Jun 18, 2018
Have you ever considered a joint
property venture to help you get into property or get yourself to
the next level?
Many people are having
difficulty getting into property or getting to the next level, and
some people are considering joint property ventures as a way to get
involved in property development. In today’s episode, I’ll discuss
the pros and cons of getting into a joint property
venture.
Later in the episode, we’ll talk
to Stuart Wemyss about how the Reserve Bank sets interest rates. If
you’ve ever wondered what the RBA does every month and how it
affects banks, this will interest you.
Finally, we’ll hear
Ken Raiss answer a question about depreciation. The
information he shares should be of interest to you if you’re a
property investor.
What to consider before you get into a joint property
venture:
- Money can change
relationships. Don’t proceed with a joint venture if you’re not
sure the relationship with a friend or family member can withstand
the pressures of investing together.
- Put everything in
writing before you get started. That includes your goals, each
person’s responsibilities, who is contributing what, and how
profits will be divided.
- Make sure that
not only are you financially capable of taking on the investment,
but the people you’re investing with are financially capable as
well.
- Consider how the
venture will affect your credit standing. You’ll get a third of the
income, but you’ll be considered liable for the whole
mortgage.
- Make sure that
you’ve documented your exit strategy as well as your entry
strategy.
- Protect yourself
with life insurance and income protection insurance, in case of
unforeseen complications.
- Property ventures
aren’t necessarily a bad idea, and you shouldn’t rule them out. But
look at them very carefully before proceeding.
Some of the things I discuss with Stuart Wemyss about
how the RBA sets interest rates:
- The Reserve
Bank’s role in managing inflation and the exchange rate
- Why the Reserve
Bank is unlikely to raise interest rates until inflation picks
up
- How interest
rates have changed over the years
- How the reserve
bank decides what interest rate it’s going to charge
- The importance of
interest rates when it comes to choosing a lender
Can you still claim depreciation on the purchase of an
established property?
- There are two
types of depreciation: depreciation on the building, and
depreciation on the fixtures and fittings
- On an established
property, you can claim depreciation on the building, but not the
fittings and fixtures
- If you do a
renovation, you can claim the depreciation on the new cost that
you’ve spent upgrading the property
- If you buy a new
property, you can claim both types of depreciation
- If you have
multiple earners on the title, you need a different type of
depreciation schedule
Links and Resources:
Michael Yardney
Metropole
Michael Yardney Books
Rich Habits Poor
Habits
Stuart Weymss
Ken Raiss
Some of our favourite quotes from the show:
“Like it or not, when money
comes into the equation, relationships sometimes change.”
Michael Yardney
“Rainy days can happen, so you
may as well own an umbrella.” Michael Yardney
“In the 80s and 90s, I managed
to take part in some very, very significant property developments
by choosing the right joint venture partners, and now I’m in the
position to help my children get into property by partnering with
them.” Michael Yardney
Never miss an episode and keep
up with all the good things going on at the Michael Yardney podcast
by subscribing on
iTunes.
You can also subscribe to
MichaelYardneyPodcast.com
to keep up with the latest
information including bonus material that comes out between the
podcasts.