Forum Replies Created
Richard,
So you are saying that for average joe this is not an option, unless they are in the business of Vendor financing?
Paul,
Re: the banks,
A rumour circulated, was that a key player in the vendor financing industry had his loans called in, as he was doing these deals without disclosure to the banks. This is a concern of mine? Other than that, it does look like a WIN, WIN, and WIN from many angles.
It sounds like you are on the right path… yes that is good advice from the ATO, also consider holding on to the property, until all your super monies have been drawn down. The power of time will give you further gains in the property. A common practice is to sell before retirement as opposed to 5-10 years after retirement, effectively another property cycle is not utilised by many people.
As you are experiencing, calculating the best strategy, coupled with the twists and turns of taxation laws and regulations, is all good fun…..JPS,
Rural is different, as you mentioned the mines…. house prices come in waves and you have to predict the highs and lows of the industry as well as other economic factors.
I suppose that is the danger of these sites. I assume circumstances that cannot be displayed through writing. A sell may be inevitable, but equity release should also be considered (I'm not sure your personal details) so it is difficult to be accurate.
Answering your question, everyone has varied circumstances according to work, CGT, children, retirement, income tax etc. But I will hold my property until death and they will be pass on to my children so they may continue the portfolio and release equity as required. I say property is an infinite resource of cash that will consistently flow for as long as you hold possession. The day you sell is the day you give the flow of cash to someone else. That being said, you may sell your flow of cash to land yourself in a better position, i.e. to create a stream rather than a flow….. I hope this helps.
Welcome JPS25,
A dollar today is better than a dollar tomorrow (due to inflation), so depreciate as hard as is legally possible (diminishing value).
And you are right on the CGT posted. This is the shine off depreciation that property marketing firms (developers) often overlook and consumers do not consider….
In general, selling your property in years to come is old school, read on this site….lots of tips.
Good questions for a begginner!
Both important questions were not answered?
1. I understand the contract is legal in all states except S.A, but is the bank okay with this?
2. How do you fit in? What do you take out of this mix-what is your cut?
Sorry but I need all the details before I go making financial decisions as we need to make comparisons (opportunity cost).
This brings on the next question, that if the person who takes up the contract does not want to sell because they have a cash job or like, then I guess you are stuck with the arrangement for the 25 years. Is there any statistics around this? What are the odds?
V8ghia,
Let me say, talking and making a difference in the life of Mum and Dad Australia is a joy. I love breaking down financial walls and restraints to show people how to save a dollar. But like I keep saying to my family and friends it is difficult to charge someone on a pension, or with two children and husband has left etc etc.
Evolve,
Please do not pretend you know me or my business model, you are so far from the truth that you have embarrassed yourself. You may need to speak to the many many clients that have come and gone through this office without a fee.
My legacy is not to create this great fat profit, but to give back to the many who may be…..if you want to know my model please join me on a weekend of training for Canberra Half Ironman this year (although given your response above it sounds like you know that I have spent 15 years as a competitive triathlete and it is a passion of mine).
I am happy for us both to open financials publicly to show people what we in fact earn (lets see how much free advice we really give) Insurance income for me was approximately $20k this year and my license and insurance was approximately $16k. With the $4k I am happy to give this to charity as long as you match me?
I read a post of yours last week on SMSF and appreciate you have a lot of knowldge in this field (I did some time with an SMSF auditor). I read many comments on this site that require a lot of help from a guy like yourself, as many of the comments/ help posted here are not entirely correct, as you read on the particular post I am referring. It may be a good idea if you could help me in guiding people for free rather than making assumptions.
Dakkar2010, I am sorry you feel that way about the industry, and I guess you will find no value on this site as the help/ advice is often from FP's.
I had several years up my sleeve, and I decided to give a little grief to all the financial institutions and like who who tried to take my money will I was creating wealth.
There is a revolution happening on this site, FP's are a thing of the past and Mortgage Brokers will rule the world…….
Dakkar2010, Planners very rarely use industry funds as their is no associated fee for them. You will find they all use retail funds.
Intrigue, next time, drop into my office and I will make your $7 that you spent on fuel worthwhile (assuming you live at the end of my street) – Forget the invoice for $7000.
Hi Paul,
Lets clear things up, If I buy the property for $400k and on-sell this to your contact for $468k, I make $68k for the 25 years the loan is in place (if required). For that, I keep no growth in the property, but I do get payments above the normal interest rate that will give me how many dollars per week (assuming 2%, I will get $153 p.w.)?
So in that period, if the property grows to $2.4M (as it historically will, assuming the double every 10 years), I only make $68k + ($153 p.w. = $200k) Total = $268k, $2M v $268k : I am missing something as this looks terrible….
Do you take a cut out of this?
I thought this process is illegal in the eyes of the bank?
http://www.birchcorp.com.auYou can purchase this with a bare trust, your name will not be in public record. Any good accountant will organise this for you.
Once you sell, you could be out of property forever. getting a loan is not what it used to be. They are gold at the moment. While you have a loan, do what you can to hold it and pass it in if you have exhausted all options. The ladies are absolutely correct….
I am happy to have a chat with you offline- nil cost of course.
As Above, but include;
Conveyancing / solicitor fees are added to the Cost Base as well.
Registration of mortgage etc is a deductible loan cost over 5 years.
I agree, I have a partnership at general law and income is over $75k but there is no need for GST registration.
Corporate trustees are nearly always a must with trust structures in case of death / divorce and like.
As a rule, I am not an advocate of complex structures for the many, but C&N have some legitimate reasons for their methods albeit they are a little over-priced.
Hi V8ghia,
I think you will find these fee's of $7000 and 4-5% are a thing of the past. I do not have any fees attached to my practice. I do not know anyone that is paying for a Planner.
It wouldn't be very nice of me to encourage leveraging into the ASX at an interest rate of 10% (margin loans) with a low LVR and margin calls that are so prominent in today's market. So, No I cannot really compare the two leveraged markets as one market is practical and reduced risk, when the other is quite expensive and very high risk. Further, as you have eluded, the comparison of using money, must be with other palatable investments (leveraging into the ASX is not very palatable).
It would be interesting to compare the number of people that have increased their wealth from leveraged property versus leveraged equities. You know as well as I, the results this would bring……
To get an accurate answer you would have to expose too much personal information on this site. I do not completely agree with that concept. Sit down with your local guru and come back with your thoughts and questions. It will be a little safer.
I have never done the mobile mortgage thing, but I am in Castle Hill if you are keen to travel.
Hi Terry,
I can tell you from experience that clients are not willing to pay anything! Nor should they, The client has to pay a management fee inside an investment (it is these managers that are doing the research and hard work). I have many clients see me with managed funds (including super). When you get down to the nuts and bolts I find many advisers are placing people in products that they have no idea about. So the client pays the management fee to the fund and the FP will then ask for a fee on top of this. You have to ask, "Who owns the top 100 FP firms in Australia and why"? There lies the answer to the great Australian FP scandal…..
Further, have look at the management fee's that are charge by large financial institutions vs industry (not for profit) you will find the difference is about 2% vs 0.5% – Is an aggressive / assertive asset class from one company to another really that much in cost? i.e. Are the investments that different? In fact you will be surprised when you consider the past performances.
Here is a tip: the institutions paying for high flying executive, paying dividends to shareholders and making multi-billion dollar profits must get their money from somewhere? When you answer this thought, you will say, "That's not where my money needs to be".
To evidence the comparison in super funds, go to the FSS website and under the compare us tab, take a look for yourself….
