What to do with Injury payout 350k

Discussion in 'Investment Strategy' started by Devitt, 19th Jul, 2017.

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  1. Devitt

    Devitt Member

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    Hi all,

    Im new here and find it very useful with great advice. My brother recieved a claim through an injury and has $350k to invest in property. He is not working and uncertain if he can work. He is not entitled to centrlink until 6 years. He needs a place to reside PPOR Also, Can purchase a house in places like Orange, Mudgee etc.. . was thinking to purchase a property with granny flat and rent out the main house? Any suggestions appreciated.... Thank you
     
    Devitt, 19th Jul, 2017
    #1
  2. hammer

    hammer Well-Known Member

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    How bad is the injury? Can your brother work at all, or will he have to rely on the 350k for the next 6 years?
     
    hammer, 19th Jul, 2017
    #2
  3. jaybean

    jaybean Well-Known Member

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    If the injury was bad, first thing is to turn his risk profile to low-moderate and use a lot of risk mitigation strategies (LMI and IO to keep liquidity high, granny flat for cash flow etc). Sounds like he can't afford to lose it.
     
    jaybean, 19th Jul, 2017
    #3
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  4. Propertunity

    Propertunity Well-Known Member

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    He's not working and has no income so will not qualify for a loan.
     
    Propertunity, 19th Jul, 2017
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  5. purplecat

    purplecat Well-Known Member

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    1. Any other savings on top of the $350k?
    2. Any other income if he's not currently working? Interest, dividends etc
    3. Write down all monthly expenses especially medical expense
    4. Put aside 6 months expenses & see how much money left
    5. Now with the final figure available your brother can see how much he can really use in his property purchase - remember this amount also need to cover legal fees & stamp duty
    6. I'm not sure about granny flat rules in NSW but better check
    7. Can he afford all the landlord related expenses? Repairs, maintenance, insurances etc
    8. What if the property sits vacant?

    A lot of things to consider...
     
    purplecat, 19th Jul, 2017
    #5
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Seek financial advice. This is a great example of a need for financial planning.
    The advice should include longer term NDIS, Centrelink and other options. There may even be (later) need to consult a lawyer in respect of a TPD claim under super.
     
    Paul@PAS, 19th Jul, 2017
    #6
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  7. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    There is no answer for this without knowing your brothers full financial situation. He will not be able to get a loan without a job.

    As Paul suggested, he needs to see a financial planner who can look at his full picture and create a strategy that will allow him to live of the income that lump sum can produce and work out how long it needs to last. Will he ever be able to work again? Is the injury permanent?
     
    Jess Peletier, 19th Jul, 2017
    #7
  8. Coastal

    Coastal Well-Known Member

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    Move to a big country town and buy a house for 100 - 150 k cash to live in... live off the rest

    or same as above buy a house for 150 k cast renovate it and sell it
     
    Coastal, 19th Jul, 2017
    #8