Good Evening Everyone,
Good to see there is a fantastic resource on the internet to help out investors!
I have a couple of questions – I am sure they would have been answered elsewhere – but would like to get some clear responses to set me on the right track.
I appreciate your responses – so thanks in advance…. here goes.
1. We have got a PPoR – which we owe $358k on, and is valued @ $430k. Would we be better off to pay some more of this loan off – or release the available equity to purchase another property…
2. If we should buy a property – and we would be looking for good capital growth as we are both in our 20's and in no hurry to retire, where would it be best to look. We currently live on Sunshine Coast, QLD – but feel that maybe the growth is slowing down here, and we may be best investing somewhere else.
3. If you invest somewhere else – is it normal practise to buy 'sight-unseen' with a building/pest inspection, or do most of you travel to see the home?
4. How do you get 'set up'. Is it best for me to set up a 'company' or is this something that I would be better to talk to my accountant about.
5. Finance ???? Anyone done any work with 'Investor Finance'? I have spoken to a IF consultant – and they seem to just want me to remortgage existing quickly so they get a deal out of it!
6. Reading MAterials??? I have read Peter Spann, Rich Dad Poor Dad and API magazine. Is there any book you would particlarly recommend which is suited to a market which we are currently in (ie NG properties, higher purchase costs???)
Appreciate your answers – to these very simple questions
Anthony & Zoe
1.
Its always good to pay down non-deductible debt. You can do this and release equity at the same time.2.
You will need to do some research and invest somewhere you are comfortable with.3.
I have bought a lot of properties unseen. I don't recomend this as you can get into trouble like one of my clients whose property was so run down it was valued at half of what he paid for it! If you cannot get there, at least get someone to look at it for you – an independent party.4.
A company is not generally a good idea for property investing as you will pay more tax. Look at trusts instead5. Nope
6. Have a look at Michael Yardley's first book too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
1. It depends, some would argue that even paying off your own non-deductable mortgage could cost you in the long run. You could continue to make repayments on your home but access the equity by either using your home as security for your first IP (thats what we did) or take out a Line of Credit or equity loan seperate to the first loan secured to your home. Make sure your loan(s) for investment are kept completely seperate from your home loan and don't use it for a holiday or a new car.
2. Are you going for high growth or +ve cash flow IPs. You need to work out your investment stratagy and then select an area. If its growth you are after Brisbane Middle ring suburbs may suit you.
3. You need to protect yourself. Have someone you can trust check it out for you – someone in the industry who knows what you are after. I would suggest that the first deals you do you inspect youself.
4. Contact an Accountant who specializes in property and ask them this question. Without knowing your situation no-one on this forum should steer you to or away from a particular investment vehicle. Anyone who does could be giving you the wrong information. Read 'How to reduce your tax legally by Tony Melvin and Ed Chan.
5. Shop around and don't overlook the big banks.
6. Michael Yardney, Jan Somers, Tony Melvin and Ed Chan, Rich dad's 'Cashflow Quadrant' isn't a bad read.
Also go to Propertyupdate.com.au and subscribe to their newsletter.
Attend Seminars run by people who have been in the game for more than 10 years. After all they survived a property slump and high interest rates.Finally – Find someone who has done what you want to do to who is willing to mentor you (paid or not). If you go to a financial planner or an Accountant make sure they are wealthy property investors (or well on their way). Whatever you do don't wait (my biggest mistake) take the bull by the horns.
Enjoy!
Thank you for your replies to my post. Good advice – even if basic, goes a long way to helping people learn.
I will keep you posted….
Anthony
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