1. ‘ It’s the worst action we have ever done’ said a client of our sometime ago when she bought an investment property.
A more recent client had bought a property up north for 450,000 ten years ago & now according to the managing agent would get in the low 2s.
Very sadly the rent doesn't cover the debt of 350,000 interest costs. On top of that is the average costs of 10,000 which, yes deductible, still have to be paid first.
How many are like this?
The figures are that even when no debt a residential rental property gives on average a net income of very consistently 2%.
2. Now compare that to a very recent offering this week of
Industrial Property Trust 8.00%pa*
The Industrial Property Trust (Trust) is designed for investors seeking a long-term investment, stable income and an opportunity for capital growth from one of the most sought-after property asset classes.
The Trust currently holds three industrial property assets, two in Mackay, Queensland and one in Gillman, South Australia.
Expected forecast distribution rate* forecast distribution rate (net of fees, costs, and less tax)
for the period from the Expected settlement date in December 2019 to June 2020. forecast returns are not guaranteed and are based on the future property portfolio and assumptions which will be detailed in the pds.
This makes more sense to anyone who needs more income today & tomorrow
PM now for more info e.g PDS and it will close 16th December 2019 .
3. The 3rd option is as we are all too aware of is
‘No option’ for savers as rates cut
Retirees and savers are being urged to look for better deals after the major banks slashed interest rates on term deposit products. (Australian 29/10/19)
and lets add a 4th as it concerns many today
4. Westpac cut its final dividend from 94 cents to a fully franked 80 cents after what chief executive Brian Hartzer said was a disappointing 12 months.
This decision was not easy as we know many of our shareholders rely on our dividends for income.
However, we felt it was necessary to bring the dividend payout ratio to a more sustainable medium term-range given the capital raising and lower return on equity.
Doesn’t improving income means less financial stress & more fun.
of course so many variable to meet your unique position so a financial strategy is required.