Canterbury Property Services

Discussion in 'Property Experts' started by armorris007, 14th May, 2009.

Join Australia's most dynamic and respected property investment community
Thread Status:
Not open for further replies.
  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    This doesn't make sense! You are not paying off debt but just shifting the debt to other security. Overall the debt would be the same and not being paid off any quicker.


    Are you employed by or associated with Canterbury in anyway?
     
  2. pdg

    pdg Member

    Joined:
    1st Jul, 2015
    Posts:
    15
    Location:
    Caloundra,Queensland
    Good question Terry, I wonder the same thing
     
    2 people like this.
  3. GThomo

    GThomo Member

    Joined:
    1st Jun, 2018
    Posts:
    21
    Location:
    Brisbane
    Terry,

    I have paid off my house and I am half way through paying off the first investment property I bought, what part doesn't make sense?

    No I am not employed by them but have been a client of theirs since 2012. I have done well so yeah I guess I am associated with them in that respect?
     
  4. pdg

    pdg Member

    Joined:
    1st Jul, 2015
    Posts:
    15
    Location:
    Caloundra,Queensland
    Hi Thomo, please enlighten me, you seem to have this sorted. How does it get paid down quicker doing what you're doing, placing all rental income on one property when the other two soar with capital interest and running costs? I have the same set up as you, house paid off and three investment properties. One is owing 510 000 and probably worth 420 000 judging by one Canterbury house for sale in that same area. The other two are each worth about 20 000 more than I paid for them 3 years ago. So as far as capital gains after 5years, there's none. We refinanced and opted to change to principal and interest instead of interest only, so each property has its own loan and are slowly being reduced, there is no other way of accelerating the process, we pay in as much as we can. The other thing is this, we were told they would be cash flow positive, that hasn't happened, between the three properties they have cost us about 6500.00 per annum to hold after tax back. Right now, as we stand, we would have been better of without them, though nobody knew what was going to happen to property prices, So please explain, I keep hearing capital gain is a bonus, the scheme works without it, how?
     
  5. GThomo

    GThomo Member

    Joined:
    1st Jun, 2018
    Posts:
    21
    Location:
    Brisbane
    pdg, dunno if I have sorted just yet, still a ways to go but it is certainly moving in the right direction. The main thing for us is that the house went down faster than others went up. We paid the running costs from the extra we were putting into our place, only the interest gets added to our IP's. We are probably the same though, the 2 we haven't starting paying down yet have more owing than what they are worth. But that said we owe $0 on our place and $270k on our place at Springfield. The one is North Lakes has barely moved in price, but our other one is down the coast and that has done pretty good. Should knock over Springfield in about 3 more years and will hit North Lakes next. There will be a fair chunk of debt on it but we will get through it and then the last one. Fingers crossed we might get a couple more during that time but the banks won't give us any more money right now.

    Do you do the tax thing to get the money in your pay? Without that we would definitely be putting in to cover the costs. We just want to pay them all off and that is our retirement income - rent x 3 at least. We aren't really thinking sell them in another few years and retire. That's just us though. If we are getting $1200/week with no mortgages and don't have go to work, we are sweet.

    GT
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    Think of it this way, you have 3 properties
    IP 1 with a $100,000 loan
    IP 2 with a $100,000 loan
    LOC $100,000 secured on the main residence

    You pay the minimum repayment on IP 1 loan - say $1,000 per month
    You pay IP2 loan with the LOC, at say $2,000 per month
    IP1 loan is slowly reducing
    IP2 loan is quickly decreasing.
    But the LOC is increasing as fast as IP 2 loan is decreasing

    So can you say that IP2 is being paid off faster than IP1?
    No, because IP1 and IP 2 are being paid off at the same rate of speed. It is just the loan secured by IP2 that is decreasing faster, but the total loan associated with IP2 is both the LOC and the IP2 loan.

    In fact you are probably doing yourself a disservice if you are not claiming the interest on the LOC because you might end up with no loan deductible on IP2, but still have a large debt associated with it.

    If would likely be misleading and deceptive for a business to say imply this sort of thing results in a loan being paid off quicker.
     
  7. GThomo

    GThomo Member

    Joined:
    1st Jun, 2018
    Posts:
    21
    Location:
    Brisbane
    Terry,

    You forgot to include the payment from me and the missus and the tax saving we get from the IP's. That makes an extra $3,500 per month going into IP1 in your example which is where all the difference is.

    GT
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    GT I think you failed to see my point.
    Structuring your loans like that makes for no advantage at all, but a disadvantage if you are not claiming the capitalising of interest.

    You could still pay an extra off any of the loans. the speed at which things are paid off will depend on the extra payments.
     
  9. GThomo

    GThomo Member

    Joined:
    1st Jun, 2018
    Posts:
    21
    Location:
    Brisbane
    Maybe I am Terry. The home loan is paid off and I am halfway through the Springfield loan and we will just continue on. I am not as clever or educated as some of the others on here, just a sales rep.

    If I can hit retirement in 16 years (I will be 55) and I own my house and 3 investment properties that give me about the same income as I get from what I do now, I am good. That is more than I could ever have dreamed of. Even if I don't quite make it, my super will cover whatever is left owing and I have an income for life.

    Not bad for a dumb sales rep at 55.

    GT
     
    2 people like this.
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    As long as your LVR overall is decreasing you are moving in the right direction.
     
    2 people like this.
  11. Switchtronics

    Switchtronics Well-Known Member

    Joined:
    10th Oct, 2015
    Posts:
    224
    Location:
    Sunshine Coast
    I unfortuantely invested at an early age with Canterbury. I was referred to the group from someone I knew who was paid a $1000 referral fee to get me involved. We purchased 2 properties and pulled the pin on the third. I can concur with Paul’s experiences in that when you question something a long winded email or statement is given justifying why only purchasing brand new properties makes sense (usually tied back to the depreciation. 1st property was purchased in 2009 and was suggested to get $1720 per month rent is currently receiving the same rent. Second property was purchased in 2010. Has just been revalued at the same price it was bought for 10 years ago. Rents that were suggested of $1720 per month actually came in at $1320 and now 10 years later have gotten $1480 per month.

    Below is suggested rent I was informed would be achieved and below based on a 100,000 loan (at over 6% interest) it would supposedly be acheiving me 4000 per month in dividends over the 6% interest. The 221d was the tax suggested I would receive back. The model certainly has not achieved any financial wealth, has been very difficult to rent and has not attracted quality tenants, which in turn has kept yields and capital growth at a minimum.

    Rent 1: 1720 p/m

    Rent 2: 1720 p/m

    Shares: 4000 p/m Approx

    221D: 1500 p/m Approx

    Total = 8940 p/m
     
    Last edited by a moderator: 10th Jul, 2020
    2 people like this.
  12. Tallie

    Tallie New Member

    Joined:
    16th Apr, 2020
    Posts:
    3
    Location:
    Toowoomba
    Hello, I've been reading a number of these threads as an Investor and wanted to know does Canterbury give you a detailed cash flow analysis ? Taking into account taxation, depreciation etc i.e. like a Financial Planner would ? I'm really interested as most reputable firms would. Also posters are mentioning they recommend investment properties in Griffin. The Canterbury website says one of their criteria for investing is land locked locations. Griffin is the least land locked location I've ever seen. There's so much land around there that's being developed it's not funny. As I've read most posts it sounds as if the tax break which was taken away sometime ago was the main reason to invest with them, and now that's gone.
     
  13. Switchtronics

    Switchtronics Well-Known Member

    Joined:
    10th Oct, 2015
    Posts:
    224
    Location:
    Sunshine Coast
    This is exactly our situation. No capital growth, no rental growth and equity only created from my own cash paid against the property. This system of capitalizing interest to create a false economy by paying down ur ppr to make investment properties capitalize does not benefit. 10 years later the system we are no better off.
     
  14. Switchtronics

    Switchtronics Well-Known Member

    Joined:
    10th Oct, 2015
    Posts:
    224
    Location:
    Sunshine Coast
    From my experience they talk up the Canterbury system and I have found the limited land releases aren't the case. They seem to follow areas where new builders are and give you tax advice on submitting a claim to the ATO to have the tax paid back weekly based on the depreciation and losses your new property would incur. I have experienced no capital growth, consistent tenancy issues and certainly would not buy these properties again. Nothing can replace good research. Had my time again I would pay a goid buyers agent instead.
     
  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    Do they give tax advice themselves or refer you off to someone qualified and licensed?
     
  16. Switchtronics

    Switchtronics Well-Known Member

    Joined:
    10th Oct, 2015
    Posts:
    224
    Location:
    Sunshine Coast
    In my experiences they have advised me directly what they suggest you should do.
    I remember getting advice on a depreciation schedule and referred to a specific company redline
    filling out a form 221d for tax reduction
    and some diagrams were drawn displaying my economical position and suggested long term position based on their recommendations. They wrote recommendations of trusts to purchase shares in and made suggestions of blood line trusts for security
     
  17. Switchtronics

    Switchtronics Well-Known Member

    Joined:
    10th Oct, 2015
    Posts:
    224
    Location:
    Sunshine Coast
    Here was a suggestion of capital growth I received.

    "Brisbane market has been relatively flat since the time of your purchase, your properties have enjoyed good capital gains – and that’s before the inevitable slingshot whereby Brisbane prices close the gap with Sydney prices. This happens every cycle. Brisbane is presently priced at $140,000 under the long term trend. Prices always systematically revert back to the long term trend.

    I haven't achieved this as yet
     
    2 people like this.
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    Is that tax advice, financial advice, and legal advice potentially. You could make a complaint to the Tax Agents Board, ASIC and the Law Society about this so they can investigate. Might be worth seeing a litigation lawyer too if you have suffered a loss because of negligent advice.
     
    2 people like this.
  19. GThomo

    GThomo Member

    Joined:
    1st Jun, 2018
    Posts:
    21
    Location:
    Brisbane
    Tallie,

    You get all the figures at each stage and as you buy the next property all the figures are updated. I still catch up with my my guy there on a pretty regular basis to make sure it is all ticking along as they said it would. I don't have a property in Griffin but I do have one in Newport which is not far from Griffin. That whole area is surrounded by water though, even Griffin. Looking at a map it looks pretty landlocked to me. The Brisbane property market has not really gone up much anywhere that I know of in the last 10 years, it has to be due right? I have seen only modest increases (Warner has done the best for me) but my home has not gone up either. Maybe the richie riches in Hamilton and Ascot have seen some better growth but for those of us 20km from the city it has not been the case.

    I have paid off a lot of debt though and that's what I am happy about. Like I said in an earlier post, if I can pay everything off by the time I retire, I am sweet as a nut. If not, I should have enough super to cover what I have not paid off. Well as long as there's not another corona pandemic the year before!

    Cheers.
     
    2 people like this.
  20. Tallie

    Tallie New Member

    Joined:
    16th Apr, 2020
    Posts:
    3
    Location:
    Toowoomba
    Hi GThomo,

    Thanks for your response, if this strategy is working for you that's great. At least you have a strategy unlike most people when it comes to property investment (I do too but different to this one). From their website they're talking about places where land is in short supply and nowhere to expand to, that was the definition of landlocked I was working off. Being surrounded by water wasn't the definition I was working off. I go to Griffin quite often to visit family and drive around it constantly and there are acres and acres of available; vacant, develop able land. Griffin might become land locked in the future, but it isn't now. Having said that I think Newport is way more land locked then Griffin. Especially the closer you get to the water, i.e. vacant land is in short supply. So in my humble opinion Newport would be a much more favorable investment proposition then Griffin because there is less vacant land there to develop.

    I hope this clarifies what I meant.

    Regards,
    Tallie
     
Thread Status:
Not open for further replies.