919 dodgy property deals, CGT changes, the 6 year rule, financial regret + more
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What red flags should I look for when working with property professionals?
These would have to be the reddest of red flags I've seen in a while. I had both of these emails come through to our inbox through our website. And I might get you to read the first one, John, and then I'll read the second one. Then we'll talk about it because there's some wild stuff here I would hypothesize.
Hi, Glenn. New listener here. Never cared about finance shite until turning 40, and now I'm balls deep in it. And absolutely loving the podcast. Just wondering if you've ever done an episode deep diving into companies like XXX, which help you build investment properties. They're a one-stop shop who help you with everything from getting the finance, choosing house and land package to suit your budget, and even guarantee you'll have tenants and within so many months. My mate has just signed up with them to build two properties straight off the bat. The strategy is set up as a seven-year plan paying interest only and selling after seven years and profiting whatever the growth margin has been. I'm not sure if it's sus or a legitimate good idea.
Cheers.
What upcoming changes to capital gains tax were announced in the Federal Budget?
And then the next one that we got, my partner, his siblings and parents have a financial advisor that they all use and has helped them set up a shared self-managed super fund. So self-managed super fund can have up to, I think, six members that are somewhat related. Recently, my partner and I have had a big conversation around planning our financial future. We decided to meet with their financial advisor to discuss our options. I'm not paying for the advice as it is being covered under their family agreement. After doing some research, I found that the financial advisor does not currently hold an Australian financial services license. My partner and his family are aware and do not feel that this is an issue.
I'm concerned about the implications of receiving financial advice from an unlicensed financial advisor, especially free advice. I'm also uncomfortable discussing strategies involving us making contributions to a self-managed super fund that I'm not a part of. What would you do? So they kind of tie in together and we'll go to the first one, John. I've circled one, two, three, four red flags and there's probably a fifth within a paragraph, right? What are you saying about this? What are you immediately saying as a red flag?
Yeah.
How does the six-year rule for main residence exemption work?
So I think before the red flags, when we're buying investment properties, there's the option of buying existing or the option of buying new, unseen yet. And the risks of buying unseen, i.e., apartment or house that hasn't been built yet is what it's all going to look like at the end and supply and demand in that particular area because it's a new building essentially or a new green fill estate if it's a house and land generally. So there's variables in that and higher risks. So if you're a first-time investor, it's understanding that concept.
Mm-hmm.
A lot of in β when we look at property around Australia, majority of it is existing stock. Now, we're at a housing supply shortage right now and we need new houses. So a lot of this stuff is relevant. But the red flags within it are real. So I suppose β what is your, to strip it back first, what is your strategy? Or you mentioned your friend, what is their strategy? Did they go in saying, well, I want to just do only new because I get great depreciation and I know I'm making money because comparable sales once it's complete is X, meaning I've made X amount of profit? Or have I just spoken to someone and they've said, yeah, you need to build new?
Is rent money really considered dead money?
So that's the first part of it there is what is your strategy? It doesn't sound as though there's a complete strategy involved. Maybe there is, don't know. Two properties straight off the bat, probably not going to do. It's just hard enough doing one existing property.
But the thing that is a red flag risk on that is the blowout times because nothing ever goes to the timeline that they say.
No, no. So, well, when you're looking at, I suppose, project homes, they control the narrative a bit more than custom generally because they've got this cookie cutter approach, haven't they?
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Chapters
8 chapters
1
What red flags should I look for when working with property professionals?
0:06β1:11
2
What upcoming changes to capital gains tax were announced in the Federal Budget?
1:11β2:47
3
How does the six-year rule for main residence exemption work?
2:47β4:16
4
Is rent money really considered dead money?
4:16β5:33
5
How can I let go of financial regret?
5:33β6:40
6
What strategies should I consider for future property investments?
6:40β7:35
7
How do changes in financial regulations impact property investment?
7:35β8:35
8
What insights can be gained from community discussions on property investing?
8:35β1:31:14
Speakers
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