It's Your Money by Alan Kohler

Author:Alan Kohler
Language: eng
Format: epub
Publisher: Schwartz Publishing Pty. Ltd

Good legal advice is essential if you plan to navigate the property sector. Different laws and protections apply to property investment compared to other forms of investment. For the purposes of some key laws relating to investment, real estate is not regarded as a financial product. The issues are similar but the protections are often weaker for property.

A genuinely independent property adviser will charge you a fee. When it comes to getting good property advice, a key principle is: there is no such thing as free advice. This applies to all investments.

Real estate can provide an ‘inflation hedge’ – that is, an investment whose value is expected to rise in times of inflation.

Warren Buffett recommends a ‘buy and hold’ strategy for shares. I’ve heard other people say the same about real estate – that you should never sell unless you absolutely have to.

PARENTS LENDING TO THEIR CHILDREN FOR PROPERTY INVESTMENT

In 2018 the AFR reported that the ‘Bank of Mum and Dad’ had become one of the biggest banks in the country. In fact, it was Australia’s tenth largest lender, ‘bigger than ME Bank, AMP Bank and the local operations of global banking giants like Citigroup and HSBC Australia’. This growth is not without risk. Lending to your children can be cheaper (if you have money to lend), but this is partly an illusion, as you might bear the cost of a possible default. And mixing family and finance can be a minefield both legally and emotionally. How to protect yourself and any offspring you might have? Seek advice from your financial planner, your financial institution, industry sources and comparison sites – and people who know you well as a person, and whom you can trust.

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