Episode 4: Unveiling Real Estate Secrets with Bob Hand

Introduction:
Welcome to another exciting episode of The Property Now podcast! In today's episode, we have a very special guest joining us, Bob Hand, a seasoned real estate expert with a wealth of knowledge and experience in the industry.
Coming with over 4 decades of experience, Bob is a passionate property man that wants nothing more than to see more people succeed in the industry that has brought him so much joy and success.

Get ready to delve into the fascinating world of real estate as Bob shares his invaluable insights, strategies, and secrets for success.

Key Discussion Points: Time Stamps

1:19: Introducing Bob Hand

5:40: Bob's best quotes

6:58: Bob's feedback on the current state of the market

10:49: Why people get held back

17:40: Buyfair Property Group

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Host: Matt Ellul 
Podcast: Property Now Podcast 
Episode: 4
Guest: Bob Hand
Duration: 27 minutes 

Chapters

• 1:19 Introducing Bob Hand
• 5:40 Bob's best quotes
• 6:58 Bob's feedback on the current state of the market
• 10:49 Why people get held back
• 17:40 Buyfair Property Group

Transcript

Speaker 1 (00:01):

Welcome to the Property Now podcast, where we talk all things property investment and new homes with your host Matt Speaker 2 (00:09):

Eol, the barbecue advice. Yeah, your second cousins uncles sister, correct. They're always, they're all always, oh, I wouldn't buy there because Yeah, it's a little bit far from the train station. Everyone expert, Speaker 1 (00:22):

If you want to learn more about what's happening in the market and how to benefit from property investment, then go no further. We dig deep as to why our sector is a key to building financial security and safety for your family. Never before has it been more important to understand the playing field than now. Speaker 2 (00:41):

It can be hard to time the market if you really get too particular with trying to time something that's operating at such a big level, you're probably going to struggle to do that. Speaker 1 (00:51):

So let's get on with the show. Happy listening and we'll see you on the other side. Speaker 3 (00:55):

Welcome to the Property Now podcast. We're going again. This is our second attempt at this podcast, isn't it, Bob? It's, we had some technical issues with the first attempt, but the technical gear looks pretty impressive now, Matt, so it's good. Yeah, I feel like we're in a Channel seven TV studio or something. It's pretty cool. I'm glad you're impressed, mate. I'm not very impressed with great honour that I Welcome now business partner actually, which is exciting for me. I don't know how exciting it's for Bob, but Bob Hand, the executive director of Latitude Real Estate, with a hundred years of experience in the industry, obviously a very accessible career mate, and it's great to have you on board board. Thanks Matt. Thank you. And thanks, lovely to have you on board as well, so it's terrific. It'll work well. So why Speaker 2 (01:39):

Don't you start with telling Speaker 3 (01:40):

Us a little bit about Speaker 2 (01:42):

Yourself. Who is Bob Hand Speaker 3 (01:43):

And what's your background mate? I'm a bit of an ageing dinosaur these days, but I started out as a carpenter electric school when I was 15 and did a carpentry apprenticeship, but I wasn't very good at that. So by age of about 22, 23, I got into selling land and new homes, which was a great career actually. It was a good career choice for me. Started working for a company called and some years in, I bought a little bit of the company and a few years later myself and another chap, we bought the company and ran it for a number of years. I was there for 20 years, sold out Oliver Hume back in 2002 and was a founding director of Villawood Properties doing residential land subdivisions. So that was an interesting period of my life as well. It was very exciting. I stood down from there probably four years in and started another development business with another group and over the last 11 years refound a business with my son doing residential land and new home sales.
(02:37)
So it's been an interesting career. What's it like to be in business with your son? Pretty special. Really? Yeah. I couldn't think of a better person to be in business with. I enjoy his company and he drives me these days because I'm slowing down a little bit. So it's good. It's a pretty funny, obviously a lot of people listening wouldn't have met you two, but seeing you two work together is actually quite a tongue in cheek relationship. It's clearly a quality relationship, but you guys have a bit of fun with what you do. Yeah, we have a lot of fun and I think the thing is I'm left behind with all the technology and in my day we used to sell properties through using newspapers and obviously that's the thing of the past. I just find it amusing when we sit in sales meetings now they tell me how many sales I've made from Facebook and I think how does that happen?
(03:20)
I don't understand it. So yeah. Do you like today's world in property more or do you like the old school ways of selling through papers? No, I think it's always comfortable where you grew up in the industry and you feel comfortable with the space that you knew best is a foreign world now. And that's why I've got people like Matt around me and then I've got James and our other partner in our businesses is George. Fantastic young people dynamic and they understand this space and that's why the company's going places. And I mean this episode is really, well, it's about you and it's about property, but I love business and going into partnership with you guys. For me it was very much about the quality of the people involved as well because you can be successful and wealthy and all of those kinds of things, but if you're doing it with people you don't enjoy doing it with, I think we're all down to earth, honest, normal people and business is not difficult, but you need to apply yourself to the changing world.
(04:16)
And that's probably the thing I have most trouble coming to grips with. I know the space really well and I understand the industry very well, but yeah, the new digital world is something really different. What's your favourite part of business in general? Bit of a general question off the top of I think finding new business and finding new ways to do things, exciting new ways to do things. A few of the things we're working with Matt in his business is very much that I think we've come to the era where education's important and most people come to most of our offices over many years have just wanted information. It hasn't been delivered to 'em. Well, people that coalface has been so damn busy trying to make a sale that they forgot about. What do these people need to know to make that decision? Yeah, yeah, education and value I think is so important.
(04:59)
I mean the money will come if you add value to people's experience. Absolutely. And you educate them in a safe environment. I mean hence what we're trying to do here is really guide people down a path in a safe and comfortable environment and explain the ins and outs, give it to them the way, it's not the way a salesman wants to portray it. So I want to keep these podcast episodes reasonably short. I mean obviously I think we can talk about all sorts of stuff, but let's talk about what you are seeing in the industry advice you have for young people. We've also got a really great book here that you should be able to see guide to Investing in Property by Bob. It's a really great read. I've read it two or three times already, so I'd love to talk about that a little bit.
(05:39)
And I might actually put you on the spot and ask you for some of your favourite quotes, realised pretty quickly that you're a quote man. You're lucky. Yeah, I like the quotes. I like the quotes. I suppose the favourite one I've had over the years, if it's to, it's up to me. Most people procrastinate about decisions in life and one of the biggest ones is in, I mean people procrastinate too long, they're going to wait for the market to drop a little or there's always a reason why they don't act. One of the biggest reasons they don't act is because they're going to talk to their friends and relatives and they're probably not motivated to be in property or they're scared of property, they don't do it, so they just follow soup. But if it is to be, it's up to me. I love that one, the barbecue advice.
(06:17)
Your second cousins uncles sister. Correct. They're all experts. They're all, oh, I wouldn't buy there because it's a little bit far from the train station. Everyone's an expert. Everyone's an expert. Yeah. So my favourite quote is, success is a progressive realisation of a worthy idea. I heard that one. They all nightingale. So success is what you make of it as long as you are progressively stepping towards it. Yeah. The other one is The best time to buy land is last month, not this month as always yesterday, isn't it? The worst time to buy is next month. Absolutely The best investment I've taken away from you. Now the best investment on Earth is Earth. Absolutely. You told me that one. That's another one that was a cracker. I'd love to get your feedback. This is obviously a property podcast. I'd love to get your feedback on what you're seeing at the moment.
(07:02)
You're really at the coalface being a land expert. Latitude real estate maybe gives a quick intro to Latitude real estate because I think that's important in the context of this discussion. Latitude was established back 11 years ago to sell residential land on major residential land projects and to be fairly boutique in it, not to be the biggest to do it well, we don't want to be marketing every project in Melbourne. We want a handful of select project of quality projects and so land is the key to it, but we also do a lot of medium density housing sales as well. And we're happy in that space. It's the space we're comfortable in and we'll continue to do it for many years. My son will I'm sure keep going long after I'm gone. But yeah, so I think that's the space we're in. What are we seeing out there?
(07:46)
At the moment we are seeing people coming into our offices very confused. They're getting a lot of feedback in the press regarding interest rates and lots of negative talk in the newspapers at the moment or in the press. And do I agree with it? Probably yes, to some extent. However, everyone needs a house to live in and we're currently experiencing a massive shortage of housing across the country. So something has to be done to fix this. So I drove down the street probably two or three Saturdays ago and I saw a queue, it must have gone for 50 or 60 metres. I was wondering what it was thought there must have been some event on it. It was just a house to rent, it was open for inspection and with this sort of demand, what we're going to see is rents will continue to increase.
(08:28)
I think Matt, you told me, I think it's gone up 13% in the last 12 months. Yeah, I'm a stats man. I love stats and some of the things that relate to what you are saying, firstly that dwelling approvals down 17% year on year, which is the largest indicator of a shortage arriving or being here already that you could ever get. Rental vacancies are about 0.9%. So vacancy rate go 1% is unheard of. The other one, which is is rental increases. So yeah, you're right, 13.2% in the last 12 months, that's a dramatic increase. So that hence the issue of whether we should be buying today or not in my view is we should people say, oh well interest rates will keep going up and house price will get cheaper. Not necessarily while there's that level of demand for housing, housing, we're not going to see a drastic downturn.
(09:16)
Some of the inner city suburbs may be, but if we look out on the fringe where the best place is to buy new homes for investment, we'll go into that on another podcast. I'm sure these areas are starved of stock. The state government hasn't kept up with rezoning land on the fringe of Melbourne, so therefore there is massive demand still, but a shortage of supply and anywhere where there's a shortage of supply of any products, you're going to see increases. I don't think increases will be dramatic and I think prices will stabilise for some time. But the main buyers during Covid, the main buyers were first time buyers and it was a little bit of second home buyer activity, but that's going to slow down because first time buyers, the affordability issues certainly big issue, but for the investors, the smart investors are already coming back into play because whilst you're getting rising interest rates, you've got rising rents as well to offset some of that.
(10:07)
So I think we'll see that the investors will be a strong player in the market the next 12, 18 months. Yeah, we actually produced a video research you've seen for a company called bifa that we can talk about, but one of the things that we talk about in that video is the percentage of home ownership dropping. So that to me tells me that buying properties is, well, I hope that it doesn't become something that's impossible. I mean the government will always support it, but it shows me that the people who do own property are the ones to stand to benefit from that. Absolutely. We'll continue to see this. I mean there'll be more and more people now that will become lifelong renters unfortunately. And I still think one of the issues here is people don't buy because they don't have the money or what they want as opposed to buying what they can afford.
(10:53)
And I'll go right back now, like back in the eighties when I started selling homes, your typical first home to buy probably 120 square metre home with a single carport in most instances are one bathroom on a quarter quarter anchor. It's true, it was on 7 7 50 square metres. And mind you, they were very expensive. You'd pay anything up around 39,000 house package. But the reality is today what we see is first home buyers come in, they want four bedrooms and a study, they want two bathrooms and they have to have a double garage and it just goes on and on. So what they're trying to do is they just can't afford it and they won't opt out of that to buy what they can afford. And the sad thing is most of those people will always be locked out of the market and they'll continue to rent the rest of their life.
(11:39)
Instant gratification seems to be a really big thing. I'm at an interesting age, I'm nearly 40, so I'm still part old school but not totally old school and I'm part new school but totally not new school. I've had to fight with that, but I've grown up from the place of work hard for what you get and sacrifice to buy. My first time I remember having to save for 12 months or whatever it was, and that 12 months actually really sucked. I didn't enjoy it and at times I wanted to go ah stuff and I'm going shopping, but I didn't. And it got me started and it was actually exactly what you just pledged was buying something that I didn't really want to live in and it was on the fringe of Perth, 40 Ks from the city, sometimes a two hour drive with traffic at Perth.
(12:20)
And it got me started and it set me up in, my first house I bought was $11,000 I think. And it was a two story townhouse with two bedrooms, one bathroom, single garage. But it got me started and I was in the market and most people my age at the time were doing the same thing. Everyone I knew was buying a house. But today most people of that age, 20 ones, 20 twos are renting and saving for, they're probably never going to get, which is really tragic actually. But the reality is that once again, whilst they're not buying, they need to rent somewhere. So somebody has to provide these people with housing. Well, you're chasing your tail as well because it's like if you look at average prices in good areas, they're going up at five to 10% a year, they're going up faster than people can save money.
(13:07)
So it doesn't make any sense to me. So another thing you add to that is migration slowed during covid migration is stepping up again. So we're going to see a lot of people arriving from overseas and wanting to shift to Melbourne as they did prior to Covid. So that's going to create more demand for housing 600,000 a year as the forecast. That's a lot of people. And you know what? 400 to move. So net international migrations forecasted 200,000 people a year and probably when we peaked out before Covid, there was about 20,000 of those coming to Melbourne. And what we see, mind you, 120,000 people don't jump off a plane and run out and buy a house tomorrow either buy, either they go and rent for a little while, establish where they want to be, they get a job and they'll be in the market within two to three years.
(13:50)
So there's this growing demand. You've got the first time buyer who now can't afford to buy, you've got migration gearing up again, and then on top of that you've got a shortage of residential land on each of the corridors throughout Melbourne. So where the market's heading, I don't think it's time you sit on your hands and waiting for something. Yeah, I mean if you look at historical data, it's very consistent in the respect that it goes up and drops off and then up and then drops off. But the upside's always better than the downside. Usually I think in the eighties for maybe 10 years it stayed stagnant, but it's a consistent flow. So you need to be in there somewhere. You have to be in the race, you've got to be in the race. And we're talking about more investment property day. But if you're investing, you're buying product never to sell.
(14:33)
You're buying a house to put tenants in to keep forever. So whether the market fluctuates marginally over those years, it doesn't really matter. I would challenge you a little bit there in respect to selling, when you hit maturity and you want to live your life and retire and selling down some assets to liquid properly, I mean they might end up gearing from having 10 or 15 homes by retirement and feel that if they sold down three of them, they could relinquish all debt and live very comfortably for the rest of their life. And that's great. Most people do that. But my theory on selling prior to that is that if you sell, you're going to pay tax, you're going to pay agents fees and the whole, were you giving money away? It's expensive. It's very expensive to change, really choose into your margin. It certainly does in a big, big way.
(15:19)
So many people attempted, I mean they bought a house hundred, it's gone to 500, be nice to take that 50 or hundred thousand dollars out. But the reality is after tax expenses you might have bulky, so why just leave it in there? You're getting a return on that hundred thousand and it's actually more liquid than people would think. And what I mean by that is that you can actually withdraw funds from the equity that you have in a property quite easily. Correct. You want to go on a holiday. Some people like, oh we'll sell that house so holiday for six months. Well you might be able to just get a line of credit anyway for 20 grand or depends on where you're at, but don't go and just get a line of credit bank interest rates, mortgage interest rates, you can go and draw down against one of your mortgages and it's very cheap money to use if you wanted to do that as opposed to selling.
(16:06)
So yeah, I mean it's a long-term game this earlier in life. You can get started the strong you're going to be later on in life. I know we're sort of bouncing around a little bit, but I think it's all really valuable and I want to highlight it, supply and demand. So what's happening in the rental space at the moment is what you are talking about from a shortage standpoint. So can you see obviously that playing a big factor in the performance of property moving forward? Absolutely. No doubt. I mean has to, if you've got a shortage rent going up, there'll be more investors coming to marketplace and at some point it'll stable out, but then it becomes important as to where to choose to invest. I bought a few investment properties recently. I picked a couple of suburbs. One was out in BAAs Marsh and I went to realestate.
(16:48)
Simple as that had a look how many rental properties were in the market at that point in time? At that point in time when I bought, there were 13 homes for rent in the area and which number were new. Now of course if you've got a brand new home, people are going to want to rent that before they rent an established home. Absolutely. So then I picked Lara in the same situation. There were very few properties to rent and especially new in Lara at the time and I picked up three or four there. So it's just a matter of selection. You've got to be careful where you buy, but hopefully that's where we can assist in some way. Yeah. Well I think that's probably a good segue into bifa and I think we should talk about it obviously helping people get into investments. I think we've actually just conducted a research activity recently interviewing a lot of people and the number one thing that came through loud and clear was that we just dunno where to start.
(17:35)
We dunno what to look for. We want to make money but we dunno how to do it. Correct. So bifa Property Group has been created to help people go down that path. Do you want to tell us a little bit more about that? We brought as a partner because his background enables us, I think to give us a great position to grow the business. bifa was created, I spent a lot of time out on the projects on the weekends and talked to a lot of investors and the thing that became very clear to me is probably 60 to 70% of the clients coming through our offices over the last few years have been investors, but they had no knowledge how to invest. So I thought, oh, where do people go to get information? And I went to the local bookshop and bought a few books on investing in property and they were so complicated.
(18:18)
They have pages of massive books, analytical type books, 8 million numbers, it was all books. This is such a complicated process, no wonder people are confused. So that's when I sat down, I thought, Gil, I'm a pretty simple bloke, let's 15. So I thought what we need is a simple book that I would understand that you could read in 40 minutes and it would give you the basic understanding of how it works. So what we then did is we took it a step further and thought, well how else could we educate people? So at the moment we've got our first investment education centre being built in Lara, which Matt is driving and it will be a centre where people can go a very touchy feely science works type approach where people can walk through the home and hopefully if we get this right by the time they come out the other end, they'll have a very good strong understanding of how to invest in housing.
(19:14)
So have we got it right? I'm not quite sure, but I think we're on the right track and I'm sure we'll be fine tuning over the years. But the thing we do know is we know that how to put the right housing together, know how to find the right blocks of land for people because selecting the house is important as you know Matt mate, most people get emotionally involved. There's no emotion in buying an investment home. You'll pay too much, you return right behind up, so you only need certain elements, but you also need elements that will last time. Yeah, it's not about the colour of the carpet, it's about the numbers. And that's something that I do a lot of people making a mistake of they don't reverse engineer it, they buy a property because it's close to home, it looks okay, it's in a suburb that they know, they buy it, they find a tenant for it and then they go to the accountant a year later and go, oh hey, is it making money?
(20:03)
How are the numbers work? Whereas our approach will be the total opposite to that. It'll be very numbers focused, where's your financial position currently for starters? Where are you actually at? Where is it that you want to go and how do we help get you there in the quickest way possible? And what the long-term goal is, people say to me, well how many homes do I need? Where do I need to be before I retire? And what I think the best way to do that is say, what would you be comfortable retiring on? What are you earning now? You're earning 50,000 or hundred thousand, what are you on and could you live on that retirement and then you can work it back from there. On today's basis, how many homes would I need to live on that income? And it's quite a simple programme, but obviously you work that on today's basis with appreciation and rental increases, you're going to find you're going to be very comfortable when you retire.
(20:51)
I mean this investor center's going to have activities in the actual house. It's a display home, but it's being presented as an investor centre, which I'm pumped about. I just think it's such a good idea. It wasn't my idea, but I've come in and embraced it a hundred percent. It's very exciting. Well Matt, there's nowhere like it, to my knowledge, it's never been done before because usually you got to display home and all they want to do is sell you a house and it's all about the house. We have a house there. That is an example of what might work as an investment home, but it's purely about the education they're actually teaching people and let them interact with different devices to show them what will happen under certain circumstances if they start to invest and selling, of course how the buy fair programme will work because the programme is a long-term programme.
(21:39)
It's not about selling you a house, banking is very much for the purchase, but it's a matter of staying with you and working with you to establish those goals for you. Yeah, like I said, I think we've got the formula and I think it'll be very well received in the marketplace. Yeah, I do too. And I think being, I'd like to think that we're good people and it's just everyday people with a fair bit of experience helping you through that journey. And it really is a never ending story because, and this is what I'm going to start trying to explain and get across to people is like, okay, you're a first time investor. Great, let's get your first time investment and let's set you up from that. But then you become second time investor, okay, what's the best property to go for as your second time investment?
(22:19)
Because there's different approaches to investing in your property. It's not just one approach and circumstances change Today I'd definitely be saying invest in Melbourne, but at certain times we might be looking into states somewhere. I mean Queensland obviously if you've bought in Queensland over the last two years, you would've done very well. A lot of people. Sping Queensland, again, I'm not so sure about Queensland at the moment, Southeast Queensland. It seems to be a market that's either up or down or it doesn't have the population growth and the employment that Sydney and Melbourne do. So it's an interesting market, the Queensland market, we'll provide advice at the appropriate time as to where you best to be. Yeah, I think it's going to be a really big help for people and we'll be out looking for opportunities as well. I mean we might find opportunities in any investment space in the future that we think, okay, yeah, this is a good one.
(23:05)
We get on this ourselves. Let's recommend this to the people in our system. What we're planning to do also is give people probably an annual assessment of where they sit. We don't want people running out and buying their second or third until they're really ready for it. I mean, you've got to be in a position to move forward and you've got to be very comfortable with your cashflow. Don't push yourself beyond that point and hopefully we'll help you with that. We're actually working on some pretty cool technology too with assessing properties. So actually presenting a property to someone that's using artificial intelligence to match with that purchaser. Yeah, it's pretty cool. Pretty cool stuff. Yeah, it's going to take a bit of time and a bit of work, but we're hoping that that will be available some time probably early next year. I would say watch this space.
(23:49)
But the other area I think is important is a lot of people live in the suburbs and they think the best place to invest is down the road themselves. And from an point of view it's probably always nice to be able to walk past and that there as well. But the reality is established housing is not a good option because one, they come with maintenance issues, but more importantly they don't have the tax benefits that a brand new home has. Statute duty exemptions as well. You're generally getting in behind the eight ball a little bit and you chase your tail a little bit more. Whereas if you can target a new up and coming area that's getting close towards infill in the coming years and you get access to those tax benefits, you're going to create your own economy almost Correct, which is how I approach it for first time investors and the Advantage pack made.
(24:33)
So talking about bifa, so I think this was your concept. What we see as bifa is in due course it will become more of a bike club. It's got to come with some benefits and sort of benefits we're talking is one of the things that I find when people build a new tenants tend to neglect the gardens. So I felt it was important that we maintain the front gardens for people. So one of the benefits is we'll maintain that front garden for people for the first 12 months. Maintenance and gardening is very important to me. It certainly tells a story about an area about a property. We'll also look after the rentals for them for the first year at no cost. I mean I want people to be able to break into this funding there and paying their new home with as little expense as possible that first 12 months. What we're trying to do is take a lot of that hurt out in that first 12 months and pick up a lot of those payments they would in that first 12 months. So what other benefits are there? We've got the insurance. We're paying their mortgage insurance, mortgage insurance, mortgage insurance.
(25:36)
We're paying mortgage insurance but we're paying for the landlord insurance. So yeah, landlord insurance is very, very important and I thought that if we start paying, we pay the first year, they give the habit of having that and they can understand the benefits of having that as well. And that's it, Ken. It comes in and does do any damage you covered if they end up not paying the rent you covered, there's a number of advantage, which we would walk through all those points with you. Yeah, it's depreciation schedule, it's essentially everything to get started. I mean obviously you've got to source your finance, which will help you with as well. We'll help you find the right accountant, those kind of things too. But yeah, it's a great head start. I mean my approach to the Advantage Pack has always been since learning it is that it's a nice supplement.
(26:17)
The property investment strategy is always the most important part, but the advantage pack, that's what it is. It's an advantage and no one's obliged. They have to do these things with us. You don't need to rent your house through us, you don't need to use the people. We recommend with the mortgage. I always recommend people go and talk to their own bank first because you've already got a relationship, they know the history, but then maybe shop it after that and we can help you with that bit of it. Just to make sure getting with the property management, if you know the local property manager in the area, that's fine. We don't have a problem with you dealing with not saying you have to deal with us, but what we're trying to do is control at the point we're looking after your asset because the quicker you build that asset, the quicker you are in a position. Speaker 1 (26:58):

Thanks for listening to The Property Now podcast with Matt elo. We hope you learned something valuable and enjoyed the show. Should you wish to reach out to us, you can do so by calling 1 302 8 9 3 2 4 or you welcome to email matt@hellobayfairproperty.com au and he'll be more than happy to help however he can. Have a great day.