Jacinta from Western Australia is troubled about property investing because, while she is keen, she is having trouble convincing her partner that it is the right thing to do. She asks ‘what can I do to convince my partner?’.
Hear Nhan Nguyen’s advice.
Kevin: I received an email from Jacinta in WA, a lovely spot of the world, too – and a very interesting question. Jacinta writes, “I’ve attended a course on property investing and I’m keen to get started but my husband is reluctant. I wish now that he had been at the course with me because I can’t convince him that it’s the right way to go. Do you have any advice? I don’t want to do it on my own.” Jacinta, I’m going to refer this question to Nhan Nguyen from Advanced Property Strategies.
Nhan: Good day, Kevin. How are you doing?
Kevin: Good. You’ve probably heard that question before, have you?
Nhan: Oh, for sure. I’m married myself, so I know what it’s like.
Kevin: What do you do in a situation like that? What should Jacinta do?
Nhan: It’s a very delicate situation, and I think it’s a slowly-slowly type attitude. Personally, I’m sure there are a lot of other courses that come up from time to time, and getting your partner onboard by having a third-party is really a good way to start and get them onboard to learn about the process, because it’s a journey, as well.
I think also in partnerships, when one spouse may be earning the income and the other may be supporting, looking after the kids, or both partners are working, sometimes both incomes are required to borrow, so you can’t just go by yourself.
I think that definitely a first start is getting education. After that, finding out is it going to be something that both parties are going to participate in? It’s very hard with two partners if one doesn’t really agree with what’s going on.
Kevin: Nhan, you raise an interesting point there I just want to dig a little bit deeper on, if I may. That is, one partner is earning the money and the other partner is not necessarily bringing money in but wants to start a separate business. How important is it to have the property investment side of what you do as a separate profit center?
Nhan: I think it’s really important to do that, especially if you’re wanting to create long-term wealth. I set up my entities separately to the property that I own in my personal name. I only have one in my personal name, and the other ones are in other companies and trusts, you could say. That’s very important, because if something happens to me, my assets are still protected and they still can be passed down.
As a profit center, that’s how we treat it. We treat properties as a separate business and entities creating their own income. I know that sometimes when partners don’t want to participate, it may be due to a risk factor. They might have an Uncle Bill or Bob who 30 or 40 years ago, went bankrupt doing a land subdivision, and they have certain beliefs about money, wealth, creating wealth, and sometimes it’s an uncomfortable thing.
But I don’t think it should stop you. If your partner likes playing golf and you don’t like playing golf, and you like playing tennis instead, it doesn’t stop a relationship; you just have to manage the risks and the outcomes.
Kevin: Yes, that’s a very good point. That really underlines that point – doesn’t it – about making sure it’s a separate profit center.
I do believe that you can’t make someone do something they’re not either comfortable doing or they don’t believe in, Jacinta. Jacinta raised the point there that she wished her partner – her husband in this case – had been on the course with her.
The other piece of advice I’d give is that if you’re going to do something like this and you want your partner to be involved in it, make sure that they’re getting the same type of education as you are. Would you agree with that, Nhan?
Nhan: Yes. I think it’s really important, so they are both on the same page. Being married myself, I that know that sometimes my wife won’t listen to me but she’ll listen to someone who’s a bit more detached who’s saying the same thing. That’s not uncommon and vice versa. No one likes being what to do by someone close to them.
I think that the other thing that you can do to really move things forward is use a strategy that you learn in a general purchase. I understand that most people are going to buy a house to live in, anyway, so if you learn how to buy property under market value, you might as well start on that one.
If you’re going to buy a property for $500,000 and you can figure it out using the education to buy it for $420,000 or $430,000 and get a $70,000 to $80,000 discount using the education, that’s a great way to incentivize a spouse, partner, or significant other to show that the stuff works.
An other ways is to build a granny flat in the backyard or underneath your house. I know we have a granny flat, and I say to my clients, practice what I preach. My wife was very much conservative and she didn’t really want a granny flat. But I was able to show her that with just a small investment, we were able to make an extra $15,000 a year passively through doing that.
It’s softly-softly, and you can use it to apply in everyday situations, because everyone has to live somewhere, so you might as well do it on something you’re going to buy anyway and show your spouse or partner that it can be done. Once you’ve given them enough proof on one or two examples, then there’s nothing holding you back.
Kevin: Excellent advance. Thank you very much for your time. Nhan Nguyen, I appreciate it.
Nhan: Excellent, Kevin. Thanks for having me.