Property Soup Allan Cuevas, John Staggs

In this episode, Allan interviews David Klingberg, a town planner, to discuss the influence of town planning on property investments. They explore the different roles of town planners and the importance of strategic planning in creating a vision for a place.


David shares how he became a town planner and his passion for designing cities.
Town planners can be divided into two types: development approvals planners and strategic planners.
Development approvals planners assess applications against planning schemes, while strategic planners create the vision and rules for a place.
David explains the value of town planning expertise in helping investors with subdivision projects and smaller developments.
He emphasizes the importance of understanding potential growth areas and changes in the planning system to identify investment opportunities.
David provides an example of how knowing about planning changes early on can lead to significant value appreciation for a property.

In this episode, Allan and John discuss how to reduce your tax through property investing. They highlight the significance of paying close to a million dollars in taxes over a career and emphasize the importance of understanding the potential tax benefits of property investing.





💰 Paying close to a million dollars in taxes over a career is a significant amount of money.


💼 Couples working together could potentially pay over $2 million in taxes over their careers.
🏠 Property investing can help you get a significant portion of that money back through tax benefits.
💸 Even getting back 20% or 10% of the taxes paid can result in substantial savings.
📊 The example discussed in the episode shows the potential negative cash flow of a property investment.
🏦 However, tax deductions, including depreciation, can significantly reduce the net cost of holding the property.
🧮 Understanding the tax benefits of property investing is crucial for maximizing returns.

This episode discusses the five key people you need to surround yourself with in order to build a successful property portfolio. These include an acquisition specialist, a finance broker, a property manager, a tax strategist, and a financial planner.


🏢 An acquisition specialist is crucial for acquiring good assets and avoiding blind spots in your investment strategy.
💰 A finance broker is essential as finance is the oxygen of property investment. A good broker can make a huge difference in securing the right financing and getting the best deals.
🏠 A property manager is important for effectively managing your properties, ensuring they are well-maintained and bringing in steady rental income.
💼 A tax strategist can help you optimize your tax position, ensuring you take advantage of all available deductions and incentives.
💡 A financial planner can help you develop a long-term investment strategy, set financial goals, and ensure you have a solid plan for your property portfolio.

This episode discusses the importance of surrounding oneself with a team of experts when it comes to property investing. John and Allan share conversations they’ve had with investors who made costly mistakes due to not having the right advisors. One example is setting up a self-managed super fund incorrectly, which can result in financial losses.


💡 Investing requires the expertise of professionals for success.
💡 The Dunning Kruger effect leads to overconfidence in investing.
💡 Surrounding oneself with knowledgeable advisors is crucial for success.
💡 Not having the right advisors can cost investors a significant amount of money.
💡 Setting up a self-managed super fund incorrectly can lead to financial losses.
💡 State-specific purchasing procedures must be followed when investing in property.
💡 Saving money upfront by not hiring experts can result in more costly mistakes later on.

In this episode of Property Soup, Allan and John discuss the concept of rent vesting, which is the strategy of renting where you live and investing in properties that are not your primary residence. They debunk the conventional wisdom that buying a home first is the only logical choice and explain the benefits of rent vesting, such as increased cash flow, tax efficiency, and the ability to build wealth faster.


💡 Rent vesting is the strategy of renting where you live and investing in properties that are not your primary residence.
💡 The conventional wisdom of buying a home first is being challenged as people realize the drawbacks of being tied to a mortgage for many years.
💡 Rent vesting offers increased cash flow, tax deductions, and the ability to build wealth faster.
💡 Expenses on your primary residence are not tax deductible, while expenses on an investment property are fully deductible.
💡 Rent vesting allows for greater tax efficiency and the possibility of significant tax refunds.
💡 The gap between median income and median house prices has increased, making it harder for people to save for a 20% deposit on a home.
💡 Rent vesting offers a more flexible and adaptable approach to property investing.

John and Allan discuss the question of whether it’s better to invest a million dollars in one property or to spread it across two or three properties. They explore the advantages and disadvantages of both approaches, including factors such as rental yield, capital growth, cash flow, and risk mitigation.



Highlights

💰 Investing a million dollars in one property in a desirable area can potentially yield above-average capital growth.

🏠 However, the negative cash flow from such a property can eat into the capital growth and create financial stress for the investor.

💸 Investing in two properties worth half the price each can provide a higher rental yield and make it easier to cover costs.

🌍 Spreading investments across different markets allows for diversification and reduces the risk of loss.

💼 The flexibility of owning multiple properties allows for potential solutions if financial difficulties arise.

📉 Holding costs for two properties can be significantly less than holding one high-value property.

🔄 Selling only one property instead of both allows for capital gains tax mitigation.