Hi all,
I have been looking at investment properties for a little while, mostly care of my financial planner who dumps recommendations in front of me based on what developer relationships they have. I've read a couple of property books in the last few weeks and get the idea that this is not the way to go. I've started chatting to a 'property adviser' who is better but I still don't get the sense that their interests are completely aligned to mine.
A couple of things I am looking at:
– developing a system for narrowing down good CF+ opportunities. Looking at current yield, population projections, supply demand, risks / shocks etc.
– a calculator to help me understand the financial profile of different investments, do scenario modelling etc. Building myelf in Excel.
– Checklists for individual asset selection – the books seem good for this.
Can anyone recommend good / favourite tools and research sources that help them with this stuff?
As a side note, the property adviser guy has put me on to Mackay which from initial readings sounds like a good play (thoughts welcome!). He is advising an off the plan development in CBD, with guaranteed 7% yield for 5 years net of strata etc, or with 8-9% non guaranteed long term / 16-18% short term yields. Any tricks and traps with off -the -plan – would love. I have also started scouting Newcastle.
So many things to consider, part of me is very tempted to go with a property adviser but the problem is how to find 'a good one'. Not sure how their interests are particularly aligned to mine as most seem to make their $ by taking commission on sales.
All advice most welcome!!
Hi EJay
A similar topic was discussed in the following thread recently which is therefore well worth a read:
https://www.propertyinvesting.com/forums/help-needed/4347813
Coming back to step 1: defining who you are, where you are at in life, and where you are trying to get to. Then determining the property types that will get you there.
So…. what do you do for a job currently? How old are you? What are the financial goals you are wanting to reach?
Looking forward to hearing your reply so we can all pitch in our thoughts
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Sounds like your so called advisor may be nothing more than a sales person??? take care
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
EJay wrote:Hi all,I have been looking at investment properties for a little while, mostly care of my financial planner who dumps recommendations in front of me based on what developer relationships they have.
Uh oh – doesn't sound like a good start!
At least you've had the sense to explore your options and seek other views.
Alarm bells usually ring any time an IP sale comes with some sort of yield guarantee.
Agree with Terry – sounds like the FP might be more into sales.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi EJay
I would suggest that you need to get better educated.
There are sharks out there willing to give you plenty of advice & pocket a commission for the privilege.
You get to take all of the potential risk on the biggest investment outlay of your life.
AND the product may not be the best for your personal situation.
You need to obtain the knowledge.
Knowledge is power.
Knowledge will overcome fear of the unknown.
You'll be able to quickly identify which R E agents, Accountants, Financial Planners and Developers know their stuff.
Potentially the ones that passs the grade may become a part of your future investment team.
Get appropriate lyeducated and put yourself in the driving seat, for life.
A Cert IV of Property Investment is available on this site.
Just do it.
Regards
Some great leads here, thanks folks. I tend to agree that I'd prefer to educate myself rather than trust the advisers. But wouldn't it be great if I could land the perfect adviser and build a trust relationship because they are prepared to take the time to educate me. Mythical creature??
As context I'm 35 yo, currently in highest tax bracket but don't want to count on that as am I'm at a point where I want to look at changing careers or at least taking a sabbatical. Latter is something I pretty firmly want to do next calendar year. I've built a bit of equity in my apartment, about $100k in cash redraw plus the neighbours recently sold for nearly about $200k above my purchase price, almost mirror identical apartment. I'm pretty attached to it though so not looking to sell and rent as some have advised.
Pretty time poor at the moment so looking for medium to longer term passive holds. Looking for early financial freedom, aren't we all? Want to see where I can deploy my equity to get the most out of it over a 10 year timeframe.
Would be interested in the comment re 'beware of guaranteed investment returns'. Why is that? What are the typical pitfalls? For one, I know I need to do my sums properly to see whether I really do come out CF+, and for two ,I need to look at any residual costs they are not covering in the contract like unexpected maintenance. But this is par for the course. Also need to look into capital growth outlook at end of guarantee period, that is a harder question to answer given the ups and downs of labour around Mackay.Much more construction planned but past 5 years, will the labour profile drop off once more? Specifics of the off the plan build and quality of builders / material, these are all further questions. So much to research!
P.s. I work in finance so can get LMI waived with 10% deposit rather than typical 20%. For now!
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