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There isn't a world shortage of oil. The price will come down again as the markets settle. It may go up a bit more first however. Back in the 70's there was a "oil shortage" and price explosion. Inflation soared. Houses devalued in the late 70's then exploded in the early 80's just prior to the recession we had to have. Nothing new under the sun.
When investing, remember :
1. location location location. Water views rock. Australia has a big coastline. We all want a slice of heaven.
2. Supply and demand. Where there is a high rental need, you can find positive cashflow properties. University towns, mining towns for example.Don't buy houses in dead end country towns with negative population growth because you make $20 a week. Nobody wants to live there. Your rental may be difficult to let. You may struggle to give it away at the end of your torture.
Stick to the coast
Stick to areas of population growth and active economies.The property deal of the decade comes along every week. Look hard
Invest for cashflow rather than appreciation. It is possible the property market may stagnate for a few years. If your rent pays your mortgage then you can look for another one. Property will go up again in the future but probably not for a while. Eventually, you will get some appreciation. Cash is king.
I really f@#^ed up recently by buying a business in a dead end town. It is an absolute lemon and I will have to close it and take a hit. It seemed like good value and the real estate is excellent but the business was a lemon. Depressed rural economies are to be avoided
There isn't a world shortage of oil. The price will come down again as the markets settle. It may go up a bit more first however. Back in the 70's there was a "oil shortage" and price explosion. Inflation soared. Houses devalued in the late 70's then exploded in the early 80's just prior to the recession we had to have. Nothing new under the sun.
When investing, remember :
1. location location location. Water views rock. Australia has a big coastline. We all want a slice of heaven.
2. Supply and demand. Where there is a high rental need, you can find positive cashflow properties. University towns, mining towns for example.Don't buy houses in dead end country towns with negative population growth because you make $20 a week. Nobody wants to live there. Your rental may be difficult to let. You may struggle to give it away at the end of your torture.
Stick to the coast
Stick to areas of population growth and active economies.The property deal of the decade comes along every week. Look hard
Invest for cashflow rather than appreciation. It is possible the property market may stagnate for a few years. If your rent pays your mortgage then you can look for another one. Property will go up again in the future but probably not for a while. Eventually, you will get some appreciation. Cash is king.
I really f@#^ed up recently by buying a business in a dead end town. It is an absolute lemon and I will have to close it and take a hit. It seemed like good value and the real estate is excellent but the business was a lemon. Depressed rural economies are to be avoided
Sell them as cheap as you can without making a loss
The punters love a bargain
Stick for sale signs on them if it's possible. PRIVATE SALE. SAVE SAVE SAVE. URGENT SALE should do it and a phone numberThe world has entered some interesting times and there does seem to be some tough times ahead. I'm not convinced it will be a wipeout but I do tend to agree that prices may come down a bit. Due to people feeling mortgage stress and wishing to sell their homes fast presents an opportunity to negotiate hard. You might be able to get significant reductions if you are brazen enough to ask and stand frim. You might have to do it 20 times or 100 times but a bargain you can find.
The reason homes will not spiral down is that in my opinion, they cannot depreciate much further than it costs to build them. There will always be a demand for housing. People don't like sleeping in the gutter as a general rule. It is certainly possible for a correction of 10-15% however. If they come down more than that I'll be buying a shitloadThey are pretty hard to find at the moment with the boom in prices and now the spike in interest rates.
- A big deposit helps.
- Buy a house where you could subdivide off the back yard and sell it reducing your debt
- Mining towns have some absolutely shocking houses which hard mining types will happily rent out for good money due to accomodation shortages. WA and QLD mining towns worth a look. You will have to sort through hundreds of towns and houses. Don't give up if you don't find one in an hour. It might take you weeks. DETERMINATION
- Commercial real estate is worth a look. Buy shops and charge better rents to businesses
- Buy property where your business can rent and get your business to pay the debts and hopefully earn you money
- Buy a large block and do a strata title and keep a few if possible for yourself (eg build 5, sell 3 and rent the other two out)
- Renovate and increase the rent
In all seriousness, the old chestnut that Australian property values will double every 7-8 years is an assumption. Historically this has happened but when you see how far house prices have increased compared to the average salary, then a slow down must be expected. There is only so much the market can pay.
However, each suburb is a microcosm of the market. The top end of the market (for example harbour side residences in Sydney for the uber rich will always be very expensive and due to the lack of supply and high demand will likely continue to appreciate. There will always be uber rich. There will always be middle classes and there will always be poor bastards that want to blame society for their problems and not take control of their own destiny. The bottom end of the market is surprisingly stable. The middle market that may be overpriced is where the suffering will be. Each suburb/area is different and needs to be considered on it's own merit. Supply and demand will always determine price and you cannot make sweeping statements across the entire market of Australia. Some areas will suck and some will go well……….and so add infinitum. Adelaide is having their boom whilst some markets are haemorrhaging.
Buying for appreciation is a mistake. Your profit should be made when you buy (ie haggle it down, find undervalued properties eg foreclosures, reduced for quick sale houses such as divorce settlements). There will always be bargains. There will always be risk. Everybody makes mistakes. If you don't have a crack, you will never have a win.
The bear market gives the buyer the opportunity to make a good investment. Two years ago in WA you had to sign the contract withing 5 minutes of seeing the house or it was gone within the hour. There was no room for negotiation. Now it's the buyer with the power. Now it's paybackThe deal of the decade comes along every week in property. You may have to sort through hundreds/thousands of properties, but now more than ever they will start to appear.
Now is bargain hunting time.
What is a recession? Merely a transfer of wealth
Interest rates of 9% aren't extreme compared with the early nineties where people were falling over everywhere.Sorry I bothered
Good luckMy two bobs worth.
Financial advisers suck. They are all stuck in the rat race working for the man………so why listen to them? They will get you to invest in a managed diversified share portfolio where you will make……………absolutely nothing. They will get a commision and your profits will get gobbled up with fees.Here's how you make money
1. Start a business
2. Invest in real estate (positive cashflow is best. Also You make your profit when you buy it not when you sell it. Appreciation is a bonus, never the motivation)
3. Invest in shares (blue chip for safety and dividends………..other stocks are like punting on the horses)You will struggle to get rich working for the man and giving half your salary to the government. A business will give you a tax shelter although the GST has put a lot of pressure on businesses starting up because you have to pay it whether you are making money or not. A business buys things with pre taxed money. An employee buys things with after tax money
Do your research. Learn for yourself. Read the "Rich Dad"series of book by Robert Kiyosaki and your life will change
Start TODAY
