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  1. #41
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    Quote Originally Posted by Elijahs Mum View Post
    My in laws when they retired sold all but one of their investment properties and are self funded retirees and yes set up a plan to "pay" themselves a weekly income from the profits as they obviously wouldn't be entitled to a pension , the low interest rates don't help but they are both 70 and will have easily enough for the next 20 years plus their family home and assets - they planned it this way as I believe a lot of people have in that age range around here - their family homes in my area are easily worth between $1-2 million and they obviously didn't know that 40 years ago when they bought them but the majority of my vendors who sell , own their homes outright and retire out of Sydney or into retirement homes and usually have a decent amount left to live on - but obviously you have to be smart about it -
    Most of my landlords also plan to sell their investment properties when they retire to do the same thing
    My parents investments are worth nothing close to that. They also set themselves up to live for the next 20 years and have done everything people like them were "supposed" to do to to avoid living off a pension. Both their parents lived off pensions when they were old so they know how hard that is.

    But their investment properties are not worth a lot. They had one on the market for 4 years before it finally sold at a fire sale price. It was rural and no one wanted to live there.

    My point is like everything this isn't a black and white issue. Ok if there are pensioners living with millions of dollars in investments then that isn't right. But that's no different to that's really no different to working age people claiming pensions when they have other means of income.

    My parents have worked all their lives in industries that didn't earn them millions yet as self refunded retirees they live with rules that are a minefield to negotiate.

  2. #42
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    Quote Originally Posted by witherwings View Post
    Are you talking about farmland that you live on or an investment property?

    All investment properties can be sold one way or another. It depends on the price. If you have a mortgage on the property, it's not going to be more than the market value, due to commercial property lending criteria. Furthermore, if you're so destitute with this rural property that you can't afford the mortgage because it's not generating enough income, losing the age pension is the least of your concerns. It's bad investment that you are better off getting rid of
    Both.

    And yes, from land can be worth less than the mortgage. Farm land can fluxuate in value the same as other property and it is not unknown for people to borrow 100% of the value.

    As for saying that if you can't afford the mortgage on farmland it must be a bad investment I actually feel quite offended. We have farmland that we can barely afford to pay the interest on, not because we are bad farmers but because of years of drought. Drought that has led to massive devaluing of property in northern Australia, so much so that it's easier for people up walk off and declare bankruptcy. In addition mining and fracking of the land has also devalued it.

  3. #43
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    Quote Originally Posted by amyd View Post
    Both.

    And yes, from land can be worth less than the mortgage. Farm land can fluxuate in value the same as other property and it is not unknown for people to borrow 100% of the value.

    As for saying that if you can't afford the mortgage on farmland it must be a bad investment I actually feel quite offended. We have farmland that we can barely afford to pay the interest on, not because we are bad farmers but because of years of drought. Drought that has led to massive devaluing of property in northern Australia, so much so that it's easier for people up walk off and declare bankruptcy. In addition mining and fracking of the land has also devalued it.
    Not only walking off the land but leading to farmers taking their own lives. Life in rural and regional Australia is tough and people just don't realise.

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    amyd  (18-10-2016)

  5. #44
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    Quote Originally Posted by amyd View Post
    Both.

    And yes, from land can be worth less than the mortgage. Farm land can fluxuate in value the same as other property and it is not unknown for people to borrow 100% of the value.

    As for saying that if you can't afford the mortgage on farmland it must be a bad investment I actually feel quite offended. We have farmland that we can barely afford to pay the interest on, not because we are bad farmers but because of years of drought. Drought that has led to massive devaluing of property in northern Australia, so much so that it's easier for people up walk off and declare bankruptcy. In addition mining and fracking of the land has also devalued it.
    In this scenario, the land would be exempt from the asset test.

    I didn't mean to offend - I was referring to people who buy it purely for investment not for livelihood/business/to live on.

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    Like any other investment - your principle place of residence is an investment - in your future. Just like any other asset you might own, when times get tough a decision about what to do with it needs to be made. If that means downsizing so you can afford the rates or a more comfortable life then there is a 'choice' to be made, a luxury many people don't have.

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    witherwings  (19-10-2016)


 

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