Hello
Just posting here to gather people’s opinions on a company called ‘the investors club’ – http://www.theinvestorsclub.com.au . I have heard alot about them lately and know of a few people wanting to get involved. For those who haven’t heard of them, basically they provide a free service – essentially getting paid by builders of new developments. The investor pays only the principle and relies on capital gain – the aim is to never sell and ultimately live off money borrowed against the increasing equity.
Along with many other services the club provides ongoing research into population and supply and demand in particular areas.
I know this is ‘the home of positive cashflow properties’ but i would appreciate educated comments and opinions so i’m able to pass them on to others.
Thanks
Josh
In my opinion, why bet your money on the capital value of the property rising? The value may raise or may fall, both of which are outide your control.
Why not find properties that generate positive cash flow from day one – guaranteed?
Hi Josh,
As i understand it(and this is just my understanding…perhaps Steve could clarify/elaborate), one of the commonly overlooked issues with this type of “investment” is that when you redraw against equity in property with the intention of funding lifestyle, your interest repayments on the amount redrawn are not tax deductable.
Further more, this stratagy is subject to the continual rise in the price of the property, and as i understand it, it does not factor for the impact of rising interest rates either.
I would also imagine that, due to the fact that you are constantly increasing your borrowed amount, that you will be very limited in the directions that you can head with further/other investment stratagies!?!
As you know Josh, i myself am still just getting to know all of the ins and outs of property investing, so hopefully Steve will clarify these points for both of us!!
Cheers Michael…
PS thanks for the email… looking forward to catching up sometime!!Hey Josh,
Good to see you getting going. Hope you succeed beyond your wildest dreams. With regards to the Investors club I have had friends buy property off them and while they haven’t done badly I still believe with a little hard work it is not hard to beat them on returns and or Capital Growth. I also heard some rumors of legal action pending on them….can’t substantiate but maybe through the question up on the somersoft forum and see what they say. I suppose the reality is doing something is better than nothing but I really believe you can do much better on your own (and cheaper). You have proven your mettle by writing on the forum so go get that property.
Enjoy
ADA great deal of talent is lost to the world for want of a little courage. Every day sends to their graves obscure men whose timidity prevented them from making a first effort.
-Sydney Smith
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