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gabbigirl

Investment property

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gabbigirl

Wow, these responses have been so helpful, thank you.

 

I think I really do need to see a specialist, as we probably need to take advantage of the tax benefits of super.

 

We just thought that a property was a possibility as someone else paid the mortgage back and we could live off the rent when it was paid off. Clearly I need to do lots more research.

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MadMarchMasterchef

What I find worrying is my current super balance is less than I earn per year - how on earht can it keep me in my current lifestyle for 20-30years?

 

 

Mines only about 100k after being in the workforce for 25 years ( albeit with 3x maternity leave and a couple of years of travel)

 

I think the idea is compound interest is what builds it up so the more you put in there younger, the better overall long term outcome.

But in the real world paying off a mortgage as soon as possible seems more urgent so most of us put all our money into that until our mortgage gets pretty low and then we start thinking about what next.

Our generation is going to have to work longer though so even though we had kids later we will still have more time to build up that super a bit more. Personally I think the Barefoot Investors work 2 days a week as long as possible sounds appealing :)

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Lifesgood

Compound interest isn’t going to help you achieve your retirement goals. Diversified investments, contributing extra amounts and paying minimal fees are what is required.

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AKAmum

I read some Noel Whittaker advice in a newspaper column when I was young and had started working full time and it made sense so I followed it. And kept reading his books and columns and following his advice.

 

His advice is very similar to TBI, but not as ‘sexy’.

 

I still haven’t bought an investment property yet though. I concentrated on paying off the mortgage and putting extra into a high growth super account.

 

Also spent a shed load of unplanned for dollars on a private education for the last 2 years of my DD’s schooling. Considering how well she is doing post-schooling, I don’t regret that at all. That was going to be the deposit for our investment property.

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born.a.girl

Wow, these responses have been so helpful, thank you.

 

I think I really do need to see a specialist, as we probably need to take advantage of the tax benefits of super.

 

We just thought that a property was a possibility as someone else paid the mortgage back and we could live off the rent when it was paid off. Clearly I need to do lots more research.

 

 

That CAN be true. You're more likely to hear from people who've made a success of it than those who don't. See my story earlier about a couple I know, where she'll be working well into retirement years just to pay the mortgages.

 

Where is the deposit going to come from? You have to consider what that money could do for you elsewhere. It might be better in an IP, it might not.

 

Whose name is it going to be in? You need to not only think of now, but in retirement, who's going to be declaring the income.

 

If you could 'live off' the rent, what will you do if its untenanted for a period? What if they don't pay the rent? You need to be able to 'live' without relying on it, because that's what gets people into trouble if they just have one IP.

 

What if you desperately need $100k at some point? You might struggle to get a new mortgage if you're retired, and if you're forced to sell, it might not be the best time.

 

I know this all sounds very negative, but you can't go into such a big decision, with an asset that's not liquid, where part of it can't even be liquidated easily, and is in the same asset category as your existing asset.

 

Another case (cos I'm old) someone I was friends with at the time bought a beautiful old house and kept her original one - both in old, inner suburbs of Melbourne. She had a thriving business employing a few dozen people. When the late eighties crunch came, she lost the new house, and had to move back to her original, smaller one with a mortgage greater than when she'd moved out.

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Not Escapin Xmas

One of the biggest probs with property is that you can’t sell ‘just the front lawn’ if you need to. Whereas with shares, you can always sell ‘some’.

 

Plus you are talking about borrowing money for an IP. Depending on your age, you might get a nasty surprise when you go to ask the bank for a loan.

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