Hey there folks . Bryce here Just wanted to share with you an episode that Ben and I recorded way back in 2017 from the very first mentor for me when it came to property . Her name is Jan Summers and it was a lifelong goal for mine to be able to sit down and meet this incredible woman and boy did we get some gold .
We talked about what property investing was like back in 1972 . Her mentor was in her education and continuous learning , found out about her thoughts on negative gearing how to improve your borrowing power . We also talked about some of the mistakes that she made along the way .
She has a very unique spin on borderless investing and she's also got some ideas around renovating . But why I think this interview is so incredible is because Jan is so humble . She's one of the pioneers of property investing education in this country .
She has an enormous property portfolio and yet she remains very , very humble , which is a value that Ben and I rate very , very highly . Back in the 90s , I watched her on the Ray Martin show , or the Midday Show with Ray Martin .
She was up with a black pen and a whiteboard on that show talking about how the tenant and the tax man pay most , if not all of your bills . From that point I was hooked . I did everything I could from that point forward to learn as much as I could about property investing .
So , folks , I am super excited to rerun this episode that we had way back in episode 103 . If you haven't heard it before , you're going to love it . If you have heard it before , it is a timely reminder of the fundamentals of property investing from a woman who has inspired me from the very beginning .
So let's cut to the interview Ben and I I'd normally say recently had , but it was a little while ago but the interview Ben and I had with Jan Summers . All right , folks , you're on the property couch where , each week , ben and I bring you the insider's guide to property investing . Hello , mate .
How are you ?
going Very good . You just got off a plane today and you got a sore back . How did that go ?
Next question .
We were not talking about back plane , I know , but I was swimming in the plane , right . Yeah , I know , I was just showing some care .
It's tough .
It's not going well , but you know good and bad hours . We might have some listeners who are back surgeons If they could just ride into Ivers .
You know what Well , actually we did . You've got a good segue there . I had Kent reach out to me in Sydney . He's got a hyperbaric chamber business out of Sydney and he was telling me that it would assist with my recovery . So here's a shout out to Kent .
What a great thing for someone One of our listeners has just come to us and basically say come on , I want to fix your back , come and see me . So his business is called Heal it . The website , I think , is HealItcomau . It's out of Sydney . So you know , a little shout out to him . We don't receive anything .
Can't cash for comment there , no cash for comment .
I don't get paid you know I can't go and see , Can't go and see him , but he's been really nice . I reached out to him and said thanks very much and he's given me a few little exercises and things for the car and a few other things to try and get my back . So thank you very much , Kent .
So you're in Sydney today . You just sort of popped into the chamber today .
I could have popped into the chamber , but no , I have to get back here because we've got a very special guest today .
We do I'm exceptionally excited . We'll go there shortly , but quickly , before we do Ben we've got the mindset minute Sounds like a plan Today I'm going to talk about . Don't compare your behind the scenes with someone else's highlight room , do you tell ?
Well , if you think about the fact that we've got so much comparison going on now with Instagram and Facebook and the thing is that you know , I'm an Instagram husband , right ? So whenever we have a meal , I'm not allowed to eat first . I've got to take a photo of it first so my wife can put it up on her Instagram page .
I'm sure you'll like that . Luckily I just Luckily I didn't pay . If people send me another photo of something they're eating , I mean really , I'm not there , she's into whole food . I get that . I understand that .
But it's very easy to compare what happens up on social media . That's the highlights . Really . That's the best of the best . Totally , I think we're in M1 and we're thinking about what's going on , which is our behind the scenes . So I think it's very important . But what's the context for our podcast ?
Well , you said I mean Trevor Handy's big on that stuff too . I absolutely think everyone thinks that everyone's going along beautifully . They look at everyone's Facebook and social media stuff . But you know , we all have our challenges . We all have our hard bits .
We've got to get through it . We do . No one puts the photo up when they're in their trackie decks . No well , I do , but that's another story .
Actually there was last week Ben and he's been in his trackie decks on the podcast . Remember , in his post-op he could have cropped it a little bit higher . You're right , I'm a magic , that's all right .
But obviously the context when it comes to property investing is the people who look the wealthiest are often the ones who aren't . So don't compare your highlights real they're highlights real with your behind the scenes . So something for us to think about today .
I like it .
I like it a lot , mate , let's get into it . We've got a very , very special guest . Very , very humble lady . I'm sure she doesn't like all the fuss that we're making . Jan Summers , who I have wanted to have on the couch for a very long time .
Anyone who's read the book will know , Bryce , the story of how we got into property investing Building wealth through investment property .
Jan Summers released this in the early 90s . I read it . I saw , jan . I saw you on the today's show . It was back in 1993 , first year uni . I remember you were up on the whiteboard with Ray Mutton , do you remember ?
that I do . That was many years ago .
And you were playing with numbers , drawing houses , and you just said there's some tax help and you can buy properties and you make some money . And I looked at them and I went why isn't everyone doing this ? And I didn't understand mindset back then .
It just seemed to me that it was management .
But welcome to the couch . Thank you very much . I have to admit that being introduced as a humble lady is a much better introduction than last Sunday when I was in a triathlon and I was introduced as the oldest competitor .
Well , you are in terrific shape . I mean you mentioned you're up at 5am this morning swimming .
I wasn't even up at 5am .
I was up at 6am , so you keep acting .
Yes , I try to . Yes , you have to make a habit of it . Every day I do something .
Yeah , and have the triathlon go .
Well , when you're the only one in at over 65 , you have to win it . You've only got to finish it to win it .
I think starting it is a terrific effort . Let me try for that .
I'll tell you , yeah , I actually have done an Olympics Ice Triathlon . That's another story for another day . I've done a couple in the past life , but that was pre-back . Now I try and hit golf balls and try and snow-scape , but that's even potentially maybe pre-back as well . So I'll have to wait and see . Now , enough about us .
I'm really keen to sort of unpack your story , jan , in terms of how you've been able to get to what you've done and how you stumbled across property , or did you stumble across it ? I mean , what I love about your work ethic , like your health and well-being and fitness , you're still doing that now , no-transcript .
You know you had a lot of drive to be able to do this in the property space as well , didn't you ?
Well , yes , and I think the longevity of what I do is simply about I've done the same thing for 45 years . There's been no change of story . There's no change of scenery , depending on the circumstance , depending on the economic climate . We started buying property back in December of 1972 and we had the same formula of borrow , buy and keep ever since .
Not that I knew what I was doing back then . It was probably 10 , 12 years later when I understood what the formula was about . The only reason we accumulated property in the beginning was because I was pretty miserly and anything we bought we hung on to because we didn't know any different .
Really , it was the same as accumulating shoes or accumulating old clothes . We accumulated property because we lived in 10 houses in the first 10 years that we were married . Not that we bought 10 houses in the first year , but it was a starting point buy and keep . We're moving on , okay , we'll keep that one and rent it out . We're moving on again .
Okay , we'll keep that one and rent it out , and so on and so on . But it was a long time later before I realised what we'd done was kind of special .
You say it so flippantly now , but back then that was well and truly not the norm . Who did you use as your mentor or the person that you took your advice on to keep them there was nobody really .
And my advice to people these days if you've got more than a couple of properties , you know more than anybody else about anything else . So back then there was no accountants to talk to , there was no real estate agents who knew anything about keeping property .
But it was a real estate agent back in 1982 , probably about 82 , it was 10 years after we bought our first property who finally told me that what I had was the basis for something huge . And it took a long time for that to sink in and it was three or four years later that we actually took up his suggestion of borrowing and buying and keeping .
It came about when we went to Sydney for the second time , 1981 or thereabouts , and I thought we've been here a second time it might be a good idea to buy some property Now . Back then property was about can you believe , about 50,000 , which was twice as expensive as a property in Sydney in . Brisbane , which was about 25,000, .
no can do the only way I thought that we could do it was to sell what we had and buy something else . So I went with my hands under my chin and , in a bit of despair , I had a chat to an agent and I was pregnant at the time and didn't have a job , and we had a single income and we were renting .
So you can imagine fronting up to an agent , very pregnant , not having a job , single income , and we're looking to buy a property in Sydney . Not only that , we never had any money in the bank .
So after rattling on for a few minutes , the agent listened to me and I thought he was about to give me the flick and we talked a little bit more and he said oh , I say , you've got a few properties in Brisbane . I said , yes , we own quite a few of them outright .
Well , he said , lady , with what you've got in Brisbane , you can probably afford to buy half of Sydney . I said , oh , okay . So I go home and tell my husband . I said there's an agent who's just told me a story and he said that we could probably buy half of Sydney . Oh , really , he said , oh , okay . So this went on for a few years .
It just took a long time to gel and it was actually four or five years later , in probably 86 , 87 , at a time when no one was buying property because we just had a global financial crash of the share market in late 87 . And here I am wanting to go out and buy half of Brisbane , which we did Not quite half but it was quite a few properties .
No , we were back in .
Brisbane .
Okay , roddy , the northern half or the southern half ? Well , the southern half .
And it's just how come nobody's buying any property ? And then at the time they had just reintroduced negative gearing . That was in abolition between 85 and 87 . We'd already bought quite a few by then by that turn . Well , the day after that you announced why aren't these real estate agents flooded ? Where is everybody ? Where is everybody ? So we had a ball .
Properties were cheap , Rates were sky-high because no one was buying property and they were all cash positive without me even trying .
So , jan , did you only take one loan for each property at a time ?
Or were you ?
doing multiple loans at the same time , before you had that meeting or that encounter with the real estate agent .
Well , at the time I was taking individual loans and trying to keep each property separated . It wasn't until I used multi-properties as the collateral for certain loans and it just became a crossword jungle of this loan was held by the security of these properties and then that loan became a nightmare , and today it still is a jumble .
But it worked and the basic principle was to hold on to those properties without ever selling , and use the security of those properties to then borrow against to buy even more . That's brilliant .
So tell us a bit about the mindset back then , because you mentioned , no one was buying . Having that much debt is something . There was a generation of pay cash for everything . Pay any debts off as quickly as you can , and here you were getting yourself into more debt , so where ?
did the determination come from ? Well , we had been brought up with the idea that you don't borrow money . If you can't afford a car , you don't go and borrow for it If you can't afford a new lounge , you don't go and borrow for it . So that was a very good upbringing .
But I had worked out for myself I'm sure other people had discovered it before me that borrowing to buy an asset that was going to continue to appreciate in value was okay to do , and so the question I asked myself was well , if I'm going to borrow to buy for these properties , I need to ask myself what have I got to show , at the end of , say , 10 years ,
for what I've borrowed this money for ? And the answer was obvious , because we had already been doing it for 10 years .
The answer was obvious we had borrowed money although it was a principle and interest loan or multiple principle and interest loans over a long period of time that we had accumulated , but the terms of the loans was very short it was sometimes 10 years and so we were cash poor , paying out all of this money , all of this principle and interest , and of course , we
had a lot to show for what we had borrowed to buy , because we'd been paying it off at the rate of knots .
So that was a critical question what have you got to show for what you've borrowed your money for , and if you've bought a car or you've had a holiday or you've bought a boat or a caravan , at the end of 10 years you've got to pay someone to take away your junk . So the answer became very clear . I had answered that question myself .
Yes , after 10 years , we bought our property in 72 and in 82 , hey , and in 92 , hey . My little $12,000 7.4 square property , which I still have today . We still have today is worth probably $400,000 . Not a lot , not a lot , but when you've got lots of these little blighters , it adds up .
Now the gearing ratio . I'm keen to understand how , obviously with 10 year principle and interest loans , obviously the commitment that you have to keep making being short terms I mean , obviously we know today we've got 30 year loan terms what interest only periods ?
Did you have a rough idea what sort of global loan to value ratio you were running across your portfolio at any time ?
To be safe . I tried to keep it at about a loan of about 60 to 70% of our total assets . I always kept a couple of properties that were totally free so that if I was being pressured then I had something up my sleeve .
I made sure that the by that stage I'd switched to interest only loans because I realised that the answer to borrowing more money was all about cash flow . So I switched to interest only and that reduced the pressure on the cash flow enormously and allowed us to borrow a lot more . So in the early days I kept it at about 60 to 70% .
I made sure two thirds of those loans were fixed and at least a third was on a credit line variable rate so that if interest rates rose which they did in the early 90s to almost 20% well , we were covered , even though I was paying 16% at the time .
There was no skin off my nose because we had a controllable debt and that's the secret to have a controllable debt .
Absolutely . I mean you said in your book , residential property , properly financing , kept long term , is a wonderful investment . Is this still true ?
Yes , it's been true forever Probably . I read a story about Cassius a car satis I probably haven't said his name correctly . He was doing it in Roman times .
He would go trot off to the money lenders and borrow a lot of money and buy a lot of property , and he was a little bit naughty because he also had a building team that was into renovations and occasionally he burnt down a few properties so that it could go on re-renovate them all and get the tenants out .
So it could improve his yield .
Yes .
Don't go and do that listen .
He was , I think , alleged to have caused or started the fire back in Nero's time , specifically to benefit from his properties . Whether that's true or not , I don't know but it makes a good story .
We know a few people who have burnt places down in stocktags sort of language , don't we ? There's comments around that as well .
You're a pioneer as a property investment educator in this country . Do you feel that true ?
No , not really . There were people who did go before me who probably made a lot more money out of property , but it was not made publicly available . You never knew what people did and it wasn't the sort of thing that you talked about at a dinner party .
Even today you don't talk about religion or politics or money and you don't sit down and make comparisons about my favourite politician is better than yours and I've got more houses than you .
There are several no-nos , so there were people before , but I was probably one of the first to document it in an understandable way that people could take the recipe and go and make their own Christmas cake .
Does that legacy make you feel ? I was chatting to the guys in our team here that you were coming in today and they were like Jen , she's in the building . Every person involved in property investment has read her book . We've got them on the desk here they're staples .
We still get feedback . I still get a lot of feedback . I had just a wonderful letter the other day from someone who just retired to Parisian , who probably saw that same show in 1992 , 1993 . And he's retired up there and he told me in great deal what properties he had . It's just a wonderful feeling .
They're well done and it's just a shame that more people don't follow that recipe . The reality is not everyone can .
We can't have every Australian investing in property . But I want to come back to what you were saying about the dinner party , about talking about money . Do you still think that that should be a taboo topic ?
I think if we start openly talking about money not about bragging about wealth , but certainly teaching people how to handle money and what you're talking about it's all through your books around appreciating assets versus depreciating cars , all those types of examples . Do you feel that there's a message there that we still need to control ?
There is . But if I'm asked I will give honest answers and I will sprout a little bit . But I never initiate the conversation Because then I don't actually have a barrow to push because I don't sell finance and I don't sell property and I don't sell M-Way and I don't sell anything else .
So I don't have a barrow to push and I don't stand there and try to sprout . But if I'm asked a question add on a bedroom to our three bedroom house Just because the agent said we'll get more , oh well , what for ? Well , I'll get more rent I'll say , well , okay , now how much is it gonna cost ? Or what it'll cost a few thousand dollars ?
I'll say , well , think of a figure and then treble it and that's how much it's going to cost . And are you going to get that money back over a short period of time ? Because I could probably go around to all my properties and out of bathroom and out of bedroom and out of patio and out of deck , and sure it'll get more rent .
Of course it will get more rent , but will it make me any more money ? Relative yes , it's a bit like adding an ashtray to the back of a motorbike , is how I describe it . Not necessary .
Oh , very good .
Now you , because you're the original independent voice in Australia with that , because on your website it says you know , whilst many organisations use our material to assist their clients with investment property , our company's completely independent and does not sell property , finance or even personal advice . Were you ever tempted ?
I'd actually become a mortgage broker in the very early years . That was back in the late 80s .
Oh , you would have been a pioneer as a mortgage broker at that time too .
You could go and get a licence just by filling in a form and saying that you'd never had a criminal conviction on your certificate , and off you go . And it was very easy for me to work at that , because I had three very young children at home At that stage .
There were probably six , four and two , but I could only get to one person at a time and one person was taking up an hour of my time and I felt I had more to offer . I felt I had more to offer and I had accumulated a lot of knowledge at that stage , and so I thought I'll just put that aside . I don't need to go down that track .
Of course I could see myself getting drawn into . Okay , you want to get a financial product through this particular financier ? Well , we'll give you this percent as a kickback and a tail and a trial and everything else . So no , I don't really want that , because then I'm influenced by what I would do for people . So I put together a little manual .
This is in the late 80s . It was a 56 page manual that I still have got a couple of dinosaur relics of , and it just outlined the principle and we printed it ourselves . My husband typed because at that stage I couldn't type . I remember I liked typing the word property because the ERTY was On the Kodi code board , and I could do that very quickly .
And people were very interested and it just virtually sold out the back of a car and I did a few seminars at that stage and people liked it . It was a very simple form and it was just like selling a cookbook and I thought , well , okay , we'll just take even more time off . I've got kids at home running around and I knew I had a good formula .
So that's how the first book came about . I wrote it , I researched it . I was fairly good at researching . That was probably . My strength back then was to research and understand how things had happened . And that year I had a book and I thought what am I going to do with it ? Most people do it the other way around .
Here's an advance go away and hide yourself and put a book together . But I put a book together all under our own steam . I had it printed and I had . I think I had about 5,000 to 10,000 books printed back in the end of 92 . Well , what am I going to do with it ?
And so people like Penguin and who are some of the other publishers ? Yeah , wiley .
There was a few publishers .
I don't think Wiley would have been around and I don't think was it .
Quite a few publishers I approached . Oh no , no , like , who are you ? Well , I'm just me .
Yeah , yeah , yeah , yeah , just done it . I've actually been approved .
Oh no , I said it's a real , very well-written book , because I was very pedantic as I am , with my properties , about making sure that every time you turn the page there's a heading and making sure that things kind of had a nice pattern , like it was a very easy to follow recipe . Oh no , we're not worried about how it looks .
And I said so , I'm good quality paper . No , we don't care how it feels either . It's got to be a good seller . So I trotted along to a little-known distributor called Heron . He'd been around for a long time and I had to check the fellow there and he said well , you could , you'll have to employ a publicist . I said I don't need any publicity .
He said if I'm going to take the book , you should do so . I did find a publicist and Colin McSween was extremely good . She was I don't mind giving a plug she was from the image we were on .
She said- she did turn the rain martin show she did .
She did . She's brilliant then .
She was very good . She says there's got to be an order of things and I said I don't really need to do all of these things , I just want the book to sell . Oh no , it doesn't quite work like that . So she had a plan and she said we've kind of got to give you a label . I said I don't need a label , I'm just me , I'm just a housewife .
She said well , that's the label .
Yeah , very bang .
That's the label , that's the housewife . Well , that's fine , I can live with that . I don't need to be a guru or an expert , but a housewife I can live with .
Well , that goes back to my don't let your behind the scenes impact the whole arts world . You were just the real . There was no whole arts world .
It was just exactly who you were Full of substance . That's authentic and full of substance .
Now you mentioned that you were the housewife . What about the husband ? Was Ian on board early or did you convince Not at that ?
stage Now . Ian was a research scientist , or was a research scientist with CSIRO , and he was a prawn expert . He was one of the first into computers . We used to travel around university in the late 60s with a card full of Fortran cards Of course Fortran was the language at the time and we couldn't disturb .
We had suitcases full of these cards , all in a nice little order , and so he was one of the first computing gurus and he used to crunch numbers for prawns , particularly in the Gulf of Carpentaria where he helped establish the fishery up there .
So after he helped me assemble the books and he helped edit it he was very good at editing because he'd edited a lot of research documents and I said I think look , this is how the numbers work . You've got to put in a few figures for a property .
You've got to put in its price and its rent and how much interest you're paying and how much rent you're getting and how much tax you're paying and what depreciation . And the bottom line should be this property is going to cost me , say , $40 . And there'll be a return on my money , because I had done a little bit of mathematics at university .
I wasn't very proficient , but I did .
You're a school teacher .
Yes , well , I did .
That doesn't mean that you know everything .
It just means you can teach everything you don't have to know everything .
So I played with these figures and I produced a spreadsheet and I put it in front of his nose and I said I want you to turn this little Excel spreadsheet into a proper software program , which he did , so he had his normal work .
And that's the origins of the famous , and that was the origin of the property and investment analysis software , pia software , which is still available for sale today . It's still available .
You can check it out . What's the ?
best way I want to do a quick look for this . Yes , our website .
We obviously , you know our business has a copy of it . We've been subscribing to it for many years . We'll put it on the show notes . Yeah , we'll definitely put it on the show notes and a link to it , because it is fantastic if you want to analyse a property in regards to your personal circumstances . It's a must have for any doer .
He still think , he still tinkers with it , he still plays with it , he still updates it .
Yeah , we see the upgrades come through every now and then .
And we both work from home . I do a lot of the property side and I do a lot of the renovating side and organise a lot of tradesmen . I do not manage the properties , I don't do that , but he still tinkers with the software . So at five o'clock I'm just going up to have a shower before we have dinner . Well , okay .
Well , an hour later I said where are you ? I just had these few things to fix up on the software . So now my traditional aligners . When you go and have a shower , don't stop at the office on the way back .
So he's detail oriented . He loves the numbers .
He loves the numbers crunching , is he ?
paralysis analysis . I mean , when you were making those first decisions to buy , was he all on board or were you having to ?
convince him . Well , no , he was totally on board because together we had seen what had happened in the last 10 years and so we had been part of that team together where we had struggled to buy property but because of the high principal and interest loan over the 10 years , he had seen the effect and what it was doing and then together we just progressed .
We progressed as a team , so he understood it all , and probably I was a bit of the gung-ho element , as I am today . I look at this kitchen needs renovating . Oh , where do we start ? Well , all we do is get it chiseled and you knock off the bench and do this and that and that . And he'll come in and we'll do it all .
But I'm certainly not the expert in that . I was a bit of a jack of all trades master of none . But I learned , to ask a lot of people along the way , things that after that real estate agent had explained , I thought there are still a lot of people out there who know more than I ever did .
I was just able to pull it all together and explain it to people in a simple way .
So , jan , you started in 72 . That was the first . Yes , that was the first property , and so you were double household income at that point , were you ?
Yes , for one year , so you were school teaching and he was working CSIRO .
Ian was with CSIRO .
Yes .
So that first 10 years you had the benefit of two household incomes ? No , not for 10 years .
No , in 72 , it was the end of 72, . I started teaching through 73 . I did teach . I didn't teach for 74 , 75 because we were in Sydney and I was just the copy lady . If you wanted anything photocopying , I did it . So I was just the gopher , go for this and go for that .
And then I did teach full time between 76 and 80 and we did acquire quite a few properties then . But between 80 , I went back teaching . I had wanted to but the system had changed .
I really I couldn't deal with the discipline or the lack of discipline that was in the schools in those days and so and I was a stay at home mum for seven years between 82 and 88 , 89 .
Just buying your property on the duty , just buying property along the way .
With , and most of that property was bought in that period of time on a single income .
Yeah , wow , I think that's good for the listeners to understand . So you know when you first start out . We want to know okay , well , how are you doing this ?
With three children , three children .
Obviously , we were getting properties that were close to neutrally geared with a LVR of 60 to 70% with depreciation . That would have been pretty , you know , quite conservative in regards to the yield that you were getting at the time . You mentioned higher rents .
Yes .
And obviously then you add your incomes on top of that a layer .
that's had to take place , but I must say it wasn't as though each property was geared 60 to 70% . It was the total portfolio . Yes , absolutely 60 to 70% . Each property we bought after even 85 , actually the work . Quite a few properties were bought in 85 , with a gearing ratio of like 110% .
Because by then I worked out how to borrow the costs on the energy , the oil .
So a bit of this what year did you work that out ?
Well , that was what the agent explained to me back in 83 .
So it was three years after that , in 84 . You started to gear up To start . Yes , and that's the sorry , you go , mate .
No , I'm fascinated by my assets . So do your parents ? Live in Queensland .
Yes , around you .
So were they giving you any tips on the shoulder ?
No Too much debt . Well , not as far as the property is concerned , but we did have a very strong background in how to manage money , how to save . I mean , I walked down here for this interview this afternoon and I can't help but stop at the op shop that's 20 metres up the road . I said I'm going to get a little freed up there .
I said humble , yeah , I didn't mean to get in .
Do you think that that's so ? You've obviously created a significant level of wealth . I have heard that the only sort of luxury you give yourself is a business class airfare if you're flying to Europe .
I do that's right .
But that's all about comfort and I get there to someone with a bad back . I absolutely get that . Do you feel that there is a need ?
I don't feel that need to drive a Rolls Royce or to buy the late Picasso . I never did feel that need . There's a few luxury items I might buy . I treat myself to running shoes .
Yeah , yeah , rollers are a triathlon and I might buy them three or four at a time .
I still drive a 13-year-old 2004 , 13-year-old BMW that I bought secondhand . I just love it to death . I can't get rid of it . The leather is scratched to pieces , Either through dogs or because I throw my bike in the back when I'm off to do a triathlon . So I don't have that need . But there's certain things .
I like nice appliances and I like a nice property with a nice view and those things are important to me , but not to wearing a $200,000 Gucci watch or it might be a $50 swatch . And that's about it . But that doesn't mean all people have to live like that . But sometimes you can't have your cake and eat it too .
And when you're starting off , there's got to be some kind of limitation . As I say , it's a cross between living in a palace and a tent . You'll find a balance and you don't have to live like a pauper for that accumulation phase .
Well , there's plenty of studies to show that once you can read I think it's once you get to sort of minimum $50,000 , there's no sort of increased happiness , just come from the extra income that you've got Once your basic needs have been met .
I think that security provides you with that happiness . That's what gives you the happiness , just the security . Know you can do this if you want to . You can buy that if you need to .
So if we were to ask your kids in terms of when they were growing up , did they feel like they ever missed out on anything ? Do you think if you asked them that question ?
I know they were sick to death of traveling around in a real estate agent's car Because there was no such thing as internet . The only advantage was that when we got to a place they liked to play with other kids toys .
When we didn't have a look at a property and they got to travel in an air conditioned car , the agent was usually horrified at these three little kids sitting in the back munching on russks .
And if they call it suit , Janet , yes , they have actually .
Yes , they're all in their 30s now , and for some of them it took a little while to catch on , but they've all got it . They've got it .
I understand that .
So in a very balanced way .
So money doesn't drive you then . So what does drive you ? Obviously keeping active in fear . But what's the why for you ? What's the why to get out of bed these ?
days , I think , just the pleasure of living , and living in a way that I want to . I try to live a healthy life . I try to stay active . I want to go to France this year again . I've already organized a walking holiday in the Pyrenees . So enjoying life to its maximum and a little bit of money along the way does help do that .
It's very easy to say , well , I'm happy and I don't have anything , but I'd like to go to the French Pyrenees and I like to fly business class there . But when I get there , I'm very happy to stay in a $20 a night mountain hut thanks very much without a shower . So it's the act of living .
I think that drives me in a way that money has allowed me to live . Sometimes it's luxurious and sometimes it's not , but there's a balance .
You have a wealth of knowledge , so I'm keen to understand . We get a lot of guests on here . I always like to know any mistakes , anything that you would have said you wouldn't do again second time around .
Yes , probably even in the last decade , I've done things that I tell people not to do .
Emotionally .
Yeah , probably put it into two categories . One , we did make a lot of mistakes in renovating properties , having a go at concreting ourselves on the absolute hottest day of the year . And trying to run a helicopter over this gravel because the concrete had all set and it was so bumpy . It was very strange .
It's a helicopter smoother for them . Yes , I don't know . No , it's except for a 5-0 helicopter .
It was very strange that the tenant in that house was actually a professional concreter . And he stood there and watched us and at the end , when we'd made this mess , he said would you like me to top that up for you , after we'd struggled all day in this 40-degree heat ?
And so we paid him to put an inch over the top , and it had a very professional finish . There were a number of mistakes like that . I think we also laid concrete on the coldest day of the year , and it was a property that we had at Capellaba , and we were there at midnight with the headlights on .
You didn't have any brick friends , wakers for the concrete to go .
You didn't have any brick friends and we got them . After our experience with the set concrete , he said make it particularly sloppy please , we don't want this going off . Well , it never did go off . So there was those kind of physical things where we made a lot of mistakes . But we also learned a lot too .
You can know my daughter-in-law was having a go at a renovated kitchen . I said have a go , like sure you'll make some mistakes . So this will be too short , that'll be too wide , that'll be too long and you'll chip the floor . But that's the only way you learn is to make a few mistakes on the way .
I guess the second category mistake is the ones that I should have known better , and that's in the last decade . I think , yeah , all right , we've got our little stable of these a little three-bedroom , one-bathroom properties that have all done very well for us . Maybe we could buy the odd holiday unit .
Oh , maybe we could buy a few shares .
Maybe we could buy a commercial property . None of them ever worked . We were lucky that we didn't .
That's a terrific message , though . Oh , it is yeah .
We didn't put all our goods in the one basket , it was just enough to dabble .
Yeah .
And I don't mind inventing a couple of those holiday units I did sell at a loss just last year and that's just us making a mistake in a poor choice and something that I've told people not to do , and I have no regrets . It was just one of those things that I'm lucky I could afford to make a loss like that along the way .
Well , you mentioned the holiday unit , so my question is are you still buying , actively buying for the portfolio , or is it tools down lifestyle ?
Not actively buying , but it's not actually tools down , because now we actively get involved in more renovations . Because I like doing things with my hands , I like pulling kitchens apart and putting them back together again .
I've got a couple of properties .
you can do that for me , oh daddly , I don't go and treat the work you gotta go to the . Sorry , I don't go and treat the work your kitchen needs to go under Sydney Probably .
I've got at the moment that you're eating , you can help me out .
No , thanks , no , no , I'm pretty choosy , pretty choosy . I just made recently a whole house full of curtains replaced . I often make curtains myself . Sometimes , if we're away , I say , oh look , I can't , I can't , I don't have the time , I can't be bothered , just bring up curtain one , letting them get them to come in and put a new curtain on .
But I like to have a go and I like to check out if it does really need a new deck or just a few boards that need replacing . And we choose to do it ourselves or we choose not to .
Yep .
If it interests me and I've got time , I will . If I'm doing something else and I'm in the middle of France hiking , well , someone else can do it .
Yeah , sounds good . Now , did you ever have that conversation of when is enough enough ? Like , I mean , you know , in my role and I advise clients on roughly how many properties they need to buy to hit a certain target , to reach their goals , and all those types of things .
I mean when you're professionally advising other people , there's normally a yardstick or a measurement that you're trying to do , but no , there was never a yardstick and I never had an ultimate goal to acquire a thousand properties .
I think it was like playing golf you do it and you try and improve your score on the way . So buying properties for me was trying to make what I did better accumulate whatever I can while we can . I have the same view with triathlons . I'm not going to be the fastest triathlete in the world , but I try to keep as fit as I can .
I don't have a particular goal to beat anybody , except to beat my own time , and property was the same . I never had an ultimate goal and I think if people say , well , how many properties have I got , I could honestly say sometimes I don't know if I'll write a list to the bank and I'll ring them up a day later .
I look off and I've got this one .
This one needs to be added in somewhere , and it's not something I've dwelled on . If you know exactly how much you're worth and you're not worth very much- yeah , good point .
How long does it take you to manage the managers of the properties Like ? You know , is it a weekly thing you're doing ?
Yes , it does , but I don't need to . It's one of those things that I will spend a few hours a day either organising tradesmen off . Don't know how many air conditioners we've had to put in the Brisbane heat in the last few months and I like to stay in touch with the property agent .
So I say , look , if there's anything over $100 , if it's just a few tap washes , well you can get someone . If it's over 100 , I want to know about it . I want to know that I can just duck up and change the shower head or do something . But again , that's not necessary . But I do like to keep a little bit of hands on .
But I think dealing with tenants is something I'm probably not psychologically set for . I'd like someone else to handle that . And we have tenants I can think of probably four or five just off the cuff who've been there more than 20 years , and I look after them .
If they want a new carpet , Well I go around and have a look and there was a lady recently , a new carpet and all the hinges on her kitchen doors were rusty . So I trot around and have a look at , hmm , this carpet is actually better than I've got at home . I'm not sure why she wants a new one and the hinges Must be .
Jen White yeah .
There's a little bit of rust there , but you haven't seen my hinges in the laundry . They're very rusty but she's there . She looks after the place like new . So I do it and it's cheap because she's there for all of that time I don't have to pay for tenant turnover , keeps them happy and keeps them there . Turning over tenants is expensive .
Yeah , absolutely . Now you mentioned that you just duck around to see the property . So all your properties in Queensland did you invest in to stay ?
No . Well , yes and no , they're not all drivable too . Sometimes it's a couple of hours and I balk at that idea and , probably because I'm hands on , I like things to be a little bit closer . But if you have complete faith in the agent , there's no reason why you can't buy anywhere , and my kids have found that out .
They've invested in Sydney and Mackay and a few different places , and while the agent is very good in managing the tenant , there's things that well okay , someone says it needs a new roof . They just can't drive around and see does it really need a new roof or is it just a few panels of collarbone that need replacing ?
So there's advantages in having it close , but it's not always 100% guarantee that you'll be able to control it any better than something that's say , in Sydney or anywhere else .
Oh , can we keep the conversation going for the next two ? Hours , Because obviously I have got so many questions . So , in terms of obviously significant portfolio , have you worked out why you think some of the properties have performed better than others inside the portfolio ? Is there anything you can put that down to in terms of the growth drivers ?
Infrastructure .
Yep .
The infrastructure . And sometimes I always knew that you have to have a place that tenants were attracted to because of the infrastructure . It had to be close to shops , it had to be close to a station or a bus stop or this or that . In a few cases I've guessed wrong .
We bought a few places in one particular suburb because the train line was coming through . Well , that actually didn't work out as well as another suburb where there's no train but there's a very efficient bus service . So you never quite know . You never quite know .
But I've always been very pedantic about the aspect of a property , particularly in Queensland and particularly when we've had this 30 to 40 degree heat , that there's something about a Northeast aspect along the East Coast of Australia that works very well and that means you get the cooling Northeast libraries in summer and in winter you get that northerly sun .
It's not as though the property has to face North or Northeast , but the living area has to have that kind of element . Otherwise the only other way around it is that you fork out for air conditioning and then you can virtually buy a place anyway . So that's probably helped a lot more .
These days , with the cheaper cost of air conditioning , that that's not so critical as when I was first buying .
Proximity to employment notes . Has that been of interest to you or not really ?
Well , yes , except not so much these days when so many people can work from home . So you need to have you've got to make sure you've got internet facilities and phone facilities and having good reception . But probably I mean that little property that we bought back in 1972 for just over $12,000 .
That was way out in the middle of nowhere , at the back of Redcliff Kipperin . Well , there's a train line 150 metres down the road that's just opened up very controversially because it's now thrown Queensland rail into complete disarray .
That's not like governments to be unorganised .
But we thought forever that there's going to be a train line somewhere . That's not why we bought there . We bought there because that was the only place we could afford $12,000 out in the middle of nowhere . And that's probably part of the problem with young homeowners now is that they're not prepared to pay that cheap price out of the middle of nowhere .
It's got one bathroom at 7.4 square . The three bedrooms are not much bigger than a dog kennel and they're like oh no , we want something at Bondi .
Beach . We want a mansion on Bondi Beach I can't understand why we can't get it and a suite and a bedroom and a triple garage .
So , based on that , do you think we've got a housing affordability problem or just an expectation management problem ?
No , no , that's exactly right . It's an expectation there's always been a housing affordability problem . I read a letter that was written to my aunt back in the 70s from her friend who lived in Melbourne at the time .
Now this friend bought property in Melbourne in the 50s and she was complaining that they needed a 25% deposit and interest rates were probably running at 8% or 9% and they had to save like crazy and they had to buy a property that was way out near Tullamoree , near the airport , where there was new estates .
She said well , what are the young ones thinking about now ? Like it was really hard then to buy . It's always been hard to buy a property , but we all do . If you're committed enough , you'll be able to do it . So you're right , it's an expectation team rather than affordability crisis , and I don't think the politicians have got that .
Let's get rid of negative gearing and then we can make property more affordable for those who want to buy . Well , I'm sorry , but there's some people who really just don't want to buy what they can afford . That's the bottom line .
They won't give up their smashed avocado , will they ? No ? I think it's fair to say you're in the debt reduction camp . In reading your books , you want to reduce the debt and sell some to pay off the debt . What's your view on the live-off equity philosophy that exists in the marketplace ?
It's very good in principle , but it's like any credit line You've got to be very good at controlling what you're spending , otherwise you'll find that your equity was gone really quickly .
And it's the same as the banks have used A philosophy for years that , ok , you can borrow against your house and you can buy the boat , the car and this and , oh , your house has gone up in value again . Now you can go and have a holiday and this and that .
There's that temptation , if you're going to live off the equity , that you're going to overextend and before long you won't have any equity . So for people who can control it , if they've got the discipline , it's good . It's like anything . It's a good idea . It's like people's pay packets how much do you spend each week ? $10 more than I earned . That's everybody .
You always spend more than you earn . And that equity thing very good in principle , but you have to be very controlled in how you use it .
Now , jan , what's great about your story is it's technically 45 years , from 72 to where we are today , and even though you didn't have an end gain , is it true that the portfolio retired all the debt out Like were you able to get debt free , or are you still running with some sort of no , still run a debt .
We still run a debt , but it's a very controlled debt so that the rents exceed the interest or the payable .
There's a significant amount of surplus cashflow coming from the portfolio . I suspect there is .
There is , but it's also very variable just depending on if we've sold a property or some properties have gone up in value or if there's been rent rises and all of those things . But I'd say we're probably not so much in the debt reduction as the debt holding , because then the increasing rents , increasing property values , debt stays static .
And so there's a legacy that's been built there . I mean , it's obviously going to be great for the extended family and everything like that . Have you thought about that legacy piece ?
Yes , we made the decision a few years ago that we did help out quite a few junior sporting teams , because I've always had that philosophy that rather than just give to any old charity , I would like to put the money where I can see some good being made of it .
And so we have channel funds into some sporting complexes and we've helped out some junior sports teams and you can actually see the result and our philosophy has paid off , because a lot of those junior sporting teams that we put money into even 10 , 20 years ago , they're all good kids . They're all good kids . There's not a bad kid amongst them that has .
They've all benefited from being able to travel and being able to participate in sport at that level . So I would hope that we continue along that vein , that we can contribute some funds where we can see that benefit .
And there's a lot of , there's a lot of beautiful .
Well , there's a lot of wonderful charities out there , but you can't just give . If you gave a dollar to every charity and you had $100 million you need , I think the human side needs to see some results .
Yes , like a poker machine , you pull the hand , you want to see what you've got , and putting money into a charity especially now , you want to see the result .
Yeah , absolutely , Ben mentioned before 45 years and you've obviously brought up three children that have experienced their parents having some form of material wealth . What were the messages that you said to your kids growing up to help keep them grounded ?
You said you didn't get access to it , did you ? Just a little allowance , you know , five bucks going by , some make it last .
Yes , well , you'd probably tell them a few half truths along the line you walk down and I listen to this .
Yes , well , they're aware of it now .
Well , I had a chat with a friend just recently . We were talking about the half truths that we tell our kids , and one of her half truths that she was told by her father was they used to run out when they could hear the ice cream man ring his bell and her dad said well , what that bell means is that he'd run out of ice cream . That's brilliant .
I'm going to use that .
So when we walked down the supermarket aisle I didn't quite say that the bell's gone or tell Feds to that extent . But I just said , well , we've got it into other priorities . So I tried to say we can't afford it , which was kind of true because we were channeling all our money into properties at the time . But I did say , well , we do have other priorities .
Yes , we can do this , we can do that , but I'd rather do this so that later on we can have all of this if we want to .
Yeah , sounds like you've led by example too , because you didn't live an opulent life . So what Maki C Maki , do they ? Saw you not sort of driving a Ferrari and living opulently ? That's probably the best time .
Yes , so even today , one of my sons . Well , they thought four-day-old Apple turnovers because they're a quarter of the price . There you go .
So something has rubbed it . That's the apple falling far from the tree . The fruit doesn't fall far from the tree .
I don't know if you've got many bin to go , we're just mindful of time . But a couple of quick ones for me . What advice would you give Pro-Investors today and what's the most common question you get ?
The most common question is when's a good time to buy . And my answer is now .
Right now .
Don't wait for anything to happen . Don't wait to see what Mr Turnbull's doing , or Donald Trump or anybody else . Look at your own situation and do it right now . So that's the most common question and my answer is just start right now . Don't look at the economic overall plan . Look internally at you .
So property will never , ever run out of being a good investment vehicle in your mind .
It will always be a good investment in some way shape or form , because I see it as a money sink . I remember a story that Noel Whitaker . I read his book back in the 80s and I thought it was a brilliant book . It's one that I would highly recommend as a good starting point . Making money made simple , and I chatted to him .
We did a conference together back in 1993 or four . We did a very large conference with him and a few others , robert Gottlieb , so I think David Kosh was there , ross Greenwood the names drop a few .
Oh that's good . You can see the calibre of the gas we get on . The show went right to the top .
Well , we were talking about different investments and he said , jan , the best investment , I really think , for a lot of people is a concrete box in the back yard . Oh , noel , I thought you'd be a little bit more sophisticated than that . He said no , for some people .
You need a concrete box with a little swithole in it where you put your money in and you can never get it out because there's no temptation then to spend it . And that's the problem with most people is that they've got this temptation to spend everything , whereas a concrete box in the back yard it will be there forever .
You might not get a great interest on it , but it will be there .
So when did you build yours ? Your concrete box was four walls and a roof . Well , I'm lucky .
I suppose I have that self-control , but most people don't have that self-control . See it , want it , buy it , borrow it , buy it .
Well , ben , I think you'd agree .
Just brilliant , something that's just quickly come to mind . So , as well as the software the PIA software that Jan and Ian have built , they also had a forum , some soft forum . Now , for those people who are just starting out and have a thirst for education and knowledge , that was one of the places that you would go . The community was always contributing .
Now that's since being decommissioned still up .
It's still up there .
So there's lots of information there that people can potentially look at strings of commentary on all different things , and now it's gone over to property chat .
It has , and people should understand the rationale behind that , because it grew out of all proportion . We literally had hundreds of thousands of people on this forum and we either needed to spend all day , every minute of the day , managing this forum and controlling the content .
Because some people had agendas and yeah , okay , and all , we had to hire someone at an absolute fortune to control it , and if that was the case , then we needed to go and have some advertising element , which we didn't want to do .
That's been part of our credibility for 45 years is that we've never succumbed to taking commission or being paid for anything that we do of that nature , and so we decided it just had to come to , although the content is archived . Then we had to relinquish control to property chat , which is now taken over .
He can do what he likes to do , but it still provides that environment with the archived Somersoft material that people can still access .
And it's strange , even now I put in the other day I wanted to compare a couple of air conditions that I was choosing for a particular house and this versus that , or Fujitsu versus Mitsubishi , or Mitsubishi Electric versus Mitsubishi Heavy Industries , and what comes up . Oh , someone's talked about this on our forum .
I wonder what they said . Perfect , so brilliant stuff .
So , Jan , we've been chatting for an hour . It's felt like 20 minutes .
I know .
I've got to tell you it's a real privilege for us to have you on . I think for someone who's been involved in property investment for as long as you have and seen as many cycles as you have , I think there was just an incredible amount of wisdom that we all got from the last hour .
So I know Ben does , but I personally appreciate the opportunity for you to come on , Pleasure . I'm absolutely certain that our listeners will get a lot better for now than that .
Yeah , look you know there's a product of consistency , a product of discipline , a product of money management , a product of research . Jan has been very much hands-on , so there's obviously she's benefited from that .
But it's also given her purpose direction and now she's enjoying the fruits of her labour , that her and Ian have gone and she's paid it forward , you know , not only in the donations and gifts that she gives to sporting institutions but also the wealth of knowledge that she's passed on . So it's an absolute credit to you and what a privilege to have you on .
So thanks very much .
It's been a wonderful life .
Yeah , I agree . So if any of our listeners are in the Pyrenees , are they able to tap you on the shoulder and say you know , have you ever been on a walk with you .
Maybe if they book the same walk-in trail , can they spend 30 minutes on the walk-in trail with you .
Well , look for me at the Tour de France , because we've got two days in the Pyrenees when the Tour de France goes swimming .
Oh well , we'll see you on SBS waving . Yeah , hello Australia . My name is the Yellow Guernsey on .
So very good . So , Ben , terrific privilege . I mean , we used to have this sign-off Jan , where Ben would go around the world and sign-off in certain languages . We probably should have asked if you had any other languages other than English , but we changed it recently . So , I'm doing a life hack today , Ben , and for me it's around the notifications .
My first life hack was around making your smartphone black and white if you're addicted to it . The other part of that for me which has worked incredibly well is I've turned off all of my notifications . I've turned off all social media notifications . There's actually a section within the settings , Ben .
You go into notifications and I turn every single notification off . I turn the email notifications off , I just turn . There's not a single point in time , Totally distracting . Where I'm notified by anyone on my phone and I've got to tell you , because I'm addicted to distraction that has made an enormous difference .
So , even to the point where I'm sitting there and I've got Outlook , I don't have the notification coming up in the front of the screen to let me know that there's a new email , because you're in the middle of one . Then you go down to Robert Warren with no one .
So I don't want to sound preachy , but all I want to say is that if you want to get 15 minutes back just in a blink , turn all of your notifications off .
Well , if you're writing an article or doing something you've got to concentrate on , you know , building a plan , whatever it may be , there's nothing more distracting than something popping up on . And then you think , do I have to get to that now ? So I think it's a great life hack , mate . It's a productivity stealer .
Now here's the key With those 15 minutes that you get back . Ben , next week I'm going to give a life hack on what you can do with those 15 minutes . And it is a game changer .
Game changer .
Special shout out to Sean Steele , who's one of our listeners . He introduced me to it Beautiful , so stay tuned for next week . I've just shown you how to get 15 minutes back . I'm going to show you what to do with those 15 minutes .
I can't wait , Can't wait . Did you know ? Did you know that there is a property for sale in America , in Bel Air in California , that's just gone on the market for $250 million US ? What type of house could you own , Jan ?
Well , we've been careful because Jan's vulnerable to a good property With a good view .
I do . I do like a good property .
Now it comes with its own helipad .
It does . I think it has several pools . I think it was something like seven bedrooms and 12 bathrooms . I don't know why you'd need 12 bathrooms . I can't work that out . It's got its own lolly wall .
It's got 10 pin bowling 10 pin bowling , seven of the best sports cars .
Now , for us that doesn't mean much , but it's just a novelty thing because I did one last week . We were talking about the Caribbean and to rent some of the houses in St Barth , in one of the area of French Caribbean . It was like $65,000 US a week to actually rent one house on this particular island .
So I've gone on that sort of opulent angle but we've got a video of it .
So it's going to be on Facebook . Facebook it's a seven minute video .
Now.0004% of the world population can actually afford this . It's obviously pitched at billionaires , so it's not for us , but it's just a bit of fun .
I've got to admit I had a look at the video and I just didn't see 250M .
There's no way not .
Sorry about 50M , but I didn't see 250M , so check it out folks on our Facebook page , the Property Couch , and , of course , if you want to join the conversation , instagram , facebook , linkedin , twitter at the Property Couch at Bryce Holdway , at Ben Kingsley , AU .
Next week I'll make it a bit real . That's a bit ridiculous , all right , well it's just part of the affordability story . Yeah , probably Exactly .
But again , Ben , it's been a trip of privilege . Thanks again for coming on the couch , Jan .
Pleasure .
We certainly know that our listeners will get benefit out of that . And a slight apology to our listeners We've gone well over time , but I think they'll forgive us . Oh yeah , it's well and truly got some gold content there , but until next week , ben , see you later . See you later . See you guys . Hey folks , bryce , here again .
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