Antilag Financial planners

[SircatmaN]

Anyone on here a financial planner? I've got my wedding in October and when I am back I'd like to look into renting out my 3x2 and building a new house as our mortgage has now dropped below the cost of renting (Finally!).
If not can any of your recommend anyone who you have used and what sort of things did they manage to do for you?

[Fukushima]

http://www.troll.me/images/joseph-ducreux/fuck-bitches-get-money.jpg

[mARC]

Not to bag out financial planners but why do you need one in this case, get yourself a mortgage broker, and an agent to manage the property?

Or alternately just get a broker and manage the property yourself 'don't know what stream of law you have studied/study but surely you can source the relevant contracts, though it may be cost effective to just get an agent to manage?'.

Perhaps seeing a financial planner for income protection insurance, other relevant insurances for income/rental insurance backup?

Law firms usually pay for income protection insurance for their employees? If so this should be a cake walk where you can potentially save a lot of cash.

[Buckets]

Establish series of businesses selling items such as kitchen ware and drugs and you'll be rolling in cash in no time. No need to worry about such things then.

[ossie_21]

Firstly buy a coffee shop, then build grand manor

[shifted]

@mARC - would a financial planner be more beneficial then when looking at multiple investment properties and a/multiple business/es?

[to4garret]

All the "financial planners" I've seen were only interested in selling over priced life/income insurance.

[SircatmaN]

This is the sort of advice I'm looking for, I only thought financial planner because I'm keen to go through and set up other possible investments in the future that might not be around housing and want someone to go back and forth with. I can deal with most of my own legal stuff but I am not good with tax and stuff like that so want the whole picture looked at.

Also I want to fuck bitches and get money.

[matty12]

Also interested. Is there someone better to speak to when setting up investment properties in regards to tax/depreciation etc?

[cplagz]

Also interested. Is there someone better to speak to when setting up investment properties in regards to tax/depreciation etc?

Yeah, your accountant. If they can't give you tax and financial advice they aren't worth using. You can then calculate your borrowings capacity and work out where to invest the funds.

[Darkside]

^^^ An accountant. (edit...beaten to it) IMHO establishing a good relationship with an accountant is handy. They can offer good advice around tax and basic investments and aren't generally in a position where they are copping commissions and kickbacks like fin planners can be to push you into certain products. Generally a bit of a case of set and forget. Spend some time getting the setup right, then just maintain it. Dont get hung up on any tax minimisation schemes, just make sure you are deducting all relevant expenses.

Also worth educating yourself a little as its not that hard to do the grunt work for your accountant. ie Have a spreadsheet and record income and expenditure and keep all your docs. Will save you some $$ and help you stay on top of your investments.

Also, fuck property managers :) Have a look here for all the info you need to manage your own properties. Does mean a little bit of work for you, but generally it isnt that hard. Main key is do your best to select good tenants and insist on direct debit payments of the rent.

http://www.commerce.wa.gov.au/consumerprotection/Content/Property_renting/Renting/NewRTALaws.html

[matty12]

Accountant, of course.. Antilag accountants????

[TJ]

Dylan.

Rob if you want mortgage broker one of closest friends is one and he wont fuck you around. Let me know.

[volt_bite]

As above, accountant and mortgage broker will be your best friends.

One thing I just did recently was reorganise my finances and am aiming to buy another house/property after just finishing off my current one.

First thing is figure out what you want to do, I guess you can speak to an accountant first with that just on a high level approach. Second thing is speak to a mortgage broker so they can give you a rough idea based on your current debt/equity, current/projected rates etc and figure out how much you have and will need in order to secure that second property.

TL:DR I found out that if I were to rent out my current 4x2 and buy a 500k property, I would need 20k+ deposit and it will only cost me an extra 1k net per month. After taking into account a LVR of 90% on my current property.

Also usually you want to start planning a bit more in advance, like have a 1 year, 3 year, 5 year and a 10 year plan. Ideally you would start buying a property before your house becomes positive so don't have that "tax benefit" gap between now and when you can buy next.

[mARC]

@mARC - would a financial planner be more beneficial then when looking at multiple investment properties and a/multiple business/es?

I use to manage these guys at a previous firm I worked for, they run seminars on property investment so perhaps they may be worth a look http://memberlink.tic.com.au/landingpage/Default.aspx?Id=8775 'I have no affiliation with this business'.

In relation to business it depends on what stage you're at 'starting new or purchasing existing', an accountant can help with the due diligence, perhaps a financial adviser can assist with cash flow analysis and financing 'but you'll find that most accounting firms now have all these services under one banner'.

IMO a financial planner who came from accounting is more beneficial then a straight financial planner as you're getting both perspectives without possibly having to see numerous people.

P.S: Any reference I have made to insurances in this thread is purely from a fail safe/asset protection perspective.

[MrSparkle]

As above, accountant and mortgage broker will be your best friends.

One thing I just did recently was reorganise my finances and am aiming to buy another house/property after just finishing off my current one.

First thing is figure out what you want to do, I guess you can speak to an accountant first with that just on a high level approach. Second thing is speak to a mortgage broker so they can give you a rough idea based on your current debt/equity, current/projected rates etc and figure out how much you have and will need in order to secure that second property.

TL:DR I found out that if I were to rent out my current 4x2 and buy a 500k property, I would need 20k+ deposit and it will only cost me an extra 1k net per month. After taking into account a LVR of 90% on my current property.

Also usually you want to start planning a bit more in advance, like have a 1 year, 3 year, 5 year and a 10 year plan. Ideally you would start buying a property before your house becomes positive so don't have that "tax benefit" gap between now and when you can buy next.

Are you focusing on keeping your investments negatively geared?

[volt_bite]

No, not particularly since I haven't hit the highest marginal tax bracket yet.

As a generalization, most houses would probably not be positively geared anyway.

[matty12]

We currently have just purchased another block, were looking at selling our current place to fund the build on the new one. After realising that rent in between would almost cost the same as our mortgage repayments we are now investigating whether we may be able to keep our current place borrow enough to build and then move in to the new joint and possibly rent out our old joint.

The hard part is finding someone that you can rely on giving good advise on ways to do this, we currently have a mortgage broker that was highly recommended through a friend sussing the sums for us.

[REXXXED]

Couldn't agree more with what Marc has said.
Good Mortgage Broker + good Accountant will do you good for what you need. In regards to the advice and processing side of things.

However being that you will be getting yourself into a fair amount of debt I would definitely be sorting out some sort of income protection/life insurance either yourself or via a Fin Planner to be on the safe side as Marc has stated.

Can be done via separate policies or worked inside your superannuation fund etc. A Fin planner can talk you through everything (show you the differing options and costs involved) and process all the paperwork for you.

Shaun Mulquiney [racegtst on AL] on 0421 959 278 is a long term Antilagger who is a Financial Planner/Advisor

I myself am a Mortgage Broker and would be happy to answer any questions or talk you through anything also.

Cheers
Sam

[volt_bite]

If its positively geared, why would you need income protection? lol.

Arguably, you still would! Especially if you have a family.

[mARC]

What happens if you lose your job, how do you support yourself and 'if appliable 'your family', if you can't/are unable to work and don't have suitable cash reserves/retirement savings?

There are to many case specific variables so all posts should be considered general.

[volt_bite]

If its an investment you would have to consider an exit plan. Without income protection, you would exit your investment ideally without losing too much.

But what I am trying to say is it isnt for everyone and even then you can plan without it.

[mARC]

^ Most definitely, hence why I stated not having access to suitable cash reserves or retirement savings.

Its a cost/deduction-reduction in tax/opportunity cost balance.

Holding term is also a consideration.

[matty12]

My mate has also recommended not to tie your second property to the first but to draw a line of credit to purchase, he says most mum/dad investor tie to their house, find something goes wrong and cant sell quick enough and loose the lot.

[stumps.]

I am looking to buy an investment property and will need a loan to pay the deposit on the one I want with later completion. I have a house currently with some decent equity.

The interest rate on the loan deposit prior to house completion is that a regular interest rate (5.xx or whatever) or is it much higher do to it not being a house loan?

[Poktrokt]

Anything related to property purchasing its best to speak with a mortgage broker (as above)
Also might help discussing this with an accountant such as Dylan on here!

Our opinions are very general and I'd hate for any of you to do what one of us do and find yourself in the shit or paying more tax than you should!
Everyone situation is very different so what works for some does not necessarily work for others!

Years ago I started to go to seminars and network! Made a few friends with a common interest to invest! Learned a lot from that and have been buying, selling and renting out ever since!!

[j3rk]

Buy all the houses!

[SircatmaN]

I talked to my mortgage broker today, thanks for the advice guys! Seems like its a goer and doable.

[benjamino]

I'm just about to sign a contract for some land in Piara Waters, to build my first home with the Mrs (I'm 24years old now, long overdue). I've sold my car and saved my ass off for a deposit, and cant wait to invest when the time is right. Reading this sort of stuff is a huge help, so thanks to all for the contributions.


Invest

=

To build all the race cars.

[volt_bite]

Saving money now to spend more later. Thats the idea haha.

[stumps.]

I am looking to buy an investment property and will need a loan to pay the deposit on the one I want with later completion. I have a house currently with some decent equity.

The interest rate on the loan deposit prior to house completion, is that a regular interest rate (5.xx or whatever)? or is it much higher do to it not being a house loan?

Anyone?

[REXXXED]

Re: ^^
Cash out the deposit using your house if you have enough equity. Will be a standard interest rate of your home loan.
Make it interest only (being that the purpose is investment, you will want to keep the interest figure as high as possible for deductibility) and pay any surplus funds you have into your owner occupied mortgage.

[volt_bite]

Will that depend on the LVR Rexxxed? I've heard standard is 80% lvr.

[REXXXED]

Obviously different banks will have different interest rates. Some banks are LVR dependant, some are not. ( I don't know who Stumps. banks with currently)
Happy to discuss in more detail in private for particular scenarios/how much you can borrow etc (assuming you do not wish to discuss your personal finances out in the open?)
Cheers Sam

[Darkside]

(being that the purpose is investment, you will want to keep the interest figure as high as possible for deductibility)

No point incurring higher expenses just for deductions. Still want the most competitive interest rate you can get on your investments. Assuming you are commenting on variances in interest rate between interest only and P and I loans. But agreed, pay off your house first and keep the debt in your investments where at least you can have the benefit of deducting your interest expense.

But at the end of the day, I wouldn't get too hung up on negative gearing. I would rather at some point own the property and have the income.

[REXXXED]

You wouldn't be incurring higher expenses it would still be the same interest rate? The interest rate will be the same regardless of whether the product is P+I or Interest only.
I am commenting on the loan amount staying as high as possible, hence the interest figure is as high as possible, hence the deductibility is as high as possible.

The extra cash you are saving by not paying off your investment loan, place towards your owner occupied debt which doesn't have any tax benefits attached to it.

Would you rather owe bugger all on your owner occupied home, and the whole amount still on your investment (which is claimable), rather than pay them down both at the same time?

At the end of the day you still owe the bank the same amount of money (either way you do it). If you sold both properties you would have the same amount of money in your pocket. One way will just give you more money in your hand at tax time..

[Darkside]

Some comments below. I think we are on the same page. :)


You wouldn't be incurring higher expenses it would still be the same interest rate? The interest rate will be the same regardless of whether the product is P+I or Interest only.
I am commenting on the loan amount staying as high as possible, hence the interest figure is as high as possible, hence the deductibility is as high as possible. Gotcha. If you have to have the debt, have it in your investment. But dont have any more debt than you need. Pay off your primary residence, then chip away at your investments....then retire :)

The extra cash you are saving by not paying off your investment loan, place towards your owner occupied debt which doesn't have any tax benefits attached to it. Spot on

Would you rather owe bugger all on your owner occupied home, and the whole amount still on your investment (which is claimable), rather than pay them down both at the same time? Agreed. Exactly what I said and the right way to do it. But ideally I would rather own the lot :)

At the end of the day you still owe the bank the same amount of money (either way you do it). If you sold both properties you would have the same amount of money in your pocket. One way will just give you more money in your hand at tax time..

[mARC]

I think we can all agree that an expense for the sake of a tax deduction only 'in most cases', is a false economy.

[mARC]

My mate has also recommended not to tie your second property to the first but to draw a line of credit to purchase, he says most mum/dad investor tie to their house, find something goes wrong and cant sell quick enough and loose the lot.

Bumping this up again as I am curious why in some cases financial planners say that cross collateralisation is the best option, is it purely from a cost savings perspective?

All responses will not be deemed as advice.

[j3rk]

Cost savings, using equity (collateral from other homes) saves paying LMI (best case) and removes the requirement to save as much deposit.

The only reason against it I've ever heard was the above "mum and dad investors" who over stretch themselves, then get caught out.
IMO, opinion only, it is a smart and easy way to invest...

[Poktrokt]

Cost savings, using equity (collateral from other homes) saves paying LMI (best case) and removes the requirement to save as much deposit.

The only reason against it I've ever heard was the above "mum and dad investors" who over stretch themselves, then get caught out.
IMO, opinion only, it is a smart and easy way to invest...

THIS!
Using the equity from 1 house to buy another makes sense!
You increase the mortgage on property A and use those extra funds as deposit for property B. This then means theoretically that property B has that extra amount as equity so you then use that from property B to buy property C and so on.
Unless you are poor you should try to never use your appreciating asset to buy a depreciating one, ie; don't buy a car with your mortgage unless you are super good with your money.

Some investors over mortgage, over capitalist etc so get themselves into hot water! Try not to mortgage more than 90% of its value if you can.

Like others have said, this is my personal opinion only.

[matty12]

Bumping this up again as I am curious why in some cases financial planners say that cross collateralisation is the best option, is it purely from a cost savings perspective?

All responses will not be deemed as advice.

My friend who gave this advice to me is all about asset protection. I think this is HIS main advice probably for him and once again may not be suitable for all applications, we know of one guy that had quite a few investment propertys who had each one tied to the one before. He got some bad advice on a property and then couldn't sell to recoup what he owed on it, pretty much lost the lot and is now renting.

They may be otherways to look after your assets and still borrow using cash in your previous property but ive only just started looking into investement propertys in the last month.


We have just got a scenario from a mortgage broker uping our loan amout on our 1st property to gain "cash" to lower our LMI for our second one. Im now alittle worried that when we make this our investment that it will have less money spare once the rent/repayments are made. Is this a bad thing?? I was hoping to have more per week into an account so when shit goes wrong ie maintainence/bad tenants we will have funds available and wont come out of our pockets. Or am I better to have a high loan on a property we can claim on than the one we will live in?

[REXXXED]

I try to keep them separate wherever possible Marc. Cash out money from the place with equity to buy the new one.
Easier in the long run. Far less headaches. Easier when it comes to selling one etc etc

IF there is LMI to be paid on the new purchase because there is insufficient equity, generally it will be in a far cheaper Mortgage Insurance 'bracket' if only paid against one smaller loan than it would be against a combined larger loan. Of course I would work out all sorts of different scenarios and work out which way is cheapest...

Disclaimer: all scenarios are different, so obviously the above might not be the wisest thing to do in every scenario.

[REXXXED]

Or am I better to have a high loan on a property we can claim on than the one we will live in?

This.

Pay/reduce your owner occupied debt first and claim the loans with an investment purpose higher. If you can have an offset account with ALL of your savings in it linked to your owner occupied loan as well.

Correct me if I am wrong Marc, but just because the small loan (i.e.: the cash out for the deposit of the investment property) is linked to your owner occupied property. The purpose of the loan is 100% investment, therefore you can claim that as well.