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Most comments above are from brokers, read between the lines. Mortgage Broking is a great job and is financially rewarding. I was a school teacher and moved into the industry many years ago after the lowering of commissions etc. At the time I was also told all the negative reasons why I should not, and could not….I like yourself was well experienced with property investments and in fact had secured my financial future due to property investing. Given money was never to be an issue I took the time and effort to establish a business. Today, I have over five staff in my office and have just started to look for a second office and although I do not have a huge income, the service I provide is rewarding on so many levels. The new friends via staff and clients that I have now have, have complimented what was otherwise an already great life. Yes, my business is now a major part of my life outside of my family and my odd triathlon. But when you enjoy what you are doing, getting up and providing this service becomes a very easy job. In fact I should not be calling it a job as it is a lifestyle… From a financial perspective, allow some time, but ultimately you will survive if your core values are focusing on your clients needs versus a typical business that will focus on their own profits. I am happy to help you get into the industry. Good luck! www.birchcorp.com.au
Jemima,Correct on all accounts. Just be careful with the debt recycling. Although capitalised interest is allowed you do not want to get caught out under part iv(A). Also, I tend to use term loans with an offset account. LOC's tend to be overpriced and dated. http://www.birchcorp.com.au
The face of investing has changed significantly in the past 5 years. Further, the strategies used by investors over the past decade are valid, but there is strength elsewhere.
A broker may talk about crossing/ uncrossing loans and other significant aspects of loan, but without having the mindset and contemporary insight into investing you will be travelling alone. A loan is but the end product to your wealth creation. i.e. are you buying the property with the correct entity? Are you minimising tax? Are you reducing a land tax bill? Are you improving your cash-flow and subsequently paying off your own house faster? Are you salary sacrificing for your investments? and the list goes on….
I guess I was wrong. Now look who is taking a large slice of count Financial. CBA has gone all guns blazing…… How disappointing that the truly independant Financial Planners are now close to nil- the banks own Australia.
I will stand strong and will claim to be one of the only truly independant Financial Planners. I have no ties with any banks or products. I claim honestly and transparently to find/ source the most suitable financial plan for my clients. No guns at my head!
I wished I could service all of Australia, but there is only one of me!!!!! How about some people stepping up to the plate and helping out a little.
I am a property investor, that has lived in Sydney all my life and have many IP's here. I do not sell properties nor have any interest in any real estate firm. I am happy to offer my general opinion. This means I would not be tarnished by locations that I have to sell on my books as per a property agent….. just some friendly thoughts.
I am happy to have a general chat and can be contacted at the address below.
Thinking out side the square, will loking at making the most capital gain for your children in future years. If it happens that you can not afford to buy, then continue to rent- that is the simple part.
Why not make a non-consessional contribution to your Super fund, this will prop up the balance of the combined super balance of you and husband. Then purchase a property in a nice suburb. The risk of no tenant is reduced in that you have 9% contributions rolling through your fund from the SGC……. On retirement the profits are tax free….. After all you are investing to improve your nest egg and I could not imagine you selling the property in the short term. There is no schemes, scams or tricks required on this one, just simple math.
The local paper has never failed me. I did this in the local paper for The Entrance NSW 2 weeks ago and had 30 applicants. I interview the tenants and have never had an issue in any of my properties. The result is generally the same in all suburbs given you have bought in a reasonably populated area.
Apart from the fact that a LOC has no term, there is very little benefit. In fact it simply lines the pockets STG or other financial institution whatever the case.
I would only use a LOC if you are in serious doubt of future income.
This all looks good, but make sure you borrow 110% for your next IP, this will ensure all is tax deductible in the event that you purchase a more expensive PPOR and or require the funds for private use. Again, any extra money is to be placed in an offset account. Utilise split loan accounts for various strategies…..
Note: Utilise the equity in your PPOR for this set-up…… have fun!
While you are thinking, and asking, you will win…..
Capitalising interest is allowed and is a very useful tool, this goes hand in hand with capitalising expenses….. These tools allow an otherwise cash strapped investor to live a fruitful life.
Negative gearing works very well. I had a very decent income and retirement fund at 33 years of age from negative geared property. Intelligent investing, utilising well thought out strategies will contribute to this…Negative gearing although not the item that makes you wealthy, it is a tool that enhances your investment career. Reduce tax by all means, but use this tool with other with the many other strategies….
The strategy discussed above must be used with caution- consider part iv(a)- Tax avoidance/evasion.
But Yes to the buffer account…You are heading down the right track….
Placing the money in an offset account is the only answer.
Definately do not pay down your mortgage. About three major reasons for not doing this. Risk, tax deductibility and extra costs on your future acquisitions.
No term deposit as this attracts tax,
You have many options, including but not restricted to SMSF gearing- particularly with internal loan arrangements that are available to you given the money parked in your offset account.
Good timing for you, I have only been back on this site for 2 minutes (busy for several months). I have completed many of these for clients in recent times. In fact the office I currently lease is owned by my own SMSF.
I am happy to discuss further- I am at Norwest Business Park, NSW.
Congratulations Tracey!
I am a realist, and what you have described is real and describes something that Mum and Dad Australia can do…. This is entirely my point. A real guide, a real family and real income can achieve financial success. Wait for the 15 year mark, and your family will not be working….. Congratulations again!
It is still concerning to think the average Australian may step into the property market armed with the motivation of a book, creativity and a team they may or may not have.
Using an example of Mum and Dad Australia, they have sold their family home being a little creative, to fund a development/ buy & sell, purchase an office building or like, move forward 5 years down the track, and they find out they do not have the necessary skills / blue-print to tackle this game in the correct manner.They lose the lot.
I guess my point is it can be done, but you have to be the right person with all the skills and associates. Like many topics and ideas in finance (not limited to the book mentioned above). We all need to be aware that marketing has a key role and your finances should be well thought out, have a clear plan and most importantly be realistic.
I have heard of better, but not sure you would go to the pain just to save a few dollars…. That is a "No to refinance" from me, unless you can get another property out of it, capitalise your interest/ expenses or create a buffer for further acquisitions. But deifnitely not to save a few dollars….
Yes that is the land value, not taking into consideration any improvements on the land.
Thank you for the Welcome back! in line with this website, I did a major renovation on my property…
There has to be a cut off point between dreams and reality…… And there is the answer…. Dreams sell, reality does not…..
I believe wealth cannot be created overnight for the average Australia, it is a 15-20 year deal and there is a blue-print for this- achievable for everyone. Those that say otherwise (shorter time-frames) have got the boundaries of dreams and reality blurred or are the extraordinary. That being said, I am happy to be told otherwise and will always be open to a new blueprint.
Yes I have seen how he is all about making money. Nathan Birch (X-Real estate agent) was also selling property to clients (as a buyers agent or like) in Mt Druitt (not exactly a top pick) for a large fee. An average Australian has a regular job, works 9-5 etc etc The question would have to be phrased: Why do you not back yourself Mattnz? Is this something only an extraordinary person can do?
I see that Steve has accomplished great things, the philosophy is great, the thought processes are impecable, nice guy and the negotiating skills are great. But what I cannot see is that this can ever be repeated. There is no strategy for Mum and Dad Australia. I hear that you can do 5 in 6 years or sub-divide several blocks or vendor finance (that is all good and I do not wish to down-play this) ….but again 0-130 (although arbitrary numbers) are they really possible in 2011 or do we play lotto given our chances of ever accomplishing this …… Everything mentioned above suggests it can be done- but again- there is No blue print. Yes, I am looking for a blueprint or else I cannot pass on this message, look someone in the eye and say read this book as a guide to making you wealthy. Who has done this today? Following the Steve Recipe or any recipe for that matter as an Average Australian?
Questions must be asked? What income is required originally? What ongoing income is required (do I have to sell books or be famous to improve my income to keep this up), What is my job title (Do I need to be an accountant, complex network or friends or have extensive knowledge, as the fees may eat into a large part of the yearly profits)? etc etc We cannot jump to the wealthy stage and say it can be done because Steve did it….. We are average Australia's. What can really be achieved and how? These questions have to be asked in case we are all sent down the wrong (if it is wrong) path.
