Episode 13

When property will work – and when it won’t! Quick tips for property investment

Welcome to Finance and Fury

  • Quick tips to help with making successful investments in property
  • When property will work – and when it won’t!
  • It is two-fold – How well the property works, and then what your own personal situation is like as well

Situations that will work – essentially, doing well in property compared to not doing well

Property

  1. Paying fair value or undervalue for the property – The first step is making sure that you don’t lose from the get go
    • Don’t overpay – New builds can have the FHOG built in
    • Or at least pay the fair value in an area that will grow
    • Remember for a place where land values will go up – The property price will technically go down (remember to watch out for maintenance costs)
  2. Potential zoning and subdivision – future capabilities of the property
    • What is the ability to increase prices?
    • Zoning – growth of land value from high density zoning
    • What are the limits on your ability to change the property?
  3. What is the ability to increase yields?
    • Sub division – 2 incomes for one
    • Duel occupancy

Your situation

  1. Stable cash flows – Don’t get caught out
    • The ability to have long term ownership and maintain payments is important
  2. Can hold for the long term
    • Future plans are important – Property is great for growth – But you have to wait
  3. Limit your outgoing – $50 or $100 p/w – Don’t get in a hole
    • The worst case is to be in a position you are paying more than you earn long term

Situation that won’t work!

The property

  1. The hidden costs – the things that kill the profitability of property
    • Sinking Funds/Body corporates – Seen $6,000 on a place renting for $28,600
  2. Leveraging too high
    1. Price declines can lead to banks increasing your repayments – LVR too high
    2. Interest rate rises – too much debt against value = Bad yields
      • Repayments may be unaffordable if too much debt and rent declines

Your situation

  1. Family/income situation changing
    • Maternity leave or starting a family – Additional costs plus lower incomes
    • Needing to buy a new home for yourself – bank may not lend if existing investment debt
  2. Property is a wealth trap
    • Worst property in best street is a good buy – but not if it is going to cost $300,000 to make it habitable
    • Title searches – Flood zones, major highways (Moving to Brisbane, places in Kenmore)
  3. Negatively geared – with no income to offset or low marginal tax rates
    • MTR of 21% means that 79% is being lost
  4. Loan or ownership structure incorrect
    • Joint owned but one person has no assessable income – bad for deductibility

Thanks for listening!

Agenda 2030 – A global conspiracy theory, or something to actually worry about?

Welcome to Finance and Fury, The furious Friday edition Intro ep to a new FF series – probably going to be the biggest Today – episode to give the bird's eye view of the overall topic - massive topic - ranges from education, energy, transportation, medicine prices,...

Say What Wednesday: Cryptocurrency Assessment

Hi Everyone, and Welcome to Finance and Fury, the Say What Wednesday edition. Today we have a question from Daniel: The question is around cryptocurrency; Daniel has come across a fascinating crypto called Liven. The business model seems really sound, with the...

Democracy has never existed in The City of London

Welcome to Finance and Fury, the Furious Friday edition Today we will talk about democracy never really existing in The City of London We are continuing on with the series of Brexit – nothing really new to report as the vote has been pushed back until October The...

How I buy shares – the horror stories and the happy endings, plus technical vs fundamental analysis

Say What Wednesdays How I buy shares - the horror stories and the happy endings, plus Technical vs Fundamental Analysis Welcome to Say what Wednesday Today's question is from Emma. She says, “I'm new to the podcast so not sure if you have covered this in the past. I...

The Great Debate! Managed Funds vs ETFs vs LICs…what they are, how they work and what’s best to invest in

Episode 9 The Great Debate! Managed Funds vs ETFs vs LICs...what they are, how they work and what's best to invest in. The debate! (it’s not time for a math debate, there will be numbers) Please do listen to our episode “Pay yourself” first The choices are: Managed...

Say What Wednesday: First Home Super Saver Scheme

Say What Wednesdays First Home Super Saver Scheme: Using superannuation to buy your first home Today’s Say What Wednesday question comes from Emma, and relates to saving for a house deposit: “Hi, thanks so much for the podcasts - I have learnt so much. My question is...

Is the ASX going to boom in 2020 thanks to Quantitative Easing?

Welcome to Finance and Fury Today – want to explore the chances of the ASX booming next year Have been talking about complexity theory for the past few Monday episodes – Focusing on collapses – but what if positive feedback loops kick in further – in the form of...

Furious Friday: How do we avoid the decline into a recession?

Welcome to Finance and Fury the Furious Friday edition Today we are continuing the discussion around supply-side economics We will talk about the best ways to avoid declining into a recession as an economy and some solutions for economic growth. Last Friday we talked...

Say What Wednesdays: High Roller; Start Investing with $1,000

Say What Wednesdays High Roller; Start Investing with $1,000 Welcome to Finance & Fury, the Say What Wednesday edition, where we answer your personal finance questions each week. Today’s question comes from Tara; “Hi Finance & Fury, love the show! I was...

Crony capitalism and Modern Monetary Theory in action!

Welcome to Finance and Fury, the Furious Friday edition. Today we’re looking at Modern Monetary Theory in action. The first stage, how this is going to be practically done, involves the merging of the central banks and Government Treasury. We’ll also look at the...

Pin It on Pinterest

Share This