Hi Neville,

Cannot comment specifically on IPS but there are some questions I picked up in an article I came across earlier this year + a few of my own that may help you in your decision making process.

Some thoughts for you to consider.
1. How long have IPS been in business?
2. How many investment properties does your ‘consultant’ own?
3. How long has your consultant been investing?
4. How does your ‘consultant’ earn their money?
5. What will they get out of each and every purchase?
6. What service do they offer?
7. How much does it cost to use each aspect of their operations?
8. Can you use your own mortgage lender? property manager? valuer? If not – why not (it is a free world)?
9. What sort of after sales support do you get?
10. Does their approach fit comfortably with you?
11. How much pressure is bought to bear?
12. Are all decisions made in IPS’s presence?
13. Are there rent guarantees? (Run away fast if there are!)
14. How does the price compare to similar properties on the open market?
15. ASIC/ Ministry of Fair TRading Issues?
16. Where have IPS’s past sales been? What were they? How much is the open market paying for them now? What are they rented for now?
17. What are similar properties (to the one being considered) renting for? Check with a couple of REA in the area?
18. What is the vacancy rate in the area like?
19. What infrastructure is planned for the area?
20. Are brochures high on ‘gloss’ and ‘glitz’ and low on facts?

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Dreamreal,

As to whether or not fixed or variable is the correct choice it really depends.

Fixed rates address the sleep at night factor and provide surety of payments over the fixed period. This is particularly useful if you are on a limited budget, your worry endlessly about cashflow and so on. The decision to fix generally relates to the need to know what my repayments are basis.

However be aware that in the long term banks usually win the fixed rate gamble and if you try to break out of your fixed loan before the period of fixing finishes you could well be up for significant break costs – dependig upon market rates and how far into the loan you are when you break.

Variable rates are generally lower, especially if you get a basic variable without frills and allow greater flexibility.

Ultimately the best choice for you depends upon your circumstances.

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Redwing,

Thanks for the ‘heads up’ – PS how long have you been teleporting yourself into the future given the seminar is still 4 weeks away. [exhappy]

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Marisa & Redwing,

Speaking of visitors Jamie McIntyre is at the Sheraton on the 5th – I’m off for a listen.

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Andrew,

The general consensus of the forum seems to be that the 11 sec properties are few and far between hence the reason many people are looking in NZ or buying in more remote areas.

Some more experienced people with good research networks and processes are still finding them in less remote areas.

But for certainly steer away from ‘remote’ areas – but bear in mind my definition of remote is based on a number of years working 100’s and in one case 1000’s of kms from the metro area.

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Daniela,

Congratulations and welcome to the community.

There are a couple of key points for you to consider when determining CGT liability.

Your home is exempt from CGT for the period that it remains your home and for a further 6 year (renewable) period provided you do not have more than one home at any one time apart from a 6 months period if you are trying to sell one property and living in another.

CGT is calculated by adding the gain (there is a 50% discount) if the property is owned for more than 12 months. This gain is added to your taxable income and levied under the same process that your income tax liability is determined.

Your CG basically determined by subtracting the purchase price + purchasing costs from the sale price less selling costs. Section 43 depreciation claims can also have an impact on your assessible gain.

I recommend a search of the ATO website at http://www.ato.gov.au and look for CGT. If you have difficulty locating it then do not hesitate to email me and I’ll return you a copy.

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Allen,

The best place for the money is determined by a number of factors which we are not aware of;

What investment timeframe are you looking?
Do you have any non-deductible debt?
If so – would $15K be best used there and release the equity?
Are there investments you are adverse too?

If you are looking short term and you have no non-deductible debt then something like an ING (or similar) account would be best.

If you have non-deductible debt either pay it off /down or set up an offset account depending upon the circumstances.

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi Steve,

Understand where you are coming from but (there is always a but) to pay $25K and then $5k for the next five properties even if they are self located.

Seems a ‘little’ over the top to me.

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi all,

It seems as if others are following suit.

http://www.theage.com.au/articles/2004/09/24/1095961857716.html

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.

Hi All,

Note disclaimer applies so you can choose ‘to believe it or not’ with my comments.

My experience with TIC is very different – the wife and I are considerably better placed from a financial position through the growth in vlaue of our properties but probably more importantly we now are more focussed in our aspirations and plans.

Coincidentally the finance advisor I first consulted four years ago about the value of property investment rang yesterday to see if he could do a ‘review’ for me – only cost $200.

I reminded him of our previous conversation and asked what would be my financial status if I had started investing with him at that time. He did some number crunching and gave me an answer. I then explained to him that he had previously told me that property investment was not a good idea and when I gave him my net worth position now (through property) the silence at the other end of the phone was deafening.

Notwithstanding Gatsby’s experience as that set of circumstances is not appropriate under any circumstances – there are a couple of matters that do need to be clarified.

There is no pressure to ‘sell aggressively’ in fact the opposite is the case and I quote from the agreement we sign; ‘you must not put pressure on your members to purchase’ and a little later it clearly stipulates we are ‘not salespeople’ – the constant message is that we, as support members, are first and foremost there to assist and guide people. I, for one (and I wouldn’t be alone either), would be out the door if this philosophy were ever to change.

I can reassure Gatsby and others that there are a number of steps involved in assisting people through to, and after, settlement that involves considerable action on a Support Members and Branch Managers part. Good systems are required to ensure the ~15 events take place in a timely manner and as an SM I am regularly on the phone and/or email to solicitors, brokers, researchers, property managers, strata managers etc either directly or indirectly to ensure timelines are met by all parties. Without these systems in place your capacity to work effectively for members is compromised and can lead to the scenario you were faced with.

To address Joe’s comments – positively geared is certainly not the investment belief of the Club so if that is what you are seeking I suggest looking elsewhere. Having said that in the not too distant past cashflow positive (with depreciation deductions) was achievable as recently as last year – things are a little more difficult at the moment because of the various positions currently before us in the interest rate, capital growth and rental return cycles.

As I said ‘believe it or not’

Derek
derekjones1@bigpond.com

Property Investment Support Available. Ongoing and never stopping. PM welcome.