Chapter 1: What is the main topic discussed in this episode?
It's The Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of The Real Estate Podcast. We're talking with Simon Reid from Worth Property Investing. Hey, Simon, welcome into The Real Estate Podcast. Thank you for having me.
And you're on the Sunshine Coast in one of my favourite spots, Malula Bar, Queensland. That would have been pretty busy over the Christmas New Year. Absolutely, with the borders open, everyone's flocking up here for that beautiful sunshine and waves. Yeah, Caloundra, Maroochydore, Noosa, you'd hardly recognise all of them with plenty of traffic over the Christmas New Year.
Absolutely, but it's good to see people here and the shops busy, people out enjoying themselves.
Chapter 2: What is passive investing and why is it important?
And it just gives that whole sort of Sunshine Coast a different flavour when you see people milling around, getting into the shops, you know, doing a little bit of sunbathing, jumping into the water. I mean, suddenly you kind of forget a little bit about COVID altogether. This is what people dream of. The Sunshine Coast lifestyle, kicking back on the beach, enjoying their lives.
It's fantastic to see people back up here. Well, we're going to have a look at passive investing. It's such a hot talking point at the moment for people. And I think that the reason is that people just want more time, exactly what we're just talking about, more time to enjoy their lives, go to the Sunshine Coast without being heavily involved in the real estate market.
Simon, passive investing generally is a type of investment where you can generate an income from your investments without that whole day-to-day rigor of the workload to carry out. Yes, look, there are many sources of passive income available. And one of the best options around is property investing. It can provide you a stable asset, ongoing passive income, and pretty predictable capital growth.
But passive income, basically, it's a regular flow of income that requires minimal effort to earn and maintain. Look, in simple terms, you can earn money while you sleep. Let the assets do the heavy lifting for you.
and simon explain to our listeners what some of the more common passive real estate investment strategies are so look i i work with you know many clients from all over australia and all over the world we have a very common goal which is to over time build a passive income that can be used to substitute their day job one of the strategies we use for our clients is to build up a sizable property portfolio
That could be anywhere between three to six investment properties, all located in the right areas where you've got low vacancy rates, good rental returns, and good prospects for long-term capital growth. The plan for these clients, build that portfolio, then sit and hold, let it go through one or two property cycles, let it double in value, in some cases triple.
We'll then reassess the portfolio, see what capital growth is there, what equity they've established, and then review which properties we could sell to pull out some profit, pay off the property portfolio entirely. So the investors then got two or three, possibly four investment properties unencumbered with debt, and they can just live off the rental returns coming in.
And the opposite of passive real estate investment, just so that everybody can get their heads around it, would be something like flipping a house. That's the complete opposite. Absolutely. Look, some people can do it successfully. These people are usually builders with plenty of time on their hands, or they've got a team of people to do it for them.
But for the average everyday investor, it's not something you want to do lightly. House flipping, it takes a lot of time, a lot of resources. And from what I can see, a lot of people overpay, they overcapitalize, and they end up not making money in the first place. So it's something that I would recommend avoiding unless you've got the skill set and time to do yourself.
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