Hi
I am an amateur and just learning.
I just came from a property seminar. The speaker seemed a little undecided as to whether or not Perth property prices would crash, or I guess he just didnt want to stick his neck out in case he was wrong.
I have 5 investment properties and feel the time is ripe to cash in. I believe the market will crash like Sydney and elsewhere but you hear different stories ie. mining boom ect
I truley believe that with the following events occurring, it is likely to crash and not just balance out:
1. Interest Rate Rises
2. Government releasing mass amounts of land in the next 12 months.
3. In all previous cycles the market we are in is unsustainable and when rookies start making loads of money you know the market is at its peak.
4. Also, how long is this mining boom really going to last.I heard tonight OVER and OVER again, to buy and hold and NEVER sell.. this sounds like a retirement fund to me.
Can some of you please give me some input, I am really confused and nervous about the situation in Perth??
Thanks [fear]
Hi,
Have not posted for a while but have seen a lot of talk about wa bubble burst. My opinion only, but if you hear the talk its time to walk.
Dom
[biggrin]Thanks for your reply!
I guess im wondering.. many people, buy and hold and never sell.
But I just believe in this market when $150k has been made in 5 months that it would be crazy to not cash in.
Also, the properties I have are negative geared so its taking money out of my pocket.
I would rather sell and buy elsewhere???????
Can anyone else offer advice to what they would do or are doing in WA????
I am a great believer in taking a profit, especially if you have returns as you stated. Everytime i have sold, the person has payed way too much for property and they would show a negitive return if they had to sell today. I am no expert in predicting the top of the cycle, Perth second most expensive city for housing is amazing, everything is pointing to a bubble to me, no one ever went broke taking a profit. Maybe sell a few and keep a few, each way bet.
Don
djr
Ahh Craig Turnbull good speaker. Its hard to predict as someone who works in the industry the mining boom aint ending anytime soon.
The way i see it youre in a win win situation [biggrin]. If you sell walk away with a nice profit, if you hold (long-term say 5-10 yrs) youll be fine too, Perth is one of the cities that are predicted to have a huge population growth (KPMG & ABS studies verify this). In the short term i believe the market will crash but it will pick up again maybe round 2008-2010.
Hi queengucci,
Like Carl I work in the mining industry in Perth and what is happening in this industry does not seem like slowing down in the near future. Fortunately it is not only reliant on the local market but there is a lot of engineering being done here for overseas companies. Also the there is a lot of things happening in the oil and gas market as well.
As for the increase of land which is supposedly going to be made available… Most new releases are at the moment about 12 months behind their original release dates. This means that there is a twelve month backlog to catch up on before there can be a glut.
As a result I don’t think we will see a burst bubble to the extent of what appears to be happening in Sydney but perhaps a slowing in the increase.
But on that note. may as well turn the positive growth of your negatively geared properties into some positive cashflow.
Whatever you decide I sincerely hope it goes extremely well for you.
Mark
Thanks Mark!
I will sell the ones taking money from my pocket and keep the others.
I think back on sales that I have made in the past… like when I sold a large green title block with a liveable house in east vic park for $180k because I was sure i had picked the peak of the market and everyone was tellign me it couldn’t go higher. Or the townhouses I sold for $290k+ in Vic Park only a couple of years ago now reselling for mid $500s. Or the beach house we sold for $90k that is probly worht 10 times that, or my last house in floreat on 1000sqm for $480k… I could go on all day but the point is… property may seem expensive today but the likelihood is it aint going to get any cheaper, particularly if you take a longer term view. So you sell and pay a huge tax bill and then what? reinvest in property? or?…. IMO the only argument that could have some merit is investing in Sydney which seems to be suffering herd mentality
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Originally posted by queengucci:Thanks Mark!
I will sell the ones taking money from my pocket and keep the others.Hi QG,
I believe you need to rethink this as it is possible that the ‘one taking money from your pockets’ is making bundles in capital growth and as such may well be contributing considerably more than it is ‘taking’
If this is the case (without number difficult to be definitive) then the challenge for you is how to leverage off the gains, sustain the properties and so on.
I prefer to look at my collective investments and income (property, share funds, developments, tax refunds and wages) as a whole rather than in piecemeals. This way I retain a bigger picture focus.
Derek
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The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113I’m with Ausprop and Derek here..
The Reason you have the Profits(un-realised)is from the Capital Growth of these IP’s, so why not top up your loans and lock in your Equity?
Have you worked out your Selling Costs and once sold what then?
If you can achieve “better value elsewhere”then definetly look at the options BUT work out everything on paper first IMO.
If you think Values are going to drop- then by how much, 10%, 20%, More?
Maybe you need to work out the various scenarios for your sitaution?
If the IP’s are taking $ from your pocket then have you submitted an ITWV Form; have you explored LOC’s, what is your yield and can ou improve it in any way..etc etc..
I work my yield out based on the Loan, so if Values drop a bit it doesnt affect my yield, which it would if you based your yield on value.
My Capital Growth has been effectively locked in as well with the WA IP’s recently so this gives me a Safety Buffer.
HOWEVER, at the end of the day its your call and you have to do what fits your Strategy.
What was your initial Plans when you bought these IP’s?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Online Positive Cashflow and Renovating CalculatorsQueengucci are you able to say what type & where the 5 ips are? You might be able to get some brain storming going here about their known potential at the moment and some possible scenarios. Thing is, even if you think there is going to be a general crash of property prices, there are always going to be markets within markets that survive. It will all come back to quality and location and desirability imho. Personally I’m not adverse to getting some cash out of the non performers either though [biggrin]
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