Investment Finance

The difference between “investment debt” and “home loan”?

Wednesday, August 25th, 2010

So you have an investment property….do you know the difference between your investment debt and your home loan?
A home loan in this context is your personal, non-deductible home loan, secured by your home. The investment loan is the loan that was used to buy your investment property. The vast majority of property investors use the [...]

The Secret to Successful Property Investment

Monday, August 2nd, 2010

Successful property investment requires two critical components, the right property funded with carefully structured finance.
The Cost of Getting it Wrong
Purchase the wrong property and it could cost you tens of thousands of dollars to replace it with the right property. Poorly structured finance blunts the performance of even the best investment property; slashing your tax [...]

10 Most Common Mistakes Made by Property Investors

Friday, July 23rd, 2010

10 Most Common Mistakes Made by Property Investors

Failure to plan:

Purpose/Reason/Objective
Strategy
Resources

Wrong property:

Poor location/locality
Splinter investment
Tenant and/or rent-ability issues

Poor Structure:

Ownership which results in:

Higher tax liabilities
Asset being put at higher risk
Earlier and higher land tax liabilities

Finance which causes:

Home to be put at excessive risk
Cashflow problems which affects lifestyle
Higher tax liabilities
Stunted returns

Excessive risk though:

Excessively high LVR’s
Portfolio imbalance
Lack of awareness of [...]

The Banks Secret Weapon: Final Part

Tuesday, June 29th, 2010

We come to end on Gordon and Sally’s investment journey.
Let’s see why their finance wasn’t structured correctly…
.1. A lender will always optimise its position, by obtaining and retaining all available properties to secure the loan. The lender is in a powerful position, while Gordon and Sally are in a weak position.
.2. A bank cannot achieve [...]

The Banks Secret Weapon: Part Three

Friday, June 25th, 2010

Lets find out what Gordon and Sally’s Grave Mistakes were;

Firstly, none of this had to happen.
This whole tragic scenario could have been avoided if only Gordon and Sally had sat down with a financier who was skilled in correctly structuring finance for property investors.
They had made many financing errors, but it was three key mistakes [...]

The Banks Secret Weapon: Part Two

Wednesday, June 16th, 2010

We continue on with Gordon and Sally’s story about their investment property…
Banks won’t lend 106% of the purchase price against a property without a much higher interest rate
and a huge mortgage insurance fee (which, by the way, only covers the lender… not you - you pay
the premium for their peace of mind!)
As you can see [...]

The Bank’s Secret Weapon

Friday, May 28th, 2010

Property investors Gordon and Sally Jones are about to lose everything, their home, their three investment properties, and potentially their marriage; if only they’d been advised on how to protect their home from the bank when they set their loan up.
You see, their bank, like all lenders, has an insidious ’secret weapon’ embedded in their [...]

Ten Tax Tips

Thursday, May 13th, 2010

TIP 1: A deduction rarely claimed
Amazingly the most frequently overlooked tax deduction is interest!  Many advisors tell their clients to pay their rent directly into their home loan to eliminate it more quickly.
However, the required loan structures and practices are rarely established causing the home loan to actually increase as deductible debt is unwittingly mixed [...]

A Real Life Property Investment Case Study

Friday, May 7th, 2010

A client, let’s call him “Dave”, called me today to ask where and what he should be buying for his next investment property. Dave wanted to buy a nice flat in the inner suburbs but his budget this time is limited to just $400,000 and the current hot market would restrict his choices. This was [...]

The car or the property?

Wednesday, January 20th, 2010

Gripped by Fear
It was the winter of 1998, I remember it like it was yesterday, I’d just added another two terrific properties to my investment portfolio. My mate “Billy”, not his real name, was aghast, he said he just wouldn’t be able sleep at night with such a debt.
A Lifetime’s Work Wasted
Fast forward 12 years [...]