Canterbury Property Services

I agree with you that it is not good for the novice... but not the professional investor

 

I would classify such an individual as someone with access to advisers, who are in turn able to guide him/her to opportunities, finance that is not available to the average Joe and yes.. they would make their primary income from passive income derived from investments.

 

New forumites saying cross collateralising is a good thing?

Not really the best way. Get separate loans for each property. Pull out equity from your other properties, get new loan splits.
Plenty of threads. Keep reading.

 

From Canterbury

Canterbury Property Services
Pay off a 20 year home loan in 3 years (using less of your money than you do now)

 

It sounds like a good model to me.

 

In theory. But capitalizing non-deductable interest in the interim? That's a fair speculation on the first investment property.

Then.....where the fk do you find a safe, secure, stable, fully passive business investment for $50,000 that produces $36,000 pa NPAT after the first couple of years?

Whilst the animation is pretty, in theory, its rather speculative.

pinkboy

 

Hello Redwing, great to see someone from the InvestED. Forum still around, thought everyone had disappeared. Hope anyone investing with Canterbury will start posting about their progress, ours is still going great, Though we have just had to find a new tenant for our first IP, ( was a horror story in regards to the last ones) we are back on track again, with Canterbury's help all the way.

 

Care to give anymore specifics on yours?

 

All you have to do for that is read all of my posts on the InvestEd forum. easy

 

Canterbury Property Services

InvestEd Link for those wanting to read, started back in 2009 and then garnered some interest, well worth a read with a variety of viewpoints

 

1. 1. How's everyone's experiences with canterbury? I can comment on how mine has been when I first started my property journey. They are knowledgeable and offer a complete service. Strong sales and very professional outfit. I did learn alot about the property process from them however in hindsight would have purchased my own selections with more due diligence.
      
      In relation to my portfolio I was suggested 3 properties. 2 I bought. I was also referred to macquarie to invest a significant sum in shares. (Instead I set up a macquarie account and put a dummy buy on the shares I was recommended) These shares would have actually lost a lot of capital had I invested at the time. Macquarie advised me to seek a margin loan and borrow to purchase the shares, which would have seen huge losses. I was advised by Macquarie they would have paid a trailing commission to Canterbury if I went ahead. The shares were suggested as the cash flow to assist paying down my ppr while the investment loans capitalized. (I did find this strategy a challenge as I was concerned with the ATO's perception, investment interest is actually higher so although I'm paying my house off faster I'm actually capitalizing intetest at a higher rate and decreasing my net wealth by paying the bank a higher amount and I was concerned with entering into an agreement that could be seen as a means to avoid tax.
      
      North lakes property hasnt seen a gain in 4 years. Purchased for 350k bank valued 2 years later for 330k. Saw large rental vacancies in the first 6 months, probably due to north lakes having significant new builds. Was appraised for loan purposes at $370 by rent my property actually got $330 rent. The first couple of years tenants were difficult I received comments of the investment style construction and small block attracted short term tenants and strong competition in the area made my house hard to rent . Now not having much issue with tenants and market starting to stabilize. Loss rent was paid back excluding 2 weeks vacancy.
      
      Purchased a property in Brisbane about 7 years ago. Purchased 420k most recent bank val 420k, possibly higher now as Ive not valued since last year. Rent was originally 400pw currently getting 400 per week.
      
      Concerns with rmp similar to other comments in the thread in the Redcliffe area however better in the other branch.
      
      In regards to the rental gaurantee I have utilized it and they supported the vacancies excluding the first 2 weeks. I was originally given a 5 year rental gaurantee which was originally declined but honoured when I produced the certificate due to changes in times throughout their business. When I questioned it I was informed that they couldn't afford to pay for every house to be untenanted and the rental guarantee is simply to get you started. It was honoured non the less.
      
      In regards to the resale gaurantee. I was originally sold it as they would take back a property for its purchase price at any time if you run into hardship, a sort of soft close.
      
      They offer to pay back the contract price of the property excluding govt charges, stamp duty etc. I went through a period of ill health, without work and looked at selling a property if things didn't get better. I thought I would utilize the resale gaurantee to undergo the medical work. It was explained to me it is not a simple procedure for a change of mind situation (like any property purchase) and consider all sales final unless you experience exceptional financial hardship. To ascertain my financial situation I was requested to supply a bank screenshot. The resale gaurantee I was informed would be looked at if I had insufficient funds left and only after I listed the property for sale at contact price excluding setup expenses, govt fees etc and it didn't sell by agent. If I sold the propety I would have been a 20k loss + agents fees.
      
      In relation to the property values it was drawn on a diagram suggesting they would have doubled in 10 years of purchase. Only a couple years left and we are close to purchase price with little growth. Noone has a crystal ball and noone can be held accountable for suggesting market trends based on the 10 year rule except us for making the decision to purchase.
      
      So in a nutshell like any property purchase consider it a long term strategy. The resale gaurantee is nice piece of mind at time of sale however like any propety purchase only to be utilized after all other avenues of a property sale are attempted and is no different to simply purchasing a propety and selling it, except your contract price is guaranteed if all other avenues of sales fall through . They do support where they can, and focus on new builds referred to a couple of builders they were using when I bought from them. They were emphasizing the depreciation for non cash flow deductions and suggest purchasing new properties as the way to do it.

 

Why did I choose to invest with Canterbury property? I was young, wanted to invest, had some enquity in my home and had read a few Robert Kiyosaki books and didn't want to be left in the employee quadrant. My job meant I was time poor and I didn't understand property, trusts, structures as i do now. Would I invest with them now, no I wouldn't as I can find considerably better investments. Did I learn anything from the experience. Absolutely, they do have a good understanding of property and structures and do your due dilgence and don't be in a rush to invest.

 

Switchtronics, Did they give you taxation advice or legal advice (such as structures?)

 

This is what was suggested to me:

A blood line trust after multiple properties were purchased . Was told not many lawyers new about this trust and I would have to seek a legal consultation from someone they suggested when I had more properties . They mentioned a situation where it protected a doctor who got sued by his clients and his assets were safe. They suggested investments in personal name whilst i was payg and suggested setting up a company trust for shares. They suggest to fill out a payg with holding form and preparing interest in advance as a way to lower tax.

 

Sounds like legal advice.

 

Anyone bought any new properties from Canterbury or have successful strategies?

 

I've got a client in my inbox right now who's struggling to manage after buying property through these guys. It's not surprising really - if you don't execute the strategy correctly, the capitalising interest can be a freaking disaster.

 

I just read through this thread and the entire thread on investEd because I was curious what people were attracted to by CPS and this particular scheme. I have no affiliation or interest in Canterbury or any competitors, just an interested commentator.

it sounds like people like the Canterbury scheme because they get presented an idea that they can pay off their PPOR extremely quickly, (this is a very strong emotional hook for many people) while not fully understanding that their debt is increasing on the IP’s and LOC (usually at a higher rate than the PPOR is decreasing due to IP interest rates being higher than an owner occupier PPOR).

I agree with @Terry_w that if you can’t claim the capitalised interest, the scheme does not seem to make as much sense. It’s basically debt recycling with some fancy marketing and a questionable OTP investment strategy..

the payg variation seems to get a lot of positive comments, but you can do this with any negatively geared investment, other IP’s or even shares that have a margin loan, this is not unique to CPS.

Some of the underpinning ideas of this scheme ring alarm bells for me;
1. only being recommended OTP IP’s for the main benefit of tax depreciation - i’d rather have a strong performing investment than get a tax deduction for an crappy investment. By reading through all the threads I can see that there have been numerous issues with marketed rental prices not being achieved. Rental guarantee supposedly helps, but what happens after 18 months guarantee ends and the rent is still below what you were promised when you purchased? I would strongly suggest that the reason CPS doesn’t use established property for this scheme is that there is no money in it for them to do so.. because there is no developer paying them a commission. There is no reason that an investor couldn’t purchase their own established IP and use a debt recycling strategy in a similar way without all the risks that OTP bring.
2. links to related parties for property investment coy, finance, legals, developers.. this does not pass a basic sniff test for me... esp when you only get rental guarantee if you use their over inflated property agents.. do scheme members realise they are just getting back money they’ve paid them for the over market pm fees and commission that CPS received from the developer (that the investor paid for in their initial purchase price) I guess a one stop shop works well to get customers that don’t know any better, but it disturbs me when customers believe they are getting a better deal through this type of arrangement.. they usually aren’t..
3. The sales guarantee is pretty much worthless and doesn’t cover stamps and legals anyways and is just a marketing ploy to get new customers to sign up thinking there is a zero risk of the property losing value (which is not true). No legitimate company would ever offer a sales guarantee anyways, no one can predict the future and no business would make money if they guaranteed every customers future losses..

Just my thoughts on an interesting discussion on property chat and investEd.

 

Has anyone got any feedback regarding their purchases? Has the current climate changed your financial position?

My property in North Lakes purchased in 2010 recently got valued at the same price it was purchased at $350,000. Anyone else experiencing this in North Lakes?

My other property is still getting the same rent it was getting 10 years ago, some lessons learnt here from me. Hopefully nooene else has experienced investments that haven't returned yields or capital.