i give up....

...trying to convince my parents to buy anything.

i think they like the idea of being an investor, but they just don't have the balls to put money on the table.

had a GREAT set of units designed, a stone throw from a new trainstation in an areas with a shortgae of good rental stock. brand new 3x2DG and after ITWV and depreciation they were CF+ by about $20 a week with definite rent increases coming for the whole area.

good area for CG too - best of bost worlds.

dad didn't like the shape of the lot and thought the "look of the house isn't something i'd live in". it's in perfect keeping with the surrounding homes and the lot shape is the reason it's so cheap.

think worst house, best street, but still brand new.

did he take it? "nah...not this time".

so that's it - i give up. i'm going to outright refuse to talk to him about his real estate dreamings and he can cop it sweet at preservation age (3 years away) when he tries to draw on his non-existent super.

some people have to learn the hard way, unfortunately, my parents are some of those people.
 
some people have to learn the hard way, unfortunately, my parents are some of those people.
I think I know how your parents feel. :D Is there some powerful reason that they should invest? I haven't any idea about them so have no idea if what you propose is right for them. Are you sure what you suggest IS?
 
so that's it - i give up. i'm going to outright refuse to talk to him about his real estate dreamings and he can cop it sweet at preservation age (3 years away) when he tries to draw on his non-existent super.

Aaron

I don't see why he should cooperate.
Did you take them to a retirement planner to see if that's a good decision for them?

IMO property is no longer the big money maker it was before the boom. I don't know their personal circumstances but if they intend to retire in the near future and have not enough super they would probably be better off salary sacrificing into super.

Paying less tax and getting guaranteed returns can be better than gearing these days and without the hassles which come with an IP.
 
...trying to convince my parents to buy anything.

i think they like the idea of being an investor, but they just don't have the balls to put money on the table.

had a GREAT set of units designed, a stone throw from a new trainstation in an areas with a shortgae of good rental stock. brand new 3x2DG and after ITWV and depreciation they were CF+ by about $20 a week with definite rent increases coming for the whole area.

good area for CG too - best of bost worlds.

dad didn't like the shape of the lot and thought the "look of the house isn't something i'd live in". it's in perfect keeping with the surrounding homes and the lot shape is the reason it's so cheap.

think worst house, best street, but still brand new.

did he take it? "nah...not this time".

so that's it - i give up. i'm going to outright refuse to talk to him about his real estate dreamings and he can cop it sweet at preservation age (3 years away) when he tries to draw on his non-existent super.

some people have to learn the hard way, unfortunately, my parents are some of those people.

Don't feel too bad.

This is what most of the planet is like; all great intentions, but no action. To buy an IP for most people is akin to speaking in public - their biggest fear.

And yet, it's amazing; many people will line up to put down big money for a holiday house which will cost them directly out of pocket funds with no returns, and never use the house. I see it every day where I live. vacant holiday homes that are used a mere handful of days per year - if that.

But show them another property (an IP) that they will be able to get some income and tax deductions from, which might cost them virtually no money from their own pocket....and they run a mile.

Forgetting the income and tax deductions, the IP will have the same outcome as a holiday house - a house they have forever, with some cap growth, and it's a house that they never use: confused:
 
i finally got mine to buy their first IP as 67 yo's, they have three now at 69yo but boy was it hard work!

And who will be the big winners, them or their beneficiaries? If you pushed without an independent financial advisor involved you leave yourself open to suspicion.

I think Aaron should be careful too.
 
And who will be the big winners, them or their beneficiaries? If you pushed without an independent financial adviser involved you leave yourself open to suspicion.

I think Aaron should be careful too.

u are a cynical old bu**er aren't u sunfish :)

Definitely pushed them into it and definitely without independent financial adviser and i received some financial compensation for the transactions as well and i am one of 3 beneficiaries so i can't understand where any suspicion would come about ;).

Given you have asked the question and in doing so questioned the essence of my moral fibre i will give you the reasons behind my pushing them into it.

My old man is a workaholic and has agreed to retire at 70 next year, parents upgraded home 10 years ago and were paying large p and I repayments trying to pay it off by next year.

We made a plan that involved them switching the remaining $250k to interest only so they can enjoy the extra cashflow and the lifestyle now. At the same time they borrowed $1m to buy three properties with $80k left over to cover all the payments for 5 years so they didn't have to make any repayments on the investments.

They bought 2 in Gladstone for $205k and $258K in Jan 2007 and a 3 bed unit a bit later in 2008 in Elwood for $410k.

Aim was/is to sell one property in July 2011 when he retires to clear home loan, sell another in 2013 to throw another $200k approx in super and again in 2015 sell the last one and put proceeds remaining proceeds in super.

Current vals are

Gladstone 1 $365k

Gladstone 2 $395k

Elwood 1 $585k


I hope the last dollar left in their super is spent on their final day on this earth and I am sure the other 2 agree. Most women in my family live to a minimum of 90 so any inheritance would be a long way off anyway:)

Cheers

BT
 
u are a cynical old bu**er aren't u sunfish :)
Of course I am. That's a given.

I did try make the post in a nonjudgemental way but it's not easy. But as you know I'm nearly the same age as your parents and not keen on being pushed. :D

I didn't read the details carefully because they are not my business but I gather that it is "short term" and not a long period of neg gearing you have advised which is defensible should someone even more cynical than I actually question your motives. Just be careful you are seen to be doing the right thing, is all.
 
And yet, it's amazing; many people will line up to put down big money for a holiday house

numerous times i've seen people think about buying an ip, and then instead decide to renovate and extend their ppor AGAIN for massive overcapitalisation.

unless they have a flexible outlook (rare) the older people get the more stubborn and narrow visioned they seem to become when it comes to any lifestyle decision - health, wealth and enjoyment.

don't fight it - not worth the stress.
 
I think I can comment on this sort of thing with some more exposure than most. I have sat in front of well over 1000 people/ couples over the years with exactly such questions.

MOST people will put off making such decisions for obvious reasons, until they hit their late 40s to mid 50s by which time MOSTwill throw out the reason that its too late.

In general, taking into account such a client's risk profile and their likely investment horizon I usually walk..........and come back after we have set them some home work so they know what their risks are. I have always said, if you are grossly uncomfortable in making such a decision, then you probably wont stay the race, becaue your emotions will be custard. With emotion being faster and usually stronger than logical thought, the outcome of such investments is predictable.

Some education and exposure to others that have been through itcan be valuable to reduce the grossly uncomfortable to just outside of the comfort zone.

Ultimately, there are risks in proceeding and making a decision to do "something", and there are risks in doing "nothing".

The REAL risk that you face as THE catalyst with such things is that a "better" sales person can often "get them". Often with something that may not present a "good" investment opportunity in reality, but it comes in a great box. Examples are tax effective investments, protected managed funds, retirement village units, serviced appartments, many an OTP project, mezz funds and the list goes on and on.

Thats why when you start putting investment ideas into people's heads you had better finish the job properly, otherwise it could be argued that you had some input into their mess !

ta
rolf
 
Thats why when you start putting investment ideas into people's heads you had better finish the job properly, otherwise it could be argued that you had some input into their mess !
Human nature being what it is you may well be blamed for any losses.

I like the investment disclaimer: "I don't share in your profits so don't expect me to share your losses."
 
for the record, my dad has been bugging me to find him something for ages, but everytime i bring a deal to the table, he cowers away.

so he's chasing it, not me. he gave me specific instructions as to what he wants and i find these deals for him.

this is CF+ and a decent growth area next to public and private infrastructure.

it's about finding an area that's going to be high on rental demand, therefore putting more and more cash in his pocket, with CG a nice by-product, not the main goal.

this is NOT some pseudo-inheritance i'm trying to build and i take exception to anyone suggesting so.

my parents work bl**dy hard and i'd like to see them slow down a little and enjoy life like they want to.

and honestly - an impartial financial planner? would you like a straight talking politician with that?
 
for the record, my dad has been bugging me to find him something for ages, but everytime i bring a deal to the table, he cowers away.

and honestly - an impartial financial planner? would you like a straight talking politician with that?
Maybe just look at it from another angle,your Father has made some big "Accomplishments",you being one of them,investing is another matter when it's within the family inner circle,willair..
 
Aaron, your Dad sounds like an older version of my husband. He wasn't opposed to investment, he was keen on IP (without the legwork), but he just would never walk the walk.

After around 12 months of me doing all the pushing; and missing out on a number of better deals than we ended up with I finally got to the bottom of his issue. It was as simple as he wouldn't purchase a property that he wouldn't live in himself....and he has high standards.

It didn't matter how much convincing, or number crunching I did, this idea of the property being something he would live in was our Mt Everest. Once I realised this; and accepted it as a "non negotiable" for IP1, this narrowed the type of property we were looking at and the area significantly. Finally we were off and running, and it didn't take long to find a suitable property.

The deal we did was average - not great or perfect, and not as good as some of the ones we passed up, but the "perfect" deal became less of a priorty given we are in our mid 30's and have time on our side. The critical factor for the first property was to actually walk the walk with Hubby being comfortable.

Now that we've achieved that we can start looking for IP2, and I can start working on Hubby's pre-conceived ideas about what is necessary in an IP. I intend to drag him along to a few rental OFI's so he can see first hand what type of home people are happy to rent. I don't know if it will work or not, but it's a start.

Is it worth talking to your Dad about what part of the deal you presented didn't suit and try and refine his criteria looking closely at the "emmotional" side of the decision.

Cheers
Buddybee
 
Is it worth talking to your Dad about what part of the deal you presented didn't suit and try and refine his criteria looking closely at the "emotional" side of the decision.

i think maybe bb has hit this spot on ... try and discuss with your dad what is really holding him back. might take some time to get past the preconceived answers and drill down to what is his real concern, but might be worth a few beers to invest the time.
 
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