Firstly I honestly believe that investment property is by far one of the best investments that the average investor can make. The current boom/bubble has made me somewhat depressed (Dr Ellis would have you believe that depression is linked to a sense of loss… Cognitive Behaviour Therapy). Anyway as a long time member of the working poor club the opportunity to buy my own home let alone an investment property somehow eluded me (that was when a house could be bought for 110k)…. ok ok I know that I could have if I really tried (skipped more meals, walked to work, stayed home every weekend and so on).
Anyway can someone please answer this
between 66% and 75$ of people are owner occupiers. According to Jan Sommers (not plugging her work but I am sure Steve McKnight would not have you read only his book before investing) this is your safety net. Owner occupiers are not going to sell up and drive prices down. Fair enough
That leaves 25 to 34% of the population to live in the rental properties……. agree?
stay with me on this one. Some analysts describe the property market as “white hot” (that is HOT), some as a bubble and well lets just say that there isn’t anyone who wouldn’t say that there is an upward surge driven by investors.
Now lets say that every home bought 1 investment property (REMEMBER that I believe in the merits of investment property… probably a lot longer than the current crop of ‘investors’)
Lets use 100 homes as a figure
100 homes = 66 – 75 owner occupiers
25 – 34 tenants
Every owner occupier buys 1 investment property
= 66 to 75 rental properties but there only remains 25 – 34 tenants!Someone has to miss out. Lets hope we all did our homework and it’s not us
Air goes in and out. Blood goes round and round. Any variation is a bad thing
I don’t agree but I understand your point. You have not quite made it clear. Have you any property (PPoR or investment property) yourself?
‘Eat rich food, barbeque a yuppie’ [greedy]
As for not being clear… I pay that one. My post isn’t clear. I was just trying to say that if everyone bought 1 residential investment property the whole idea wouldn’t work. It certainly seems that there are plenty of “investors” out there at the moment. In a paper last week some Real estate agent was saying that investment properties with a defence force lease can get snapped up within half an hour.
I am sure that I am about to ruin any credibility (if i had any to begin with) and say No I do not have any investment property. As I said in my original post I do believe in residential property as a definate road to financial freedom.
Thanks for taking the time to reply to my original post
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Hi Torachan,
There are always a lot of ‘ifs, buts and maybes’ in property investment.
Sure we are going (or is that just gone?) through a period when property investment was sexier than it has been for along time – really just market forces coming into play. Long term, good property will be a winner if you are there for the long haul and can cope with the ‘down times’.
Dotted throughout this country’s history is instance after instance when it wasn’t a good time to buy investment property – yet also throughout these times long term returns have been proven.
I also suspect you ears now prick up whenever the subject of property investment comes up in conversation or is in the media – I believe this is result of your psyche being more attuned to property investment. Whereas the average ‘Joe Public’ would entirely miss the comment – his mindset is elsewhere.
So is now a good time? Well that depends on what you believe.
Derek
[email protected]Property investment support – starts but never stops.
Hi torachan,
Youre theory is inherently flawed for one reason (and, having read Jan Somers’ book, you should know this)…
You said “if every owner occupier bought an investment property” the points you mentioned would arise…
Accrording to ABS stats, between 6.5% (late 90’s) and 11.5% (late 2003) of people own an investment property… your logic was based on 70% of people owning an investment property ..
(Australian home ownership rate is 69%, and you based your reasoning on 100% of them owning an investment property…)
Instead of 70% of people owning an investment property, the number is closer to 10%…
Hence, the pool of potential renters is approximately 7 times what you thought it to be…
Can you see now that there are actually plenty of tenants for property investors?
Best wishes on your journey,
Jay
Thanks jay I was going to get to that after I established wether Torachan had any property.
My point was if he/she didn’t have one for some reason, he/she wouldn’t be the only one with reasons not to have one. Your stats just back that up,
‘Eat rich food, barbeque a yuppie’ [greedy]
Torachan,
You can prove black is white & that 1=2 with enough hard work and spin.
If you don’t want to buy Investment properties then don’t – you’ll be in the majority, you can feel OK about it. You don’t need to have property investors support your view for you to be justified in your choice.
I’ve had people tell me to their face that property investing doesn’t work and use all kinds of reasons to justify it. When I ask them to justify how come I’m now effectively retired and not yet mid-30s they tend to either get intimidated & run away, hostile & defensive & tell me I must be doing something illegal or put it all down to luck.
Only a few say – hmmm…could I do that!
Those few people are the ones who invest in properties – all the others never will.
And if everyone was investing in property – property investors would be investing in other areas – there’s always a niche for those who care to look for it, rather than justify why it wouldn’t work!
For you personally I grasp your point that you reckon property is a good investment – but that you haven’t invested yet…If you don’t DO at some point you’ll be no better off than the people who don’t believe it works. Both roads have the same destination.
You can justify your lack of action any way you like – but the fact is that there are people out there who started from worse positions than you and created a lot of wealth for themselves. Not simply because they believed the investments were good, but because they took ACTION!
Do or do not do – there is no try
Cheers,
Aceyducey
Yeah! Just do it!
Just don’t do it like the kiwi investor mentioned in todays Financial Review…or the first home buyers with negative equity mentioned by Aussie John in the same article.
Cheers
Hi all
Thanks for taking the time to reply to my concerns. I wasn’t trying to sound negative (I am sure we all know people who are). I do not own any properties (investment or otherwhise). The only thing holding me back is my low income (full time study does that, but hey, education is an investment as well) and poor finances (credit cards have been destroyed and are well on their way to being paid off).
It just seemed to me that every man and his dog has an investment property. That got me thinking about how not everyone can have an investment property.
If it is a “bubble” and if it does “burst” then there should be plenty of opportunities for the true investors.
To reiterate. I wasn’t trying to be doom and gloom. If anything I am very excited at the prospect of becoming financially independent (my goals are somewhat modest than Steve’s). Negative gearing has never made sense to me (well I understood the principle but it still seemed … well dumb).
Thanks again for replying to my post. There will more sometime soon
Cheers
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Hi Torachan,
There are two ways to make money in property – income and growth.
The income process is patently clear to all and sundry = more money coming in than going out = positive gearing.
Sometimes overlooked by some proponents of property is the growth equation.
So if I own a property that is costing me $100/week (as an example and to keep the maths simple) I need to be fairly certain it will grow sufficiently to make more than $5200/annum to cover my costs.
For me, and my circumstances, I aim to gear myself (neutrally I might add) in pursuit of capital growth which can be reasonably assured with good comprehensive research.
PS – I wouldn’t even entertain -$100/week.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Well said Aceyducey & Derek. That’s what I am thinking.
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]Thanks everyone for replying to my post. I wasn’t trying to sound negative but may have come across as such (and the last thing the world needs is another negative person).
It’ll be a while before I can invest in property as I am currently studying full time but rest assured that I am studying the market and have a few plans and am prepared to learn from both people who have been successful and those who have not. Of course I listen with the B.S. detector turned on and the bias filter at the ready (we all know people whose returns have hardly been good let alone great).
Thanks again and I hope that I get such great replies to my future posts
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Hi Torachan
Not sure if you are still watching this, but I’ll give it a shot.
To your hypothetical question, “if all owners would buy each a IP” . . .there would be not enough properties nor builders to build them, in fact there would be fist fights in front of the RE agents.What prompted me to respond is the way you formulate your question. “Does this work for everybody” or words to that effect.
I get this a lot in our personal development seminars. Usually people who put this question “IF everybody would do so then this does not work” have an inquisitive mind but are trained to spot injustice, not business opportunities. Usually of a “left wing ” inclination, they like to fight injustice and have acquired during such exercise an long string of limiting beliefs that stop them from achieving.
Yet if I point this out to them, they are usually offended or at least very surprised.As entrepreneur, you must ask yourself, is it legal and will this work for me?
The question “IF everyone does it” has value but for a different purpose.
You must ask yourself “Does everyone do this?” if the answer is yes, you know you must look somewhere else for an opportunity!Entrepreneurs are artist, leaders, inventors, not crowd followers. One last thing, real entrepreneurs do not retire ever.
May God bless you
and prosper you.
MarcThanks heaps Marc.
Not much I can say other than you are spot on and have given a lot of food for thought. Of course there isn’t a system that is going to work if everyone does it.
Thank you for taking the time to reply.
Torachan
Air goes in and out. Blood goes round and round. Any variation is a bad thing
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