Young property investor Nathan Birch<\/strong> became interested in property at 13 and started investing at 18. He can now say he has over 170 properties in his portfolio. Hear his amazing story. Nathan is our guest today.<\/p>\n Kevin<\/b>:\u00a0 My next guest is Nathan Birch. We spoken to Nathan on the show before. Nathan started his fascination with property at the age of 13. We\u2019re not going to give away your age now. It\u2019s irrelevant, really. Nathan is very skilled at being a property investor. Young property investor Nathan Birch became interested in property at 13 and started investing at 18. He can now say he has over 170 properties in his portfolio. Hear his amazing story. Nathan is our guest today. Transcript: Kevin:\u00a0 My next guest is Nathan Birch….<\/p>\n","protected":false},"author":176692471,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,25],"tags":[101],"class_list":["post-5427","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"\n<\/h4>\n
Transcript:<\/strong><\/h4>\n
\nProperty had something to do with your background, do you think, Nathan?
\nNathan<\/b>:\u00a0 Actually, at the age of 13, I got excited by investing in property. Coming from a blue-collar working family, I wanted to be rich and thought property was the way. I got excited at the young age of 13 and wasn\u2019t able to sign a contract until I was 18. Giving away my age, I just turned 30, and my property portfolio is very strong at 170+ properties.
\nKevin<\/b>:\u00a0 That\u2019s an amazing number of properties. I think the latest stats I saw were around about $30 million worth. The thing that amazes me is we hear a lot of people who have a lot of property but in your case, I think, you\u2019ve driven for it to be neutral or positively geared. Is that correct?
\nNathan<\/b>:\u00a0 That is very important to me, yes. Managing the cash flow is something that is close to my heart, because building a sizable property portfolio isn\u2019t really possible if you [1:12 inaudible]<\/b> cash flow position. It could sink or make you.
\nKevin<\/b>:\u00a0 Some people would say at age 30, you\u2019re more than capable of taking on mortgages because you\u2019ve been working for quite some time, but it\u2019s commendable that you haven\u2019t done that. How hard is it in this environment to find property that is either neutral or positively geared?
\nNathan<\/b>:\u00a0 I think it\u2019s the same problems I\u2019ve experienced for last decade \u2013 be it finding the right properties that is going to fit into the portfolio to make you successful, that side of things. A lot of the properties that I bought in the early days weren\u2019t positive cash flow. They were just neutral cash flow. But what happens over time, investing in capital cities and whatnot, the actual rents will rise and turn into a positive state.
\nThe Sydney property market at the moment isn\u2019t really the best market. We can\u2019t find highly cash-flowed properties. However, the two states that I do find it is very possible are Brisbane and the Gold Coast, and Adelaide. Those are the spots that I\u2019m looking at and purchasing in actively in the current market.
\nKevin<\/b>:\u00a0 Talking about cash flow, obviously in this low interest rate environment, it\u2019s very tempting for people to go out and borrow as much as they possibly can. Do you think that\u2019s a bit of a mistake?
\nNathan<\/b>:\u00a0 It\u2019s something that just depends. If we\u2019re looking at the Sydney market, which is at the highest point it\u2019s ever been, if you\u2019re pushing yourself and having a very high LVR, I think that it could be a bit fraught with danger.
\nHowever, if you\u2019re looking at markets like Brisbane, southeast Queensland, and Gold Coast, those markets have been depressed since the GFC \u2013 so for about seven or eight years, the markets have been very, very depressed. I\u2019m picking up properties there all the time that are still $50,000 less than what they were selling for seven or eight years ago.
\nLooking at the cash flow positions on them, they are positive cash flow. You can pick up properties for $200, $250 or even for $300, $350, $360 per week. From that perspective, if you built a portfolio of ten of them, the boom is on its way to that region, and obviously, the pricing is going to go up. It\u2019s not like it\u2019s on its way down.
\nKevin<\/b>:\u00a0 Where do you sit on the debate about interest-only and principal-and-interest repayments?
\nNathan<\/b>:\u00a0 Good question, Kevin. From a perspective of interest-only and principal-and-interest, I think a lot of people get caught up in the fact that you want to pay down the property as quick as possible. Paying off the property as quick as possible is one way of looking at it.
\nI\u2019ve always looked at investing as there are different phases that you go through. One of the phases is obviously educating yourself on what you\u2019re trying to do as a property investor. The next one is accumulation, and the third one is consolidation.
\nFor me, personally, looking at accumulating properties, you need to keep yourself as lean and as thin as possible from a cash flow perspective. In that instance, I think in the early years, it\u2019s best to be interest-only.
\nThe reason being is if you want to have five properties in your portfolio \u2013 or ten properties or whatever \u2013 if you\u2019re paying an extra $50 per week out of your pocket to pay the property down, that could be $50 per week going toward your next deal. I\u2019d rather be paging through a property cycle, an extra property, an extra ten properties, or an extra 20 properties through a market cycle, not just trying to pay it down and have no debt.
\nDebt is a part of good investment strategy \u2013 but minimizing debt, as well. I\u2019m not a big fan of 90% and 95% loans. I\u2019m a big advocate for 20% deposits. That is something I\u2019ve done in my personal property investing journey but also bearing in mind that paying down the property is just a numbers thing.
\nThe view in the future is you should always be paying down debt. What I mean by that is I look back on my properties that I bought ten or 12 years ago that I might owe $530,000 on and they\u2019re worth $450,000 or $500,000. If I only owe $100,000 on each, that\u2019s only 20% LVR that I have in the current market. I would rather have ten of those sort of results than five of those results if I had being pay down those mortgages.
\nThe reality of it is that five or ten years on, what is the difference between owing $100,000 or $80,000. I\u2019d rather be making that $400,000 spread on the other side.
\nKevin<\/b>:\u00a0 That\u2019s all good leverage. Nathan, we\u2019re out of time, mate, but thank you very much for your time. Nathan Birch has been my guest, and the website is Binvested.com.au.
\nNathan, thanks again for your time.
\nNathan<\/b>:\u00a0 My pleasure, Kevin. Thanks for having me on the show.<\/p>\n","protected":false},"excerpt":{"rendered":"