education . And if you are an entrepreneurial type of person well , I'm not . I'm trying Like side hustles and whatever , but just do it Like .
If you're an entrepreneur , go launch yourself Like , yeah , apply yourself , play your skill and play your brain . And , yeah , don't buy stuff that you don't need , because that's a major drain , great advice .
My final question is in the same family as Ben's . I put a call out to say come and join us on the winter series . It's actually quite confronting to come on and share your numbers and be transparent and talk about your aspirations and your goals and towns will not working and all that sort of stuff . So why did you come on ?
Why have you been so brave as to be transparent about your particular circumstance ?
I don't know , something just shifted in me and I wanted to share . I wanted to inspire . Maybe someone , if only one woman or one person , would listen to me and it would motivate them to act .
I'd be so happy and I just wanted to give back to the community because we've been gaining the knowledge that you share , guys , and thank you for that and , yeah , and thanks to you , probably we are where we're at now , and thanks for all our actions , too , about the knowledge you provided .
Yes , I just wanted to give back .
I just wanted to give back and share . And well , Braden was making me for over a year saying go , go they don't want another male there .
They don't want another male .
That is true . Braden is a very wise man . We did want to hear from you . Thanks for modeling action taking . I mean , when you break it all down , that's what you've done . You've modeled action taking . I think there's a takeaway here from the migrant mindset .
I think there's something in that for everyone where you've taken opportunities and you've had a swing and you've had a go . So , on behalf of everyone here on the property couch , thanks for joining us on the winter series . Miller , thank you , see you . Oh , wow , ben . How cool was that .
That was an incredible story , and I just we spend a bit of time speaking about the action orientation , but it's something that you and I probably you know early days on this podcast , we spend all this time teaching people the , you know , the buyer's decision quadrant and the property investment .
For now , we're just trying to teach people how to take action and that was modeled beautifully .
Yeah , it's a classic case of you know , that knowledge is empowering if you act on it . So I mean , we've been , you know , sort of double clicking on that message forever , but it's also fortune favors the brave .
Now here's someone who didn't know anyone at all got an opportunity in South Australia , moved across and made an amazing life for herself and , from my point of view , is making an awesome contribution to this country because she's getting on with it Right . And , you know , the other big takeaway for me is that mindset around thinking in abundance .
You know , though , that's a powerful mindset to be in right . You know , in terms of anything is possible , fortune favors the brave and this abundance attitude .
I tell you what I'm going to be , you know , really enjoying watching the next five years , 10 years , you know , the next couple of decades , in terms of the impact that Mila and Braden are going to make on their lives , their daughter's lives , and the contribution that they're going to do . So it is a wonderful story of coming across and making good .
Good pick up by you , ben , because , to quote her , she said I trained my mind to be abundant .
I trained my mind to be abundant and the backstory of living with someone else , having singles and other strangers in like , if you want to sort of compare your story as to why you can't change your future compared to Mila's , I reckon you probably would find that it's probably easier to play from where you are , from where she was .
Correct , and there was a little little hint in there about a divorce that also occurred in there which we didn't go into . We didn't need to . You know it wasn't something that we wanted to talk about , but but you know that's still facing adversity , there's still challenges associated , but there's a rebuild that's got to come after that .
That you've got to bring your , your attitude and your mindset along with . So it's just a great story of get busy living , get busy doing right . It's a ripper .
Yeah , yeah , no , it was a ripper and we've all got baselines . If you're born in this country , you're pretty lucky to have a baseline of trust around money . So , even even having a baseline with no trust around money and putting it under the under the mattress , miller , you're a brave soul . We appreciate you coming on . We loved you , you and I , ben .
We talk about this off here , we talk about it a bit on here , but it's just this . It's just this really awesome opportunity for you and me just to lean in and learn from other people right , particularly with circumstances that are atypical to our own being being blessed , being born in this country .
So that was exciting and thanks for putting your hand up , miller . We know it's brave . We've got more to go on the winter series . We're excited about it , mate . So until next week .
Bryce . We mentioned it earlier a couple of times during the show . Knowledge is empowering , so please act on it .
I'll see you next week . Hey folks , bryce here again . I just wanted to catch you real quick before you go .
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