Off The Plan - Shopping Mall IP Stands??

L

li21

hi all,

Just wanted to get an opinion of wht people think of those kiosks/stands in shopping malls that are trying to sell IPs interstate?

In sydney I've seen a few but never really thougt about it till now.
The flashy stands with models and things on the table and say "$1000" deposit or $95/week.. which is never completely true. Some of them have a "rental gaurentee" which ive been told to stay away from

I had a chat to one of the guys, basically you obtain finance, purchase a brand new house, which is yet to be built and negative gear it. These houses didnt have the "rental gaurentee" however. Strangely enough this is more comforting

The thing that attracts me is that its in a decent area (i think within 15kms of Brisbande CBD) and its brand new which means plenty of depreciation..

They can help with finance and assit with completing on of those forms which allow you to claim tax back on a monthly basis.

Anyhow any one have opinions, success or horror stories?
 
Run as fast as you can - in the opposite direction!!!!!

Friend of a friend went into something similar - she fully owned her PPOR and bought 3 properties. She now faces bankruptcy and the loss of all 4 properties.

Cheers
LynnH
 
If you are still in contact with these guys, but haven't committed yet, ask them if you can supply your own;
1. Finance
2. Legal advice
3. Bank Valuation.

If the answer to any of these is "we prefer you didn't" or "no" then you need to run away.
 
LynnH said:
Run as fast as you can - in the opposite direction!!!!!

Friend of a friend went into something similar - she fully owned her PPOR and bought 3 properties. She now faces bankruptcy and the loss of all 4 properties.

Cheers
LynnH
Click to expand...

Sounds like a nightmare? Can you give any more information on what went wrong?

While I'm not interested in taking up an 'offer' like this (I prefer to buy locally ;) and do occasional drive-bys ... ) I would like to know how everything went from rosy to horribly wrong?

DJ
 
DJ

Would give you more information if I could, but as I said, she is a friend of a friend, and I didn't like to pry too much. All I know is that she invested under similar circumstances to those described by li21, and that all of the paperwork (valuation, conveyancing, etc) was done by people associated with those who were selling the properties. She was given no paperwork (apparently) and doesn't even know who the loans are with (unbelievable as that may seem - I was aghast when I heard that bit!). She has been to the ombudsman, but was told that the company had 45 days in which to respond - and I've been told that that will be too late to save her from losing the properties and facing bankruptcy. Oh, and there were 'rental guarantees' involved, too! As to what actually went wrong/processes/how long it took, I don't have that information.

But it does make me cross that firms are allowed to operate in that manner, seemingly untouchable by ineffective government legislation. We have been through all this before in Qld, and the Government (supposedly) tightened up the legislation - but still the sharks circle!!!

Cheers
LynnH
 
First question to ask is that if the properties are so good, then why aren't the locals snapping them up?

Why go interstate to find buyers?

Bet they are in Queensland. SEQld properties have been flogged interstate for years, in fact there is a name for it - "two-tier pricing", i.e., one price for interstaters and another price for locals who have better knowledge of values.

Run a mile.....
Marg
 
li21 said:
Ill tread carefully, just seems to be a good way to get max deprecisation in something new.
Click to expand...

What's the point of getting $10k in 'extra' depreciation if you have to pay $10k or more for it? Depreciation is only ever worth the marginal tax rate to you. So $10k in depreciation is only worth, say, $4k to you. If you end up buying an overpriced property you'd have to take out $10k in debt to 'buy' that depreciation.
Alex
 
Don't focus on the tax benefits!!!!!!! Please!!!!

I also agree with the others........run like hell away from these types of things. With the growth we have seen in Bris-vegas and Marvelous Melbourne, ask yourself, why do these properties need to be marketed interstate. Why? Because they are dogs that they can't sell locally. Because they know they can get a higher price interstate, ala the old two tier marketing. Maybe they are in less desirable locations.

I'd also suspect that so many people have their hand out along the supply chain for one of these "investments" you will pay a higher price. How else do these companies pay for their shopping centre stands, glossy borchures, nice models, the solicitors kickback, the banks kickback, the quantity surveyors fee's, not to mention the rental guarantee..........it's all loaded into the final products asking price.

The other way to get max depreciation, is to buy something new.......yourself. Find some reputable local builders or architects and put your name down, let them know the areas you like and give them a rough budget, they may need to offload one or two properties quickly to get finance, although in this market those kinds of oportunities may no longer exist.
 
alexlee said:
What's the point of getting $10k in 'extra' depreciation if you have to pay $10k or more for it? Depreciation is only ever worth the marginal tax rate to you. So $10k in depreciation is only worth, say, $4k to you. If you end up buying an overpriced property you'd have to take out $10k in debt to 'buy' that depreciation.
Click to expand...

If the land component and building size is similar, paying $10k more for a new place might not be such a bad deal if it rents for $50pw more.

But generally the difference is far more than $10k and the above comments above apply. Eg a $200k house renting for $200pw versus a new $300k project home (on a smaller block) renting for maybe $250pw plus depreciation.

The new home might still put more money in your pocket short term but as soon as you leave your job it becomes more of a drain.

A $210k place (built c1989) might be a happy medium and give the best results of the lot unless you can get a 30-40 year old cheapie for (say) $150-180k which might be as good or better.
 
LynnH said:
She was given no paperwork (apparently) and doesn't even know who the loans are with (unbelievable as that may seem - I was aghast when I heard that bit!).
Click to expand...

The sad thing is, you hear about this sort of thing all the time (my immediate family included).

ie, people handing over their money/investments to a planner etc and then not asking the right questions (eg, what interest rate on the loan? who is it with? term?) and not getting any paperwork.

What can you do? Legislation can only go so far to protect people ...

I must say, though, I am a bit surprised to hear that this has happened to someone who had already purchased several properties. The group involved must have been very convincing.

DJ
 
Debt Junkie said:
I must say, though, I am a bit surprised to hear that this has happened to someone who had already purchased several properties. The group involved must have been very convincing.

DJ
Click to expand...

DJ

From what I was told, the lady concerned is a very hard worker and bought her PPOR and paid that off very quickly.

As my friend said, the thing that this lady has going for her is that she is in her mid-30s and knows how to pay off property quickly, so she will be able to dust herself off (which she is apparently determined to do) and start over again. But, hopefully, much wiser for the experience. :(

Cheers
LynnH
 
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When are the free flights starting again?

It seems that 2003 is back again.

Listening to the AM talk stations (heard by those well-off 50+ not tuned to the ABC) I noticed a recent upsurge of ads for investment property marketeers.

These ads outnumber those from share trading gurus by at least 5:1. And even competing with the Federal Government.

This morning was a milestone. In one ad break there were two consecutive ads - one for a property investment expo and another spruiking IPs.

Normally it would be good commercial radio etiquette to space ads from potentially competing merchants of similar products, but it seems that 3AW is running out of ad room!

At work I pass a static display spruiking an inner city block of flats.

Will Henry Kaye make a comeback?
 
Spiderman

It's a bit scary, isn't it? Lots more newspaper ads are spruiking investment property and the property shows have started up again on TV!

Don't know whether Henry Kaye will make a comeback, but there are certainly many others who will fill his shoes! The 'two-tier' marketeers seem to be well established in SEQ again!! And so many people will get suckered in - yet again. As I said - scary!

Cheers
LynnH
 
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Guys,

You wanna try living in a mining town. This stuff is just consistently being promoted to death..........two cold calls a night I'm currently averaging, in addition to the continual sickening bleating over the radio and TV.

I can confirm though that people seem very easily parted with their money.

Obviously it's working.

Getting a lot of "look what we've bought" and then a blank stare when I ask what the yield is.........:(

Some of the neg gearing holding costs are absolutely mind blowing.....even for people on high salaries.

Pretty sad really


ciao

Nor
 
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