Do people believe that people involved in real estate are going to say that there is always an opportunity to buy no matter what time, what interest rate etc. If that is their industry are they going to say no its not a good time to buy, maybe in a couple of years it will be. Of course they are not and of course the real estate section in the newspaper is going to focus on the good time to buy and great opportunities. If are a good talker you can convince anyone and i dont know much about the real estate market but i believe it runs on emotion just like the share market does. Do you think stock brokers are going to say no dont invest in shares, its time for real estate. Everybody is out for themselves and this creates emotional swings by consumers who rule the market. If i was involved in real estate of course i will be saying, “yes its the time for buyers maybe not a sellers market but its now that the good opportunities come” and i know you can make money out of any market at any time but i hope some of you can understand my opinion. cheers
Yes – I agree. Everyone has a VESTED interest in something.
Even the owner of this site has a vested interest in getting people to his seminars (at $1000) eventhough the property opportunities are not there like they were in 1999 when he started.
Real estate agents need buyers – so they say now is still a good time to buy. Share Brokers and financial advisers have a vested interest in commissions so yes its always a great time to buy shares.
Maybe I too have a vested interest. As a property investor I want prices to stay as they are or even go up.
Thats why I like to know a little bit about the background of someone and where he/she is coming from.
I like looking at facts and the fundamentals. We are in a historic growth pattern. Property prices have risen very high. We have historically low interest rates which has probably driven up property prices. Can this continue? Who knows? If the economy picks up(and there are signs it is), then interest rates must rise. If interest rates rise, then historically property prices go down.
Im my opinion (for what its worth) I am sitting tight and consolidating. Why – because thats what the facts suggest to me. (maybe those years of economics classes are starting to pay off).
I may be back in the market in a year or two.
yeah i agree too .. if the economy continues to grow at the current rate, then interest rates will have to rise, resulting in property prices stalling/dropping depending on the area.
all those families out west who have drawn on the equity of their homes and have purchased inner city apartments based on the negative gaering model are the ones who will suffer the most. It the ones who hold tight and have an educated approach to property investing will win, no matter how good or bad the market may seem.
Hi all
yes i think that no matter who people are they always (half the time unaware of it) make comments from within there own little paradime (i can’t spell), we are all affected by what our own situation is and the influence we put ourselves under. We cannot (perhaps ever) be totally objective.
Now Yack don’t overestimate the value of that economics degree i can’t remember one economist tipping that the property market was heading where it is now. Sadly it’s not an exact science don’t need to tell you that. In fact i don’t think i saw any economists in the richest 500 listr in the BRW ?? strange that. Sorry, as you can see i don’t have a lot of time for those guys, but hey i think a economics degree would be great and its going to help you more with investing than my degree (well maybe not)[
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Yack do you think your studies really help that much with property investing ? serious question (not being a smart alic this time)
i’ve a good joke on this topic better go to forum frolic
regards westanI find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
My ‘vested interest’ is that I want my properties to be as ‘set and forget’ as possible. I want to hold them all long term (give or take the odd consolidation) and certainly don’t want to be frigging around watching the market getting in and out all the time like a trader, trying to always buy at the bottom of a boom and sell at the top. sure, I’d refinance at the top of a boom and be cashed to buy more at the bottom – but I want to be in the market all the time.
i think if I don’t like where the cycle is at as a buyer I would cast around for a market where the cycle is at a different point more conducive to buying.
cheers-
miniInterest rates are only going to increase as a result of an improving economic outlook, both local and international. Don’t forget, North America & Europe are coming off recessions and historically low interest rates as a result.
Whilst individually, it may be difficult to asses what that means for each of us financially, on a macro level, that means more income as an economy.
So whilst the increase in interest rates will have an affect, so to will rising income levels affect issues such as housing affordability & rentals.
Westan, I think my commerce degree (economics major) has helped me, but people get their information from a range of different sources. My road was a tertiary degree and subsequently working across various industries, some get from running their own business, others from just trial and error and actually investing and learning.
Property investing is not rocket science, however, street smarts, a degree of business acumen can be developed over time, whether with or without a degree.
I agree rickyw, there are very few people who can give good advise with regard to R/E investing, it`s a rollercoaster, you have to know when to get on and when to get off, everyones situation is different.[8D]
why are people going to wait a couple of years i dont understand. because property prices are droppin, isent that a good time to buy, not wait?
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“Your Profit is made when you buy… not when you sell” (Rich Dad)Westan
I did commerce with an accounting major. Now working for a US software company as a sort of systems accountant. I suppose i know enough economics to be dangerous and worry the hell out of me at times.
But i suppose it has not really helped in property investing.
I saw the property market in nthrn california in 1999 but that was probably fuelled by migration into Silicon valley and I thought the same could happen here.
The old man was also a builder, so I got to see a few things he did and many things he should have done. But thats the past.
I bought my first investment property in 1997 and really had not heard about positive cash flow investing. I knew it was possible back then, because I heard of many stories about people buying $60k houses in Nth frankston (Pines). But these properties had their problems of bad area, tenants and no capital growth. So i never invested there.
But now I am worried that many people are buying in these type of areas thinking they are making a $1-2K postive cash flow investment. They will be in for a shock when interest rates rise, tenants leave or cause damage or the bathroom/kitchen is so bad that you need to spend $20k on a $120k investment just to get tenants in. And 5 yrs down the track your still only making a $1-2k return on all your efforts. Not to mention the distance of travel. I dont know about you but I find it hard to sit at home while a property is on the market unoccupied. I am proactive and go to the property is see what else I can do to make it more presentable. There is no property manager out there who is going to do the small things that count.
I am a firm believer in the Jan Somers idea of investing. I invest near home. I know I have good quality properties in good growth areas. I can support these properties and a few are now self supporting and I get a great tax refund every year. As rents rise, so too will my capacity to invest more.
I have no time for financial advisors. I saw one about 2 yrs ago. Cost me $550. All he said was your into property too much. Invest whatever your comfortable into managed funds. I bought another property instead. I think I will go see him in 5 yrs. I am sure he will live in the same house.
My next venture is either a holiday house around Mansfield or rye/sorrento.
Cheers
Andrew
Hi Guys
isn’t it funny how a lot of uneducated people (no Degrees etc) have been out there doing it and making buckets of cash and the educated elite have been sitting on there backside commenting on the developments.[?] I see this happening all the time. I used to work in a school and all the educated teachers have been seeing what i’ve been doing investing big over the past 7 years and a lot were saying it’s too risky, but others were saying they should do the same. But not one of them ever invested. They all saw my journey, i arrive broke 7 years ago and then 7 years later retire at 39yrs old. I think being smart (educated smart) sometimes gets in the way of making decisions. As georgisj said often being street smart is the best thing.
Yack just out of interest would you have been telling people that investing in The Pines was a bad move 7 years ago ? i suspect you would have. And i too don’t have much time for financial advisers. I have shared this on the forum a few times, when i started investing 7 years ago i went and spoke to an accountant/finance adviser to find out all the tax intricacies about property. I explained my strategy of buying houses for 30k that rent for 100pw puting $40 pw in my pocket. He advised not to do it.[] i still have the receipt for $75 which i paid for that advice. Lucky i didn’t take his advise.[:o)] I also found it interesting that a few years ago (it may have changed now) financial advisers didn’t even do a unit on property.[8]regards westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
Westan. As usual you make some good points. This is now 2004 not 1997. What was attractive then is not attractive now. I have still invested in what I believe are quality properties but not so called rural cash flow properties.
I dont have much time to look and interest rates are only go one way. What does one do now? Thats what i need to decide?
Yes Yack
i am with you an that one i wouldn’t be investing in my old stamping grounds of regional centers in Vic and SA. On the other hand i’m happy to hold about 12 properties left in OZ. by the way i love driving around looking for properties and i love spreading my risk, there are great opportunities in other peoples backyards, half the time they don’t even realise it. But some of my best investments have been given to me by locals who say you should invest here because Blaa blaa and they were right but they didn’t do it themselves. oh well at dinner parties they can say i knew this place would take off. i was just taking with Janine my wife about this yesterday, how so many people can see what to do but don’t do it, even real estate agents (they are the worst sometimes).
i’m not so certain about interest rates, long term though, we could even see it drop again, i know this is not the popular view. (am i just an optimist)?
Where to put your money in 2004 , Gee even the stock market looks pricey. i’m not rushing there. nothing again stocks i have been investing in them for longer than property, but i prefer to keep my money in property nowdaysregards westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
yack, you know I would say (i know, I’m like a broken record – ) ‘buy positive cashflow’ properties in regional areas with a high rental componenent/demand in the area that will break even with a 10 percent yield *after* holding costs. In NZ now or Australia soon. probably in the lower third of the market, but not the very worst.
but given your stated fears, and respecting your opinion based on your own analysis of the market, the future, and what you know and are familiar with, sounds like you’re not that keen to buy at the moment, and that therefore you probably won’t.
but – you say “This is now 2004 not 1997. What was attractive then is not attractive now.”
when is a 20 percent yield not attractive? it works for me any year.
Also, I have the perfect solution for people who fear interest rate increases – FIX your rates.
cheers-
miniThis is great stuff guys keep it comin I say![
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cheers
philFor me, it’s time to buy after I’ve defined my strategy and thoroughly researched the area. As long as I can hold the property long term, it doesn’t matter what the market might do in the next few years.
Cheers,
CarLover.
MY NEW QUESTION IS) – How much do you think education can affect investors results? Do you need a degree to invest in property?!
rickyw
Of course you don’t need a degree to invest in property. There are too many examples of people with very little formal education that have made huge money. These people have educated themselves over time by trial and error and just getting in and experiencing. This certainly does work, probably better than any economics degree.I have an economics degree and agree with what was said earlier, that economists get it wrong a lot. I too have got it wrong a few times in the last few years especially about the property bubble. But what I can say in favour of formal education is that it is a thorough and intensive means of acquiring knowledge. What one learns in a three year course in economics can take others 20-30 years to learn through experience. Sure a lot of what one learns is not that useful but I have found that my fundamental understanding of economic cycles and trends is very useful in analysing the property cycle. Many people however refuse to accept what these forms of data analysis do for us (predict) and prefer to try second guess the market. They are more than welcome to do so, but for me I prefer to put my faith in data and analysis.
>>Many people however refuse to accept what these forms of data analysis do for us (predict) and prefer to try second guess the market.<<
The word ‘predict’ should be banned in our vocabulary as the consequences of making predictions is that one is inclined to lock oneself into one mindset and thus walk around with blinkers. The effect of these blinkers being that it causes us to minimise and discount the importance of any negative factors.
It is infinitely better to get into one’s head that we use data to project, rather than to predict.
Pisces
pieces
I thought that predict and project both mean the same thing – that is to forecast? I also dont know how you can insist that by using data to predict one gets “locked into one mindset”? I totally disagree and would argue that this data and the predictions are only a small part of the information and decision making process and predictions do not in fact drive us in one direction only but rather help us to better understand a certain aspect of the picture.
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] i still have the receipt for $75 which i paid for that advice. Lucky i didn’t take his advise.[:o)] I also found it interesting that a few years ago (it may have changed now) financial advisers didn’t even do a unit on property.[8]
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