After paying off my PPOR 2 yrs ago, I dived into property investing with more enthusiasm than research, figuring that I'd learn along the way & 'time in the market' is the important thing.
Now I have 4 IPs + PPOR, all cross-collatoralised under the ANZ pro-pack (which I now discover is not the ideal set-up) = $1million. Three IPs are interest only, the one with biggest loan is p&i with offset – this seems to work fine.
The $1m milestone has made me stop and review… and do the reading I should have done in the first place! In summary, I think I've fluked an ok portfolio, but could have done better.
Now I want an expert opinion on how to improve the current portfolio, and of course want to move forward to achieve financial freedom as soon as possible.
So who do you think I should talk to?
An accountant? I always thought they were just about tax, but maybe I'm wrong?
A financial planner? I always thought they just sold financial products for the commission, but maybe I'm wrong?
A property mentor? I dont really know what they do, but they're really expensive and I'm worried the money will be wasted.What would you do?
Hi PQ, don't berate yourself & don't fix what's not broke. Of course, you could have done better, so could I & so too could everyone else.
Congratulations on being in the big M category. You've done what most of us did, jumped the deep end & then flailed around adn swam from necessity.
I did exactly the same, didn't even know that I was a 'property investor'.
If I may be so bold as to make a suggestion, you yourself are probably your own best advisor. Though of course, in the area of tax and further acquisition & holding, you might want to look at more sophisticated ways. The forums have a lot of info that you can get for free.
Good luck,
KYYou may need to consider your asset structure.
Using a trust setup – discuss with accountant or solicitor.
Thanks guys. I guess I'm just having one of those "I-dont-know-what-I-dont-know" moments, as we all do I suppose.
Have just been reading about trust structures, but since I'm still using negative gearing, I thought I would wait until my first IP finally turns cash flow positive in around 8 months and then set up a discretionary trust.
Hi, consider the cost of trusts. If audit is necessary, you'll find that what you save just goes to pay the accountant, sometimes maybe even -ve.
From what I know, trusts apply only if the value of the portfolio is sufficiently large.
Re having enough to live on from properties, I'd suggest you leave out PPOR. It's not an investment, it's a liability.
You'll find that your portfolio is not enough. I discovered that years ago when I had 4 houses & I don't have dependents.
1M invested will just about do it i.e. you need 4 IPs paid off. Then you can live off the rents.
KY
I generally believe you have to do your own research and work out which way you want to go and then start talking to various advisors. Learn as much as you can yourself – eg. look at discretionary trusts – get a rough idea how they work, benefits and disadvantages and costs – and then you will have an idea if you need one -then see an advisor. If they advise something other than you expect ask them to justifiy it. At the same time consider other areas such as tax, and future loans etc
I agree you are going good. No need to break that not broken, but you could stream line things a bit to speed things up and/or set up more tax effective ways.
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
Hi PQ,
Good on you… you have seemed to fluke it reasonably well considering 1ppor and 4 ips…
All I can suggest is to knowledge up yourself as opposed to relying on other so called professionals. Read books, watch investing seminars – the program by Henry Kaye is quite inspirational, anything investor/property related that you can get your hands on. It is good to get advice and shop around for the right person to give you the right advice. However you can only be wary, as to ulterior motives.
If you become knowledgeable yourself, you will have more confidence in talking to someone, and less chance of falling into any sort of traps. My Dad made too many of these mistakes, by not involving himself and relying on other 'specialists' to do their work – not the best way to go about things.
However, if I had to pick a field, I would source around for a good mortgage broker, that has the results you want to obtain. You want to get information from someone who has good results within their own lives, if they are giving you advice yet unable to get it themselves, then we would we go to them for advice in the first place?
Anyway, a few of my own opinions that I thought I would throw into your thread…
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