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Oh my – here we are, knee-deep in electioneering ahead of next week’s Federal Election, and half-truths and untruths are flying thick and fast. Do share some of yours too as you see/hear them.
I rather like someone’s suggestion “That parties found to be telling blatant lies during an election campaign should be brought to justice!” I can’t see how easily such an idea could work, but boy, I am hearing some whoppers out there right now.
1. This one, this morning, from Get Up who are actively targetting Right-wing sitting members – targetting Tony Abbott because “he refuses to debate Climate Change”. That’s funny – for years, I’ve been hearing “the Science is settled” whenever anyone wants to debate the issue – and THAT four-word slogan has been widely promoted by the Left side of politics. Is GetUp now saying “the Science is NOT settled after all?” Not really – they are simply slinging mud and hoping some will stick !!
2. Ads right now (from Greenpeace) show Tasmanian “survivors” posing in front of blackened land (after a bushfire supposedly) and blaming the Govt as if the burning of coal has created the bushfire….
Both Tasmanians and Victorians should be looking to the REAL cause of out-of-control bushfires, and that is the Greens themselves who, with the balance of power in both State Govts, vetoed the long-held practice of “burning off” yearly. So, when lightning eventually DID start a fire, there were many YEARS of build-up of fuel on the floor of the forests, such that it became a wildfire that was impossible to stop.
For those of you that think “Oh, we shouldn’t burn off, as it makes ground-dwelling animals homeless, and kills lots of them” I simply say “Think about it – a small fire started on a day where wind is low, specifically for the purpose of burning off the fuel load, WILL allow animals to escape as it creeps along the ground. It also greens up the forest, and promotes the seeding of fresh grass and new trees. But now, think how many animals CAN’T escape when a wildfire is roaring and jumping highways as it burns out of control. And think how many people lose their lives, including firemen who are attempting to control the uncontrollable?
Fortunately, the Greens don’t hold that power in Qld – yet – so we still burn-off to contain the build-up of fuel and keep future fires more manageable. It’s all about common sense – some parties have it, others are sadly lacking.
More thinking is required methinks :p
Let’s hear some of YOUR beefs too…. ;)
Benny
As the clanging bell of “Climate change” becomes more and more strident, the more I believe we all need to take a cold shower and re-look at some facts.
One fact I recall (about the time that we were fighting “chlorofluorocarbons in aerosols, and the hole in the ozone layer”) was that the icy poles on Mars were observed to be melting (or had completely melted). I can’t think ANY scientist on Earth was attempting to blame us for that. Of course not – the Sun was having a bit of a party, and that probably aligned with those times (mentioned above – from 1975 to 1998) when our Earth was getting hotter too. But for the last two decades, our temperature HAS NOT increased. The Sun has cooled – for now….
Isn’t that significant?
Doesn’t that throw some doubt on the whole carbon dioxide / climate change / end of the world drama that is clogging up our newspapers and our lives?
Seems not – the bells just keep on clanging, drowning any attempts to bring a wee bit of common sense into the argument. Schoolchildren are encouraged to play truant to bring even more emotion into play with “What about our futures” rallies. Demanding that Govts “do more” to make the bogeyman of Climate Change go away.
I struggle to know how Govts can stop volcanoes from erupting – and when the Iceland volcano threw off its lid in 2010, I read that it released as much pollution in one day as Sydney did in one year !! How do we (sensibly) do anything about that? That volcano went on for weeks – how many major cities should we close down for a year to counteract that pollution?
And, as we have earthquakes regularly, as tectonic plates shift, wouldn’t it make sense that there will be volcanoes erupting UNDER WATER too (unbeknown to us perhaps)? And what would that do to our oceans – maybe warm them somewhat? Well hello!! What can man do about these, seriously? How many more cities would we need to “shut down for a year” to offset the warming/pollution that arises from each of these events?
Now look, I certainly agree we need to do things to prevent pollution – like all those plastic bottles and bags that are currently choking marine life. That IS our problem, and we MUST fix that one. And we can do far better by keeping (and planting up) more trees – they give off oxygen, so that is goodness, even as they store carbon.
But the call to flee to sources of energy that are unreliable, costly, and are totally not viable if we are to keep a robust economy, instead of renewing our energy sources to use HELE coal, or Uranium, or even Thorium is beyond belief. Maybe in decades to come, the current “hot topics” (wind, solar, wave power) WILL be reliable and inexpensive – but that is not today. And I hear that even if Australia CLOSED RIGHT DOWN and the country generated NO emissions at all (turn out the lights and all leave!) the savings that were made from the cut in greenhouse gases would be totally negated within 6 months by China’s and India’s growth !!
So come on !! Let’s get real here. Our old people may yet die in huge numbers because of the current huge cost of electricity this coming Winter (thanks to the subsidies levied to cover the cost of solar, etc). Labor leaders talk of “renewables” (solar, wind, etc) being “the cheapest power around” – but if it is, tell that to South Australia! I’m sure they don’t believe it for a minute.
And even as Bill Shorten projects having 50% electric cars within 10 years, HOW will he provide all the extra Gigawatts needed? Surely not Solar or wind power – or we might be intermittently getting to work each day, depending on whether the day before was cloudy with no wind. Sheesh!
By demonising coal (as seems now to be happening), where will that leave Australia’s economy when its 2ND LARGEST EXPORT is axed? Don’t allow the Greens to gain seats in this election, please! How will all the school children who are today “demonstrating” about climate change end up when their parents suddenly don’t have a job, or when electricity costs grow even higher as ALL coal-fired power goes away. there might be enough solar power to let them charge their mobile phones, not much extra for anything else.
Think about it. Sure, we might need change – but let’s do it in a measured, orderly fashion, not in the heated rush that is “climate change alarmism” right now. Over time, let’s remove coal – sure. But replace it with something that is RELIABLE, just like coal is. Uranium, HELE coal, Thorium, or whatever is next.
Last words go to my newest mentor, Howard Thomas Brady:-
“It is hard to see a way forward in the climate debate due to the inextricable links that have been forged between so many disparate groups. It is rather like a thousand cats in the same room playing with a thousand balls of wool. It has got to the stage that a sharp global cooling, much like the Dalton Minimum between 1795 and 1820, may be needed to bring the foundations of modern climate science to its knees, and to disentangle those disparate groups caught up in the climate debate.
“To some extent we have been conned by our new awareness of the climate in polar and high altitude regions. In September 2015 President Obama had his photo taken near a retreating Alaskan glacier, and used this image to tell the world it is on the verge of catastrophic change. Obama did NOT tell the world that these polar regions have always been vulnerable to the slightest changes in climate, and always will be!
“In the past 40 years scientists thought that rising greenhouses gases provided a general guide through the climate maze. They were wrong. There are many competing forces behind climate. However, it is going to take some extraordinary events to change the present simplistic carbon dioxide global warming theories within the scientific community.
“The Fairy Tale called the Emperor’s New Clothes is very relevant. The defence of the role of greenhouse gases as the primary driver of the present global warming may become more strident but one day, someone or some event will make it clear that the emperor and all his rabid followers are stark naked, and the science community will suddenly nod in agreement and change sides so that climate edifice, built up over the last 40 years, will collapse. Then the charade will be over.”
Benny
Yeah, about 8 years too late !! Reviving old posts to spam us is not appreciated, Dean. This “local cleaning service” just happens to be your own. No surprise there I guess, but obviously disingenuous, so I doubt anyone will be calling you.
Give us a break mate !!
Hi ALJO,
That sounds pretty awful. One would hope someone could direct your steps if you talked to a Technical type within Telstra…..But wait, I hear wireless can be just as quick these days – maybe look at the capability of receiving Internet via a Mobile phone at that place and forget the ADSL altogether. Especially as (once NBN comes along) you will be forced to “give up” the ADSL anyway.
Wireless Mobile could be the answer to BOTH problems. But I am not a techy, so if others can add thoughts for Aljo, please do,
Benny
I appreciated his work so much that I immediately shelled out a few dollars to purchase his book, titled “Mirrors and Mazes”. I can’t wait for it to arrive.
Woohoo – it’s here !! And now that I am able, let me state a few more thoughts from this book that might turn a few hypothesese on their heads – like this one:-
“For those who talk about present temperatures being ‘unprecedented’, geological history shows that for 80% of our Earth’s history there have been NO ice sheets at the Poles. Indeed Mother Earth has normally been at least 3 to 5 degrees warmer, and plants and animals have happily lived and evolved in those hotter conditions.”
and this…
“The world has warmed over the last 300 years, yet not as much as various warm periods in the last 8000 years. More of our modern thermometer temperature readings may be broken, but such records only go back 150 years!”
One section of Chapter 1 – “The Climate Debate” is titled “Solutions before Answers” where he talks of over-spending on as yet untried solutions that cost billions :-
“In the fervent rush to reduce greenhouse gases, many countries have installed large-scale solar plants and wind farms that require large subsidies or tax credits to justify some return of capital. In Spain the economy was not robust enough to fund these subsidies that became a significant component of its ballooning National Debt.”
And just one more quote that shouted at me in a quick read through Chapter 1
“Carbon Dioxide levels rose about 11% between 1975 and 1998 while temperatures were also increasing. However, Carbon Dioxide levels rose another 9% between 1998 and 2017 while temperatures did NOT increase. So, how can rising carbon dioxide be the main driver?”
Dear reader, are these questions and comments of interest to you? I don’t wish to simply add to a store of website information if it is of no interest to others, so I’ll hold back now to see if there are any reader reactions before continuing. Meanwhile I will enjoy reading the whole book.
* All quotes from “Mirrors and Mazes” by Howard Thomas Brady – “A guide through the Climate Change debate”
Benny
Absolutely with you re “Caring for the environment” Jason. I’m sure we can be doing lots better in that regard too – i.e. don’t clear timbered areas to build homes. Leave the trees there and build homes where there are no (or few) trees. Don’t be in a rush to knock down old homes – the wood therein has captured a bunch of carbon, so fix it up if possible. And wood has very good insulating properties to keep the interior warm in Winter and cool in Summer.
I’m looking forward to the day when I drive my electric car with solar power absorbing paint. The future is bright – pardon the pun :)
I’m appreciating the imagery !! Why not, eh?
Hi SBH,
Back to my earlier comment of mine:-it sounds like I am asking more questions than I am answering, but that is purely to start you thinking around the whole subject, rather than just concentrating on “do I sell this or not”? There are many good reasons why you should and/or shouldn’t. Becoming more aware of ALL your available options is a good option at this time.
While responding to your most recent question, I thought more about one of your comments – this one:-
I think I was looking for a simple advise whether I should buy in where I want to live or not. rents probably cheaper like $500-600 for a standard house and owning a house costs a bit more for sure.
What came back to me today was a very early learning point for me – and that came out of a forum debate about “Do I hold my old PPOR as a rental, or do I sell it and buy a new one?”
Now, as I referred to earlier, there are a HOST of other questions/comments/learnings linked to that very simple question of yours. One MAJOR point was this one:-
Where one is thinking of retaining their old home as a rental, there is one point that should be fully explored before making a decision. It involves taxation deductions and the like. Goes something like this:-1. If you are buying a new home, any loans you take out are not deductible. Even if you take a loan against the old home (which might have a heap of equity in it) that you are making into a rental, it doesn’t matter as the REASON for the loan is to shelter YOU, not the tenant.
2. Carrying on from 1 then, any NEW loans against your old home are only Tax deductible if the loan is for investment purposes (e.g. borrow against old home to buy ANOTHER investment property).
3. One problem with turning your old home into a rental is that, in many cases, any mortgages have been paid down over some years, thus the remaining mortgage might be quite small (e.g. a house worth $600k today might have just a $120k mortgage against it – so $120k is a Tax deductible amount once the property is rented).
4. That is fine if you are wanting to have the property highly positive geared (nothing wrong in that at all) but then, you MIGHT be better off to sell your old home outright, claim the full CGT exemption and keep ALL of the equity to put against the new place, THEN borrow against the new place for other investments if you want.
SBH, there is so much more to this too (you KNEW there would be, right?) that I can only suggest you find a great adviser who can run through all of your options with you. You will find some right here, but then, you might have someone over there who can answer specific question s and can guide your steps.
Do come back here with any other questions too – we all learn by reading and learning from others like Steve and Jason, and a host of professional people who frequent these boards (see their signatures). Not me – I come up with a few thoughts from time to time, but have no qualifications that make me a professional, as such, do check all I say with your own advisers.
I hope the above thought helps somewhat. In closing, this topic might have some good thoughts around your question:-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697967Benny
Check out the forum called “Heads Up” where we discuss things like meetings – here’s the link:-
https://www.propertyinvesting.com/forums/community/heads-up/To find it at any time, click on “Forum” (top centre-right of any page) and scroll down to the Community section where you will find “Heads Up” along with other community types of forums.
Looking through the list of topics, I note that Melbourne and Brisbane/Gold Coast meetings are pretty active, with only occasional entries for Perth and other places. Of course, YOU can start a topic in there, asking for others in the Perth area if they would like to meet up. It is a really good way to learn heaps quickly.
Benny
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This reply was modified 5 years, 9 months ago by
Benny.
Landlord Insurance perhaps? Of course, you might be thinking of some kind of Body Corp Insurance (i.e. to insure the common areas as well as the individual units).
I am quite unfamiliar as I’ve only ever owned private homes – perhaps someone else can come up with a better answer….
Benny
Hi SBH,
Re the “Rentvesting”, you might want to use the Search feature (click on Forums, then “Search”). One result I found from doing that led to this topic:-
https://www.propertyinvesting.com/topic/5041971-newbie-getting-started-2/
That might prove useful to you.You also ask this:-
Is there a benefit in the long run to own a house in this area?
… but you don’t mention what area you are renting in (even though I can’t help you with Perth areas, others might – but they would need a suburb name).
Hope that helps somewhat,
Benny-
This reply was modified 5 years, 9 months ago by Benny. Reason: Correction - poster lives in Perth, not Melbourne
Hi Steven,
Technically buying a new house is not “adding” to the number of homes available.
It may be a matter of semantics – but to me, if there are (say) 600,000 rental homes in Australia, a builder builds a house, and I buy it as an investor and make it available to rent, then there are now 600,001 homes available for rent. If someone else bought it as their own home, then there is no nett gain in rental homes available. But you are right – the other aspect is this…. If I buy a second-hand home to make it a rental, then the available rental numbers again go up by 1. But there are no EXTRA homes in Australia – owner occupiers now have -1 and rentals have +1. Is that what they don’t like? I dunno !!
…. nobody will want to buy from them because by then those are considered as second hand housing and whoever buys from them can’t negatively gear.
BINGO !! And therein is where many of us see a major problem with the Labor plan to allow neg gearing only for new homes. For those already owning investment homes, it appears that Labor are thinking to allow neg gearing to continue IF it is already in place.
This will likely lead to more market distortions – i.e. investors might rush to “fill up” on investment properties ahead of the election, perhaps lifting values temporarily – with the fall in value to come after….. As I said, it sounds like 1986 over again – and that hurt investors and renters !!!
Benny
Hi Steven,
Good question – I think Labor’s intent is to only reward those investors who are ADDING to the number of homes available. Buying second-hand doesn’t increase the total number of houses, so no “bonus” for these investors.But, as Steve had mentioned in an earlier article – “We really need to wait to see just what Labor proposes once they actually hold power” at which time we will be able to answer a heap more questions with some kind of certainty. For now, it is all conjecture,
Benny
Hi SBH,
I can’t make any comment on the Perth market as I live on the East side of Australia. However, it is good you are asking before “doing” as there are a number of things you should check out before you make your next move.First off, there are Tax benefits in selling your first home before buying another (and it might mean you can offer cash for your next home, thus allowing bargaining of a lower price perhaps). On the flip side though, there are also Tax benefits in providing rental accommodation for others by keeping your current home as a rental and buying another. Your income appears to be sufficient to be able to buy a further property (and not sell your first home), depending on your current expenses of course. A Mortgage Broker could help you more on that though, as the lending climate has changed markedly since the Royal Commission into Financial Institutions.
Further to this are other thoughts – like, are property values in Perth likely to appreciate in the medium- to long-term? If so, would you want to hold two properties instead of one over that time, thus building up your Equity? The risk there is that values might stay low, and keep your finances locked into two assets that aren’t growing. Also, it could be your money might be better used elsewhere. Is your spare cashflow sufficient to cover all costs during that period? Then again, if you sell now and buy again soon, the Equity you have in your current home is then “all yours” with no Tax payable, allowing you to buy another in the same climate, thus not losing out on any growth that might occur in future markets. But if there is growth, holding two would be better than one, yes?
Whew !! Sounds like a circular argument, eh? ;)
Sorry SBH – it sounds like I am asking more questions than I am answering, but that is purely to start you thinking around the whole subject, rather than just concentrating on “do I sell this or not”? There are many good reasons why you should and/or shouldn’t. Becoming more aware of ALL your available options is a good option at this time.
Benny
Well, I missed the Dec 2018 “anniversary” to update this (would have been 10 years). So here we are in Mar 2019, and we are seeing a price correction in play currently. Syd and Mel have had their values settle back somewhat from their recent highs. All to be expected. Pundits right now are stating “We will see a 20% drop before the trend changes back to positive” (Referring to Syd & Mel). Other areas are stagnant or dropping slightly. Recent articles call a 13% drop since last peak for Syd, and about 9% for Mel.
We are in unusual times right now though – with a Federal Election imminent and the Labor Party in the ascendant (according to Polls). Meanwhile, Labor have stated that they will forgo Negative Gearing on all but new properties (1986 anyone?). As well as that, they want to bring in Death Taxes and also remove Franking Credits. With those kinds of policies, I would have thought the Liberals should steam back in again – BUT they are instead imploding with the recent antics of their more left-leaning members. So all bets are off re who will win !! And, depending who does, will (I believe) provide markedly different paths for property investors and investing over the next few years!!
So, will house prices fall further (as Scamp had predicted over 10 years ago)? Like, 40% or even 50%? I see a possible larger fall should Labor win Govt in the next few weeks. But still not 40% nor even close. Perhaps the 20% that others have predicted recently. And if Libs get back in, less likely !
What do YOU think though, friend? Does Scamp have a point? Or is he still licking his wounds from selling off what has been a strongly rising asset over the last 10 years despite his assertions?
Benny
Hi Harley,
This is where “your own situation” is most important. What does your situation need? Cashflow or growth? In all of that though, remember that cashflow is king. Like, if you suddenly don’t have a job, then payments (if negative geared) can become a monster that could eat you alive.You are in a great situation to make a considered decision. Such an injection of equity can be the start of a huge change in your life. As such, do give it some time to check out all options…..
Though your options aren’t likely to be unlimited, this is a huge “leg-up” should you wish to change your job (if you don’t like it) by e.g. buying into a franchise that you DO love. Or it can set you up with property (of course), but also shares, or some other investment type.
Take the time, and even spend some dollars on your education, so that when you make your next move, you will already be convinced it is “the right move for you”.
Re property itself, growth is nice, but even better is buying something you can afford even if you lost your job, so having more rent coming in than expenses paid out is quite desirable. As you said, you might look at buying two properties rather than keeping one that WON’T pay for itself. Remember too, it is good to be able to sleep at night, so keep your next move as stress-free as possible.
A good way to do that is to avoid a negative geared property (Blacktown?) that costs you extra money each week. Start with one that puts money in your pocket each week. I recently attended Ian Ugarte’s day seminar that shows a way to increase the income of a rental property markedly – his way can even take a negative geared property and make it positive. Perhaps that can work for the Blacktown property too – I don’t know, but others will.
Good luck with your choices, and remember this – “If you think education is expensive, try ignorance!”
;)Regards,
BennyHi Tiggie,
Given a choice of only those two options, I’d go the NE facing one. My main reason being that West is quite bad for heat, AND there is no guarantee that you will have a mountain view in one year’s time anyway (depending of course on the aspects of the surrounding land). i.e. I assume it is possible to build to the West of your Unit – but maybe not, if there is a canal, or land already used for infrastructure – rail, motorway, etc.You would know whether it is possible to build to the West or not (thus blocking your view). If you keep the view, you still get the oppressive Westside heat – can airconditioning cope?
Hmmm – and just now, on a re-read of your post, I caught this bit:-
I’m buying off the plan.
Well, after answering you with my opinion on “aspect”, I also want to add the following:-
Personally I am not overly interested in Units, and particularly not if they are Off-The-Plan. There is just too much that can go wrong, and I much prefer to own a chunk of land. I would only consider a unit if it were a small part of a boutique block in an already settled area of a city (no hi-rise for me thanks). Just thought I’d add that wee note of caution….There are some really good references in here re “Buying off-the-plan” that you might want to seek out. If you have trouble finding them, come on back – but have a look in the Training Centre first.
Regards,
BennyHi Steven,
What an interesting muse !!Unless they propose negative gearing cannot be used to offset the investor’s own investment portfolio, in which case that will probably kill off the invest altogether and cause some very serious consequences to the economy…
To me, this question really comes down to “Where does ‘negative gearing’ begin and end?”
I know many who do a kind of “cordial mix” – having some positive geared properties offsetting other slightly negative geared properties. If losses can be absorbed “across the portfolio”, then that’s not so bad. Some though might depend on having it offset their other Income – THAT is where such a change may lead to a change in the rental market (thinking there of “those starting out” who aren’t yet into the consolidation phase). Think mid-1980’s and the introduction of CGT. and removal of negative gearing, and the upset that caused!! (see below for more on that)
Knowing just where this proposal begins and ends is mandatory to understanding the change. One to watch in a couple of months, eh?
Looking around, I found a summary of those 1980’s changes. Initially, it looks like John Symonds is dead against it, but DO read the text and you’ll see that his video offering is not the FULL story. The words also say “the removal of negative gearing was not the only cause of rents going up…” so there does seem to be some balance in this report (from May 2016 by the way…).
Check it out:-
https://www.news.com.au/finance/real-estate/what-happened-last-time-we-messed-with-housing/news-story/ad060b7d2557bd382f4bba5d1fa9ca98Benny
Hi Naomi,
From the info you provided, you sound like you are in a prime position to do just that. I haven’t done that myself, but the good-looking chap right on top of your post (advertising the one-day seminar) is doing this and showing us all how to. Get in on his course (I’ve heard it is almost full in Melbourne, so don’t delay). I am sure what he brings will fill your knowledge bank up quickly with respect to those two properties.Only one thing that stood out to me as a possible problem is that yours are both built on slabs – that makes any new plumbing a lot harder unless sited on exterior walls. But don’t let that stop you going ahead – there will be “ways” around that too I’m sure. And maybe Ian even has an answer to that to – ask him on the day…..
Benny
Compound Interest is great – but what effect do yearly expenses play on your compounding investments?
I stumbled over a post from a year or so back – it shows just how well compounding can work. But this time, it has a twist…. It ALSO shows how much damage can be done when the compounding is accompanied by expenses along the way (be they admin fees, taxes, other costs, etc).
Be prepared to be surprised – I was !! Like, I was already aware of how GOOD compounding can be, but I was unaware of the massive effect of those regular expenses.
It starts by showing how, if you take $1 and double it 20 times, you end up with a little over $1m. Nice !! And I was not overly surprised by it, as I was already aware of the power of Compound Interest.
What surprised me was what happened if you take out 30% each year as you go (for fees or whatever)…. now THAT result surprised me. I thought it might halve the end result….. but I was WAY wrong.
https://www.propertyinvesting.com/topic/5034678-that-surely-cant-be-right-or-is-it/
Then try it again with only taking 5% out each year – think about what the result might be, then calculate it out. Again, surprising !! There has to be a big lesson in that – re watching expenses, Interest rates, taxes, etc.
Benny
Hi KDL,
As a non-resident, I guess you are restricted to “buying new” – am I right there? If so, it limits your choices somewhat – but as a general rule, I’d be looking to buy in a settled area rather than in outlying suburbs. Perhaps developers are doing “urban infill” in Southport that could suit you. Though land size is smaller (where they subdivide a large block into 2 or 3 smaller blocks) its location should give it a better value into the future.I don’t live on the Gold Coast, but from what I read, now is not a bad time to be buying in SEQ anyway. If considering a unit rather than a house or duplex, look for smaller builds (6 or 8 units to a development) as they hold their value better.
My thoughts on Pimpama are widely known – although fine for owner-occupiers, I believe it will take many years before the value catches up to the purchase price. OO’s will spend many years there, and add value by fencing, gardening, putting in a pool, garage(s), etc – so they will grow some equity over time. But this is an area where land is readily available, thus not hugely valuable (at least not for another 20 years or so). In Southport however, the value is already there, as is the infrastructure.
Re “which suburb” to recommend, I don’t know them well enough to say – hopefully others can add some value there,
Benny
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This reply was modified 5 years, 9 months ago by
