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What to do with 1 Million Dollars?

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Veggies | 11 Mar 2016, 12:25 PM Agree 1
We have saved $1 million dollars and now I am in the dilemma what I should do with it.

Here are my options as I see it:

1) Buy Investment properties x 3 around the Sydney Region and take on Debt of around $700k in order to eventually have an income of around $1200 per week from these properties. Probably will take between 7-10 years to pay off loan. Hope to keep these properties for as long as possible.

OR
2) Upgrade from the house I am living in and rent it out, but would still have debt of around $800k as I would as have to with draw funds from my-off set account for this property to ensure that I don't have loan on the house I am buying.

So is it better to invest in your own home as it is tax free? Or is it better to secure investment properties with rental incomes despite eventually having to CGT anyway??

Any advise would be appreciated. Thanks!
  • Invest76 | 11 Mar 2016, 07:41 PM Agree 0
    I am pretty much in the similar situation as yourself. Just can't work out where to invest ?
  • GeniusPat | 13 Mar 2016, 10:32 PM Agree 0
    or be an Equity/cashflow partner with someone knowledgeable & seeking a break into property.
    • Veggies | 14 Mar 2016, 02:11 PM Agree 0
      Hi GeniusPat, thanks for your reply, however looks like maybe part of your reply was cut off at the start?
  • | 14 Mar 2016, 02:30 PM Agree 0
    Hi Veggies
    Sorry about the cut off

    I am in full support of your first option provided you have knowledge of the property market and have done your research & due diligence Or you could simply become a equity/cashflow partner for those that have knowledge but limited funds for entry into the market. In that way you've invested your money and helped a knowledgeable someone to enter the market.
    • | 14 Mar 2016, 02:35 PM Agree 0
      Ok - thanks very much for your advise! :)
  • Sow | 14 Mar 2016, 03:37 PM Agree 0
    buy a commercial property and earn $100K per year passive income. look for retail outlets in high traffic areas. Ensure long leases are already in place before you buy. Commercial is far higher yields then crappy residential.
    • | 14 Mar 2016, 04:02 PM Agree 0
      Sow, thanks for reply, must say that i dropped commercial property as i thought it could be too risky and low capital gain....but might reconsider.
  • GeniusPat | 14 Mar 2016, 04:31 PM Agree 0
    Veggies

    Commercial is higher yields higher returns = higher risk
    If your don't have tenants for a while, repayments might/will be higher by my understandings
    • Veggies | 15 Mar 2016, 12:20 PM Agree 0
      GeniusPat - thanks yet again - I think this is why I am hesitant about commercial property - due to the level of risk
  • AnnaDanishek | 29 Apr 2016, 05:03 PM Agree 0
    Share your secret how you managed to do it :)
    • Veggies | 25 May 2016, 12:57 PM Agree 0
      long time - just always lived small and within our means ....got to think that it eventually pays off
  • MrNice | 02 May 2016, 05:25 PM Agree 0
    Hi @Veggies,

    Put it all against your PPOR, then create multiple drawdowns for each investment as a start.

    That way your PPOR is 100% tax deductible (Not neg geared).

    I am in the same boat, would love to talk to you and collaborate but i dont know how to PM you on this forum.

    Let me know if your interested in chat and we can work out a way to connect.


    • Veggies | 25 May 2016, 12:58 PM Agree 0
      Thanks Mr Nice ! I'll contact you if I should need to.
  • A Property Guy | 24 May 2016, 10:10 PM Agree 0
    Veggies

    Anyone giving advice before having all of the relevant facts is not working in your best interest (despite perhaps the best of intentions). Proper investment advice takes into account your income, family situation, tolerance to risk, tax and employment situation, short term and long term goals etc.

    Every strategy has its strengths and weaknesses. Without the above, what works for others might not work for you (and vice versa).

    For example - If you're 53 years old making $150K per year then you are paying a significant amount of tax. Purchasing three properties with significant tax benefits and contributing extra to super could be a good way to go.

    If you're 40 and making $70K per year but have come into money via inheritance, insurance or some other means - looking at commercial or a higher rental yielding property makes more sense.

    What you do with this cash will likely have very large long term ramifications (perhaps hundreds of thousands of dollars). Speak to a professional who knows what they are doing and will work in your best interest.
    • Veggies | 25 May 2016, 12:58 PM Agree 0
      Thanks Property Guy for your level headed advise!
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