John Foong has over 20 years of experience investing in real estate, primarily in the US (Silicon Valley residential and […]

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John Foong has over 20 years of experience investing in real estate, primarily in the US (Silicon Valley residential and commercial, and commercial property on the East Coast/South) and Australia.

 

Episode Highlights Here:

 

John

The other thing is the way that capital gains, the way that expenses are monetized or are counted here. So let’s take some specific examples like depreciation, you know, and interest are very, very faithful. And in America, you know, for example, you can take a depreciation charge, but you pay it back in a sense when you sell the property, it increases or decreases the original selling price.

 

Pierce

Can you quickly summarize the differences between the Australian real estate market and the US real estate market for people?

 

John

So thank you for that question. The American real estate market is about 20 times as big as Australia, in terms of just the number of houses, the number of sales total for that 15 to 20 times that reflects the size of population. But the amount that Australians have spent on property is much larger, right in terms of the average sell price of a home, in terms of the amount of revenue in the real estate industry, commissions paid and things like that. And the way that’s reflected is in America real estate’s a big deal. But the real estate agencies around my area, obviously live in Silicon Valley, the last five or 10 years. They’re kind of like tucked in an office building somewhere in the town. In Australia, you go near the railway stations, which is the center of commerce in each Australian city, Australian suburb. The prime real estate is taken by real estate agents. And not just one or two, there’s like five or 10 Really big brands, and then each suburb will have its own boutique brands. So you’re walking down the main street, you know, of each city or each suburb, and it is dominated by real estate agencies. And that’s because in Australia, we have a saying that real estate is Australia’s national pastime. When you go to a barbecue, when you go to a dinner party you will always talk about house prices going up going down, interest rates going up or going down. And interestingly enough, Australia has some very advantageous capital gains laws, which make it such a very, very attractive investment vehicle, which was certainly my path. You know, once I turned 18. So it’s a big deal in Australia. I like to think of it as it’s more than America, but it’s a bigger deal here. Sure.

 

Pierce

And you mentioned something interesting, you mentioned that the capital gains is really favorable over there in Australia. So dive into that a little bit, and how is it different from the United States capital gains? Sure.

 

John

So I’ll give you some personal examples, my primary residence in America, there is a small capital gains exemption for primary residence, you know, depending on where you are, right, it’s 250. K, if you live there, too, for the last five years, if I’m okay for a couple, right, and that’s a big deal. You should take advantage of that, though, in Silicon Valley that doesn’t go that far. In America, as long as you’re an Australian resident, your primary residence is tax free. Wow, that’s great. That’s a big deal. Right, you have a massive incentive to invest big, and continue to invest in your primary residence. And so that’s one thing. The other thing is the way that capital gains, the way that expenses are monetized or are counted here. So let’s take some specific examples like depreciation, you know, and interest are very, very faithful. And in America, you know, for example, you can take a depreciation charge, but you pay it back in a sense when you sell the property, it increases or decreases the original selling price. In Australia, these are expenses you have every year interest expense every year. So that’s all for a primary residence. That’s for an investment residence. You know, but that’s something that’s very, very attractive in Australia, which means I think, you know, if you have a steady income and you have bond investment in Australia, there is nothing more attractive than property investing. If you can hold for at least five years, you’re gonna make a good seven to 8% on capital gains on average each year, particularly via a single family dwelling, you know, rather than an apartment. And then if you hold that over time, you’re, you know, most people are putting down 20%. Here, you’re going to leverage that four or five times and you’re getting capital gains on that. And because the interest, the way that you can write off the expense, it’s tax. It’s very, very tax efficient.

 

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About John Foongs

Natasha Baumgartner

John Foongs began investing in property at a young age, leveraging funds from a college scholarship to purchase his first home at 18, a small university apartment in Sydney that cost $60,000—the first of 20+ investments in Australia alone. 

Since then, John has made millions of dollars through buying, holding, and selling residential and commercial properties. Profits from these investments allowed him to attend Stanford University, where he earned an MBA and Masters in Education (summa cum laude) and was elected President of the year. 

John has also had a remarkable corporate career. He spent 13 years at Google in the UK, Ireland and the US, where he held a variety of senior leadership go-to-market positions, including heading the multi-billion dollar global partner program for Google Cloud, where he was responsible for 20,000 partners and 350 employees. In 2014, he became the youngest director at Google Cloud. 

John has also worked for McKinsey and Uber and is currently the Chief Revenue Officer of Domain, a leading Australian real estate property listings platform with 9M+ monthly users. He was recently named #36 in Australia’s Top 50 influencers and innovators by Elite Agent, the #1 real estate publication in Australia.

 

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