Hi Mel,

Have run a few small businesses over the years i wouldn't see the decision small business veruses property investment but small business veruses working for someone else.  With any small business there will be hours that you will need to invest into it to make it sucessful. 

If you buy the gym how many hours a week will you need to work?  Alot of  gyms will be open for about 90 hours a week, during the week the open early and close late to allow people to do work outs before work and after work.  The less hours you work the higher the wages bill.  The other thing to consider is no staff member will run YOUR business to the same level that you would do yourself.

If you need to work 60 hours a week, and make $35k a year…doesn't really make for a good investment.  The other thing with running a small business is income isn't guaranteed.  Many people have started cancelling gym memberships due to increasing fuel prices and intrest rates.  This hurts when your costs of living increase but your income decreases as other people cut back on "luxuries".

If you have an interest in property investing and are relying on income from a small business to fund loans it can be more dificult to get finance.  Banks will quite often look at a couple of years of financials, one bad year in business can affect borrowing power for the next couple of years.

You may be better off staying in paid employment and then investing in property

now that is the best solution

Richard,

Its funny how you receive the offensive emails, yet you propbably have more money available to invest in property then many of the people targeted by the telemarketers.  Maybe they need to review their target audience

if you have 10 x 1c shares if you sell 1 share you sell 10% of the company.  What you wont be able to do is sell 2.5 shares if you wish to sell a 25% share.

Yep every industry has them but unfortunately I think this industry attracks more due to the large sums of money that are dealt with.  As much as I would love to see payday lending cleaned up, the advantage for MB is whilst there is less regulation in pay day lending hopefully more shonky characters are attracted to that area and leave decent MB to clean up our part of the industry.  I think alot of people coming into this industry dont realise just how much work goes into learning about so many different products and how much reading is required to keep up to date with changes.  If you believe some companies you get paid thousands each day for typing some numbers into there "special" computer program and spend the rest of the day playing golf

Hi Tess & Megan,

I have recently I decided to become a broker.  My initial stop was lookin at the franchised guys (Refund Home Loans, Mortgage Choice, Smartline, etc)  These companys are charging $10-70k to get new brokers in.  Alot of new previous expirience and tellig the new comers the can make 6 figure incomes very easily without too much effort because you are using there name and systems.  Alot of people are getting into these and then struggling to make the level to live comfortably.  Although they are trained well in simple loan applications, as Richard mentions often the structuring loans when you have multiple properties is important, and many franchised brokers are unsure.

I then went to a smaller aggregator who introduced me to one of their brokers after meeting myself.  The aggregator knew the broker well and thought we would be well matched.  I now have a highly expirienced broker as my mentor who I work for.  I figured for myself this is a better way to go as I get one on one guidance and advice, he is more interested in my progress as it helps his business (if I make mistakes it hurts his business).

We both have the same views on customer service – its all about service.  In our earlier conversations we discussed simple things like honesty, doing what you promise, friendly, helpful, etc.  My background – I owned a pizza shop a few years ago and ran it for 8 years.  In the area I operated if you had no customer service skills you would have no business.  I had times I put alot of effort in, and lost money on some orders (where the customer was at fault) to keep the customer happy as I knew the importance of customer referrals.

I think alot of problems that they come into this industry wanting to make millions (and getting promised that as well).  They are driven by money and they're not a people's person – this industry is all about dealing with people.  Franchise's measure the quality on how many applications get approved, not if they are structured correctly.

There are some really good brokers out there, best way to find them is word of mouth and asking for referrals on here.  On finishing, there are some good franshised brokers who like the convienance of the franchised system.

Chris,

There was no negative comments for you choosing to invest in the property market, as many people in this forum believe it is one of the greatest areas to see an investment go well.  Alot of the initial comments were more related to the telemarketing of companies.  Recently there has been alot of advertising posts on this site from first time posters where they come more from salesman for the company then actual investors.

From your origninal post it appears that you have been dealing with them for about 3 weeks and not sure if you or anyone else you know had known of this company prior to the telemarketer ringing you.  Many people on this forum will suggest when looking for a mortgage broker asking people who are already investing to recommend a broker that they have used before.  The first few weeks of dealing with a new company that is trying to sell you something should always smelly rosey as they are still trying to sell something.  Yes they will make it look like they are doing the best thing for you but they fail to mention just how much they profit from the deal.  It may not be until after you hand over the deposit, finalise the deal, go to the accountant at end of the FY or buy a 2nd IP that some investors may start to notice the lack of customer service or that the investment doesn't suit or that the finance wasn't setup correctly.

Please don't take offence to the questions and comments made as most people on this forum want to help all other members benefit from investing in property.  But there are alot of people in the property industry more interested in filling their own pockets at other peoples expense. 

With a P&I with each additional payment the ratio of interest/prinicple changes.  In the first year the majority of the repayment is interest.  What you can do is each year recalculate the difference between in IO and P&I and increase the principle payment into the offset account (this amount would equal the reduction in interest you are currently paying due to the increase balance in the offset).

The method you used to calculate the figure of $1250 would achieve the desired effect of having $450K after 30years.  With the amount of interest you pay per month calculated at $3375, this would only be for the 1st months interest payment.  This figure would reduce each month as the offset account balance builds.  The problem with this is is you initial few years you will be paying alot more out of you pocket each month but in the long run you will save alot more interest payments

primary place of residence

Another option since you spend so much time away, and to still benefit from the FHOG and SD free purchase, is to buy a PPOR and lease a room or two out.  This way you get the financial benefits of a PPOR, your house wont be empty for 3 weeks/month – (hopefully if you find a trusted friend or gf they will take care of the place while you are away).  This will also provide some additionl income coming in.  With the income from leasing rooms out and your high wages you will be able to build up some equity quite fast.  Once you have that equity built up look at an IP.

If the 1st place you buy is an IP you will loose FHOG and SD benefits for any purchase of a PPOR later on.

If you purchase the 1st place as a PPOR and then convert to a IP you wont be able to benefit from the interest you pay on the loan as a tax deduction, unless you go through the expensive process of setting up trusts and then paying SD and transfer fees.

By buying a PPOR, building equity then purchasing an IP later this year or next year it will also give you some time to do further research on investment possibilities and follow the market for awhile to get a better feel for trends and opportunities