Michael Yardney says there are 10 things to consider before you buy an investment property. Some will be quite familiar to you but he has a few that I had not thought of so it makes interesting listening.
Getting the jump-start of other buyers can mean that you find out about properties before they come on the market. How can you do that? Cate Bakos tells us some of her secrets but she has a warning as well about the potential to overpay.
Also this week Jacque Parker, President of REBAA, recommends investors get an independent second opinion when investing their super savings in real estate and details why and his concerns.
In the past few years, Chinese buyers have started to make their presence felt on the global property market. For many Chinese, global property investment is an emerging opportunity which until recently was out of reach. Now a website has been developed to cater directly to this huge market and we catch up with its founder to find out what impact it is likely to have on property here.
As the cool of winter sets in, thoughts of the beach may be far from your mind. However, winter is often a great time to look at buying a beach house or holiday home. There’s a lot to think about when purchasing a holiday home. Where, what and how to buy it? Andrew Mirams shares his experience with us.
Transcripts
Andrew Mirams
Kevin: You know what it’s like. You go on holiday, somewhere on the coast and it’s a beautiful day and you’re walking around, licking your ice-cream and thinking ‘I think I’d like to live here. Yes, let’s buy ourselves a holiday home.’ Quite often you see that come unstuck not long after that purchase has been made. A man with his feet firmly on the ground, Andrew Mirams, from Intuitive Finance probably sees this quite a bit, Andrew, do you?
Andrew Mirams: Absolutely, especially this time of year in Melbourne, Kevin, when the winter starts to set in and people go on their northern beach holidays.
Kevin: Sabbaticals.
Andrew Mirams: We are, yes, the common phone call is say “we went to somewhere nice up on one of those beautiful Queensland beaches and we’d like to buy a property.”
Kevin: Or even the phone call that comes from there, “oh, listen, we’re on holidays here, Andrew, can you organize some finance for us?”
Andrew Mirams: We have had that a bit in the summer in Victoria, yes, as well. They see the place next door and then it’s such a good buy.
Kevin: Well, let’s look at some of the problems that can emerge from that. I guess the first one is asking yourself if you can really afford it. What are some of the things we should go through, Andrew, to work out.
Andrew Mirams: Well the key’s to whether you can afford it is ‘can you afford to take on another mortgage if it wasn’t rented?’ That’s probably the primary one. The great Australian dream seems to be to own your home and then the second one is to own your holiday home. A lot of people come unstuck just trying to manage two mortgages. If they do have two or just managing the mortgage if they’re not getting … if they’re not putting it out for rental.
Kevin: I guess the main motivation is to think, ‘oh, well, maybe we can use this ourselves and then in the off-time we can actually rent it out’ so probably two different types of people; those who can afford to hold it on their own and those who want to get some money back from it, Andrew?
Andrew Mirams: Yeah, absolutely. The thing with the holiday home is most likely when you want to use it, is when everyone else wants to use it too. People, they want to go on their summer holidays or things like that, well guess what, everyone else wants to go on that summer holiday and wants your property then. It’s often a balancing act as to whether you want a return from it or whether you want to use it just for your own personal use.
Kevin: What about the location? Pretty important too, about where you buy it I guess, Andrew, isn’t it?
Andrew Mirams: Yeah, well again, the holiday home tends to be a really emotional buy so someone’s gone on their holiday and they’re just loved it and they can see themselves either retiring or going there every year. The thing is that we have seen with some of these holiday homes, where they don’t work, is people actually get bored with going there every year or they want to start going to other places but feel compelled to have to keep going back to it. But anywhere the old sea-change is going to be always be sort after by the next person that goes on holiday. You would normally think that somewhere along the coastlines and things like that is going to give you a better return if you’re putting it for rent or certainly something for your own lifestyle purpose.
Kevin: I guess another consideration too, Andrew is the type of holiday rental it’s going to be, whether it’s a long term rental or whether it’s going to be short term because the cost in those short term rentals can be quite high, getting them managed.
Andrew Mirams: Absolutely. Yeah, you’re generally look at around about 17% versus a normal rental at about 7% and some of the marketing firms then have a marketing fee and things like that too. It might cost you 20% so you generally … you have to probably get around about 100 nights a year. If I know the Victorian agents and things along our Victorian coastline, to try and get and obviously, primarily because the whether is a lot more seasonal in Victoria. That really comes across about a 3, to 4, to 5 months, real hot spot, when it is. As I said before, generally when everyone else wants to go there, it’s probably when you also want to go there. It’s really a fine line between managing and getting the right returns on it, if that’s what you want to do or whether it’s just purely a holiday home.
Kevin: So the final word of advice, Andrew, if someone is on holidays and they get this bright idea. What’s the best advice you can give them? Go away and think about it?
Andrew Mirams: Absolutely and have a really clear plan as to why you’re buying it. I mean, I think that’s the biggest thing. The ‘why’ tends to be the real key as to why people would do it, is those who can afford to hold it and just have it without and there’s others who will want a return from it. If you’re investing for a return, do your research, do your homework, understand your costs and also what sort of tenancies and rentals you’re going to get from the property.
Kevin: Spoken like a true financial wizard, which is what we expect of you, Andrew, all the time. Thanks for your time.
Andrew Mirams: Thank you Kevin.
Cate Barkos
Kevin: Have you ever heard of ‘off-market transactions?’ You’ll probably get a bit of a hint just from the name but let’s find out a little bit more about it and how it can impact you, probably more importantly. Cate Bakos who is a buyers agent from Empower Wealth joins me. Cate, nice to have you on the show again. How are you?
Cate Barkos: I’m well thanks Kevin. Thanks for having me again.
Kevin: Good. Tell me about off-market transactions, what are they?
Cate Barkos: Well, there are two kinds of off-market transactions. There is what I call pre-markets, which is effectively when the vendor is planning to take the property to market and I might get an opportunity to go through the property before it hits the internet or maybe even before the photographer has seen through. Then there’s the genuine off-market which is when someone doesn’t really want to take the property to a public sale. They might not want to have a board up the front and they might not want to have the property advertised on the internet at all, but they are a genuine seller.
Kevin: Is there an opportunity there for you to maybe source property that will never hit the market; in other words, no agent would be involved?
Cate Barkos: Look, rarely and I do work quite a lot with selling agents. Occasionally I will have someone approach me or I might have a situation where neighbors have been talking and the word has got out that someone is an interested seller. I can then do what is called ‘putting the deal together’ but typically I’ll do work with listing agents and often they will give me a phone call and let me know that there is a keen seller there and they might have a property that suits my client’s brief.
Kevin: I guess there’s a great message there for people who want to buy, too and that is actually fostering a good relationship with those listing agents because they are the first ones to find out those properties coming on the market, Cate?
Cate Barkos: Absolutely. I had a recent example where a listing agent that I know well had a property for sale and she had a buyer come though who fell in love with the property but said that she was not in a position to bid because she hadn’t sold her own property. Some purchasers are particularly nervous about committing to a sale before they have sold their own and when this agent probed a little bit and found out more about the buyers house, she felt that it might have been suited to one of my briefs and gave me a call. I went through the property that afternoon and we had a handshake agreement by Monday and we had contracts prepared by Tuesday, so it can happen.
Kevin: Okay, just on another point though, most sellers when they come to list their property, their expectation is a little bit higher than sometimes what the market will pay. Does that necessarily mean that you’re going to pay a little bit too much for the property?
Cate Barkos: That can be a problem and obviously I won’t take the deal if I’m paying too much but it can go the other way as well. In a moving market the seller may not be aware of how much their property is worth and if you combine that with the fact that they are usually in a position where they have to sell or they really want to sell and also combine it with the fact that they’re not paying for marketing and advertising, they might be prepared to discount the property substantially just to have a quiet sale and a completion date.
Kevin: So how does a buyer look for these off-market transaction opportunities, Cate?
Cate Barkos: It’s tough when you’re a regular buyer. I obviously get a bit of special treatment from the agents because of the volume of property that I buy. One really good tip for a buyer when they are looking for these opportunities is to be nice to the agents and to have a chat to them about what they’re specifically looking for because sometimes when the agent gets a really good insight in to exactly what the buyer’s needs are, they can suggest these types of properties but only if they know the buyer is ready to move and not wasting their time.
Kevin: Yeah another way of course, is to work with a buyer’s agent, who, like you’ve indicated, is probably more likely to get an advance warning of an upcoming listing.
Cate Barkos: Absolutely. I think that is probably the most straight forward way to source good off-markets and anyone going down that path should be quizzing their buyer’s agent about what sorts of off-market opportunities they get and where they commonly work and to see some examples of off-markets as well.
Kevin: Always great advice, Cate. Thank you very much. Cate Barkos is from Empower Wealth. That is empowerwealth.com.au. Thanks for your time Cate.
Cate Barkos: Thanks a lot Kevin.
Jacque Parker
Kevin: No doubt as superannuation funds grow and investors become more interested in what they can do with their superannuation funds, property comes up. There is a recommendation that’s come forward that investors get independent second opinions when investing their super mark savings into real estate. The warning, I guess, or the recommendation comes from one of the industry bodies, Australia’s leading body that represents professional buyer’s agents. The President of that organization, which is called REBAA, R-E-B-A-A, is Jacque Parker; also has her own buyer’s agency called House Search Australia based in Sydney.
Jacque thank you for joining us on the show. I wonder if you could just tell me firstly why you feel the need to make this recommendation.
Jacque: Hi Kevin. Thank you for the opportunity of talking with you.
First of all I think it’s really important to point out that buying through self-managed superfunds seems to be on the increase so that’s why we put out this release about it. I think that purchasers of real estate have enough going on when they look for a purchase besides having to worry about everyone providing advice to them. At the end of the day they want to make sure they’re making a totally impartial decision when it comes to purchasing real estate.
The trouble with a lot of the financial advice industry is that it is not regulated as strongly as it could be and there are a lot of financial planners, and brokers, and other so called advisors receiving commissions on properties that they are recommending to purchasers. As buyer’s agents it’s our job to search, locate and negotiate entirely on the buyers behalf for a fee and thereby pay a fee for us to do and provide that service for them, whereas we fund the superfund recommendations for purchasers. They basically are not paying a fee as such but the person who is recommending that particular property to them is receiving a commission from the [inaudible 02:08].
Kevin: I understand reading some information on this that those advisors can actually be achieving up to 3 times the standard commission payments. Do they have to declare those payments?
Jacque: Absolutely they have to declare those payments. Under Section 47 of The Property Stock and Business Agent Act, real estate agents have to declare any payment. A commission of up to 3 times the normal amount … and I believe in a state like Queensland the commissions of selling agents is around the 2 ½% … For advisers to be asking for up to 7 ½- 8 % is simply ludicrous. They obviously represent the clear conflict of interest when they’re recommending such property to their clients.
Kevin: You can almost bet too that those fees are actually added on to the purchase price as well.
Jacque: Absolutely. It makes sense simply from a, I suppose, a common sense point of view that if you’re paying $650,000 for an investment property, for example when the developer is paying out a 3 to 8% fee to the advisor than obviously that makes up anywhere between $20,000 to $50,000 of that purchase price which of course it’s included in that price.
Kevin: Of course you wouldn’t want to discourage anyone from doing this from putting property into their superfund. I know it’s a very good way to invest, but how can investors make sure they’re dealing with people who aren’t actually doing what they’re saying?
Jacque: Even if you’re aware of commission that it’s received and it is disclosed. I think you need to be aware that it can represent a conflict of interest because the advisor is saying to you, okay we believe that this property is a good investment for you, but asking this if you’re engaging their services to provide advice even if they are disclosing this fee to you be aware that they are recommending this property from a number of reasons and one of them is because they are receiving a commission payment, a [crosstalk 04:08].
Kevin: I guess the give-away is anyone who’s operating one of those one stop shops where we’ll do everything for you, we’ll find the property, we’ll help you fund it as well.
Jacque: Absolutely, absolutely. You also got to be careful with buyers to say to them, what else is out there for sale that compares directly to this property and realize that the recommendation that they’re receiving not only can represent a clear conflict of interest if the advisor is receiving a commission, but they’re basically acting the same as the seller’s agent.
Kevin: Is there any move by any of the governments to start to regulate some of this behavior?
Jacque: It’s a very mishmash area. There’s a lot of advisors out there, there’s a lot of agents out there, there’s a lot of brokers out there that are receiving commissions. It is a very difficult industry. At the moment, I think, the government is swamped. I think that it will be an ongoing problem. I think that at the end of the day consumers have to conduct more research and ultimately look for a credited people and ask the hard questions like, “Who is paying you? Why are you recommending this particular investment? What else is out there for me?” Let’s just remove too that when it comes to investments nothing is free, someone is being paid.
I think at the end of the day the buyer is the one person to make that choice and understands that if they are paying someone to work on their behalf whether or not it be a buyer’s agent or a selling agent to be very clear that who is looking after their best interest.
Kevin: Very good advice Jacque. Thank you very much for joining us; Jacque Parker who is the President of the Real Estate Buyers’ Agents Association of Australia, REBAA. Jacque, thank you so much for your time.
Jacque: My pleasure Kevin.
Michael Yardney
Kevin: No doubt as the markets continue to improve and more shows like ours, I guess, and promoting the fact that you should get into property investment, more people are doing just that, they’re becoming property investors. But how do you go about succeeding? Where do you start and what are some of the questions you need to ask? We’re going to detail some of those very important questions for you in this segment with Michael Yardney. Michael, thank you for your time.
Michael: My pleasure, Kevin.
Kevin: There are some key questions that need to be asked before someone launches into a property investment portfolio, or property investment career. What are they, Michael?
Michael: Kevin, I think you should start with the big picture. The first question I would be asking myself is what do I want to achieve? Is it money, is it wealth, is it financial freedom? Maybe it’s all of those together. Remember, Kevin, bricks and mortar isn’t really the end goal. It’s just the vehicle to get there. So, first of all, identify what your goal is, then formulate a plan to help you get there in the time frame that’s going to work for you. Because if you don’t have a plan, it’s going to be so easy to get distracted, Kevin, by the next hot spot, all those invitations we get in our inbox every day.
Kevin: That probably leads me to the next point, doesn’t it, and that is about having a strategy. I know you well enough to know that that is one of the key or the cornerstones of what you do.
Michael: Sure. Thank you, Kevin. So I know my goal, what’s my strategy? We know that there are a number of different strategies and you’ll read about some people would suggest cash flow-positive properties, others suggest capital growth. My strategy that’s worked for me over the years is what I call a four-strength and strategic approach. I look for buying unoccupied-type properties, ones that will be in strong demand by a wide range of owner occupies, but buying below intrinsic value. I like buying in areas that are going to have long strong capital growth, related to the demographics of the people who are going to live there.
The third strength of my approach, Kevin, is I look for a property with a twist, something a bit special, a bit unique, a bit different about it. The fourth strength is I actually like buying a property where I can add some value, manufacture some capital growth through renovations or development so that if one of those strengths isn’t working for a period of time, the others will take over.
Kevin: So once the strategy is in place, what’s the next question?
Michael: I think the question is what sort of property are you going to buy? What type of property? You need to own the sort of property that’s going to be in strong demand and in my mind today, with more people trading backyards for balconies, most investors will do well by buying medium-density properties, apartments, townhouses, those sort of things.
Kevin: What about old or new, is that a consideration?
Michael: Definitely. That’s another question one should ask yourself. More often than not, new pr off the plan properties are in largish complexes where, in today’s market, you’re paying a premium to the developer and giving away the first couple of years of capital growth. While I understand why some people like them because the concept is that you’re going to have better depreciation and they’re new and they’re not going to need much maintenance for a while, my preferred strategy is to buy an older one and tidy it up a bit to manufacture some capital growth and actually not pay for my depreciation. I’ll actually be manufacturing it myself.
Kevin: What are some of the other considerations, Michael?
Michael: Another question you should ask yourself is where should I buy? The logical thing for many people is to buy in their backyard areas where they know, where they live, where they want to holiday, where they want to retire. That’s not an investment decision. That’s how you buy your home. I think you should open yourself up when you decide where am I going to buy to those areas that are going to outperform leverages by having strong capital growth, Kevin.
Another question I’ll ask you is when should I buy? Is it a good time now? A lot of people like to time the market and by timing it, they often get it wrong. I found many [inaudible 03:44] successes I made is actually by looking when others are not as keen so buying counter cyclically, not when everybody else is excited. I’m not suggesting that you wait ’til the cycle is over. The right time for most investors, Kevin, is when they’ve got the money, when they’re ready to do it, you just buy it. Because when you look back in 10 years’ time, boy, you’re going to be happy you’ve made the right decision.
Kevin: And then what you can afford as well, too, I suppose.
Michael: That’s another one. You’re right. You’ve got to work out what your budget is beforehand and that will also determine where you buy, Kevin. Why [inaudible 04:12] because if your budget is $500,000, you’re not going to buy in the upper-range suburbs, but you can still buy a great property in good locations, not by buying a front and backyard. Those questions of where, when and what are important.
Another one is, in fact, in what entity am I going to own it? That’s why before I start off even be speaking to your accountant about should you buy it in your own name, maybe in a family trust. For some people they’re buying it for their super funds so it’s important to do before you go ahead. The next step is, do that before you go and get finance because you’re going to get finance in the right entity. These are the things you do upfront, Kevin.
Kevin: A lot of these questions, Michael, are going to be very difficult for people to answer on their own. You mentioned earlier about a team. Who should be on that team?
Michael: It’s important to ask people. If you’re the smartest person in your team you’re in trouble so I really suggest you should have an accountant. Not a financial planner necessarily, because a lot of financial planners are interested in selling insurance and superannuation funds, but a qualified accountant. A smart solicitor, a proficient finance broker, and I think an independent property strategist. Not somebody who sells you property, but who can give you good advice. Kevin, one of the things that changed my life a lot was when I got a mentor or a group of mentors. I still have business coaches to help me so I believe you should get a mentor who can inspire you, who can question you, who can challenge you as well.
Kevin: Michael, I’ve seen a lot of investors come unstuck by asking the wrong people the right advice and by that, I’m talking about family and friends.
Michael: Kevin, one of the things I always ask at my seminar is, ‘Hands up anyone who’s got multimillionaire parents.’ Most of the time, there’s hardly anybody, but occasionally there’s one person in the room. Now you can imagine the conversation around their kitchen tables would be very different to the conversations around my kitchen table when I grew up and yours where we had working class parents. In fact, you’ve got to know who you’re getting advice from and while advice from your friends and family is usually very well-meaning, they aren’t the right people to ask about this. I’d actually be prepared to pay for advice because learning it yourself is a much, much more expensive way of doing it.
Kevin: Some great lessons in there, Michael. I thank you for taking the time to spend with us in the show. Thank you very much, Michael Yardney from Metropole Property Strategists.
Michael: My pleasure, Kevin.
Simon Henry
Kevin: In the past few years Chinese buyers have started to make their presence felt on the global property market, snapping up everything from luxurious trophy homes and vineyards to some of the most modern units and apartments, and other investment opportunities. For many Chinese, global property investment is an emerging opportunity which until recently was out of reach.
There’s a website that was developed, specifically, to help facilitate the purchase of these overseas properties on behalf of Chinese buyers. It’s called Juwai, and I’m talking now to the co-founder and co-CEO of that website, Simon Henry.
Simon, thank you for your time.
Simon: Thank you for having me.
Kevin: We’re talking to you … of course, you’re in Hong Kong. Is that the basis … is that where your company in situated?
Simon: Yeah, our head office is in Hong Kong. We’ve got about 35 of our staff here, and then we’ve got an operation center up in Shanghai, where we’ve got another about 45 team members up there.
Kevin: Tell me, how did the site come about? What are your origins? How did you become involved in it?
Simon: My co-founder, Andrew Keller, and myself were living in southern China for probably the last five or six years. I was running a digital media agency in Macao, reaching high network Chinese to lure them to come to Macao, and Andrew was working for [Newzealandersrealestate.com 01:14], before he came and set up squarefoot.com.hk. Andrew saw back in 2010, a lot of mainland Chinese coming to Hong Kong and buying a lot of property and he asked the question, “What happens when they look further afield than Hong Kong?” There was no site or service inside China which actually helped facilitate this and so we started doing a bit of business planning and Andrew quit his job and took 12 months to do a lot of market research on the consumer and the customer, the agents and the brokers overseas, and we launched juwai.com in November 2011.
Kevin: One of the complexities in dealing with anyone from another culture is how those cultures work, particularly when it comes down to negotiations. Have you found that there’s a need…that the Chinese buyers are more comfortable dealing with people who do fully understand their culture?
Simon: Part of the service which we offer, when we first launched the site, we were definitely looking at, well how do we expose international property to the Chinese audience and what we very quickly found is that we had a second emerging market and that was actually educating and training agents and brokers from around the world on working with Chinese customers. It’s a very very different experience.
The Chinese consumers are very high touch consumer and by that I mean they …its not like a domestic real estate park where you market a property and the lead goes though from the buyer to an agent. The Chinese will typically telephone rather than email…thats their preferred method of contact and they’ll ask a lot of questions about property overseas which are unrelated to property such as macro-environment, what happens with tourism, how do I get there, what’s the visa policies and what’s the education like, what’s the lifestyle like.
So a lot of what we do is educating the mainland Chinese consumer about various property markets around the world and then on the flip side when we generate the leads for one of our agents or partners, the first question comes back is, “Oh help, what do I do next?” So we work with our agents and partners in teaching them a little bit about Chinese culture, how the Chinese buyer can go hot and cold very very quickly and how that the buying process for Chinese consumer is a much longer one than for a domestic buyer.
Kevin: I’m talking to Simon Henry. He is the co-founder and co-CEO of Juwai.com. Can you give us a feel, Simon, for the amount of property that you are dealing with, related to Australia, if you could?
Simon: Yeah. I’ll give you the macro-first, if I can. In the last 6 months of last year we generated leads for our agents and brokers in little over 3 billion US dollars. Practically, in Australia last year, our sales to mainland Chinese were 5.2 billion US dollars for the year.
Kevin: Are you saying that trend…is that growing?
Simon: Dramatically. When we started back in 2011, the impact of the Chinese consumer on international property was around 25 billion US dollars. Last year it capped out at 52 billion US dollars and this is only for residential property. So you are seeing a 50 to 60 percent, year on year increase.
Kevin: What types of properties are Chinese buyers looking at or are interested in, in Australia?
Simon: The average price that the Chinese consumer is paying in Australia is around 425,00 Australian dollars.
Kevin: And the type of property? Is it a house, a unit or is that not a concern?
Simon: No the vast majority is actually units. We got 2 demographics which we work with. The first Juwai is the Chinese language website. We reach Chinese no matter where they are in the world. 80% of our consumers or property buyers come from mainland china but 20% come from audiences around the world. We have Chinese using Juwai in Sydney to find Sydney property. So we do have the 2 types of consumers. The domestic Chinese consumer who can buy a second-hand houses as well as apartment and we see them generally gravitating more towards the second-hand house properties. For the international buyers, they buy what they know. What they know from China is apartment living.
Kevin: Tell me if someone’s got a property in Australia that they want to have marketed on their site, is that possible and how do they go about it?
Simon: Its very simple. We set Juwai out to be a site which is very, very easy to use. So we have an English language portal which is list.juwai.com. Just go in there, read up about us. You can click to join, sign up and start marketing your property straight away. We have also got our ales support and our account management team in Hong Kong and China who can help work through any questions which people may have.
Kevin: So can a property owner in Australia list their own property or do they need to go through an agent?
Simon: No, they can list their own property. But do we do actually get a lot of calls from consumers direct and saying, “Look I’d like to market my property on Juwai, can I do that?” We generally will refer them to an agent in Australia as our first point of preference because working with an international buyer is difficult and we’re actually very much an agent first website and so we’ve giving a lot of referrals and leads from Australian property sellers to real estate agents in Australia who want to list their properties.
Kevin: And agents can do the same thing? Just make contact with you and set up some type of arrangement?
Simon: Correct.
Kevin: Simon, how would you describe the motivation of a Chinese buyer?
Simon: In the last 3 or 4 years we have actually seen a pattern emerge in terms of what the Chinese consumers’ motivation is. Generally there’s 4. The number 1 is investment. It’s become very difficult to buy a 2nd or 3rd property in mainland China because of the cooling measures which the government has put in place and it’s also making international property more open to them. So investments are number 1. More than 50% of our consumers are looking for investment properties.
The 2nd biggest segment is education. A lot of the Chinese families will spend 70% of their disposable income each year on their children’s education and typically that will also include an education overseas for which they will buy a property for their kid to live in rather than rent. The 3rd group is the trophy homes. Around 5% of the people are looking for those trophy homes around the world. And the last group is people looking at immigration. People looking to currently move from where they are currently living to Australia.
Kevin: Simon it’s been great talking to you. Unfortunately, we are out of time. If you want to get some more information about Juwai, the spelling of it is juwai.com. My guest has been Simon Henry co-founder and co-CEO. Simon, thanks for your time.
Simon: Thank you very much for your time, Kevin.