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September 15, 2013 - 7:27 am

Hi Joe

Welcome to the forums!

The first and most obvious question is, are you contemplating another IP purchase in your own names, or are you contemplating setting up a Self Managed Super Fund and using your superannuation money as deposit and buying costs on the IP?  I'm guessing you'd have sufficient funds in your super to fund a hefty deposit on at least two properties, and with the correct yield, they'd be paying for themselves, such that they'd be paid off by the time you're retired.  Hello tax-free rental income! 

5.15% is a bit on the low side for yield – certainly when you are no doubt wanting the properties to be debt-free or close to it by the time you hit retirement age.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
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VIC Buyers' Agents for investors, home buyers & SMSFs.

September 15, 2013 - 7:26 am

mizfitz wrote:

Thats exactly right JacM, some photos go back years! I'll just have to bite the bullet and go for a road trip!!

 

Possibly yep!

Always remember to keep the numbers of things in mind.  Don't spend more on a road trip (petrol, accommodation, loss of wages) than you could just staying at work earning your wages doing what you do best, and outsourcing the hunting.  I often come across clients who forget that very important equation and have been struggling for ages trying to understand why they are not moving forward.

Certainly when I started investing I ignored that particular fact and could've bought an extra property or two with the time and money I frittered away hunting about trying to get up to speed with things by myself

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
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VIC Buyers' Agents for investors, home buyers & SMSFs.

September 11, 2013 - 11:51 am

Hi Chrighto

Jamie has hit the nail on the head in pointing out that your personality and risk profile will play a part in determining what type of investing you are comfortable with.

Depending on what your income is like, then assuming you wanted to invest your $200k in property, it could put you into up to 8 properties.

As you say you are "starting again" you want to be relatively certain that you are choosing a stable and predictable path.  When you are purchasing property you'll gind that you will need to use a series of professionals along the way such as Brokers and Accountants.  Be certain that each person you allow to work with you is already wealthy or financially free via the vehicle of property investment… or well on the way.  After all, why would you follow the advice of someone who is not succeeding in improving their position via the path you are planning to tread.

ps, did you know you can use your superannuation to invest in property.  This might be something worth pondering as a portion of your investing plan.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 10, 2013 - 1:37 pm

Certainly tread with caution buying sight unseen.  I've seen plenty of properties whereby the pictures are a few years old.  For example, pictures taken immediately after a new property has been built, but has since been tenanted for a few years, perhaps the grass has died, perhaps the demographic in the street isn't as you'd hoped.  The power of a pair of eyes and an attentive nose is very important.  You cannot smell issues such as damp from the luxury of your sofa.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 9, 2013 - 12:47 pm

Superannuation money is already locked away anyhow.  Might as well put it to awesome good use.  Further, when you salary sacrifice income into super, you simulataneously reduce your taxable income, which in turn saves you tax.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 9, 2013 - 12:41 pm

Agree with Jamie.  Have your cake and eat it too.  Done correctly, an investment property can be funded with little or no money down.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 8, 2013 - 10:16 am

Hi again Kane

The order in which to do things will come down to serviceability which is best commented on by one of the brokers.

I'm wondering what's happening with your block of land in WA which is accruing mortgage interest but is not earning rent because there is no dwelling on it. I thing this is something to ponder.

As to the new versus old argument…

Unless you have a crystal ball you cannot know for certain which areas will rise in value.  The property is new so there is little you can do to force value-add.  With an older property, there are several things that can be done such as renovate or subdivide.in

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 8, 2013 - 4:41 am

Hi again Joe

It is always a very nice thing to keep a substantial cash buffer in an offset account.  This helps you save on mortgage interest but is also a supply of readily-available cash in the event of scenarios such as periods of unemployment.

This can be achieved by going for a higher LVR, thereby keeping funds in your control rather than handing them over to the bank in the form of large deposits.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 7, 2013 - 11:57 pm

ps have you considered using your superannuation to purchase investment property?

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 7, 2013 - 11:56 pm

Hi Kane

I am wondering what industry sector you work in, and as such whether it is likely that you'll have to up and move from Newcastle after a short period of time.  A lot of money is lost in the buying and selling process (Stamp Duty, Agent fees etc) so if there is the possibility that Newcastle is a short-term thing I would weigh this up carefully.  Potentially in that regard renting would be better.

Either way, it may actually be possible for you to do both (purchase a PPOR and also an IP).  Placing the bulk of your savings into the PPOR and acquiring an IP with a high lend (100% is possible).  Then of course there is the option of renting yourself and acquiring two IPs…. with the right kind of property it becomes possible to carry on buying.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 7, 2013 - 11:50 pm

Hi Tom, further to what Jamie said, keep in mind that if you will be opting to do broking part-time in addition to your current job for a while, you'll need to be aware you'll be using all your spare evenings and weekends either at your desk writing loans, or out visiting clients.  It would be a good idea to be very honest with yourself about how long you think you can dedicate to this lifestyle (having very little time for rest or social activities).  It would be a shame for you to put in a lot of hours and effort but only get half-way there before burning yourself out.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 7, 2013 - 11:47 pm

My vote would be for neither.  It's nice to avoid strata fees where possible and instead go with a clear title property elsewhere.  Naturally depending on the pricepoint you're shopping in, it may be unavoidable.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

September 6, 2013 - 10:17 am

Hi SirDangerMouse

First and foremost is important to be aware that it is not necessarily guaranteed that you'd be able to get finance for a demolish and rebuild venture.  It is important to look into this from the perspective of whether you would qualify for such a loan from a serviceability perspective, and whether a lender would happily finance it.  Perhaps they'd be unhappy lending you a big pile of money only to have you then demolish the only dwelling on the site.

Assuming you could finance it, then the option you should take is (and please try not to laugh too hard when you read this), is the one that makes you the most money via the path of least resistance.  Cut the numbers to understand the costs, timeframes, and likely profits of each option.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 29, 2013 - 12:43 pm

Lenders offering SMSF loans dictate a minimum yield on properties.  As such this is one of the essential parameters you will need to work within.  Another such parameter is that your SMSF needs to have some reserve cash "just in case".  

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 28, 2013 - 12:04 am

Sorry forgot to answer your question.  Richard Taylor (https://www.propertyinvesting.com/user/qlds007)  is a Financial Advisor and specializes in SMSF setups nationwide.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 27, 2013 - 11:57 pm

Hi floody

The most powerful part of purchasing property in super is the leverage (ie the ability to borrow money from the bank… which tenants will pay off).  No, it's not smart to pour all your funds into one property.  Better to split the pile of cash into 2.  Or purchase 1 now and another in a year when your fund has a wee bit more cash by means of your salary contributions.

May I ask if you have started setting up your SMSF as yet?  If not, definitely prudent to use a provider to set it up that has set loads of SMSFs up before for the purpose of investing in property.  You would be alarmed to hear how often we see SMSFs set up incorrectly that stumble when they try to get finance for their first property.  Errors in SMSF setups just end up costing you down the track.

Best Regards

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 27, 2013 - 5:14 am

Taking a step back, is there a reason why you're thinking of going down the trust route?  Or is it that you've heard about trusts and are trying to figure out if using them is appropriate for you?

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 25, 2013 - 12:06 am

Hi Elegy

Welcome!  Hope you find us helpful here on the forums.

I'm just going to suggest that you be sure in your own mind that you feel comfortable with a provider before you have them help you with your investing.  Don't just follow opinions of the others.  Understand the reasons why you believe the provider is best positioned to help you.

Which forums to read…

Help Needed

Value Adding

Creative Investing

General Property

Hope this helps!!

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 24, 2013 - 1:21 pm

You can listen to what has someone has to say and learn bits n pieces from it.  You can be matter of fact in your evaluation of whether or not that person's information is useful to you or not (and why) without needing to be paranoid.  It is a good thing to expose yourself to lots of people in your chosen field because the more you listen to, the higher the chance you will hear pieces of information that are useful and relevant to you.  And you might just come across a person whose service or knowledge you can leverage so that your investing moves much more quickly and strongly than it could under the steam of only your own knowledge. 

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.

August 24, 2013 - 4:24 am

Hi Rick

As opposed to saving for the next 12-18mths for a deposit, have you considered purchasing a property that pays for itself on 100% finance?  That would then enable you to direct your surplus salary income into your home loan.  Best of both worlds.

Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone Me

VIC Buyers' Agents for investors, home buyers & SMSFs.