Forum Replies Created
Hi Cindyli[
]
Dont panic or do anything rashly.There is a lot of expertise available to you on this panel,however we all need more detail in order to give you advice.
If the detail becomes too specific for you to post then it can be handled off line.
You will only become a victim if you sell when there is no need to.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi All[
]
One of the reasons is it gives you more protection against losing your principal place of residance if an investment goes bad.
Basically your home can be with one bank whilst your investment streams can be with another.
If you get into trouble then you can sell one of the investment properties and use the cash to reconsolidate debt without having your home affected.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi mitzu5[
]There are motgage brokers who are great at servicing the specialized needs of investors on this site.
Normal Brokers may not understand setting up loans for trust structures or avoiding cross colateralization etc.
It is important to set up your investment structure correctly at the start.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi Agent 007[
]
Its listed At the “soap box” under the heading “Adelaide Investors Meeting” posted by “Summo”.Regards
Bryce Inglis
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http://www.ipal.com.auHi Simon[
]
Thanks for the info.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi All[
]
I use PIA PRO ,it is very comprehensive.The only problem is that you can’t email a report unless the recipent has a copy on their system.This is not a problem if it is used soley for your own use.If any one knows of a program that can be emailed I would be interested.
RegardsBryce Inglis
[email protected]
http://www.ipal.com.auhi Bill[
]
It is not clear if you are in favour of purchasing a property there or advising against it.
Personally I wouldnt touch them with a bargepole.Bryce Inglis
[email protected]
http://www.ipal.com.auHi NATS 12 [
]
try RJA Financial services based in Rowville
email; [email protected]Regards
Bryce Inglis
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http://www.ipal.com.auHi B Diros[
]
As I understand your position is as follows,
1/ you have 3 neg geared properties.
2/ they are cashflow positive
3/ you have acheived an 80% capital gain
4/ are still in a growth area
5/ you have no savings
6/ you wish to increase your cashflowBased on this I would suggest
1/ you dont sell as you will lose too much due to capital gains tax,and miss out on future capital gains.
2/ use your equity to purhase for positive cashflow.It is quite usual to obtain a cash return of12-15% with something like a land float or a syndicated investment such as an aged care facility.
Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi scotty[
]
Just thought to bring this back to the top of the list
Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi kelly1100[
]
Gearing or leveraging is using borrowed money to enhance returns on investments.
The higher your gearing ratio,the higher your profit.For instancce if you invest $10k of your own money at a return of 10% per annum you would receive $1k.
If you borrow an extra $90k then you would make $10k less the borowing cost.
If an investment returns more money than the costs then it is positively geared,and as such earns income which is taxable.As it earns money it will enhance borrowing capacity.
However if the investment loses money it is negative geared .This produces a paper loss for tax credits.
The rent received together with the tax saved and depreciation claimed will offset this loss.All other expenses incured can also be claimed.
This may or may not result in a positive cash flow according to circumstances.
Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi jars11[
]
There are 3 phases in property investment
1/.Aquisition of property in the highest growth areas you can find, using negative gearing. This maximises the ability to purchase more growth producing property.
For example. A client purchased two properties that produced a capital gain of $20k per month and after 14 months he purchased his third property by using the equity and cash flow produced from his original purchase.
2/.Aquisition of property to produce positive cash flow.This is used to increase loan serviceability or to provide income.
For example.Investment into a land float to deliver a return of 12% when paid monthly or 15% if paid yearly.
3/Consolidation of property to provide income either on retirement or as required by changed circumstances.It is also important to consider how the portfolio is set up in the first place with regard to tax structures,liabilities and loan flexiblity.
The use of Hybrid Trust is to be discussed at the next Somersoft/msm meeting and would be worth attending.
It is also wise to consider the avoidance of cross colateralisation with loans and a discussion with an experianced investment Mortgage Advisor is worth while.
Risk management must also be considered. Due dillegance is required to purchase sound investments.
Another way of risk minimisation is to use a good Financial Planner, in order to spread investments across other asset classes such as shares,managed funs and cash.
However a word of warning should be given to chose a Financial Planner who uses a fee for service as services given for commision may be biased.
They should also have an arrangement to work with a property consultant as they are not able to advise about property matters.
It is also worthwile to investigate changing Superannuation into a self managed fund.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHI Sha[
]
Most apartments in the Melbourne CBD are oversupplied, often in order to disguise this rental guarantees and 5x5x5x5 lease arrangements are used.
The rental gaurantee is paid by the property being overpriced and the lease is not renewed after the initial period.
The tennant is induced to take an initial lease at a lower price and this is also subsidised by the purchaser without their knowledge.
The sale can proceed in safety if it is conditional on the purchaser obtaining an independant valuation.
It is also wise to provide your own solicitor etc as this type of pressure sale will offer to provide you with all needed services in order for them to con you.
This is how 2 tiered marketing scams work.
Finance for these types of scams can be arranged by using the equity in your home,for exampleInvestment Property price $230k
IP Valuation $160kThe Differance of 90k can be covered if your equity is $90 + $23k [deposit + cost]=$113k.
Also due to oversupply a purchaser may see an actual drop in the true value of their investment when the market corrects itself in the future.
Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi paulaj[
]
You have already started.You have gained an awareness of what constitutes good debt/bad debt.
The most successful investors operate a wealth creation budget,in order to create money.
This is used to eliminate bad debt, and the money eventually saved is used to invest.
The budget also requires you to discover the differance between a need and a want.
This can be quite fun as you reason with yourself on what strategies you can use to obtain a want.
Can you find it at a dicount,or are you able to do without something else to get it,can you make it, can you do without it etc.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi Scubar[
]As you are new to property investing it would be very dangerous for you to buy a property sight unseen.
I suggest that you learn more about property investing until you are more able to realise the enjoyment that this will bring to you .Most people on this site will tell you how addictive this becomes.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi kkowalsk[
]Quoting the summary from BIS Shrapnel.
“Adelaides price growth has been particulary strong over the past three years rising by 36%.
More recently,prices have been influenced by the introduction of the first Home Owners Grant,which has stimulated purchaser activity. Price growth of a further 20% is forcast for 2002/03.The additional First Home Owners Grant for new housing has also stimulated new home construction,which has exceeded underlying demand, and driven an increase in Adelaides modest oversupply of dwellings.
The rising excess dwelling stock,together with continued weak underlying demand [as a result of low population growth due to net interstate migration outflow af 2,000 persons per annum] will limit the prospect of significant price growth.Prices are forcast to rise by 9% over the three years to June 2006, or decline by 1% in real terms.”
I hope this answers your enquiry.
Regards
Bryce InglisHi Maiya-s[
]A word of caution regarding the possibility of interest rate rises.You need a good yeild to offset the cost of these rises. Factor in a rate increase of at least 1% and see if you can still afford the investment.Check the rental amount with Real Estate agents prior to purchase.
As most properties in Melbourne are approaching the top of the growth phase it is difficult to justify buying for capitol growth with very low yeilds at the moment with intrest rates forcast to rise as reported by Bis Shrapnel.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auHi Caddy222[
]
The report only covers 2003-2006 and even Saul Eslake will not predict beyond that.
Intrest rises are being used to curb inflation predicted in the world economyRegards
bryceHi All[
]
According to the latest BIS SHRAPNEL report intrest rates will be
2003 6.6%
2004 6.1%
2005 8.3%
2006 10.1%
I attended a business lunch last Fiday
where the Cheif Economist of the ANZ Bank Saul Eslake said exactly the same.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.au
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