On today’s episode,
In today’s episode, She Renovates guest Jo Vadillo of the Property Women and Advocate Property Services will share her tips on how to get a presentable portfolio. We will also talk about how to prevent a woman investor’s property from being taken advantage of and sabotaged.
Listen to Episode 57: How Women’s Attempts To Build Wealth Through Property Can Be Sabotaged
- Common mistakes in property investing
- Using the right strategy
- Matching your needs to your portfolio
- Educate yourself
- Sabotaging ideas
- Be confident
- Teaching children to be money savvy
01:49 – An interesting topic
04:20 – Looking on other people’s successes
06:46 – The house and land formula
08:56 – A decent portfolio
11:58 – Helping your child get into the property ladder
13:36 – Kids that can manage their money
15:20 – SheRenovates Facebook group
This episode is sponsored by our brand new one day training, The Game Changer Mastermind. Years come and go and dreams of making significant changes to your income with renovating can fade if you don’t breathe life into them. A new year is always an opportunity to take stock and start with renewed energy and focus. Now we are into a new decade, so let’s change the game completely. If 2020 marks the line in the sand for you to transform your working life or your retirement with renovating this event is for you.
Hello, everyone. It’s Bernadette back with another episode of She Renovates. And today, I have my usual co-host Jo Vadillo from Property Women and Advocate Property Services.
We’re going to be talking about how women’s attempts to build wealth through property can be sabotaged and the things that really undermine their efforts to get ahead in the world. So welcome, Jo!
Jo: Thanks for having me Bernadette. I always love being on She Renovates.
Bernadette: Awesome. We love having you. What do you think about this?
Jo: Interesting topic. And when I say repeat itself time and time again, the conversations I have and the faceplant here we go again on this. And I’d suggest part of my role as a buyer’s agent or as a property mentor is I’m talking people out of their own stuff, their own money mindset issues, the burdens that they carry with them from childhood about their attitude towards buying things. Maybe they need to have their purchases validated by a sea of 6 people- their nearest and dearest partners and friendships and parents. And instead of just making a decision and having faith in their own decision-making skills.
Bernadette: Yeah, exactly.
Jo: And I see that come up quite a lot.
Bernadette: Well, it’s interesting. I suggested this topic because I had a meeting with someone last week and I thought, “Oh, my God, it’s come up again.” And this is a woman who has been investing for many years, is now in her late 60’s and she’s got a portfolio of properties that are rubbish. And I see it a lot, it’s not the first.
She’s done the right thing and bought property but has relied on others for her advice. And actually probably two things about that – she has relied on others for her advice, which is fine if the person that’s advising you has integrity and knows what they’re doing. But the second thing is it has no strategy. What’s happened is that she has inadvertently ended up in a negative gearing strategy and not realised that.
Jo: I hate hearing these stories. I think everyone who has one of those properties in their portfolio or knows someone who’s got them.
Bernadette: With or without one it would be okay but that’s devastating when you get that point in your life. It’s not the first time but this is a regular occurrence. Maybe not to that degree but people in my case, women who have been actively investing and are in a position where they’ve not achieved the outcome that they are after.
Jo: Yeah, I understand. And the one thing I noticed with some investors even though they’ve got an adequate amount of education behind them is they might look to other people’s successes and try and replicate that.
And what happens is they go and say, “Well, my sister did this 4 years ago and that worked out well for her” and end up buying into the same strategy. But 4 years ago was before the market took off or there was not an oversupply or etc, etc. so they’re replicating a ship that’s already left at that point. That in itself is a really big mistake.
Another big mistake would be that perhaps they’ve got no interest in doing a development but then again they know someone who was successful. So they get themselves into a property investment that doesn’t suit their risk profile, their budget, their abilities.
And they’re trying to make something work but they’re not looking at themselves properly in the mirror and go, what is it that I need? What’s going to suit my stage of life? If you’re pregnant with twins, perhaps think about which trip to embark on. And the same thing if you’re very busy, if work is really full-on and you’ve got a houseful of kids and it’s just hard to balance everything, be kind to yourself and make sure your strategy matches you and your phase of life as well as it stands in today’s market.
Bernadette: And I hate to be always talking about negative gearing but it’s because so many people get caught up in this net. That’s one of the things with a lot of people getting snared by the people that are selling off the plan and house and land packages.
That if they bought them in when they’re in their 20’s and 30’s that they would be okay.
But because they’re buying them in their 50’s and it’s just an ordinary old house and land there’s no opportunity to crank up the cash flow or increase their equity in it by adding value. And yet these people are extremely skilled. I’m talking about the people selling the properties here, at really hoodwinking the buyers.
Jo: And if you’re looking at doing that sort of formula be aware of what’s around that area because your hectare could be the first of multiple hectares of land that are going to be sliced and diced over the next 30 years. And property investing where you can finally make money in 5 years you don’t wait for 30. It’s a perfectly valid formula to have in your portfolio but be aware of where it is. You can do the house and land formula but sometimes you can do it closer to a capital city because a block of land becomes available. So you don’t have to buy into these big organisations that put a big room on and a big sell, sell, sell formula. And also I’m a big fan of diversifying your portfolio as well.
Jo: Put your eggs in one basket but not always with the same strategy as well.
Bernadette: I think the message out of this little section is – the first one we keep harping on about – is to get educated. And then the next one is to have a strategy or develop a strategy that actually takes your personal circumstances into account and don’t borrow it from someone else because it just won’t do. It’s like borrowing your partner’s medication that’s been prescribed for them. And yet it’s a similar thing, isn’t it?
Jo: Yes, absolutely. I’ve also noticed that women tend to sabotage themselves. As I mentioned before sometimes lacking confidence in themselves. Where they’ve done the research, they’re confident and they’re almost there. And then they’ll go and ask someone who’s got zero understanding of their opinion and that person’s opinion clashes with where they’re at mentally. And all of a sudden the insecurity flares up and they miss out on fine, amazing deals as a result of that. That is another one I find that happens and it’s frustrating because a lot of amazing deals come across my desk. I’ll get access to a lot of off-market opportunities and look at them. I’ve got a really strong philosophy that if I would be willing to put my money into a deal I would be promoting it to anybody else in a heartbeat. But not to the point where I think you should overanalyse so heavily that it will talk yourself out of a deal.
Jo: Have confidence in yourself, I have confidence in you. If you’ve been looking at researching an area or a certain formula or a strategy make the right steps in the right direction but get advice from people who either have done it before you and have got a decent portfolio. We’re not just talking to your neighbours at the barbecue and was gonna give you misguided information because they’ve read a headline and decided to make a negative blanket statement over an entire city.
Bernadette: Exactly. I completely agree with that. The next thing I want to talk about and this is something. Once again, I see this quite often and it’s not really just women. Its parents in general being bled dry by their young adult children. And my experience has been it’s the people that can least afford it that are paying the most.
Jo: Tell me a bit more about that, Bernadette. Because that’s a stage of life you’re probably more familiar with than myself.
Bernadette: Well, I’m not telling you from experience because our kids are great.
And I’m not saying these children aren’t but I know of a lot of families where there will be at least one adult at home working full time, paying little or no board, not contributing to the family income as well. And I’ve heard of people in their 30’s still living at home and not paying their way.
Now, I personally think that it’s not only doing a disservice to the parents but it’s also doing a disservice to the child. Because I think there’s a guilt thing that comes in. I want to put some sort of sense that you shouldn’t be doing this for your child and paying all the living costs and basically giving them what they want when they can easily do that themselves.
Jo: You’re talking about children who have got more disposable cash than the parents, the one that is footing the bill of their lifestyle? So, yeah, and I think if that’s your circumstance and I’ve often thought if you put the means as a parent now.
My children are still at school age but if you’re financially in a position where you don’t actually have to ask for the money perhaps get your child into a habit of saving or be putting away a percentage of their income. And even if they don’t know you’re doing it put it in a term deposit or put into an account they’re unaware of. Get them used to not having 100% of their income to play with. Do them that service or get them into the market.
There’s a lot of discussion over first-time buyers and how difficult it is for people to break into the market especially in capital cities but don’t lose sight. Your first purchase doesn’t even have to be your home. I know that there’s government grants that make it. You have to live in it but perhaps that’s a false economy. Maybe you’re better off investing in something and then just making that choice and then renting where you want to be at.
But as a parent I know in certain loans and certain lenders you can be a guarantor or there are different ways that you can help your adult child get onto that property ladder sooner as well.
Bernadette: Yeah, I guess I always see it from the parent’s point of view. We work with the parents because they’re trying to get prepared for their retirement and they’re having all this money draining out. They’re keeping a house full of young adults who could be paying their own way and aren’t. And then at that point in time it’s such a massive wrench to actually have to ask them to contribute.
I just think it’s a crying shame. And to be honest with you, I believe that they need to be paying their own way because otherwise they’re going to make horrible housemates if they’re not used to taking responsibility for themselves. What’s going to happen when they move out?
Jo: I’m 100% with that. It’s a service you’re trying to provide as a parent but you’re actually doing a disservice to your child. The message there is if you’ve got children who are in their late teens, early 20’s and signed to work, I think now’s the time to say even if it’s 50 bucks a week, $100 a week that they start to pay their way.
Bernadette: We always had a rule in our house that they can live at home, rent a board rent-free until they have a full-time job and until they finish their uni. And then if they stayed at home that’s usually a pretty good incentive to move out. Not that I wanted them to move out but if they stayed at home then they would have had to pay it forward.
And I was never really one of giving pocket money because I think that’s really just bringing them up to expect handouts.
As a result, I think we’ve brought up kids that can manage their money and I’m really grateful for what they’ve got. I just love that.
Jo: And that’s really good. I’m a bit when it comes to pocket money I’m a little hit and miss.
I want the kids to earn it and I don’t think it should be a handout. I’ll ask them to put the bins out and they’ll say, “What do I get for it?” And I’m like, “You’re a bin collector?” Like what else do you want for it? I’ve caught out Greg, my husband, before giving the kids significant things. It was significant like it’s $5 for that? I mean when they go and flip burgers for $14 or $15 an hour they’re going to be mortified.
So it’s about from a young age teaching them to be money savvy and to start putting their money aside and earn it. And if it’s chores they shouldn’t get paid money to make their own bed.
Bernadette: Oh, I absolutely agree.
Jo: And it’s all on us and sometimes I know now talking about it, I’ve got to pick up my game. Because I want these children to be really financially literate beings when they leave the nest. And I do want my kids to be able to buy into the property market and to understand salary sacrificing. I mean, as lovely as it would be to holiday throughout your entire 20’s and have lovely cars and nice watches and whatever but it’s at that time when you really should be making some really smart buying decisions as well.
Bernadette: Exactly. When they get to that age you’ll have to come over to The School Of Renovating and do an Avocado Smash reno with them.
Jo: I’d love too!
So that’s it for this episode. If you haven’t already done so, please go over to iTunes and leave us a review so that we can share the love because that’s how people find out about the podcast. And also we have a free Facebook group called She Renovates and you are welcome to come over and join that, too. And if you do, share what your retirement plans are. Have you got any retirement projects that you’re working on? We’d love to hear about them.