Forum Replies Created
- waynecrismani wrote:Just a quick word of advice as a fellow student. Despite the fact that my girlfriend and i are both PhD students making pretty good money via tax free scholarships, and we had saved very hard for the last few years, the banks gave us a hard time just because we had the title of "student".
We got them to be more specific about their reluctance to lend to us. They said it was actually the insurance companies that were edgy about lending to students. So if you can avoid Lenders Mortgage Insurance (LMI) by being able to pay your stamp duty etc and offer a 20% deposit, i would recommend it. Then go find a good mortgage broker or two who will do the leg work for you and find out which banks are comfortable lending to students.
(Mind you, if you buy something positively geared with no money down and a bank will lend to you, go for it!! Just tell me where you found it
)Good luck and be persistent!
Hi Wayne
You will usually find that in every suburb, there will be about 2 agents that usually undersell by about $30-$50,000 compared to other agents. Hint. They'll usually be the major franchise brand names. The reason is their focus on volume and turnaround, rather than better prices for their clients.
Get your name on their books and their databases because most of the time, the really good properties don't even get advertised on the internet. Most agents send the "coming soon listings" to their database first and in a hot market, these properties are usually under contract the same day they were listed. Call those agents regularly and get on top of their minds.
re: finance – don't bother with a mortage broker.
Do the legwork yourself.
Ask for a personal banker if you end up going with one of the big banks. (They work harder for you and build up a relationship for future purchases. )
Let them know you intend to do a lot of investing.Have a plan to show them your strategy and let them know there's more business for them.
If either of your parents will go guarantor for you, that always helps aswell.
If you're looking for an owner occ property, look for some companies that offer vendor finance and some that will lend to anyone but with a high interest rate. Don't write them off. If you can get the loan with them, do it. Get your property refinanced in 6 months, (with the capital growth), and then refinance. The money you would have lost on the higher interest and refinancing will be more than made up with the capital growth if you buy right.
When you're getting your property revalued, call the banks you're wanting to deal with and ask who their panel of approved valuers are.
Get one of those valuers to do the valuation privately at your own expense, and submit the valuation to the lenders. That way the valuation is in your favour and not the banks and will have a higher value and the bank will approve it because it's one of their panel valuers.
Hope that helps.
Tanya
I'll retype that because the editing was dodgey on the last:r_windows wrote:
hi again…
im half way through rich dad poor dad and was intrigued when the author was explaining setting up a corporation for tax advantages and asset protection…. would anyone recommend doing this or setting up a SMSF, what are the strengths and weaknesses of both.
Tanya's response:
The advantages of a SMSF are many, however, there is a bucketload of paperwork and record keeping required and the legislation changes frequently. Tax is the main advantage of super, and govt co-contr. if you're a low income earner.At your age, setting up as a company or a trust would hold more advantage because you then have the advantage of being able to borrow funds to purchase the property and take advantage of leverage, and you have immediate access to the assets.
Being a Pty Ltd and acting as a director allows you some legal immunity and the advantage of company tax rates of 30%ish. By doing it under that structure, you pay yourself as an employee, and only the amount you chose to take in the hand gets taxed at your personal tax rate.
A trust has other advantages similar to a company, but adds another layer of legal protection and limited liability depending on the structure take – ie, discretionary trust, family trust, unit trust etc. Nick Renton's got some good books on the topic or a chat with a good solicitor and accountant would point you in the right direction too.
r_windows wrote:II am currently studying commerce (1st yr) at uni thinking of majoring in property and finance and was wondering what peoples thoughts about chosen professions would be… property manager, funds manager, stock broker, financial planner etc?? Im mainly interested in tax advantages/loopholes as i find this topic alot of fun. Put simply what job would u choose if u could start all over again… preferably something in the property market as i find this most interesting.
Tanya's Response:
I've worked 10 years in the banking industry, I've got my Diiploma of Financial Planning and own my own real estate agency.
Real Estate is by far the most exciting and rewarding of all 3.
From the Diploma of Financial Planning, I learned that it's really a salespersons licence.
The course is designed to teach you to recommend reatil products to clients -(ie. managed funds, insurance etc) collect commissions, and shift your liability.
Unfortunately, since the Financial Services Reform Act, came to be, you will be hard pressed to find a decent financial planner who will tell you honestly where the best returns are because they increase their liability to get sued if you don't take the responsibility to use that advice wisely.
From my banking experience, I learned that everything is negotiable. I always recommend that when you are shopping for finance, don't go through a broker. Get a copy of "Your Mortgage" magazine and make some calls directly to the loan providers.
By dealing directly with the finance company, you can negotiate a better deal for yourself as far as getting fees waived, better products, honeymoon rates, fixed rates etc. It's all negotiable, but with a broker, they only have access to certain products and offers, and will usually push you to the one that pays them the best commissions.
Before applying for finance, go and get a free copy of your credit report from baycorp. Every time you apply for finance, the institution asks for a copy of your credit report and it appears on your credit file regardless of if you get the finance. If you give them a copy upfront and shop around to several institutions, they don't need to order a copy and it then doesn't mess up your credit file.
r_windows wrote:Also what books would u suggest reading? Here are a few which i have found people advised for so far:
Think and grow rich Napoleon hill
"Real Estate Mistakes" Neil Jenman
Richest man in babylonwhat would be ur top picks for a starting investor and would u advise me to educate myself more before buying an IP or to get in asap before prices are to high??
Tanya's Response:
Most of your picks are great.
Napoleon Hill is a MUST.
Richest Man is Babylon. Another MUST.
Neil Jenman – there's a reason why he gives this book away for free
Also, as far as timing goes, its good to get educated first. Make a mudmap or plan of what you want to achieve, and then dive right in.
Career wise, perhaps property management would be a good start. You learn the property market, how to value a property's rent potential, conflict management, excellent organisational and record keeping skills, and you'll never be without a job.
Some other investment vehicles you may want to read up on are: CFD's (Contracts for Difference), Options, Warrants & Futures.
CFD's and Futures are both high risk, but as you're young, it's a good place to start learning how to manage risk.
That should keep you busy for a while.
Kind Regards
Tanya
r_windows wrote:hi again…im half way through rich dad poor dad and was intrigued when the author was explaining setting up a corporation for tax advantages and asset protection…. would anyone recommend doing this or setting up a SMSF, what are the strengths and weaknesses of both.<br
The advantages of a SMSF are many, however, there is a bucketload of paperwork and record keeping required and the legislation changes frequently. Tax is the main advantage of super, and govt co-contr. if you’re a low income earner.
At your age, setting up as a company or a trust would hold more advantage because you then have the advantage of being able to borrow funds to purchase the property and take advantage of leverage, and you have immediate access to the assets.
Being a Pty Ltd and acting as a director allows you some legal immunity and the advantage of company tax rates of 30%ish. By doing it under that structure, you pay yourself as an employee, and only the amount you chose to take in the hand gets taxed at your personal tax rate.
A trust has other advantages similar to a company, but adds another layer of legal protection and limited liability depending on the structure take – ie, discretionary trust, family trust, unit trust etc. Nick Renton’s got some good books on the topic or a chat with a good solicitor and accountant would point you in the right direction too.
r_windows wrote:II am currently studying commerce (1st yr) at uni thinking of majoring in property and finance and was wondering what peoples thoughts about chosen professions would be… property manager, funds manager, stock broker, financial planner etc?? Im mainly interested in tax advantages/loopholes as i find this topic alot of fun. Put simply what job would u choose if u could start all over again… preferably something in the property market as i find this most interesting.<brI’ve worked 10 years in the banking industry, I’ve got my Diiploma of Financial Planning and own my own real estate agency.
Real Estate is by far the most exciting and rewarding of all 3.
From the Diploma of Financial Planning, I learned that it’s really a salespersons licence. The course is designed to teach you to recommend reatil products to clients -(ie. managed funds, insurance etc) collect commissions, and shift your liability. Unfortunately, since the Financial Services Reform Act, came to be, you will be hard pressed to find a decent financial planner who will tell you honestly where the best returns are because they increase their liability to get sued if you don’t take the responsibility to use that advice wisely.
From my banking experience, I learned that everything is negotiable. I always recommend that when you are shopping for finance, don’t go through a broker. Get a copy of “Your Mortgage” magazine and make some calls directly to the loan providers. By dealing directly with the finance company, you can negotiate a better deal for yourself as far as getting fees waived, better products, honeymoon rates, fixed rates etc. It’s all negotiable, but with a broker, they only have access to certain products and offers, and will usually push you to the one that pays them the best commissions.
Before applying for finance, go and get a free copy of your credit report from baycorp. Every time you apply for finance, the institution asks for a copy of your credit report and it appears on your credit file regardless of if you get the finance. If you give them a copy upfront and shop around to several institutions, they don’t need to order a copy and it then doesn’t mess up your credit file.
r_windows wrote:>
Also what books would u suggest reading? Here are a few which i have found people advised for so farclass=”MsoNormal”>Think and grow rich
Napoleon hill and W Clement Stone- "Real Estate Mistakes"
Neil JenmanRichest man in babylon
what would be ur top picks for a starting investor and would u advise me to educate myself more before buying an IP or to get in asap before prices are to high??Thankyou
Most of your picks are great.
Napoleon Hill is a MUST.
Richest Man is Babylon. Another MUST.
Neil Jenman – there’s a reason why he gives this book away for free
Also, as far as timing goes, its good to get educated first. Make a mudmap or plan of what you want to achieve, and then dive right in.
Career wise, perhaps property management would be a good start. You learn the property market, how to value a propertie’s rent potential, conflict management, excellent organisational and record keeping skills, and you’ll never be without a job.
Some other investment vehicles you may want to read up on are: CFD’s (Contracts for Difference), Options, Warrants & Futures.
CFD’s and Futures are both high risk, but as you’re young, it’s a good place to start learning how to manage risk.
That should keep you busy for a while.
Kind Regards
Tanya
- "Real Estate Mistakes"
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