It’s Q&A time! This week on The Property Couch, Bryce Holdaway and Ben Kingsley will be answering the questions below from our fellow listeners. Thanks again for submitting your questions!

• Exiting a contract question from Alex: Hi, Just looking for some advice as the more I listen to the podcast (and read your book), the more I think my first IP buy could be better. I’m currently on a defacto visa so can’t buy anything but new properties which led me to an off the plan development in Brisbane. While its marketed very well and made out to be a great buy, it goes against all you talk about- high rise, buying through a unqualified salesman, no room to improve, rental guarantee, and high strata. At the time it looked good but the more I understand what makes a good investment, the more I think I could do with the $40k deposit I put down. My question is, is there any way out of the contract that won’t cost me? It’s not due to be built for another 2 years so wondering if I could ask the developer to renege on the contract without penalty or even onsell it for cost price. I’ve started putting away some cash every week just in case it comes in undervalue but would rather not be in the position of ‘hoping’ this doesn’t happen. Would appreciate any advice to help!

• Crowdfunding questions from Carol: I have heard people talking about “crowdfunding” being the next property investment strategy. What is “crowdfunding” and how will it work?

• Ownership questions from Rob: What property ownership structure should investors use when buying an investment property? Individual, trust, company etc. Is there a need to balance tax advantages with long term asset protection on this issue?

• Global events question from Cookie: I have an economy/finance related question and would like to hear your discussion on it. As we step into 2017, the market has been flooded with negative sentiment news. Lots of countries are under the water as oil and other commodity price plummet. China economy slowdown and share and currency tumbled. In the middle-east you have ISIS terrorist and European country have migration crisis. The central federal government around the world response to the crisis with more and more quantitative easing money printing. I feel like 2008 all over again and this time the crisis is on a global scale.The question I want to raise here is what will happen to the property market and banking policies if the crisis come in the near future? Few friend of mine thinking that the property price will go down like during the great depression. Am I best to wait until the crisis come and then purchase undervalued asset? But if there is a crisis and bank run, will interest rate raise to double digit and banks tighten the lending? What happen to my home loan if there is a bank fail? European central bank is doing negative interest rate already, will Australia heading to this direction one day? How should I position myself now so to be prepare for the day to come?

• Case study question from Chris: Brief Bio – 33 yrs old. married with one child, live in Sydney, workfull time. have three properties. two in Townsville (both rented) building one in Melbourne currently. Currently renting in Sydney as units where we want to live sell for $800 k to $1 million. However we can rent and invest. We put all our money into our offset and pay out the credit card at the end of statement period. We also have a full functioningPAYG withholding variation in place.
  • Question 1 – with the house I am building in Melbourne. Will I ever be able to claim back the GST I have paid in the build contract?
  • Question 2 – With one of my properties in Townsville I am concerned that our body corporate fees are way to high. We pay over $5k pa for fees. No lift, no pool in complex and it is a three story masonry construct building. How do I compare if this is the going rate in our market?

 

References:

• Episode 8 – Investment stock vs investment grade
• Episode 37 – Understanding the scarcity factor
• Episode 48 – Different property investment structures
• Bryce on The Today Show – Double trouble for the property market
• If you are interested on the 2016 Outlook for the Global Economy, do check out our videos here.

 

If you like this Q&A episode (Exiting a contract, crowdfunding, what’s the impact of global events on Australia Property Market and more), don’t forget to rate us at our iTunes channel (The Property Couch Podcast) and our Facebook page. Any questions or ideas? Feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/