What to do with Inheritance

[Leper]

Leper's advice is probably the most sound.

Think about it:

* $400,000 commercial property.
* 10% return of $40,000.
* You're only paying interest on $250,000, plus expenses.

I'm glad to know people in this board, especially the esteemed Groves, like the sound of my advice (I assume you were all referring to the bit about "---- lots of chicks")!

I would like to know, Apples, where I can find a commercial property ~$400k that returns 10%. I'm thinking of buying another some time next year, but the rental yields seem to be more around the 6%-8% mark (with tenant picking up most expenses). Not that that's too bad when you consider residential rents (after expenses) are running at around 3%-4% (with all the hassles that go with residential tenants).

I guess the best tactic is to just run around making low offers that correspond to the 10% yield, and don't take s**t from agents. Eventually you'll get a desperado that bites. A bit like asking every chick in the pub for a you know what - eventually you'll get a yield!

 

[Kurt Angle ©]

I would like to know, Apples, where I can find a commercial property ~$400k that returns 10%. I'm thinking of buying another some time next year, but the rental yields seem to be more around the 6%-8% mark (with tenant picking up most expenses). Not that that's too bad when you consider residential rents (after expenses) are running at around 3%-4% (with all the hassles that go with residential tenants).

If your investment range is medium to long term, and you figure for some capital growth out of the commerical property too, the best bet is to find a trusted agent.

You can get these ranges in Perth and the Gold Coast. Obviously the agent is there because managing from that far might be too difficult. I'm factoring in the growth to cover the agent fees.

I guess the best tactic is to just run around making low offers that correspond to the 10% yield, and don't take s**t from agents. Eventually you'll get a desperado that bites. A bit like asking every chick in the pub for a you know what - eventually you'll get a yield!

Desperado also implies risk.

My theory is not going to every chick in the bar finding the loose one.

But going to a different bar where loose chicks are the norm

 

[Rhombus]

Put: 10% up your arm (drugs), 10% down your throat (grog), 10% on yer knob (pros), 10% in yer head (eccies) and 10% on your body (tatts)

Invest the rest wisely.

 

[year of the roo]

I think the only person who needs to be given advice here is whoever authorized handing over a $150-200K inheritance to an 18 year old. I don't get any of my inheritance until I'm 25, which seems to be the sensible way to go.

 

[Ghostwriter]

An 18 year old investing in commercial property, yeah right, and watch the sharks eat him alive, put it all in the bank son.

 

[Casey]

An 18 year old investing in commercial property, yeah right, and watch the sharks eat him alive, put it all in the bank son.

You're a bank manager arent you....?

B-Rock, you think your good... get this. When my grandad dies i get his piano accordian

 

[MadRyan]

Spend it all on booze.

Wanna know something f*cked up? My friend got $180,000 worth of his Fathers inheritance and he has already spent about $30,000 on booze over the past few years.

 

[General Havelock]

Wanna know something f*cked up? My friend got $180,000 worth of his Fathers inheritance and he has already spent about $30,000 on booze over the past few years.

i reckon the person with the money should build up the biggest pr0n collection ever. mmmm, and by a large TV.

 

[DoubleA]

i reckon the person with the money should build up the biggest pr0n collection ever. mmmm, and by a large TV.

Perhaps they can buy you a dictionary

 

[ablettjnr]

I would speak with a boutique financial planner, they'll be licking their lips at the though of holding, and hopefully growing that kind of money over a very long period of time. But most importantly read up on investment for yourself so that you know what your money is doing.

Put it this way, would you really trust ANYONE with that much of your money without wanting to know ALL the details?

I would honestly, at your age, spend about $10k on a car, and maybe another $10k travelling - just because I personlly never had that oppurtunity and it's something that if you've got the means to do it, I think would make a world of difference to your personal growth and probably make you appreciate the rest of the money more.

Say WHAT!

Well, well, well. rick James, you impress me.

 

[Todman]

150 K is not a large sum of money.

It's really only 2 or 3 years of wages for most people.

Spending it on wine women and songis overated, so in travelling.

If you want to se modern slums,, go see europe, Nothing gets rebuilt unless there is a world war.

Start off by studing the sharemarket (it will have a lifetime full of rewards )

and invest in couple of growing companies with good dividend yields.

 

[theorangeapple]

Wanna know something f*cked up? My friend got $180,000 worth of his Fathers inheritance and he has already spent about $30,000 on booze over the past few years.

My mate inherited an unforgivable amount of money, the first thing he bought was a BMW M3, unfortunatley he drove into a brick wall, even more unfortunatley he had forgotton to pay his insurance (because he is that sort of guy), so he ended up having to spend an unbelievable amount (I dont know how much) to fix the bloody thing.

BTW, any updates B-Rock? How has it all come along?

 

[lenny&carl]

With that sort of money at such an age, the world really is your oyster, so you should at least go & visit it, (the world, that is.) But do it on the cheap still. ING bank is offering 5.4% just for normal deposits, (barely higher for term deposits,) so put most of it there until you know enough to make some investment decisions.

 

[B-Rock]

Hey all, thought i would update this thread. After a long legal process with will disputes etc, i was eventually entitled to around $60,000. A few months ago i invested around $20,000 of this in shares, which have been slightly profitable. I have around $40,000 left atm sitting in an ING account. Im looking to be a little more pro-active and invest in another area.

Should I save some and have a look at some property? Any ideas? I am 19 now and on about 40k a year, any suggestions would be helpful.

 

[Hawk Dork]

Travel with the rest you will have a lifetime of working but only a very short time that you are young, debt free, care free ,and healthy.

I have gone round the world 3 times burnt a lot of money best things I have done.
You spend it you make some more and spend it again

 

[R00StaR]

Do you own your own home? If so Id seriously look paying off the bad debt asap, if not you may considering buying one and paying it off asap.

Then the equity can spring board you into many investments

 

[B-Rock]

Do you own your own home? If so Id seriously look paying off the bad debt asap, if not you may considering buying one and paying it off asap.

Then the equity can spring board you into many investments

I dont know many (if any) people who just turned 19 that own their own home! Is 40k enough, to get off the mark? As I stated above my salary isnt all that big at the moment but should grow in coming years, so I dont know how much of a dent id be making in a mortgage at this stage.

 

[danielcan]

B-Rock, I only have one piece of advice.

Go and make an appointment with a reputable financial adviser. It will probably be money well spent.

 

[B-Rock]

B-Rock, I only have one piece of advice.

Go and make an appointment with a reputable financial adviser. It will probably be money well spent.

Do you know any reputable ones?

 

[bunsen burner]

The thread is 18 months old. What did you do with the money? Have you got it yet?

 

[arakaan]

The thread is 18 months old. What did you do with the money? Have you got it yet?

guess you haven't read the 6 posts above yours.

 

[danielcan]

Do you know any reputable ones?

Not in Melbourne, only in Canberra.

Most of the major banks have financial advisers, but then, they would also try to sell you their bank's investment products.

You seem very sensible in your approach. Good luck with it, many happy returns (that was a good pun hey?).

 

[bunsen burner]

I'm very sceptical about financial advisors. There's good ones out there but how do you know which ones? And given there's many people on this site who come out with crap like "shares always out perform property because my FA told me so", makes me more sus.

I think you should start with residential property.

Why?

1. You don't know anything about shares. They are complicated to learn (ie be very knowledgable about) whilst property is easier.

2. Share market is high atm. A standard buy blue chip to hold strategy, whilst good, may take longer to get good growth

3. Melbourne residential market is cheap atm. Will start to rise (albeit slowly) soon, if it isn't already.

4. Leveraging. It's all about leveraging. You can get more (and hence potentially more profit) by investing in RE.


Example:

- sell your shares
- You might have $60k.
- At 20% deposit you can afford a property for about $270k (& $30k stamp and other costs = 300k).
- So you need to loan $240k. At 8% that's about $20k per annum. Half your wage. Either get a renter in if you live in it, rent it out, or borrow less and get cheaper place.

Quickly, we can see:

- You need a 2brm unit
- You probably want to borrow $160k ish (that gives you $220k, buy unit for $200k). Repayments will be 12,800 pa or $246 pw.
- Rent a room out to your buddy for $10 under market rate (maybe $80pw), leaves your repayment at $170pw.
- Dn't forget to factor in rates and strata levies.

Hang on to it for 5 years or so and you will be happy. First couple of years will be tough when it doesn't seem the market is moving but once a quick boom sets in you will be well positioned. This is the move that will set you up for life.

1. Do the figures.
2. Find out what areas are in your budget that you'd want to live in. And if not, do the figures if you get a tennant and rent yourself elsewhere.
3. Buy some real estate books. Anita Someone or rather would be a good one for you.
4. Don't do the holiday. Do that when you're 26. You'll never get a better chance to build your base.

 

[rowdy37]

Hey all, thought i would update this thread. After a long legal process with will disputes etc, i was eventually entitled to around $60,000. A few months ago i invested around $20,000 of this in shares, which have been slightly profitable. I have around $40,000 left atm sitting in an ING account. Im looking to be a little more pro-active and invest in another area.

Should I save some and have a look at some property? Any ideas? I am 19 now and on about 40k a year, any suggestions would be helpful.

Hookers and beer and plenty of them. .

 

[- PC -]

I'm very sceptical about financial advisors. There's good ones out there but how do you know which ones? And given there's many people on this site who come out with crap like "shares always out perform property because my FA told me so", makes me more sus.

I think you should start with residential property.

Havent you just self pwn3d yourself?

'I hate people who give financial advice but heres mine