Hi guys,
This is our first post. We are a young couple who are intent on pursuing an 8yr wrapping plan [
]. However, we live outside of OZ for the moment. We are working to save a good sum of money to use as deposits for the 8yr plan…BUT, we can’t start investing in OZ until around mid 2005 []. SO, what to do with our savings until then????We need to have our savings at least partially available by the time we kick off in 2005. Is holding money in a bank account the best and safest option for us? Any comments or alternative ideas would be appreciated,
Edited by – [email protected] on 28/01/2003 1:19:27 PM
Hi Elta
There are various options out there.
1) Bank account – well, don’t waste your time with an ordinary bank account. If you’re going to go down this path, at least find out about some of the online accounts such as ING Savings Maximiser, which are paying in the realms of 4.75%.
2) Term deposits – depending on the amount you have available, these may be another option, although you will have set exit dates which may not suit you. But if you have until 2005, that’s probably not a problem.
3) Managed funds – I know of at least one person who has successfully used managed funds to build up their funds for property investing. But that was prior to the last year or two of awful returns!
4) Become a private investor – plenty of property investors and wrappers reach a point where they run out of funds for deposits (I know I have!!) and so take on board private investors to supply some or all of the deposits for their properties. Returns are usually around 10-15% pa, and you can negotiate the term to suit yourself (eg 2 years). These are secured by real estate, and so if you pick a wrapper/investor with some track record (ie has done more than one property) you can get a good return on your money relatively safely.
These are just a few options, I’m sure some others will have other great suggestions!Keep smiling
FelicityHi,
Thanks for your post and welcome to the community [
]Please note this is NOT financial advice.
If you wanted to invest indirectly in property then you might like to explore the idea of listed (on the Stock Exchange) property trusts.
This would allow you to invest in property and also have liquidity if you decided to sell.
Alternatively, you need to weigh up the amount of risk you are prepared to take on with your savings. I remember only too well the people who had their money with “Pyramid Building Society” trying to eek out an extra 2% only to lose everything.
Me, for my personal funds (as opposed to busines money) I have an e-trade account that earns a pittance, but more than the token amount banks offer.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks a lot for taking the time to reply, guys. Appreciate your advic…ah…suggestions [
].Felicity, number 4 looks interesting. Does a ‘deposit’ mean a deposit and security for the loan? Have you, or anyone, had experience with this? How exactly does it work? Would I need to have a mortgage or just supply the cash?
Thanks Steve. Umm…etrade account??? Excuse our ignorance but we don’t know what that is exactly.
(Really enjoying your WSR stuff[8D])
Appreciate any comments at all.P&E
Hi P&E
Different investors set their deals up in different ways. Some arrange for their investors to actually take out the mortgage etc in their names, to help avoid serviceability problems with the bank. This probably wouldn’t help you, as you’re still OS.
In my situation, my plan is for the investor to provide either 10% or 20% deposit in cash. We have a legal agreement setting out the conditions of the loan, an unregistered second mortgage and a caveat on the property. I haven’t actually done one of these yet, so don’t take this as gospel – it may change once I get talking to my solicitor to set up my first one!!
Again, others may do things differently. Some investors put their funds in for the life of the loan (which in a wrap could be anywhere from 0-25 years) others take out an annual agreement, and a set period before the agreement is up they make the choice whether to roll over the funds for another period, or withdraw their cash.
In the end, there are probably hundreds if not thousands of different ways these sorts of things can be set up, it all depends on the individual wrapper and investor. I’ve only floated a few ideas here, hopefully others can add some more.Also, Steve may need to clarify, but an etrade account may well be similar to the online account I’ve mentioned in idea 1), or alternatively if you open a cash management account with a share broker, you can often get quite good interest rates.
Hope all that helps, I know venturing into the area of private investor finance is certainly making my head spin. [
]Keep smiling
FelicityThanks again Felicity,
That makes two heads spinning, but not as fast as it was thanks to some generous people.
The idea of taking out a mortgage but having to split profits is not so attractive as I would be very limited as to how many times I could replicate that scenario.
The idea of just handing over the cash and have that returned at an agreed time with an agreed return sounds good. Of course, I know ziltch about the processes that would be involved [], but perhaps the investor could agree to give the wrapper the deposit for a % return (but I guess this assumes that a cash out would take place in a few years [?]). If the wrapper makes more than half that for him/herself, good for them. Does anyone know if anyone has done this type of thing???
Thanks again Felicity, we would be interested in anything you find out about this.
P&E
]. However, we live outside of OZ for the moment. We are working to save a good sum of money to use as deposits for the 8yr plan…BUT, we can’t start investing in OZ until around mid 2005 [
]. SO, what to do with our savings until then????
]
]
.
], but perhaps the investor could agree to give the wrapper the deposit for a % return (but I guess this assumes that a cash out would take place in a few years [?]). If the wrapper makes more than half that for him/herself, good for them. Does anyone know if anyone has done this type of thing???The topic ‘Secure savings’ is closed to new replies.
