Forum Replies Created
Hi Andrew.
Just a gentle reminder, and to bring this thread back to top of mind!
Cheers[
]Suggest General Discussion Forum has a number of sub-forums with titles such as “where are property prices going”, “legal structure for purchasing IPs””Which areas are hot” etc.
This would make it easier to follow threads as they would mainly be in one forum. At the moment the general forum is all over the place and the same type of threads are being posted again and again.
Cheers[
]I’ve noticed in the Forum of late, that emotion and invective seems to be replacing reasoned, rational debate and information.
My view is that you are bound by your agreements, whether they work in your favour or not. Its an integrity issue.
Cheers[
]I’m always amazed at the reaction by Aussies and Kiwis to Network Marketing. Network Marketing is just another method of product distribution which relies on word-of-mouth referral (ie. person to person) rather than through normal retail distribution.
Unlike pyramid schemes (which are scams and illegal) many do offer hard working people good income potential (notice I said ‘hard working’ not ‘do nothing – get rich’!).
The better companies offer consumable products (which means repeat business) of a good quality at a reasonable price. Nutritional products (vitamins) and household cleaners are favourites. They also charge very little to join (free to under $100).
I am not advocating network marketing to people, but I don’t think it should be ‘demonised’ as it has been in some of the posts above. I generate one income stream from an ethical networking company, whose products I use and get great benefit from, and am happy to recommend to others.
Incidentally, I use a ‘magnet-therapy’ mattress cover (totally unrelated to above)and have gone from being a sceptic on the benefits of magnet-therapy to a believer. They’re great!
Cheers[
]The question I continually ask myself is – “Where is the opportunity right now, that most people are not seeing?” That is what Steve and Dave did.
If the herd are charging into investment properties, then maybe the opportunity lies elsewhere. Where are people not investing, is there a good reason or is it just ‘against the trend’.
We just need to use our grey matter – “the truth is out there”.
Cheers[
]Aussie citizens can live and work in NZ indefinitely without any visa requirement etc.as well as utilise the Public Health System (no Medicare in NZ altho’ prescriptions are subsidised). They can’t get any benefits (such as dole) unless they apply for and receive permanent residence, and then there is a waiting period.
Income tax in NZ is lower, maximum 39%, no compulsory super, no CGT. GST is 12.5%. Wages are generally lower (even factoring in exchange rate) but so is overall cost of living. Weather is definitely worse, unless you’re from Tassie!
Cheers[
]The above link to the BIS Shrapnel report was very interesting. They may be right, but then again???
I am just making the point that caution should be the operative word. If you see a good property investment, do the numbers, if they work buy by all means.
But, like Crashy, I would tend to put surplus cash into equity markets right now. A low fees, indexed fund would be my choice.
Cheers[
]Hi Aaron.
You can’t really blame people who utilise a facility that they are legally entitled to use (such as the FHOG). If blame is to be laid, it should be at the feet of those who wordsmithed the grant legislation.
Incidentally I have anecdotal evidence of young children of Aussie home owners purchasing property (presumably with suitable guarantees to the bank from Mum & Dad) and getting the FHOG.
Blame the legislators.
Cheers[
]Hi Johnny.
One of the reasons I know that there are professional RE agents, who do act with integrity, is because my wife is one. She is rapidly building an excellent reputation in the Redlands shire because of the fact that she is focused on the needs of the vendor and the purchaser, rather than her commission cheque.
In the final analysis this pays off for her as well, as more and more vendors and buyers choose to deal with her because of that integrity.As you sow, so shall you reap.
I am confused about your use of the word ‘agent’. In normal situations an agent works for a principal, whom they represent. Thus a company may have an agent in a particular location who represents them and distributes their goods. In the case of a RE agent they are an agent representing the vendor.
I have not used an architect here in Australia, but I have overseas. He designed my house, I paid his fees, and he acted as my agent in ensuring the builder delivered on the agreed specifications for the property, via progress meetings etc.
As a man of integrity he would point out if I required something that was outside of the agreed specs and would negotiate an agreed additional cost with the builder.Nevertheless he was at all times my agent – I paid him. It may be different here in Aus – although I cannot see how it would be, unless there is specific legislation.
Cheers[
]Hi Sooshie.
Sorry, I don’t get it. From your example he would seem to have mortgaged the property for more than its full valuation, unless he had paid down some of the principle on the earlier mortgages?
As all mortgages interests are noted on the title, how did he manage this? The mortgages may be from different banks, but they will have each searched the title for prior mortgages. So presumably the third bank went in ‘with their eyes open’? So I am not sure where the fraud lies (apart from mortgaging the property he doesn’t own).
If the mortgages are higher than the value of the property, his best bet is to sell the property now himself, rather than one of the banks foreclose. That way he can get best price and retire as much of the debt as possible.
Then he can rent, pay off his liabilities over time, and hopefully recover his position eventually. Of course this all requires him to take personal responsibility, which doesn’t seem hopeful based on your posts. Good luck.
Cheers[
]Couldn’t help myself, have to say something on saving for retirement.
I agree with Alf. The greatest impediment to people creating wealth and being able to fund their old age is the tax system. The current tax system in Australia is designed to suck as much money out of income earners as possible – not just to fund necessary services such as health, education and policing, all of which are going downhill anyway, but to fund this enormous bloated bureaucracy, which very few of us want or need.
We have far too many politicians, far too many administrators in the public service, as opposed to people who ‘do’ things like nurses, policemen and teachers and a bureaucracy posited on – one form is OK, two forms are better and three forms plus a licence is best!
I had the pleasure, at one stage of my life, of living in a low-tax economy. My average rate of income tax was 12%. I was able to create wealth at a prodigous rate, because after tax I could meet my expenses and invest substantial amounts.
With an effective top tax rate here of 48.5%, which kicks in very early, after paying tax and meeting necessary expenses there is little if any surplus to invest and create wealth.
However why would a government want the population to be wealthier? Money gives people more choices and makes them more mobile – I have lived and worked in 5 countries – and government would then be more accountable for delivering on their promises, otherwise people would vote with their feet. Not a good outcome for the politicians!
Anyway, thats my rant for the day! Sorry Alf you touched a chord.
Cheers[
]Hi Johnny.
To answer one of your questions, a Real Estate Agent is an agent for the vendor. It is the vendor who pays their fee/commission out of their proceeds from the sale.
That said, professional agents, and there are some, will work to achieve a good outcome for both vendor and purchaser. However it is not possible to get the highest price for a vendor and the lowest price for a purchaser. The agent is obliged to get the highest price for the vendor, whose agent they are.
Yes there are a lot of shonky agents out there, as well as some very professional ones. Being a commission based income(and most vendors would rather that than a fee, which is paid irrespective of outcome)and a sellers market right now, some agents will overpromise to get a listing and then underdeliver.
It is also an occupation, where many people are ‘passing through’ and just give it a go. Unfortunately this can lead to a lack of professionalism from some due to ignorance or a desperate need for income.
This is being addressed by more stringent training requirements and more effective legislation, particularly in Queensland.
Incidentally, from my experience, Australia has one of the lowest commission rates, overseas 4-7% of the sale price is the norm.
My advice to buyers is when you find a good agent, and they are there, build a relationship with them. Remember that they are the seller’s agent not the buyers, although professional agents will work to achieve win-win outcomes. Good luck.
Cheers[
]Hi Guys.
Business Consultant and Coach. Until 12 months ago ran a small to medium size financial institution.
Have invested in Real Estate for last 20 years but keep moving countries which doesn’t help!Cheers[
]DantheMan not sure I follow your comment about a new property depreciating like a new car? Cars generally depreciate down to nil value (unless it becomes a classic).
Any reduction due to a new property, fixtures and fittings etc. no longer being new, will generally be more than offset by the more established garden, rise in land value, building cost inflation and general appreciation in property values?
So how is a new property like a new car?
Cheers[
]The Pest Inspector may only have spent 5 minutes in the roof but while he was with your neighbour he couldn’t be elsewhere earning money – so given there is probably a minimum callout charge it was probably $120-$130 + cost of bait traps?
Analogy – Power Station stopped working, nobody could find problem. Expert called in – he looked around then put black cross with texter on a dial. He said replace that dial and its associated valve. When they did, Power Station came back online.
He presented Station Manager with a bill for $20,000. The manager was taken aback – “All you did was place a cross on a dial?” “Let me itemise the bill.” said the expert.
He gave the bill back to the manager, on it he had written – To travel time $99. To placing cross on dial $1. To knowing where to place cross $19,900. The manager paid!
Cheers[
]Hi Andrew.
Are you able to give an update on a Brisbane meeting? It would seem from the postings that there is a lot of support for one.
Cheers[
]MiniMogul I read the above with interest and I take the point about the landlord benefiting more than the tenant.
However, given government is reducing its contribution to low-cost housing for low income earners how can such housing be provided?
In order to charge an affordable rent, the prerequisites are that you, as owner, have purchased a property at a low price. If the cost of land and building and established homes rise and you, as the new owner, still want to make a profit you have to charge a higher rental.
If people who would typically rent a property of the type you own cannot afford the rent, it will stand vacant until you drop the rent (take a loss) or resell the property at a loss, allowing the new owner to charge a lower rent because his investment is less.
The only other alternative is for people in a higher economic demographic to drop their sights and rent your property, because they cannot afford to rent a property of their choice. But there is excess capacity at the high priced property end of the market and rentals are under pressure, so this is also unlikely.
In those circumstances, I cannot see how price levels of property can continue to rise at either end of the market? Unless the economy grows to such an extent that everyone benefits and has significantly more income – and I don’t see that right now.
I may be missing something and would appreciate alternative arguments.
Cheers.[
]There goes the neighbourhood!
Cheers[
]I’m with Crashy on this one.
He is putting forward facts, coupled with his opinion. Its a literal truth that Doomsayers speak prior to markets falling otherwise they wouldn’t be doomsayers!
Everything moves in cycles, all the indicators suggest the Aussie property boom is at, or near its peak.
The saying is that when your next door neighbour and taxi driver are giving you stock picks its time to get out of the equity market. I would suggest that when everyone is leaping in to the property market, and conservatives like David Murray are saying the boom is sustainable – it ain’t!
Minimogul your statement that 92-94% of the property market is owner-occupier driven may be true in total, but I read, I think in API, that 30%+ of new borrowings on property is for investment not PPOR.
My view – move forward, but warily, with in-depth research and making sure the numbers still work, and are serviceable, in a tighter environment. Now is not the time for unbridled enthusiasm and a ‘she’ll be right’ attitude.
Cheers[
]My RE buddies are buddies first and RE agents second, so they share the truth behind the BS when we chat. They are all saying interstate investment into Qld is still very strong.
How long that will last is anybody’s guess.
What are the views on the negative article on wraps in the Aussie Property Investor?
Cheers[
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