Forum Replies Created
The Money Magnet is from Brendan Nichols
I have witnessed Brendan Nichols speaking at the Melbourne Property Investor Meetings and was impressed with what he was presenting.
Your problem is that you are not allowed to advertise for joint ventures because of ASIC. You are only allowed to approach 5 people a year I think was the rule unless you submit a propectus that is approved by ASIC.
I have thought about this problem myself as I have limited income and realise I will have trouble affording property on my own.
I have thought up this possible method.
I would attend property investor meetings and get to know other investors.
If you are in Melbourne see https://www.propertyinvesting.com/forums/property-investing/general-property/4324824Once upon a time in lala-cowboyland, a man wanted to make a lot of money for the least amount of physical labor and risk. Logically, he insured the building with landlords insurance instead of taking a massive risk with one single investment.
As this investment had his life savings in it he got a very good property manager to manage and reference check his tenants and do regular property checks.<fast forward>
After 6 months, he comes back to flip the house ( as one does ). He finds his rooftiles have been stolen , his house demolished and vandalized and most of his doors and windows 'recycled' into other houses. The house is a wreck and barely stands.
Then he remembers he had Landlords insurance. See http://www.yourinsurance.com.au/landlord_insurance.asp
which was a tax deductible expense and so he rang his insurance company and told them of his plight and made a claim for his unexpected loss.
Unfortunately in my case when the tenant abandoned the property the damage to my house was more from being worn out and I had to spend $20,000 to bring my house up to a presentable standard to rent.
Thought I would add a few more.
You do not notice train line running behind the house before you purchased.
You do not notice that a New freeway is being built on your land.
Mining company decides to mine your property.
You get bad tenants that trash house.
Termites.
Bed bug infestation.
Mold infestation.
Prior owner did an illegal extension not council approved.
Gum Trees that tower over house cost money to be cut down and council refuses to let you cut them down.
Ground moves and foundation of house collapses (saw on Current Affair)
Fence needs fixing and neighbour refuses to pay for new fence ( My current headache)
House was built on previous Garbage tip . Foundations collapse.
House in Mining town and Ground opens up due to old mine hole.(saw on Current Affair)
House has poisioned ground due to previous mining.
Bikers or neighbours from hell live next door.
House in Footscray Victoria and you didn't know that a 100 trucks go past the door every day.
House in mining town and mine closes down.
Property is in small town and only bank closes down.
You want to live in your house and tenant refuses to leave house (saw on A current affair)Government taxes – Stamp Duty
– GST on new buildings
– Land Tax
– Capital Gains TaxHaving negative gearing is costing you $30,000 at the moment but just imagine if the interest rate has say two .25% increases to .5%. how do you find an extra $7000 p/a to cover the increased interest rate charge. So as an example on a marginal tax rate of say 40% you pay out 30,000 to get a tax rebate of $12,000 so you are losing $18,000 a year.
What I am trying to have my goal to be is to have a few positive geared properties to offset a negative one so the total income may be zero rather than negative $30,000.To get a hold on your finances you have to stop spending money on assets that go down in value over time.
Most people want the new Plasma Television or the New Car worth $32,000 that will eventually be worth $500 and usually owe $160 for every $100 they earn in income. This level of debt means that if a person loses their job they will go broke in less than 2 weeks due to their debt.
Do not forget to factor in possible stamp duty and mortgage insurance costs
Neil,
Another way of going which is what I have sort of done is you buy a lower priced house say in Cranbourne around the $240,000 mark and travel into work on the train. The loan repayment would be approx $610 a week and it costs about say $100 a week for the train. so you are $290 a week better off. If you put the extra $290 onto the loan repayment you will pay off the house in may 2019 with total interest at $194,000. Where as if you pay $610 a week interest would be $336,000 and it would be paid off at may 2029. This is based on 12% interest rate rather than 9% as interest rate at a possible worse case scenario.The main thing is to get your foot into the property market as property values go up while you are trying to save the money and rents are going up where as the mortgage payments stay the same if you calculate the worst possible scenario of what you can afford . Like say a 16% interest rate the repayment is $770 a week. Or say a 18% interest rate the repayment is $855 a week. At 20 % interest rate a $240,000 loan is still cheaper than $1000 a week.
They come into being useful when you do not have the time to go checking properties
Disclaimer; never used one and possibly never will.
How about this idea .
Short advert .
For further details see www.{your website}.com.auPlace a web site with all the details. Use a service like http://www.freeweb.com
Capital Gains Tax is one major drawback . Sell the property down the track and you are liable for CGT. You may need do do it through a real estate agent property manger so that the transaction of rent paid is at an arms length and charged at market rent prices.
It is such a shame you have to pay to join the insiders group when a game like ms halo does the multi playing on other peoples servers and ms just lists the servers available for free.
Some financial advisers may get money / commission from a small percentage of what you invest over twenty plus years so the $3000 is upfront but are there any on going commission charges on top of this charge for the products you invest in ?
I do not know if on going commissions work out dearer than $3000 up front .Don't take financial advice from a mortgage broker unless the mortgage broker is licensed to give financial advice under the FSRA act 2004 as regulated by ASIC.
http://www.fido.gov.au/FIDO/fido.nsf/byHeadline/CA08-06%20Are%20you%20getting%20the%20right%20advice%3F?opendocument
"keep living in our PPOR, keep the IP and utilise as much equity as possible to reduce costs"
option A will incur capital gains tax and when you sell an IP you have legal fees, selling commission to the real estate agent and stamp duty to buy the next IP.option B
To utilise as much equity as possible means you either have to borrow money from the first PPOR Loan as a line of credit loan to use as a deposit (interest charges will be incurred and this must be seperate from PPOR for tax reasons which doesn't reduce the costs)
or you are referring to using the PPOR as security for the second loan and lowering the LVR to avoid or reduce the mortgage insurance on the IP loan. (if you can't pay the 2nd loan you lose PPOR security as well)Another thing to think about is what will the rent be after 6 months ?
Option C
With the lowest vacancy rate in more than 20 years for rental properties you will experience a long and difficult hunt to find a rental property and rents are quite high due to this demand. They open rental properties for inspection and at least 20 people come hoping to secure the rental property in inner Melbourne.What amount of risk are you prepared to tolerate as you could be risking over committing with a third loan and run out of cash flow from an unexpected interest rate increase or loss of income or tenant income?
I can't give you specific financial advice and am hoping the above questions will reveal some of the risks involved and how much risk you can tolerate.
A good financial planner would need to be licenced and know your financial situation and future plans in your life to be able to give you specific financial advice.
Mortgage Brokers makes their commission from you taking out a loan.
It really will be a wait and see approach. If the RBA increases the interest rate they have to wait to see if the increase has the effect of slowing demand in the economy. this is known as a lag effect in economic terms.
"Should demand not slow as expected or should expectations of high ongoing inflation begin to affect wage and price setting, that outlook would need to be reviewed." RBA Media Statement MAy 2008
http://www.rba.gov.au/MediaReleases/2008/mr_08_07.htmlWhat they are saying is that if inflation pushes up prices of goods and services then wage earners demand wage increases . If wages increase then inflation increases which means interest rates increase.
City bank are an international bank also that would be worth investigating.
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I do not use the email address for email just for use with MSN messenger.
Victoria.
Currently waiting for my two daughters to go to school so I can work again and put wage into investment as currently in a holding pattern with investing.
Sorry for my lack of understanding what is a heat pump and what purpose or task does it perform?
If it is for heating the air in the unit then an inverter air conditioner may be a possible way to heat the air in a reverse cycle. It is an efficient form of heating when compared with other forms of heating and can be used as a cooler as well.
Scamp history repeats itself over and over again. Humans do not learn from history . I have studied the great Tulip crash 1634-1637 Holland and lived during the recession we had to have.
http://www.investopedia.com/features/crashes/crashes2.asp
http://www.holland.nl/uk/holland/sights/tulips-history.html
Depends on what other business is in the town. If you have a local IGA in town they might not be happy with the expected loss of business but on the other hand more jobs for locals.
