Strategies that went pear shaped over last decade

The biggest dud strategy was definitely the LOE model - of ongoing IO expanding debt well into retirement. Now it's a case of IO in general being non-existent beyond 65, let alone expanding debt further.

 

The ever present dilemmas of -
Paying too much for a "renovator's delight"
Spending too much on the reno
Underestimating transaction costs eg stamps, commissions and taxes

 

Buying in NT during the boom.

I remember being in a cafe surrounded by cranes thinking "this cannot end well" as a respected acquaintance was patting me on the back telling me that you can never go wrong buying in Darwin....

 

Wrapping and vendor finance. Quite a few people tried their hand at it and there's still a few doing it, but it's high on regulatory hit lists.

 

Yes, I've been stung by pine forests' needles.

 

I don't think property in Queenstown got affected by the CHC quakes either.

 

Because the banks pay the most rent and get first choice on location as they are usually a sitting tenant

 

here are some good ones

So-called inner-city hotspots some of the wackiest 2013 opening claims in Australian real estate: Terry Ryder

 

Lol Pete, that article is hilarious - Gladstone, Mackay, Moranbah, Port Hedland, Karratha. It's a worst of the worst list.

If I bought into the hype - I'd be broke right now. Seriously, we'd be on the street.

 

Capitalising Investment Property Interest (as a strategy)

In March 2012 the ATO issued TD 2012/1 stating they would apply Part IVA do deny a deduction for capitalised interest if the dominant purposes of the arrangement was for a tax benefit and they do not consider wanting to pay your home off sooner to be an alternative dominant purpose.
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Capitalising Interest | BAN TACS

@Terry_w @Paul@PFI Would it be correct to say that there may be circumstances when Capitalising Interest may be permitted but generally this would not be considered acceptable?

 

ha, not exactly a well-diversified strategy.

almost as bad is the opportunity cost - Sydney market has done well over the last 5 years.

 

I stumbled on a recent private ruling the other day - capitalising interest was deductible for that situation.

In fact the high court and the ATO even admit that capitalising is deductible. But it is where it is a scheme to increase deductions is where it may be denied.

 

It might not be as exciting and obviously the high entry costs attract a lot of haters but you can't go wrong (touch wood) buying properties in desirable suburbs within 10-15kms of the CBD in our major cities as long as the financial fundamentals underpinning your decision are sound. They may not achieve stellar or stratospheric growth rates but are proven long term performers.

 

So Terry - what arguments could one put forward as to why they need to do it if they got audited? Financial hardship??

 

cash flow is the major.

Borrowing to prepay interest perhaps.
Maternity leave
no job - such as on retirement!!

 

I really like this:



Contrast with this

 

Yeah have heard some horror stories, especially OTP - rents & prices down 50-60pc etc.

 

some more

Property investors will thrive in areas benefiting from LNG boom: Terry Ryder | Property 4 Profit

 

and people pay for this rubbish

 

not when markets fall, it impacts on blue chip as well, no market is invincible. .Sydney corrected in 2003 and areas such as Manly got hammered, it only started rising/booming around 2013, that is a long time between drinks. Still comes back to timing the market. Of course, some will see it differently, time in the market, but then there is opportunity cost???? a big one, you don't get that time back.