Clients of Destiny Financial Solutions or Margaret Lomas

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destiny.com.au

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  mskeggs on 19/02/2016 - 07:15

  I haven't used them. The main reason I wouldn't is that their investment approach seems completely reliant on continued substantial property price appreciation. My question would be what if there is a multi-year period of below inflation growth (such as the early 90s) or an actual decline in house prices.
  The extremely high use of leverage makes their system blow up in such a scenario if the investor has any hiccup, like a short period of joblessness or similar.

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  cisco on 19/02/2016 - 09:49

  Thanks for shating your thought but Isn't this the only reason that we all buy investment property that it's a safe option and that over time the price of the property will grow?

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    mskeggs on 19/02/2016 - 10:26

    +1

    Not necessarily. A safe property investment would offer a rental return and the possibility of capital growth. And there is a difference between buying a property investment that you can afford to meet the repayments with, versus buying so much that a small issue could force you to enter bankruptcy.
    For the last 20 years there have been almost no examples of people losing their homes because the bank foreclosed on their investments properties. But if prices for investment housing fall, if, for example, negative gearing rules change to make property investment less attractive, then you have an investment that loses you money every month and is worth less at the end of the year than at the beginning.

    I personally believe that the fact that there have only been winners for the last 20 years makes it much more likely that property is not a safe investment at current levels.

    However, there will always be property spruikers who believe the only way is up, and that 20 years of strong growth just shows that we can expect it to keep going.

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      cisco on 20/02/2016 - 21:09

      I went to destiny and they were talking about the same strategy positive cash flow and hold.

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  cisco on 21/02/2016 - 14:41

  I'm surprised there isn't even 1 person who is a client of Margaret, anyone? If someone is not willing to share their feedback here, please feel free to pm me. I would to hear from you.