Semi retirement advice

Discussion in 'Investment Strategy' started by Zimmernz, 30th Apr, 2020.

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  1. Zimmernz

    Zimmernz Member

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    Hi All,
    I am very fortunate/blessed to have sold my business in Auckland for a reasonable sum, paying off the mortgage on a 1.3M house, and giving me a bit left over.
    My family and I's dream, is to buy a catamaran sailboat and sail off into the sunset. I have 3 primary school kids, so now (in the next 12 months or so) be a good time to consider this.
    I am thinking that a move to Brisbane, with lower than usual house price avg would allow me to purchase a home and aloe afford a decent boat, without going into debt. I have a few small commercial syndicate investments giving a small return.
    However, I want to try to structure this, so that I am able to get a return on the house while I am away on the ocean. I am considering an apartment, but my wife doesn't like not having land (fair enough too). I guess we would be looking at around 750K on a house?
    Is airbnb a valid option these days for getting a return, or has that jumped the shark? I am attracted to the fact that I could come back and live in the house anytime I needed, should enything go wrong...
    Open to advice, even any slagging off if appropriate!
     
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  2. Zimmernz

    Zimmernz Member

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    I guess the question really is - is property the best investment vehicle for the cash, or would it be better to try and find higher yield somewhere and use temporary housing for the next year or two when needed? There are tax issues I guess to consider also.
     
  3. TAJ

    TAJ Well-Known Member

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    My first question is "How much time have you spent on the ocean"? Living in a relatively confined space with you wife and children will present problems at times. Part of being human I guess...
    While it's certainly doable, a rigorous amount of planning needs to take place before sailing off into the sunset.
    AirBnB has taken a pretty severe hit due to the pandemic outbreak.
     
  4. Trainee

    Trainee Well-Known Member

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    Have you actually done the calculation and your ‘extra’ and the rent will actually pay for your lifestyle?
     
  5. Zimmernz

    Zimmernz Member

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    Thanks yes, costs on the lifestyle are quite variable, but yes I believe we can live on $3-4K a month, with a saftey net of savings for any larger expenses. Yes able to do the confined spaces, and have spent a reasonable amount of time on the ocean - it is a shared family goal.
     
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  6. TAJ

    TAJ Well-Known Member

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    Will you be using the proceeds of the sale of your business to purchase here in Australia? Or are you selling up in NZ, and using the funds from the house sale?
    Do you intend to sail from Auckland to Australia?
     
  7. Zimmernz

    Zimmernz Member

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    Hi, thanks for your questions. The proceeds for the sale (CGT free in NZ) will mainly go towards paying down the nz mortgage.
    I would prefer to purchase any assets in Australia, after selling the house in NZ, and any cash will be in NZ bank accounts for the interim.
     
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  8. TAJ

    TAJ Well-Known Member

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    Gotcha, thanks for clearing that up.
    It may be beneficial to purchase in a town (oceanside) away from Brisbane enabling a lower cost base initially. This would provide more funds to be left in your NZ accounts.
    Queensland has an extensive coastline with seaside towns all along it. Will you be purchasing the boat here in Australia?
     
  9. Zimmernz

    Zimmernz Member

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    Yes I believe so, that will give us the most opportunity to coastal cruise before going further.
    The reason for looking at Brisbane is for future school prospects, but I would be open to looking elsewhere - did you have an area in mind? My research has shown Proserpine to be a decent option?
     
  10. TAJ

    TAJ Well-Known Member

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    Proserpine would be a good option as you are in close proximity to Shute Harbour, where a lot of yachts are moored. It provides easy access to the Whitsundays which is a sought after cruising destination for many sea-goers.
     
  11. Zimmernz

    Zimmernz Member

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    I guess my concern is really around timing and putting the money to best use. A coastal town would be nice and cheap to live, but unlikely to generate the type of reoccurring income needed. Also worried about the housing market as a whole.
    My feeling that the Australian Fed has been relatively smarter about covid19 in terms of keeping the economy ticking over, compared to NZ, complete shutdown for 5 weeks, plus another 2... I have dire feelings about the NZ economy's ability to recover from this...
     
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  12. QB12

    QB12 Member

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    I think some where like Redcliffe (and surrounding areas) close to beach and city, schools, shops, high occupancy rates.. something around 500k for 600sqm + block (main dwelling) rents for 450pw, with option and room to build a granny flat (150k) rents for 300pw
    You do the math...
     
  13. Zimmernz

    Zimmernz Member

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    Thank you QB, very useful. All the best for our impending lockdown release, the sooner the better!.
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Are you a tax resident of Aust and will you remain one while travelling? The CGT laws for non-residents are pretty harsh.
     
  15. Zimmernz

    Zimmernz Member

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    I am not currently, although that is something I will be establishing, yes. Is your advice to rather not purchase Aus regsitered assets, until this status has been established? Could I ask you to please refer to the specific tax you are concerned by?
     
  16. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I am not advising anything other than to be aware of the laws such as no 50% cgt discount and no use of the 6 year rule. Also no tax free threshold and higher starting tax rates
     
  17. James Bond

    James Bond Well-Known Member

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    What is the criteria to ensure you maintain tax residency?
     
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    That is rather complex. You will have to seek legal advice and/or read up on the many cases.
     
  19. robboat

    robboat Well-Known Member

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    Will be plenty of good cats coming onto the market so if you can buy well and hold/use/enjoy for some time you may even turn a small profit.
    You would be looking at @45ft cat for the whole family...?
    Make sure you have a watermaker...:)
    Go cruising for a while, get into the groove,home school the kids....plenty of beautiful remote anchorages with no virus issues.
    Next year things will be clearer...
    Fair winds...!
     
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  20. Zimmernz

    Zimmernz Member

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    Thank you - yes that is the plan!
    I too think there will some good deals in the next few months to be had. Here's hoping..