Mike Mortlock: Welcome to Geared for Growth. This week a very special interview we've got Charles Tarbey who is the chairman and owner of Century 21 Australasia. Charles obviously sits at the top of a huge real estate network in Australia and has vast experience heading all the way back to 1972 when he began his career in real estate. We have a chat with Charles about the Century 21 network and how he got to where he is. He's got some great advice for property investors and some insights into what's happening in the real estate market in Australia. Hope you enjoy the podcast. Charles Tarbey thank you for joining me on Geared for Growth.
Charles Tarbey: Thank you Mike.
Mike Mortlock: Probably a silly question as your reputation precedes you, but can you let us know who you are and what you do.
Charles Tarbey: I've been in real estate since I left school back in late 71, 72 and I fell into that role only because I was waiting for my HSC results and I got a job cleaning flats. Ended up staying in the industry, wasn't sure if it was for me but everywhere I turned I found myself back part of the industry. So I wanted to sell cause it looked to me like that's where the money was and in the early days' when you're a young man that's what you think about.
It's not until later years you realise that what you do is more important and money follows what you do. So I became a sales person at the age of 18 out at Emu Plains, about three years later, there's you know working in between there, but three years later I had a chance to buy the business I worked in and I'd made a little bit of money out of a property I bought when I was 18 and the growth was good in that 2 or 3 year period so it gave me the financial wellbeing to go and open a real estate agency, I had no idea what I was doing I lived by the philosophy then I think that anything is possible when you don't know what you're doing, because if I knew what I was doing I probably would have talked myself out of it, but that's the way things happen.
Mike Mortlock: You didn't know what to be afraid of.
Charles Tarbey: Yeah, exactly, so I'm not sure where it was in that early stage of my career, I didn't have a lot of support, family members were a bit disappointed, I think boarding school they expected me to become a doctor or a lawyer or something of that nature. But nonetheless I managed to move it forward by my first, second office very, very quickly, and third office, fourth office, fifth office you can hear them ringing right now in the background, and by the time I was around 25 I had 5 offices. I was approached by an American franchise to change and I jokingly said to the chap, "I'm going to do it myself," and he told me I couldn't and that was the start of Combined Real Estate, a company I built to 56 offices.
It was in the early 90's that Century 21 US parent approached me, after I'd already approached them in the mid 80's and talked about an opportunity, which ended up with my acquiring Century 21 Australasia in 1995 off the US parent. So it's been around that sort of thing, in that time set up an IT business that today caters for our franchisees with CRMs, and websites and social media search engine optimization platforms. In that period of time I secured an 8000 property management portfolio in Sydney, Melbourne and Perth to bolster the business and expand it, so that's where the business sits today. I don't have any partners or shareholders in the business. It's still 100% owned and I guess at some point in time in the future somethings got to change because my children are not interested in real estate because I asked them to think about what they wanted to do with their lives and to pursue that, and that's what they're doing.
Mike Mortlock: Now this IT company that you mentioned, now we're talking back around 1986, is that right?
Charles Tarbey: Yeah it started with a PC based platform, a CRM that operated off the systems from the documentation. So somewhere in my early 20's somebody told me to write things down, 1978 I've got my first diary in my study, and have them all lined up, and it was at that point in time of writing things down, planning my day, making mistakes, correcting mistakes, that manuals were developed and those manuals became an operating system and that operating system I recognised needed to be applied from a technology point of view. So the system was written with a young chap who did the coding for me and was written on Cobalt, still around, very old operating system. Mike Mortlock: I was going to say, this is quite some time ago.
Charles Tarbey: It was.
Mike Mortlock: If you don't mind me saying, I mean there wouldn't of been an SEO component ...
Charles Tarbey: No, no we were I guess excited to watch a typewriter print a memorised letter, so it was pretty big days. It was an early operating assignment, in the late 90s I bought a small IT company that was operating and converted everything to web based and relaunched in 2002. So since 2002 the company's been web based, broadcasting to clients, so we've had seller login platforms since then it's been quite extraordinary. We've actually probably kept ahead of our agents more than anything else cause we're still struggling to teach our agents to understand while we keep adding onto the system, because it now version 9 being launched at the end of this month’s November.
Mike Mortlock: Which for me sounds something a bit unusual in the industry, it's always like "aw head office are backwards and they need to keep up with the technology", but you're driving it from the front.
Charles Tarbey: There are some franchisees that can give us some great ideas, there are others that will ring me and suggest ideas, which I would tell them, "it's already in the system, they should've known about that two years ago," so I think we keep each other very well balanced from that perspective.
Mike Mortlock: Now you sort of glossed over a big part of that journey and that is how you actually go from a baby based properties sales agent to acquiring such a massive amount of offices. You must have been terribly good at what you do.
Charles Tarbey: I think it was just the dream more than anything else. I did read a lot of books, I did go to a lot of seminars, I listened to as many people as I could and still do, but the thing is I think is that there was a point there where goals I found were restrictive and that was a big change for me. I don't have long term goals anymore, I have short term objectives and those short term objectives can be today, or this week or towards the end of the month and I find that with those short term objectives, and then a long term vision or a long term dream, which is mailable and flexible. When I was a young guy I had a dream that I wanted to own a Holden GTRXU1, well I didn't realise that I could do more than that.
So when I set those limitations on myself they did become limitations, and I do remember saying that one day I'd like to have 90 offices in Sydney, I didn't even think about Australia or New Zealand or New Guinea. And so I think when you start, when you get to that point where you recognise that goals can be somewhat destructive for certain people and that you create short term objectives, that you can achieve basic things each day, it's amazing how when you turn around at the end of the year you've built something. It’s like laying a brick in your back garden, you put 500 bricks out there and you just lay one and at the end of the year you end up with a barbecue. And I think that's what it is, nothing special, it's just what I wanted to do and I had a reasonable vision of what it looked like, never turned out the way I thought, but I think that's what it is.
Mike Mortlock: I think it sort of goes against many of the textbooks, we're taught we're supposed to have a long term plan, that I think that psychology is now telling us that maybe a 60 day action plan or a 90 day is better.
Charles Tarbey: Okay, well I didn't know that but I just have to say to you that if you plan your life, how boring, how boring is that? And I think that you've got to have some surprises and as you walk down the hallway of life, which is the first thing is walking down that hallway, there are all these doors and you open up, there's something different. And I think that that's the problem, most people stand at the start of the hallway and look down and it just looks too dark and they don't even enter. I know a lot of people who have worked just as hard as me, if not harder but the difference between the people that work hard and achieve and those that work hard and don't achieve I think is that one of them lacks ambition, they put the same effort in but they don't know why. I think that's all it is.
Mike Mortlock: And do you think that sometimes that ambition is actually just tied up in a materiel goal or I want to get the XU1?
Charles Tarbey: Yeah that's right. Those sorts of objectives to me, or visions, are part of the reason you do what you do, they shouldn't be the reason. If you want to live in a big house, you can live in a big house, but it's really about achievement, if you set out to achieve things that create, for me anyway this may not apply to others, when you achieve things that give other people benefit, so if I create something in this company that allows a sales person to perform better and they provide a better service to the customer then somewhere in that I find a financial reward but I also find an emotional reward, and I think moneys easy to make but I don't think reputations are easy to build.
Mike Mortlock: No, correct. Look I want to talk about the investor journey as well but getting back to the real estate side of things, how would you describe the industry today compared to when you started? What's the difference ...
Charles Tarbey: The only difference is the way we deliver our message. Instead of a fax, we might send an email, instead of a letter to a client or a flyer, we might send an electronic broadcast. So I think it's the way we deliver our message, I still think that the best sales people and the best people in any industry are the ones that have that contact to contact, voice to voice, belly to belly, voice to voice process. I think you can send lots of people lots of things but if you don't follow up the conversation you don't really get to the bottom of it. I say it to a lot of the generation that work in my company now, "did you get in touch with such and such?" and they say, "yes I sent them an email," and I say "that's not what I asked".
I think that's the only thing that's changed is the way in which we deliver our message and if you look at the last five years of real estate in Australia where it's been a boom sort of cycle the agent's sort of socially media savvy have done really well because they look pretty, they look fantastic, they present a certain way and the market sold the property not the agent. Now we're back, we're back. We're back in an environment where I tell people there's only two types of markets we're ever in. One where we get the buyer up to meet what they think is the sellers ridiculously high price and that's called a boom, and the other where we get the buyer down to meet what they think is the purchasers ridiculously low offer and that's called real estate and that's what we're in 90% of the time.
Mike Mortlock: And that's what cuts the wheat from the chaff, that's the hard market.
Charles Tarbey: It requires communication, it requires a lot of time with people to help them understand, to see what's happening. As I say to all my team, "if you build a relationship, the conditions are negotiable," and I think that's a really important thing, and this is what I say to buyers, investors "don't wait for the agent to call you," if you want the best property, build a relationship with a good agent, take in a coffee to them once a week see how they're going. When something comes up you are top of mind, that's the difference.
Mike Mortlock: And that's something I definitely want to talk about is how investors need to sort of leverage their real estate agent, whether it be a surer property that they might be selling, or whether they're looking for an investment, but just getting back to yourself for one second, you're part of the furniture on your empire, regularly quoted in the media, I'm sure you're in a position where you can quite comfortably put your feet up but you choose not to do that, you're on Facebook visiting everyone across Australia where your offices are. How important is it for you to maintain your sort of position and your voice within the industry?
Charles Tarbey: I don't think that achieving, I guess yeah I don't have to work, I could sell this business and that, but I don't think that's what it's about. I see so much experience wasted when people retire and I think that also if a person expects to retire and be the same person that they were before retirement, they're going to be really, terribly, sadly mistaken, because you change. I don't know whether people notice this but it's amazing how much work you get done before you're going on a holiday, because of that short term deadline, but it's also even more amazing how sick you sometimes get within the first week of your holiday because you've slowed down and everything else has caught up with you.
So I think staying active, staying part of, not having to drive it but being part of contributing is a really important part of it. So I've got a number of ventures on the go and they keep me very busy but I notice that if, say over Christmas, I get a few days to myself, the days still go, they still move along, everything still moves along, so I don't see any reason why people should look towards building a retirement plan where they stop working.
Mike Mortlock: Yep, yep. Now getting back to disruption, key word you sort of mentioned there. There's been quite a lot happening in the real estate space, BrickX, Purplebricks ....
Charles Tarbey: Open agent, local agent find and buymyplace.com. I can go down a significant list for you.
Mike Mortlock: Yeah, yeah. So what do you see for the industry and I know that there's some things you're involved in, in that space as well?
Charles Tarbey: I don't see them as disruptors, I used to, I now see it as constructive evolution and that term was delivered to me by the ex-CEO of CoreLogic, Graham Mirabito. He said "you're looking at it the wrong way," and when I started looking at it the other way, I recognised there was opportunity with those businesses, they've all been there for a long time. People have been selling their properties privately, there've been agents discounting their commissions for years. They're there, they're just more visible and they're a little bit more structured. So I welcome the disruption because it's taught me that if a local agent finder or an open agent can find leads for agents, then why can't I? That's what we do and so it's taught us to learn how to sharpen the saw.
Mike Mortlock: And do you see any, I guess strong movements in these sort of organisations that are offering to help sell your property online at a reduced fee, do you see the agent as always being a crucial part of that transaction and the relationships?
Charles Tarbey: I do and they do too, because unless someone would go into real estate they wouldn't be referring. The sad part about a lot of those industries is that their representation and the way they present themselves is not correct. Finding the best agent, and "it doesn't cost you anything" story is not true, you know they will find the best agent that they think might sell the house and they will pick up a percentage of that agents commission, they're not in business to help you find the best agent, that's only part of it, they're in business because they take a percentage of the agents commission.
So they don't always find the best agents because not always the best agents want to use their service. So there is a little bit of concern around the way in which that's presented, you know there's companies that say "you don't pay any agent commission" but they don't tell you that you pay a lump sum upfront and if you don't sell you don't get that back, they don't tell you that.
Mike Mortlock: And rather then maybe having the best agent in your area, you're having the agent that's most likely to agree to a highest commission to them, so they're buying the business in a way.
Charles Tarbey: Correct. And if you're paying somebody upfront, I mean the job is nowhere near well and truly over, hasn't even started at that point. So, and this is why I like the incentive, I'd have no problem paying an agent higher fee if they give me the best result.
Mike Mortlock: And of course it's a win win for everybody ...
Charles Tarbey: I mean we're talking about a real estate asset, we're not talking about a second-hand motor car.
Mike Mortlock: Yeah exactly. It may be the most expensive thing, or the most important thing you own financially, it's not worth cutting the corners.
Charles Tarbey: No.
Mike Mortlock: On a bit of a data note and I guess I can't help but wonder with the power of the Century 21 network, what sort of data you're able to collect. It's not a privacy question, but more what is the industry telling us ...
Charles Tarbey: It's a very, very important question, because from my perspective because we operate in real time and have done for the last 15 years, every office, every sales person, right down to the second can find out exactly what their conversion ratios are, what the average commission should be, what they're medium price is, how long a property sits on the market. I can see that, I can pick up my iPhone and zero down to a single sales person in Whakatane, in New Zealand, and see how they're performing right now. So from my perspective an agent knowing their position at all times is absolutely critical.
A lot of agents will tell you what their position is based on the last seminar they went too, our agents can tell in real time, just by going into the system, exactly how they're structured in a suburb, what they're ratios are, what their conversion ratios are and they can present that to a client. So from my perspective that data tells me a lot.
I keep data every year, sorry every week around four stats. Around auction clearance rates, around rent movement, around listing numbers and around vacancy rates, I've been doing that for five years and I can see the trends in the marketplace. You can go back and see, you can almost pinpoint where the markets started to move and change, based on those trends and so I sprout those trends every week whether it's on radio or TV, because I think it's important for people to track that movement, so data is critical.
Mike Mortlock: And comparing say the data that you collect to RP data, which relies on valuer generals maybe it's two or three months until it settles.
Charles Tarbey: Sometimes it is, yeah.
Mike Mortlock: Yeah so we're talking real time.
Charles Tarbey: We're talking real time here. So when they talk about listing numbers, we're already ahead of that game or when they talk about medium price of a certain suburb we already know that. So yes and that's why they're all moving to that, they're all moving to try to capture real time data from agents and they're doing that in a number of ways.
So they'll get there, and we certainly rely on CoreLogic RP data very heavily because if you walk into one of our open for inspections as at the end of this month, you tab in what you want, put your name in, put your email address in, tick I'd like a building report, I'd like a contract, I'd like an automated valuation model, hit the save button, walk through, it pings your phone and now all of a sudden you've got a list of properties for sale, a list of properties sold and an average range of 15% as to what the property you've walked into might be worth.
And so all of those things only come about because CoreLogic are capturing the data and then our valuing properties every week in the USA they value them every day through their automated process, and we tap into that through an API straight into our CRM, which allows, see all these acronyms, which allows our agents to see everything as it's happening.
Mike Mortlock: Now I would hazard a guess to say that property investors are used to having a relationship with their property manager, you would hope so at the very least, but with sales agents I don't think it's a typical strong relationship, they would find a property or maybe they use a buyer's agent that goes through an agent. How can an investor leverage a local real estate agent to help them buy an investment property?
Charles Tarbey: That's a really important question. As I mentioned earlier if you build a relationship you can get things done. I think a lot of people have this expectation, you hear a lot of these things where people say, "the agent never called me back." Now for me if I were an investor I'd see that as an advantage. I would find the right agent in the area and I would hound them, cause I know as an agent that when I got something that came up for sale immediately, now we might use a CRM to search, but in those days you would immediately go through your mind as to who you've dealt with, then you'd go through your file box to see who you thought it might match.
Now if somebody was in my face nicely on a regular basis they would come to mind straight away and I do think it should be the other way around. I mean good agents in my view will build relationships with their clients, but a good investor, or a smart investor will build a relationship with an agent.
Mike Mortlock: How would you recommend an investor I guess source an agent that they think is going to be trust worthy and working in their best interest? Obviously the agent is generally paid by the vendor rather than the purchaser.
Charles Tarbey: There are a lot of good agents out there, a lot of really good agents, there are a lot of agents that just move along, very nice people and do okay, but the best way to sort out which agents are the best, there's a couple of ways, you don't go onto the sites that rate real estate agents a lot of people do and that's sad because a lot of those sites are self-rating. If you look at some of those sites you will never see anything negative about the agent because its filtered, so again it's misrepresenting the true nature of that agent's failure or success.
I've always said to people if you really want to pick a good agent don't go with the agent that's got the most for sale signs because that agent is not competitive. If I was selling my property, you look around the area and you see one agents sign and you think, "oh yeah wow they're active," but if I give them my house I'm now putting my property with a whole bunch of people that haven't sold. I look for the agents with the sold signs when I'm making a decision on who to use, and I will tap on the door of few of those sold signs and if I get the seller not the tenant I'll ask them, and that's the best reference you'll ever get about which agent to use.
Mike Mortlock: I even heard some stories about real estate agents giving someone a carton of beer to put a for sale sign up in their yard.
Charles Tarbey: That's illegal of course. Some agents will see it as marketing, sharp marketing but no, again that in itself is false and misleading. So I think that, there's a lot of young and enthusiastic agents that haven't sold anything so I'm being a bit unfair to them in that sense because when I was a young agent I really didn't know what was going on but I was enthusiastic and people would look at me as a 21 year old pimple faced kid with my own real estate office and first thing I'd say to them is "look I know that I might look young but let me just say to you what I don't know when you ask me, I know people that do know the answers and I will find it out for you, but I will run around everywhere for you to find the right home if that's what you want me to do."
Mike Mortlock: And you're using your weakness as a strength there right? Because they're sort of thinking this guy’s got to prove himself, he's going to be acting for me.
Charles Tarbey: Correct and that again is that relationship building process. You can go on social media, you can go on agent rating sites, you can go on all those things but really you've got the agents talking about themselves. I think that's really the wrong place to go if you're a seller.
Mike Mortlock: Now I want to talk about the property market Charles, obviously you've got your finger on the pulse with the data. I wanted to ask about auction clearance rates, I know that auctions aren't as prevalent in Brisbane as they are in Sydney or Melbourne. How good of an indicator are they of the overall health of the market and does Sydney and Melbourne sort of speak for the regional areas as well in terms of what's happening?
Charles Tarbey: Yeah, look auctions are a very unique proposition they shouldn't be used on every property. If you've got ten homes for sale in the same area that look similar, why would you risk getting pest report, building report, loan approvals turn up to an auction where you might miss out. So a lot of people won't go that way but auctions are definitely, and people can see the values, if you've got ten houses similar you can see what's going to be like. But when you get something different, unique it’s very hard to value those properties so auctions do speak loudly, particularly in Melbourne, Melbourne's the capital, I mean in this week just gone and we're now in November 2017, this weekend just gone, Melbourne only had 309 auctions because of the Melbourne Cup but they still had a clearance rate of 77.3%, last week they had 1,983 auctions and they had a clearance rate of 73.4%, So it gives you an indication that there's still a lot of activity there.
Sydney was always in the 70s and 80s and that's declined in this last week and they had 1,217 auctions in Sydney in the weekend just gone and their clearance rate was 67.4%. It still gives you an indication, there may not be as many buyers that are pushing the prices up but if you sold 7 out of 10 properties that went up for sale, to me that's a very, very good market place.
So they do give you an indication, but they do tell you also that the market is changing it's not so much the clearance rates or the numbers, it's that percentage change that you really want to watch and what I see now when I tap 67.4% and then I look at the fact that the listing numbers increased this week over last week by 2.53%, well you know, supply and demand. So you start to see that next time they go and look at a property that's in an area where there's average properties I'm probably going to make an offer, I'm not going to jump in and buy straight away, and that's the sort of little indicators that you get, that people miss because they don't watch those numbers every week, or they go and buy an investment property in Hobart, what they didn't see is that last week the rents in Hobart dropped by 2.11% and that's because all of a sudden you've got a lot of people buying in Hobart as investors and now do you have the rental population to satisfy that? And what the rent might have been today could be very, very different in three months’ time and then all of a sudden if you see interest rates move, that's a double whammy to an investor.
Mike Mortlock: And the medias jumped on Hobart pretty strongly and it's not a huge city so obviously there's going to be a real change in the supply dynamic as investors come in. For the benefit of listeners as well, Charles has got no aids, he's got no numbers, or facts or figures written down, he's obviously lived and breathed these stats. I wanted to chat about the state of the market at the moment, obviously APRA's come in and hit investors with a bit of a sledge hammer, do you see that as a big move in the property market and do you think that the heat is coming off Australia wide?
Charles Tarbey: I don't like the fact that I'm being told how I should invest, that part I don't like. But then again as in investor myself in the early days I would have done things that I would not recommend to other people. So having equity in the good old days meant that I could borrow what I liked and having equity today without the cash flow through means I can't borrow what I want. So I'm being told how to invest, so I don't particularly like that but I do think for the overall population of the overall investor, who's a part-time investor that's probably a good thing.
The slowdown in the market place is not so much a slowdown, it's more a levelling out. Sydney market went crazy for one reason and one reason only and that was, it started a dozen plus years ago whenever the Carr Government was in, I can't remember when that was, when they put the Vendor Exit Tax on and it stopped people from investing in Sydney and they started to move to places like Brisbane and Perth, with the mining boom in Perth, and you started to see the prices of properties in those areas become disproportionate to Sydney prices. You would sell something in Western Sydney years and years and years ago, you'd go to Queensland, buy something better and still have cash left over. All of a sudden they were almost equal and so Sydney went crazy only because it fell so far behind, not for any other reason. I'm sure there's a lot of overseas interest and so on but it needed to catch up and it needed to be 20 or 30 per cent, to 40% greater than Queensland.
Mike Mortlock: And it was that for a long time. People forget that, they just kind of see there's a housing affordability crisis because we've got ...
Charles Tarbey: This floor we're sitting in right now, I purchased this floor in the CBD of Sydney 10 years ago for 2.4 million and it's sat at 2.4 million up until 2 years ago, and now the agents are suggesting that they've got buyers for six and a quarter million. So it's really crazy because the interest rates came down, people who purchased Strata realised its cheaper for them to own their own property then to rent. So it's those market conditions you've got to watch, you've got to watch the changes.
So I think it's levelled out, I think Brisbane's starting to get a little bit of upside, I think Perth has now hit the bottom and starting to get some upside, I think Melbourne is starting to edge towards a levelling market, as has Sydney and I think places like Hobart and Northern Territory, which is a place unto its own, that to me has become another Asian city because of its proximity. I think Darwin, Hobart will slowly come backwards in pricing, but when I say backwards, nothing spectacular you know the only things that will impact on that are unemployment and high interest rates and those two things don't look likely at the moment.
Mike Mortlock: Especially interest rates, it looks like that's going to be on hold for a while. I came across, I'm going to give you one more question, I came across a cheeky photo of yourself and two franchisees you sort of labelled them, and that was Scott Morrison and the prime minister himself, obviously the subject there was negative gearing, I want to touch on that quickly.
Charles Tarbey: It was. Very kindly invited myself and four other people to a meeting on negative gearing, yes.
Mike Mortlock: Obviously the property industry was pretty active the last election. What can we expect to see from the property industry coming up to the next election and where do you see, I guess what's your views on negative gearing and the impact that that would have on property?
Charles Tarbey: Yeah negative gearing is a business and its money in, money out, so I understand why it's there. If the Government decides to make that more difficult, and if you look at Victorian Government right now slapping on all sorts of different things against landlords, then you better be prepared as a state government or a federal government to come up with a better housing policy, because in the past handing that over to governments hasn't been a wonderful thing.
So I think if you touch it you're going to remove the incentive, if you remove the incentive investors will go elsewhere and we'll have a housing crisis on top of the housing crisis we already have now. We have significant red tape, green tape in Australia, to the extent where hundreds of thousands of properties could have been built and haven't been because of councils, local councils, and I think that the more Government gets involved in this process the more likely they are to create future problems. I think it's there, it works, you want to make some minor adjustments to it that's great, but it is a business like any other business.
Mike Mortlock: And the business is essentially providing affordable accommodation for tenants.
Charles Tarbey: You want people to create wealth for themselves so you dot have to provide wealth for them in time to come, which way do you want it? It's incredible how they bring these things in then remove them. I tell you what you can remove, I was sick of looking at this morning, how about you remove payroll tax because I don't know why I pay payroll tax and I have hundreds of employees and I pay hundreds of thousands of dollars a year to employ people. So I don't get that.
Mike Mortlock: It's a disincentive from being an employer which the goal of the government is
Charles Tarbey: To employ more people. So it's really bizarre, the whole thing is really quite bizarre. I'm sure pay roll tax was introduced so many years ago for a particular reason and then it became part of consolidated revenue that they couldn't remove. But I do think that they've got to be careful, the state governments, particularly in New South Wales state government have a bundle of cash, and a lot of that has come from stamp duty on property transactions. So you need to be aware of that and keep that in mind.
Mike Mortlock: Yeah and if the property prices are going back the revenue from the Government is going to take a hit, so there's a lot of moving parts. Just before you go Charles I just wanted to ask you one last question, if there's one piece of advice you could give to property investors in building their portfolio and achieving their financial goals what would that be?
Charles Tarbey: I would suggest to them that they're patient, that they don't rush in, buying off the plan can be very dangerous if you're not really educated to a changing market, When you are buying an investment, don't buy an investment that you would live in because you like it buy an investment because it's practical. You don't buy something that has a swimming pool in it cause that's going to cost you a lot of money down the track.
So you look at properties that are affordable, you look at properties more importantly and most importantly that have a balance between rental income and capital growth. There's no point in having something in a mining town that gives you a massive rental return and then the capital growth disappears overnight. So it's critical that you buy properties where tenants want to live and you buy properties, and it’s going to cost you a little bit more, where capital growth is guaranteed because there are significant number of potential buyers around should you wish to sell.
Mike Mortlock: Yep. I think that's all we could have asked. Thanks very much for joining us Charles, appreciate your time.
Charles Tarbey: Thank you. Take care.
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