Family Homes - Why they are so draining on your pocket?

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It's the great Aussie dream, to own your own home. Is it really all it's cracked up to be. Your own home comes with a whole lot of expenses that just take money out of your pocket instead of putting it in as we want our real estate to do. In this video, I looks at why your family homes can be so draining on your pocket?

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Transcription

Hi, I'm Phil Anderson from LifeCorp, the home of street smart property investors. Today, we're gonna touch on a very sensitive topic. The topic is your family home, and why is it the most expensive and most difficult home to ever have to pay for, particularly in comparison to investment properties that you can buy with just a lunch money budget. Today, we're gonna explore that together.

Okay, so let's explore this together. First of all, let's consider that each of us have a net wage component- the amount of money we take home each week after tax. Of course, many of us choose to give our tax money to the tax man each week out of our pay, and don't ask any questions. They just, you know, freely pay the tax thinking, "You know, I gotta pay tax." And I'm gonna question that in just a moment. And obviously, we have our super component, the amount of money that gets contributed into our superfunds. That's a topic for another day, because there's some new great government laws that allow us consider buying investment property using our superfunds as well.

Today, we're gonna talk about the family home, and why is it so expensive to service those loans in regards to our family homes, and why can in investment property be as little as $10, $15, $20 a week out of pockets to service. Well, this is what happens. When you buy a family home, you must pay for it out of this net wage, out of the take-home after-tax income. And many Australians, let's face it, we stretch ourselves to the maximum of what we can borrow, buy as much house as we can possibly afford. And many Australians find themselves fairly stretched when it comes to this mortgage. Considering the fact they don't have the option to tap into their tax, their tax component can't be used to service a family home, but it's very different when it comes to an investment property.

I've gotta say, though, most people do get it wrong. Most people who buy an investment property don't know how to fully utilize the benefits of these tax concessions and so forth to buy investment properties. They buy the wrong sort of property, putting even more pressure on to their take-home income, squeezing down this take-home income even further, because you've still gotta service that family home, and obviously, leaving yourself with not a lot left over at the end of each week to have a lifestyle, putting a lot of pressure on the fact that maybe it wasn't a great choice to buy this investment property. I'm going to really say that with a little bit of thought, the scenario can look totally different to this.

Now, like I said, obviously, this family home is always going to be a tough one to service, and it's gotta come out of your take-home income. But that tends to be the Great Australian Dream and what most of us all choose to do. When it comes to an investment property, I'm gonna challenge you to think quite differently. I'm gonna challenge you to believe that you don't need to use any more than $10 or $15, a maximum of $20 a week to service an investment property if you do the numbers up front, if you use the great government laws that have been provided to us. You see, the government decided many years ago they didn't want to supply housing here in Australia, they wanted investors to supply housing. So, they give us some great tax concessions if we supply the rental properties here in Australia. So, you can literally devise ways by testing the numbers, utilizing government laws to service this loan using mostly your tax component.

Many people that I actually put through this exercise, many people that get to know these government laws, are pretty excited and surprised, I guess, to know that they can have more than one investment property, fully utilizing this tax that they're giving away freely each week, and using a very little amount of their take-home income- like I said, a maximum of about $20 a week. And that will be what my suggestion would be- set yourself new expectations that you can do this. Many Australians can do this. Of course, you need to test this for yourself. You need to consider, can you get the loans, do you have the ability, all of those things. But if you are in a position to add an investment property- if you're in a situation where you wanna add an investment property, and that's definitely part of your retirement plan and your wealth creation plan- please set yourself new expectations to let the numbers do the talking. Tap into that tax. Get that tax money back to be able to service the loans here. You've got enough problems up here servicing your family home out of your take-home income. Don't put any more pressure on yourself. Set yourself a new expectation of a maximum of $20 a week to service, whether it's one or multiple properties here utilizing your tax, utilizing new government laws, or government laws that allow you to get that money back in your tax each week- sorry, in your take-home pay each week. You don't even have to wait until the end of the year, you can get that money back in your pay each and every week to help you service those loans and set yourself some great new expectations.

Like I said, this one's tough enough. It's gotta be paid for out of your net wage. If you're gonna have an investment property, please don't make life any harder for yourself. Utilize your tax as best as possible. And that's the lunch money principle. Remember- if you can't buy a property with your lunch money, don't buy it.

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