Hey,

The fatal flaw in your theory is that these are all things that you think might increase then rent.

Personally, I do it differently… before letting the property interview the prospects and offer them:

1. A base rent ($160 per week)
2. A list of improvements and the additional weekly rental cost.

For example:

Weekly Rent (not negotiable): $160

+ Tick which combo offer you would like:

[ ] Movies at Home <Pay TV> (+12 per week)
[ ] Secure garage (+20 per week)
[ ] Breezy Comfort <Ceiling fans> (+$5 per week)
[ ] Speedy-Net <Boradband Internet> (+$10 per week)

etc etc

That way you spend your money in a way that will increase the rent according to what the tenant (rather than you) wants!

Remember to sell the benefit rather than just the feature. E.g.

Be cool in summer <new air con> (+10 per week)

etc etc

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

This is quite a complex inquiry, so I will try to break it down into components. This is just my opinion – you would be well advised to seek proper legal and accounting help for this one!!!

Right then:

Okay – first point… be very careful when you combine an investing decision (property) with a lifestyle decision (home). The former needs to be based on fact whereas the latter is mainly opinion. Personally, I think you are on dangerous territory when you blend the two as you can end up with a hybrid result that is less than the best of either.

From my limited knowledge, your daughter’s name would need to be on the property’s title (as a co-purchaser) in order to qualify for the FHOG. I’m not sure what the rules are about co-ownership (in the case of flats and a main house), but the non-negotiable aspect is that she would need to live in one of the dwellings as her PPOR soon after buying.

While it would be wise to call the SRO, my instinct tells me that to qualify your daughter would have to be the only purchaser rather than being in joint-names (unless all the joint owners are eligible for the grant). Having the property solely in her name may cause some problems – mainly with the lenders, but this may potentially be overcome through guarantors.

Link to NSW FHOG

I would expect that, provided the transaction was at arm’s length, you would be able to claim the interest on the loan and other normal rental property deductions. On the flip side though, there would also be CGT when sold.

It could be. Unfortunately, you will need to see your accountant for this one. Ultimately, you need to blend asset protection and tax planning with cost effectiveness.

Getting back to my original point then, I’m wondering whether or not the two are compatible… if you want to help your daughter out then another option is to provide her with a low/no interest home loan as a help for a deposit. Remember, the FHOG is only $7k, and in the scheme of things is incidental to the transaction. That is, it’s better than nothing, but I wouldn’t especially do a deal to access it.

Hmmmm – watch out for emotion as this causes normally sensible people to pay too much. Be sure to do a thorough due diligence – especially on the numbers so you know whether or not you can afford the property should interest rates rise a couple of percent.

My final warning is a general ‘heads-up’ about mixing family and investing. It’s great when things turn out well, but it can be terrible in other situations when what started off as helping becomes a financial millstone for all involved.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Geoff B,

Thanks for making your post.

So… if you can, would you (and others) like to share say up to three insights you have when it comes to investing in general?

Mine would be:

1. Luck is hoping to profit whereas skill is applying a known strategy with a specific outcome in mind, by a specific pre-determined time, prior to beginning

2. Speculators buy on opinion, investors buy on fact

3. Investing has at least three phases: The Buy, The Manage and The Sell.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Francis,

The current and prior bills relate to the conveyancing costs associated with the purchase and sale of real estate. When you enter into a property transaction you need a legal representative to review the contract as well as deal with mortgage and title issues.

Exit strategies are the ways that you plan to realise your investment profit, or else exit the deal in a worst-case scenario.

For example, when you purchase a property on a buy-and-hold strategy the normal exist strategy is to sell it. However, more sophisticated investors develop this strategy by nominating a required return on investment and also a minimum purchase price (prior to buying) that they will accept should they need a quick sale.

Another example as an exit strategy for a B&H might be to wrap it, or offer more creative financing on sale such as offering a 2nd mortgage.

Hope this has helped.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I’m sorry if my personal declaration of faith has been misinterpreted.

The quote you mention is on the acknowledgement’s page as I wanted to give God the glory and to thank Jesus for saving me.

Nowhere in the bible does it say it is a sin to be wealthy. The parable of the rich young ruler says “if you want to be perfect…”.

Surely Jesus, knowing the heart of the person, would have known he’d be unable to do this, so two possible lessons that come out of it are:

> No one can be perfect before God in his/her own right. It is Jesus who intercedes for us and only through him can we been seen as ‘perfect’.

> Do not serve money – serve God!

Two other points to note:

* There are many references made in the gospel to people who fund Jesus’ ministry.

* Jesus came for one reason – to die for our sins. While we can try to be more like him, we cannot save ourselves through works.

A good passage, written by the Apostle Paul, that talks about the wealthy is 1 Timothy Ch 6:

As a final comment, I do NOT believe in the prosperity doctrine.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I’d say you had the basics pretty much figured out.

In time you’ll need a reason to invest, but for the moment all you need is a deal to get your teeth stuck into.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Why not ask him to help out here on the forum then? We need all the experts we can!

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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