FAQ or "WHAT IF" QUESTIONS

What if I don't have enough money for a deposit?

1. There is no need for a cash deposit if you have enough assets to borrow against.

2. Providing you have sufficient equity in your home (the part of the house that you own - with the bank owning the rest) you can use of this as a deposit on an investment property.

We are paying over $1200 a month on our Home Mortgage. How could we possibly afford an Investment Property?

1. Providing you have the correct tax and loan structure the tenant and the taxman make the majority of your repayments. You pay very little.

What if I can't get a tenant?

1. It is not your job to get a tenant. This is one of the reasons you have a Property Manager. It is his job, and costs him money if he doesn't have a tenant in your property.

2. You have the right house, in the right area, at the right rental, with the right Property Manager, in an area where the vacancy rate is only 2%. There is no possibility that your property would be untenanted for any length of time.

3. Any shortfall in rental is tax deductible. The taxation department will help to fund the shortfall.

4. Your investment account has a "buffer zone" of a couple of thousand dollars. You have enough there to ensure your household budget is not disrupted.

5. If a tenant moved out and, for whatever reason, a new tenant had not moved in within a couple of weeks and it caused you to worry, you would simply drop the rent by a small amount per week for one rental period. This shortfall would be tax deductible.

What if I lose my job?

1. You need to be able to cover the tax rebate side of things until you get another job. The best way in the short term (if you feel insecure about your job) is to have "Income protection Policy" insurance.

2. You could take some of your redundancy pay or termination payment, and put it on the loan so as to reduce the interest payments to where the rental income will cover it. That way you can go indefinitely, until you need the money. When you are re-employed, you simply re-draw the funds, and gear up the investment again.

3. As a last resort, you could sell the investment property, and pay out the loan, keeping any profit you may have made from the sale.

What if interest rates rise?

1. It is important to understand that where investment property is involved, and interest rates do rise, then the tax rebate also rises.

2. In any business (and property investment is a business) when your costs go up, you pass it on to the end user. Therefore rents also rise.

3. The property investor is buffered against any interest rate rises by these factors, and his "bottom line" remains much the same.

What if I don't feel comfortable about going into debt?

Because of our parents, family or well meaning friends, we have been conditioned to fear debt unnecessarily and pay cash for everything. Whilst there is some truth to this belief, it should not be taken as a blanket statement that all debt is bad and therefore should be avoided.

Going into debt for consumables such as televisions and holidays can destroy wealth, but debt for assets, such as investment property, can build wealth.

There are two principles that will ensure your security when it comes to borrowing:

What if the Government abolishes negative gearing?

1. They can't! It would impact on too many other areas of the economy.

2. The building industry would collapse! All the dole people who work in construction (about 50% of the workforce) would be out of work and on the dole instead of working and paying tax!

3. The rental market would collapse! There would be no investors to provide housing for the 40% of people who rent, rather than buying their homes. With the shortage of rental properties, rents would go sky high. And families would be living on the streets!

4. Both Liberal and Labour have stated that they will not abolish negative gearing.

Don't more people want to buy their own property?

In 1978 approximately 73% of people owned the home they live in. By 1988 that had dropped to 66%, and by 2010 the percentage of people that own the home they live in is expected to be 49%. This means that 51% of Australia's households will rent. The pool of people who have no choice but to rent is increasing.

What professional services are recommended by The Jason Ryan Group and why are they required?

Finance Specialist

When you purchased your home it was very straight forward, you saved for a deposit, approached a lender and found a house. Along the way you more than likely added a car, a holiday and a couple of credit cards.

Your Finance Specialist can generally sort out your finances, freeing up some extra cash for investing. Because he is a property investor himself he understands and can calculate tax deductions, rates, rent, depreciation schedules, maintenance and incomes to demonstrate loan serviceability to your chosen lender.

As a finance broker he is able source and compare loans from a large selection of lenders in order to tailor a financial package to suit your particular requirements. Your finance specialist will also implement a mortgage reduction strategy to reduce the term of your current mortgage using your investment property as the accelerator.

Investment Property Specialist

When you sell your home you engage the services of a real estate agent. This agent is contracted to work for you the vendor and attempts to get you the highest price possible for your property.

Our referred investment property specialist acts for you the buyer and looks after your interests. Armed with information from the finance specialist the investment property specialist works within a carefully designed perimeter to locate investment media that meets your investing needs.

Accountant

If your accountant doesn't specialise in property investing we are more than happy to assist him/her with the set up of you investing structure. If you haven't got an accountant or your current accountant doesn't specialise in investment property we can recommend an account that is both qualified and competent.

Quantity Surveyor

In order to maximise your investment property tax deductions it is recommended that you engage the services of a qualified and competent quantity surveyor.

Paperwork and Law

We insist that all paperwork is thoroughly checked by your solicitor. In the event that you haven't got a solicitor we can recommend an independent solicitor that we believe is qualified and competent. This solicitor will work on your behalf only.

Insurance Professional

The correct insurance takes the risk out of property investing and gives you the peace of mind to make well informed professional decisions.

The Jason Ryan Group works for you the buyer, unlike a real estate agent that is contracted to act on behalf of the seller.

Download a free information pack »