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Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm

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Speaker 1: James Kirkby. Welcome aboard everybody. You Every now and again

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Speaker 1: you come across somebody in the property industry and they

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Speaker 1: just catch your eye. Tony Odaherty is a real estate

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Speaker 1: agent with the McGrath Group and he quite simply wowed

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Speaker 1: the audience at the National Property Conference, the Eric Conference

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Speaker 1: on the Gold Coast recently, and I'll tell you he

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Speaker 1: had some stiff competition on stage there. I can tell

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Speaker 1: you he's one of the top real estate agents in

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Speaker 1: Queensland and remarkably, and this is a complete coincidence which

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Speaker 1: you'll probably find hard to believe, but it's true because

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Speaker 1: I didn't know he was Irish when I went to

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Speaker 1: look for him as an interview, but we grew up.

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Speaker 1: I would say, cycling distance from each other in County

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Speaker 1: Limerick and the West of Ireland. I didn't know that

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Speaker 1: until today. So it's going to be fun. How are you, Tony.

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Speaker 2: I'm very well. I'm very well. Thank you for having

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Speaker 2: me today and hopefully sharing some wisdow.

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Speaker 1: Thank you well. Look at you know. One of the

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Speaker 1: things I thought I would ask you, and I think

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Speaker 1: it's something that is special when you come from another

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Speaker 1: place and it just so happens that you come from

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Speaker 1: the same place as me, but it could have been anywhere.

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Speaker 1: And then you get really involved in the property industry,

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Speaker 1: you only get like, you get one chance right to

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Speaker 1: have first impression. And when you arrived and you looked around,

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Speaker 1: it was probably different than now. But what was your

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Speaker 1: immediate ideas in terms of the opportunities that you could

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Speaker 1: see in front of you and the risks that were

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Speaker 1: different if you like, that were distinct to Australia.

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Speaker 2: I think the opportunity here is residential real estate, which

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Speaker 2: is my area of expertise. Yeah, the opportunity is phenomenal

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Speaker 2: from my point of view. As a selling agent. We

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Speaker 2: get paid to assist people sell their properties, as you

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Speaker 2: well know. But Australian culture, we move quite a lot

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Speaker 2: on average. One used to be an average once every

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Speaker 2: seven years in the areas I operate from now once

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Speaker 2: every five years. Yes, then you have the unfortunate reality

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Speaker 2: of people, you know, partying ways, which is culturally extremely

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Speaker 2: common in this country, in excessive fifty percent, which I

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Speaker 2: know we're not here to talk about, but.

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Speaker 1: It means people are changing it's turnover.

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Speaker 2: There's turnover where you and I grew up. And it's

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Speaker 2: not just in our neck of the woods. It's Europe

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Speaker 2: in general. If you were speaking to an Italian guy

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Speaker 2: and a Greek guy, they most likely did not move

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Speaker 2: their family home every five years, in fact, staying there

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Speaker 2: forever intergenerationally. Often yes, yes, like our previous generations. My

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Speaker 2: mum was in a house that she's three hundred years

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Speaker 2: with her people have been in that house. Australians don't

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Speaker 2: do that. The other opportunity for me was sky high

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Speaker 2: is ownership in Australia. The Australian dream is to own

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Speaker 2: a property. That recently, Switzerland, which is one of the

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Speaker 2: best economies in Europe, sixty six percent of people in Switzerland,

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Speaker 2: which you're known as Swiss people. I have to think

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Speaker 2: about that. It shows you Swiss, It shows you if

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Speaker 2: I can make it in real estate, So do can you?

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Speaker 2: Ironic the Swiss people sixty six of them rinned they

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Speaker 2: don't own a property.

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Speaker 1: Six very common continental Europe. Same, Yeah, Austria is similar

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Speaker 1: and even Germany. But here's the thing, so that's your

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Speaker 1: So you could see the opportunity, of course, and you

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Speaker 1: can see the stinct opportunities tell me about it's hard.

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Speaker 1: Maybe even the world risk isn't the right world. But

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Speaker 1: where things could go wrong I'm guessing. But if you see,

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Speaker 1: if you've and you've come to this market, and you've

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Speaker 1: watched it particularly obviously a very hot market Queensland for

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Speaker 1: a long time, I imagine complacency must be something of an

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Speaker 1: issue that people think it's all too easy.

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Speaker 2: Look, first of all, I'm a big believer in property.

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Speaker 2: I bought a property again recently myself. I think the

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Speaker 2: risk to your listeners are exposure and leverage. Warm Buffett,

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Speaker 2: the smartest mind of all when it comes to money,

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Speaker 2: describes the three greatest risk to mankind is in disorder, liquor, ladies,

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Speaker 2: and leverage. I'm not going to tell you what to drink.

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Speaker 2: We hope you're doing the right thing at home. Leverage

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Speaker 2: is the risky one. Leverage is the risky one. When

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Speaker 2: you buy real estate, make sure you can afford to

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Speaker 2: make your repayments at you know, higher interest rates than

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Speaker 2: what are currently occurring. The risk is over exposure, a

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Speaker 2: long term thing we know about real estate. Guaranteed as

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Speaker 2: sure as night follows day, real estate property will go

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Speaker 2: up mightn't be here in year, but it will be

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Speaker 2: decade on decade. So the smartest people I know in

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Speaker 2: terms of residential real estate, which is the area that

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Speaker 2: I'm across, buy and hold, yes by and wait.

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Speaker 1: But at the same time you were telling me the

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Speaker 1: start there is this endless turnover accelerating turnovers. So not

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Speaker 1: everybody has the choice. I suppose sometimes and as you say,

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Speaker 1: people get stretched. Just explain if you would, about in

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Speaker 1: this market, and it's a hot market, what are the

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Speaker 1: issues that people should be careful of when they're entering

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Speaker 1: the market or they're starting to accumulate money. Of the

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Speaker 1: money puzzle listeners there will beyond there only their first home.

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Speaker 1: They're just starting to build properly by residential start to subdivide.

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Speaker 1: What are the issues there?

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Speaker 2: So when you talk about developers, and we'll discuss them,

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Speaker 2: we'll call them mom and dad developers or amateur developers.

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Speaker 2: I currently have a development business. We do knockdown rebuilds.

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Speaker 2: Consider must have an amateur developer despite the fact that

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Speaker 2: I've done quite a lot and do a lot at once.

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Speaker 2: What makes me an amateur is I buy on market

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Speaker 2: pain market value. I'm not a builder or a town

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Speaker 2: planner or anything. I am a sales agent, but that's

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Speaker 2: the back end, so I'm an amateur. I can't save

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Speaker 2: the fifteen percent or twenty percent that you're likely paying

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Speaker 2: your builder to build, so therefore I'm not a professional

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Speaker 2: developer by my own definition. They risk to a lot

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Speaker 2: of mom and dads, and we love to see this

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Speaker 2: as an agent on behalf of my clients. I don't

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Speaker 2: like to see it as a developer is that people

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Speaker 2: are over pain all too often, and they're over pain

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Speaker 2: not acknowledging what it's going to require to do the development.

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Speaker 2: You see, although I'm a due development I don't do

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Speaker 2: any development in the areas that I sell because my

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Speaker 2: primary function is to optimize a sale price and raise

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Speaker 2: the values. So I continuously do it in other areas.

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Speaker 2: But the risk to people I see. I sell homes

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Speaker 2: to people all the time at auction where your reserve

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Speaker 2: might be two million, which is already aggressive. It sells

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Speaker 2: for two point four. You congratulate the buyer and you

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Speaker 2: know their plans are to be a developer, and I

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Speaker 2: understand development. Then you're like, WHOA, they're paying for today

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Speaker 2: but requiring future prices, so.

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Speaker 1: They're backing too much into it, asking the market too much.

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Speaker 2: They're asking the market to bail them out. And for

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Speaker 2: me as a it's fantastic. Yes, you want me to talk,

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Speaker 2: We're here to talk about you know, the other side

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Speaker 2: of the coin. I think the risk is to people

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Speaker 2: growing costs. The development space as a whole. Right now,

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Speaker 2: Land is at an all time high. Building costs is

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Speaker 2: at an all time high, and generally speaking, in prices

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Speaker 2: over the last year or two have stabilized. Though there's

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Speaker 2: three key factors to development. Buy well, build well, sell well.

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Speaker 2: It's very hard to do three of them, almost impossible,

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Speaker 2: but you need to do too and most people are

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Speaker 2: doing one. And I hope that's enough.

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Speaker 1: You make your profit when you buy, is that.

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Speaker 2: Not if you buy off of us? I want that clear.

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Speaker 2: A good agent job is to make sure that they

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Speaker 2: optimize the sale price by running a great campaign where

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Speaker 2: I buy well. When I'm buying is I tend to

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Speaker 2: buy two buyers agents. So again in massive space, I'll

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Speaker 2: summarize that in two sentences. A good buyer's agent is free.

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Speaker 2: They cost you nothing. They cover their cost. A bad

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Speaker 2: or average bars agent is just another stamp duty. So

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Speaker 2: there is opportunity to buy it. There's a lot of

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Speaker 2: I think my industry, it has been described at today's

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Speaker 2: conference ninety seven percent poor professionals, five percent good, two

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Speaker 2: percent great. So if you're buying after ninety seven percent

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Speaker 2: who are lazy and not given good advice, and often

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Speaker 2: it's the vendors fault. They're hiring the agent who's the cheapest,

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Speaker 2: they're avoiding marketing costs, they're thinking about pennies when they're

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Speaker 2: transacting millions.

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Speaker 1: Right. It's funny, isn't it. It's common in all industries.

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Speaker 2: Yeah, there's always no industries.

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Speaker 1: You know that the ten percent of the eighty percent

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Speaker 1: of the business, and there's a reason for that. Tell

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Speaker 1: me about something I wanted to ask you. Would you say?

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Speaker 1: It's how would you categorize the atmosphere at the moment

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Speaker 1: in terms of their property market. Sometimes there's issues that

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Speaker 1: are very clear, like that the rates of sky high

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Speaker 1: rates and sky high right now they're actually starting to fall.

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Speaker 1: Some people say prices are very expensive, Well they are,

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Speaker 1: but so they are all around the world. How would

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Speaker 1: you categorize this market at the moment?

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Speaker 2: I think if we're talking about a national level and

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Speaker 2: a global level, it's an interesting time. There's a lot

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Speaker 2: of stress on all markets, a lot of political stress,

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Speaker 2: financial stress, stock level stress, there is a lot going on.

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Speaker 2: Affordability seems to be an issue for some and let's

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Speaker 2: be real, the richer getting richer and that's just the case,

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Speaker 2: and that's probably a lot of your listeners.

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Speaker 1: And in fact it's the fact this came up on

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Speaker 1: the earlier podcast on the are A conference, a very

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Speaker 1: similar observation. They know that and they're going for that

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Speaker 1: end of the market as which is something. But so

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Speaker 1: that's a characteristic of the market at the moment. Maybe

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Speaker 1: it's separating to some degree.

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Speaker 2: The gap is getting bigger on a global level and

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Speaker 2: a local level. I think markets are marginally more attainable.

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Speaker 2: I'm not an expert in your law market. Which is

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Speaker 2: Melbourne not a local market substantial?

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Speaker 1: Well, it's a national show with people listening from all markets.

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Speaker 2: Yes, okay, yeah, so my as you said, Queensland agent,

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Speaker 2: Melbourne is an area where and when I speak to

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Speaker 2: my more successful clients, they're fully exploring Melbourne. Now, Melbourne

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Speaker 2: is a global city in terms of stature and population

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Speaker 2: and what it offers. Yet it's median house price correct

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Speaker 2: me if I'm wrong, as our Brisbanes has marginally got ahead.

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Speaker 2: So that to me is that doesn't make sense in

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Speaker 2: a you know, on a global or national level, if

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Speaker 2: I was an investor, now, yeah, I look at Queensland,

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Speaker 2: don't get me wrong. And even Sydney Like Sydney, Sydney's

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Speaker 2: always been a very aggressive market since the Olympics, like

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Speaker 2: growth it had the four years leading up. And you

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Speaker 2: can talk to experts and there's data there and all

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Speaker 2: these different forms of information where they tell you that

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Speaker 2: market is going to correct. By god, have they been wrong.

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Speaker 2: I mean they've been wrong for several twenty five years.

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Speaker 1: They've been five years exactly. Look, well, take a short break.

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Speaker 1: We'll be back in a moment. Hello, Welcome back to

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Speaker 1: The Australian's Money Puzzle podcast. James Kirby here today at

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Speaker 1: the ERIC Conference in the Gold Coast and I'm talking

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Speaker 1: to Tonio Diharty from the McGrath Group. Tony is an agent,

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Speaker 1: a top rating agent in the state of Queensland, but

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Speaker 1: with both national and international. I would suggest Tony. So

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Speaker 1: one of the things we were saying there about property

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Speaker 1: and whether it's expensive or not, is it expensive amount

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Speaker 1: I don't really know. You look at prices in all

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Speaker 1: other countries. We were just talking about that, since we

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Speaker 1: both know Ireland and Dublin property prices are higher than here.

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Speaker 2: Dublin property prices are the small economy alarming.

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Speaker 1: Yeah.

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Speaker 2: Again, we don't need to overly get into it because

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Speaker 2: I don't know how many of your listeners are from Dublin.

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Speaker 2: But I think there's mismanagement there with housing supplies and

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Speaker 2: people are going for the safer economy that is Dublin.

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Speaker 2: There's plenty of opportunity to buy value across Europe and

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Speaker 2: in Ireland, just not in Dublin. Personally speaking, I'd be

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Speaker 2: very slow, and I'm no expert in that market I'm

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Speaker 2: talken about as a consumer, I'd be very slow to

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Speaker 2: bout hinting those markets.

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Speaker 1: Yeah, so you don't have that, you don't have that

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Speaker 1: concern here.

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Speaker 2: I don't have that concern here. We've got more than

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Speaker 2: one string to our bow. Yeah, you know, there's so

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Speaker 2: many industries here. It's a country that has continuously grown

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Speaker 2: population wise, and you're surrounded by massive economies Asian economies,

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Speaker 2: Middle Eastern economies. Yes, and it's a safe if you're

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Speaker 2: a wealthy individual from these foreign countries. Your money is

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Speaker 2: safe in Australia. You're going to take it out of

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Speaker 2: your bank account tomorrow.

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Speaker 1: At least you have a stability.

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Speaker 2: There's an element of stability, you know. It's not a communism.

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Speaker 1: Yeah, there isn't. Sovereign risk isn't something that's really on

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Speaker 1: the table. I want it now. On this segment, I

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Speaker 1: want to ask you as an agent. Everyone listening to

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Speaker 1: this show will sell property regularly in one way or another.

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Speaker 1: Tell us about how someone should select in agents and

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Speaker 1: how they should get their pretty ready for sale.

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Speaker 2: Okay, so two massive questions. Selecting an agent, I would

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Speaker 2: be going off performance. Who's the guy or girl in

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Speaker 2: your geographical area? Remember this is a geographical sport. You

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Speaker 2: hire somebody who's quite dominant in your area. You sit

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Speaker 2: them down and you talk to them. The reason why

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Speaker 2: you should interview if you don't have a relationship two

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Speaker 2: or three agents. You should disregard fee, disregard marketing because

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Speaker 2: all too often a vendor will say to me, oh,

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Speaker 2: we want to work with you, but your marketing budget

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Speaker 2: is eight thousand and this guy's four thousand. That's not

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Speaker 2: a reduced marketing budget. That's a reduced level of exposure.

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Speaker 2: So my suggestion would be interview the high performers that

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Speaker 2: have you know, you've seen, you've noticed in your area,

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Speaker 2: sit them down and see who you feel as though

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Speaker 2: you can trust in a more holistic way. I find

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Speaker 2: that your gut will tell you who's telling you the

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Speaker 2: truth and who's over promising, and.

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Speaker 1: What way would that person the better agent? I mean,

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Speaker 1: I'll obviously get a better price, right, but what do

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Speaker 1: they do that makes them Superior's.

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Speaker 2: See, it's not one thing, it's everything. It's not one thing,

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Speaker 2: it's everything. It's hard to define success in one question

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Speaker 2: in fifteen seconds, but it is everything. So what does

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Speaker 2: that look like? You mentioned presentation? The most important thing

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Speaker 2: is in a campaign when it comes to optimization of

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Speaker 2: a sale price presentation? How do you bring emotion into

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Speaker 2: a problem? So it starts by it might be a

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Speaker 2: lick a Paine new Carpets handyman to fix all the

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Speaker 2: the imperfections. You've got a building and Pett report done again,

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Speaker 2: so you find anything about I might find in advance,

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Speaker 2: and you fix it. Styling a home. Almost every home

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Speaker 2: that we sell now is style. Yes, yes, the reason

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Speaker 2: for that is emotion. You want that man and woman,

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Speaker 2: that husband and wife to walk in the door and

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Speaker 2: really want it and really want it. Yeah, it is

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Speaker 2: a start. Which is this is it's sexist and accurate.

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Speaker 2: It says that women make the fundamental decision when buying homes.

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Speaker 2: We kind of know that, but what you may not

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Speaker 2: know is ninety two percent of the time. So you

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Speaker 2: need to really make the home pop is the questionable

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Speaker 2: terminology we use. But you want that husband and wife

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Speaker 2: to walk in.

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Speaker 1: To buy it as a home, as a property as

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Speaker 1: That's very interesting. Yes, I see, given buy.

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Speaker 2: Houses, you need to appeal to them and if they wanted,

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Speaker 2: price becomes less. But in a reason everybody's got capacity.

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Speaker 2: But you want them to buy with emotion and justify

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Speaker 2: with logic, not buy with logic because logically I can

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Speaker 2: get you a better price to a motion than I

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Speaker 2: can through logic.

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Speaker 1: That's very interesting. That's very interesting. All right, take short break, folks.

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Speaker 1: I want to one or two more key questions for Tony.

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Speaker 1: Back in a moment. Hello, Welcome back to the Australian's

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Speaker 1: Money Puzzle podcast. James Kirby here, but Tony or Dougherty

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Speaker 1: from McGrath real Estate. Tony what's the one thing that

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Speaker 1: at the end of each day that consistently you get

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Speaker 1: annoyed with with you? What the mistakes that people make,

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Speaker 1: that the clients make. Is it that they expect too much,

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Speaker 1: they expect too little, too fast? Is there something that

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Speaker 1: is a something? So that is a constant sort of

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Speaker 1: bear bug.

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Speaker 2: It'd be more about my industry than with my clients.

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Speaker 2: And I suppose it's people hiring. We've got high market

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Speaker 2: share in the area we work in. High market share

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Speaker 2: means in thirty percent of what you say of your area,

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Speaker 2: So that means seven out of ten people go to

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Speaker 2: the market without meeting with the most dominant person in

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Speaker 2: the area. So my personal selfish pet hate is the

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Speaker 2: fact that Hey, give us an opportunity, don't hire us

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Speaker 2: because you don't like us, but don't not interview us.

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Speaker 2: And that's my entitled little line there, guys, just so

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Speaker 2: you heard it, my pet hate. The thing that I

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Speaker 2: feel the most sorry for vendors is they're often going

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Speaker 2: with the agent that seems to be cheap. Is that

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Speaker 2: the start yes, turns out to be the most expensive. Yes,

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Speaker 2: I've got a list of agents. When a friend of

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Speaker 2: mine rings me and says I'm looking to buy something here,

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Speaker 2: I'll say, don't worry about streets, worry about agents. The

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Speaker 2: right agent can get you into a property in twenty

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Speaker 2: twenty five for twenty twenty the wrong agent, but the

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Speaker 2: right for them can work rewind the clock back two years.

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Speaker 2: So there's plenty of very average agents out there. Sav

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Speaker 2: the savvy's developers I know are picking the eyes out

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Speaker 2: of the weak agents. And the cost of mom and

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Speaker 2: dads who've lived there is for decades. Yes, we're trusting

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Speaker 2: the professional and all because they heard the wrong guyer

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Speaker 2: girl right.

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Speaker 1: It's amazing, isn't it. It's still so individual personable really

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Speaker 1: as a business. Yeah, yeah, very interesting. I have a

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Speaker 1: couple of questions if you bear with me. We take

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Speaker 1: questions every week. If you want to add to subtract

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Speaker 1: to this, you can. The first is from Evan Hi James.

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Speaker 1: I love the info around the property in super This

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Speaker 1: was the show Tony where we talked about whether owning

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Speaker 1: property inside superannuation made sense any longer. But there's so

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Speaker 1: many rules now there's the new super tax, which is

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Speaker 1: going to crimp things further, and the number of people

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Speaker 1: who are actually prepared to lend two people in their smsfs.

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Speaker 1: So the banks have run away from the business completely.

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Speaker 1: Evan asks in property, can I run my own business

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Speaker 1: out of? How does that work? That's the best one, Evan.

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Speaker 1: That's called direct property, where you can actually put if

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Speaker 1: you own a business. And let's say it's called Evans Toys.

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Speaker 1: And this, by the way, is never advice, it's information only.

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Speaker 1: But let's say there's a company called Evans Toys. You

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Speaker 1: have your own super fund, Evans Toys can actually the

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Speaker 1: building that Evans Toys works out of can be owned

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Speaker 1: by your superfund and pay your superfund rent. That is

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Speaker 1: it at its most, at its very best. That's how

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Speaker 1: it works. I'm sure you can. We can develop that

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Speaker 1: on another show. Thanks Evan, and Kathy asks what are

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Speaker 1: property depositive bonds? Would you like to tell people what

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Speaker 1: they are? Tony? And do you get people? Actually? Do

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Speaker 1: you like it when that happens and someone says, I

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Speaker 1: don't have a deposit, but I've got a property deposit bond.

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Speaker 2: Look at Okay, So deposit bond is where you don't

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Speaker 2: have you bind a property off me. We're asking for

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Speaker 2: a five percent deposit and rather than you transferring one

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Speaker 2: hundred thousand dollars to our trust account. You're going to

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Speaker 2: the bank, and the bank are essentially giving you in

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Speaker 2: all money a bank guarantee. Yes, So to me, when

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Speaker 2: I advise my clients, they're as strong as the lender.

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Speaker 2: So if the bank guarantees from a top tier bank

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Speaker 2: eighty percent at the time, that was a randomness did

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Speaker 2: pulled out of the sky. What was your lying there

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Speaker 2: that that was? This is not advice, it was just

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Speaker 2: information like that. I would have no problem telling my

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Speaker 2: client if it's a top tier bank that this is okay,

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Speaker 2: because it is essentially revenue, and.

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Speaker 1: It's normally with someone who knows the money's kind of

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Speaker 1: come in. It's just timing, yeah, or they're.

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Speaker 2: Willing to give you equity. The bank I might saying, okay,

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Speaker 2: we know you've got this, so therefore we're happy to

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Speaker 2: give you a line of credit essentially. But yeah, so

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Speaker 2: it's not common.

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Speaker 1: It's not common still even at the higher end.

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Speaker 2: Even at the higher end, like when I say not common,

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Speaker 2: five ten percent of the time, I wouldn't even be

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Speaker 2: one intent to be honest with you. So there's nothing

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Speaker 2: wrong with it. Again, if it's a good lender out

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Speaker 2: of no problem saying that cline to mind, and again

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Speaker 2: I'd ask them to get their own advice. I would

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Speaker 2: have no problem recommending a top tier banks bank guarantee. Okay, pause,

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Speaker 2: upond in your words.

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Speaker 1: And ironically, Kathy, of course, the biggest charlector in the

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Speaker 1: country is the Albaneza government because they've just about introduced, well,

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Speaker 1: they're about to introduce the universal Property Guarantee, which means

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Speaker 1: anyone by their first home, all they need is five

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Speaker 1: percent and deposit and the other fifteen is covered by

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Speaker 1: the government guarantee. That's the universal Government guarantee scheme for

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Speaker 1: first time virus about to begin on July one. Okay,

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Speaker 1: we'll leave it there, Tony, thank you very much for coming.

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Speaker 1: Great to talk to you. Pleasure and keep those emails running.

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Speaker 1: The money Puzzle at the Australian dot com dot au