Our property investment is losing money. Please help.
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Q. Five years ago we bought an investment property in Port Douglas. It is a dual key apartment and is in a complex with 40 other apartments. We pay an interest only loan of over 400k. I am at my wits end because there are only a few months of the year that the rentals pay for the interest payments - around $3000 a month.
My husband and I have used our savings and have withdrawn $25000:00 from his super fund to assist in the payments. If we sold the unit at present we would lose about 80 -100k. We are close to retiring age and don’t want a huge debt hanging over our heads.
The other partner is my sister who can’t afford to put much money towards payments as she is on her own and doesn’t earn a lot of money. We thought that the rentals would cover the payments but with all the competition up there now, the units are rented at a lower price. Have you any suggestions? Read more
Money Tip without the Boring Stuff - Will property prices fall?
October 10, 2008 by Josie Kay · Leave a Comment
Bricks and mortar - safe as houses? Not sure after surfing the internet trying to find a balanced argument in favour of buying property at the moment. Here is a summary of what I found. The blue (as in colour) comments are mine. Please share your thoughts on this subject.
John Hewson – former Liberal leader, economist – 7 October 08 Gold Coast Bulletin (quite pessimistic)
“Property markets are going to go down, and go down for some time.” said Dr Hewson.
He said that falls would be across the board, particularly commercial properties. “I think there could be a hell of a property shakeout.” Read more
How safe is our fixed term deposit with Suncorp?
October 9, 2008 by Josie Kay · 3 Comments
Q. How safe is our fixed term deposit of $260,000 with Suncorp that we have deposited for 3 years? I have heard a few rumours that Suncorp could be sold and wonder how safe are our funds a) if suncorp is not sold and b) if suncorp is sold. My husband and I are both now retired and wanted to be sure of our investment.
Josie’s answer: Lots of rumours flying around at the moment that Suncorp will be gobbled up by the Commonwealth Bank or ANZ. CBA have already pounced on Bank West.
Oh the poor banks they really seem to be really suffering at the moment (with my tongue firmly in my cheek!). Suncorp are a second tier bank, which means they don’t have the same rating as the big four i.e. Commonwealth, ANZ, NAB and Westpac. Read more
$360K in cash management account. Should I leave it there?
October 7, 2008 by Josie Kay · Leave a Comment
Q. I’m 57 work part time, own an investment property which is rented out. I own my home and also have investment in trees. Please advise me what to do with $360,000 in cash management account. Should I put it into my super, buy another investment property or investment portfolio ???
Josie’s answer: Obviously I don’t know what income you would like to generate when you do finally retire, but sounds like you are on track to achieving a comfortable lifestyle in your twilight years. My thoughts are as follows:- (please remember that it is general advice only) Read more
Help! I have lost my super.
October 6, 2008 by Josie Kay · Leave a Comment
Q. Hello I have lost super and I have been told that I could use this to buy a house for our retirement. I am 55 and my wife is 51 we are renting and would like to have a house that is ours what can we do. thank you.
Josie answer: A common problem with billions of dollars lost. However, it is not really ‘lost’, just too many people not caring enough about their superannuation.
Super funds contact you on a regular basis, but if you have changed address it is very easy to forget. You have worked very hard for your money and great to see you have finally mustered up some energy to find all those lost superannuation accounts. Read more
Save money on insurance - this week’s Money Tip without the BS (boring stuff of course!)
October 1, 2008 by Josie Kay · Leave a Comment
Insurance is one of the expenses that we just love to hate. Unfortunately insurance is also one of life’s necessities. Following are some suggestions on how you can save on premiums:-
Review your insurances annually. Insurance companies are very clever at finding ways to make sure you pay the premiums on time and often.
Pay by the month is a great way to manage the budget, but I suspect the insurance companies also know that we probably won’t check on them until the budget is really tight. Read more
Do I have to pay Capital Gains Tax?
Q. Our son has just purchased a unit as owner/occupier but cannot move in until current lease period has expired, which is 14/01/09. Does this preclude him from the capital gains exemption as an owner when he does finally sell, after one year of ownership of course.
Josie’s answer: Capital Gains Tax is a confusing area of tax law and it is really a question that needs to be directed to an accountant. Anyway, I will give you my understanding of the way it may apply to your son’s situation. He may be subject to some capital gains tax, however it will be pro-rated when he sells. For example, if he Read more
Investment paying 12%pa - is it too good to be true?
Q. I recently saw an investment for a sporting club raising funds that advertised 12% per annum compounded, calculated annually (over 5 years in unsecured notes.) I have no intention of investing, but the return is interesting and seems too good to be true. Have I misunderstood the 12% pa compounding annually.
Josie’s answer: Compounding annually means that they credit interest 12% interest on 30 June and the following year, they will pay 12% on the original investment, plus the 12% paid the previous year … and so on it goes until the end of year 5. Read more
Superannuation or Mortgage?
September 29, 2008 by Josie Kay · 2 Comments
Q. Should I pay off my mortgage first or salary sacrifice into super?
Josie’s Answer: Good question and very difficult to answer. It all depends on your priorities, your savings discipline and your spending patterns. Read more
Short selling stocks - Risky business?
September 24, 2008 by Josie Kay · Leave a Comment
To put it simply, short sellers make money when the share price goes down. It goes a bit like this. Let’s say you own 1000 BHP shares and the current share price is $40 (total value = $40,000).Because I am a risk taker, I will take on the role of short seller. I contact my broker who gives me, I mean borrow for a fee, your shares and then I immediately sell them on the stock exchange. I have pocketed $40,000. Read more
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