All – my wife and I have been discussing the idea of property investment to reduce our tax bill and also to pay down our own residential mortgage. We’ve been engaging a rep from Pillar Financial Group, who has detailed an off the plan 4 bed off the plan property for us in Cranbourne. we’ve signed the contract and paid $1000 – however thinking about it not so sure it’s the wisest of choices and would like my own solicitor to review the contract.
Is there any way to extend the cooling off period? I assume that if we do pull out then we lose the $1K – anyway to prevent that?
Tread carefully.
OTP has plenty of cons. If you do some research online you’ll read all about the good/bad side of OTP investing.
Also – it’s not a good idea to invest if the primary motivator is to reduce your tax bill. It’s a flawed way of thinking – you give away $1 to get back between 30 to 50 cents.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Totally agree with Jamie and…
would like my own solicitor to review the contract.
Is there any way to extend the cooling off period? I assume that if we do pull out then we lose the $1K – anyway to prevent that?I believe it’s prudent to get your solicitor to review the contract ASAP and ideally before you sign (too late for this one, I know, but moving forward).
Not a lawyer so can’t say for sure but I would presume that unless there is a clause that allows you to extend the cooling off, then you can’t. However, you can tell the vendor that you want to consult your solicitor and you’re asking to extend the cooling off. If they feel that if they don’t agree, they get the $1K but lose the sale, they might agree :-)
Hope this helps?
Cheers,
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
thanks all. We’ve requested an extension to the cooling off but it’s not long enough for our solicitor to review. I’m trying to see now if they’ll refund the 1k since it was nt made clear that this was non-refundable. If not – write this one off to experience.
with OTP investing what guarantee do you have that the developer won’t go bust. Irrespective of how big or how small.
Huge risk unless you think it reasonable to lose the insurance premium for a Deposit Bond.Hydramax
I don’t think there is a 100% guarantee to that @hydramax. You can check the reputation of the developer and ask around as well. Check their history and such. Another con to OTP purchase, and there’s so much more. So be careful with OTP purchases.
Jerry | Mortgage Station
http://mortgagestation.com.au/
Email Me | Phone MeFinance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne
Hi Blagger
Could you please share with us the reasons given as to why Cranbourne was suggested to you for an OTP purchase and how does this purchase fit with your objective of reducing your tax bill.
To reduce a tax bill, if that is the only goal in property investing, one should be looking at a negative greared property.
Thanks
Patrick Ow
http://howtobuyrealestate.com.au
Email MeAs Jamie said the negative gearing concept is flawed. You lose money to save tax compared to paying tax on profit. I know which one I would prefer to utilise. OTP as others have stated is quite risky as well. Good luck and I hope you get your deposit back if you decide to pull out.
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This reply was modified 8 years, 1 month ago by
Tony Fleming.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
A couple red flags:
OTP – Buying OTP is fraught with danger. In general there are always good and bad properties, but this type of property sale leaves people locked into long term contracts which may result in poor valuation and subpar stock. As they’re generally apartments/units/townhouses it can mean you buy into a property which has weak appreciation through ongoing new supply coming into the market and tempering any chance of growth.
Chasing tax deductions – investing in property with the primary focus on tax deductions is a flawed way of growing your wealth, as it’s just throwing good money after bad. Don’t try lose money to get part of it back, instead invest in good quality property which will provide you with the return to grow your assets and wealth.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
You dont need to buy a new property to get negative gearing benefits. Well located properties in Capital cities. Close to City and near good schools are better place to buy. You can negatively gear them and reap the tax benefits.
Hari Yellina
Email MeKeep Investing - Grow while Resting.
so I pulled the pin on this within the 3 day cooling off period. Cranbourne was recommended to us by the rep at Pillar Financial Group as a growth suburb but having done my own research into the property price points it was evident that we were paying a premium at any capital growth would be non-existent.
I’ve requested the return of the 1,000 dollars – on going trough the recordings I made of the meeting it was nt clearly mentioned that the $1000 would be non-refundable. If not forthcoming ASIC will be receiving copies.
good thing you asked the question here. :)
Jerry | Mortgage Station
http://mortgagestation.com.au/
Email Me | Phone MeFinance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne
so I pulled the pin on this within the 3 day cooling off period. Cranbourne was recommended to us by the rep at Pillar Financial Group as a growth suburb but having done my own research into the property price points it was evident that we were paying a premium at any capital growth would be non-existent.
I’ve requested the return of the 1,000 dollars – on going trough the recordings I made of the meeting it was nt clearly mentioned that the $1000 would be non-refundable. If not forthcoming ASIC will be receiving copies.Did you record their conversations without them knowing? This could be a criminal offence.
What does the contract say about the refund of the $1000. It probably don’t matter whether they said it was refundable or not.
Department of Fair trading would be the department to complain to about this as they regulate agents and not ASIC – were you actually dealing with an agent?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
We just got ourselves in the same situation? Any advice?
A friend of mine was in a similar situation before and she wasn’t able to get the deposit back. They just told her that it is non refundable and that it was mentioned while signing the contract… Be very careful of OTP’s as they have got no guarantee :(
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This reply was modified 8 years, 1 month ago by
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