Forum Replies Created
Hi everyone
Just happen to take a break to see what's up at PI.com. I'm probably the most unlikely person to login and comment, this is an exception. The new format has made browsing for followup topics difficult ;and so most ,I dare say, gave up.
I think this actually lead to some making use of their time doing rather than watching this space, any thoughts? It maybe a good thing…
I was given the impression by other fellow forumites it maybe better next door at somersoft; not a regular but will check it out.
CT
The Media love hype and investors should do their sums; Dandy is doing fine overall.
CT
Take today’s share market for example; ouch, it hurts. I finally got rid of TLS shares.. Enjoyed the little ride while it lasted. Astute investors are cashed up took opportunity of the days? weeks? of corrections. Smart move it seems. But according to the analysts there are more corrections before mid year. Another option is to dripfeed into the market.
Where are the markets all heading 2007/08?
The point is, a correction cannot be ruled out in the property market as well. Those ripe to take advantage of Super “window” are the lucky ones for the moment at least. Current unsustainable housing issue coupled with spiralling debt level do not seem to give comfort for investors taking the plunge.
I’d like to know what are the gurus doing for wealth in this climate? Keep dogged persistence on reinvesting? Stay at sideline to wait for markets to crash? Buy blue chips? Sell more seminars to investors?
Hmmm… on that note, I’d better sign off. [confused2]
CT
Hi James62
Don’t know if this article helps; do check it out.
http://www.prosolution.com.au/newsletter.php
Stuart Wymess is a well respected Vic based fin broker, I believe the answer can only come from the analysis of your own porfolio.
Good luck.
CT
Hi Kum Yin
I appreciate your take, coming from an old hand, on the situation at hand.
From my lack of experience, you seem to be unemotional about the current housing woe facing some of us. One necessary skill I have yet to master. I guess taking ownership to make the first step, and learning from doing, make anyone with the desire a stronger investor.
Good on you, Kum Yin! Wishing you continuing success.
CT
Hi Foundation
Must return here sometime as I thought we’ve lost you for good. Your take on Mr M’s comments is provocative because you scratch beyond the surface to find the truth… sometimes it’s a hard pill to swallow.
Thanks for the follow up here on the thread. I do agree Mr M need to better qualify his comments as people like me may interpret it the wrong way and further entrenched themselves in the position they’re in.
I loathe inaction but sometimes it is all it calls for – more due diligence in asset selection, careful timing, prudent valuation etc. No wonder I look like a fool in this forum. [tired]
CT
Hi all
Just quoting Michael McNamara from latest Home Price Guide regading Melbourne properties in general:
… Whilst any growth in new housing remains stunted, there will be growing pressure on rental markets. Strong migration patterns have brought over 100,000 new migrants per annum to Australia in 9 out of the last 10 years. Simply, new housing is not being built at a level to satisfy our bourgeoning population. Parents are no doubt feeling the burden of this as their (ahem) children stay home until their late 20s. Rental vacancy rates are less than 2% nationally indicating that demand for rental accommodation will push rents even higher.A renewed focus is required to take the pressures of soaring rents and higher house prices in our urban markets. Governments need to encourage the de-centralisation of our cities with better infrastructure spending. The new housing sector also requires the tax relief to create more affordable housing not only in outer suburban markets but also in inner urban areas where the demand is growing most strongly.
I believe his explanations should relief some concerns; but it may never lay the topic to rest. It’s just too hard for some of us to ignore returns on achievable with the other asset class that is doing all too well right now.
We need to take heart and do our due diligence.
Cheers
CTGreat yarn, Rhys.
Congratulations on getting the message across here for an open discussion. I am still a newby threading property investing gingerly. I’m a fan of Noel Whittaker, Dale Gillham, Alan Kohler but not so sure about Paul Clitheroe. I suspect they probably own properties as part of their portfolio amongst other assets … to create wealth.
Timing the market is a hot topic I agree, even the best of us here have no crystal ball. Seeing that your pricing predictions were so accurate, you should be singing praises as you must have acted on your hunches, but sadly …
As for Numbers, I leave it to my accountant, he’ll tell me his opinions, I’ll have the final say. I prefer discipline investing than saving.
I wonder if you can entertain the idea that housing is NOT a staple or necessity. Sure the young can delay moving out; but extended family existence is rare and far between in Australia. As we live longer baby boomers are not going to disappear any time soon. Even if housing is unsustainable, we need roofs over our heads. Then tenants will rent if it is not feasible to own or buy, it is a service landlords provide. The social issue of rich getting richer is to be addressed equitably, but the poor not afford just to expect handouts to get ahead. An aged old subject not ready to go away anytime soon.
My commonsense logic is that housing is a marketable commodity; therefore forces of demand and supply will bring about equilibrium as it has since historical time.
Prices to come down? I won’t hold me breath on it, especially in the blue chip areas. Investors will be enticed back into solve the social problem the gov’t seemed only too eager to pass on. Most grants and subsidies failed miserably as the price has already been factored into supply or boosted demand. A real Catch 22.
Good luck with your new book, let us know when it hits the stand.
CT
Thanks for the tip off, wealth4life.com. I sometimes wonder why the need for Chan and Naylor to mass feeding info to the general public… a bit like soliciting for service.
CT
Hi James62, I’d love to be in your position to have done so well, albeit this is a trying time.
You have the wisdom to ask and those before me have given you their honest opinions. I do believe now property investing is for the long haul, sell only as a last resort. Revisit your goal and affirm your plan to wipe out negative noices around.
For a quick pickup, Jan Somers book on Building Wealth Story by Story (again availalble in good libraries) is quite inspiring without gimmicks.
Cheers
CTHi dare_to_dream
I’ve asked myself this very question – shares vs property, about a year ago. Thanks to books and forum contributors, I now know better they are different asset classes worthy in anyone’s portfolio.
This is strictly because of their different characteristics and often complement one another in any business cycle. I don’t hear the stock market and property market in the doldrums simultaneously in any point in time. An exception maybe in the Great Depression.
I think you are on the right track seeking share market terms and definitions and their effects on share prices. It’s what they call a fundamental analysis. Any good share trading book in local library will do the explanation better than I can.
I’m wary of courses offering promises fast returns, chances are they’re not going to be there when students falter. It’s just clever marketing preying on the time poor want-it-all instantly …. You don’t have to look far for them, they seek you out. Have you been bombarded with wealth seminars and newsletter lately? I have. [rolleyesanim]
Cheers
CTHi DaveA, couldn’t agree with you more on the issue of getting trust advice from accountants.
Seen my accountant but have sceduled to see another. This one walks the talk. The practical bit that no uni can prepare undergraduates with. I guess that the difference.
Wish me luck the accountant doesn’t cash in on his ‘expertise’. [hmm]
CT
Great observations Simon, I’ve lived there half my life time and would not invest in Malaysia as there are plenty of opportunities here now that I’m a permanent resident.
Quote:[They don’t have PMs as such. A PM will find a tenant for you but ongoing rent collection is your responsibility.
/quote]The situations are changing on PM; there are markets for ex pats and OS residents investing over there. My mother is currently using one in Penang, while Calvin Saw is based in PJ Kuala Lumpur.
For Suzieq – getting a few PM, as you may know already, is a simple Google search away. Check out MIEA website would be a must. I emphasise the need for due diligence to sort the wheat from the chaff. For the tyranny of distance, never give the PM the autopilot right. I’d ask for inspection digital photos to be sent with report every 6 months or so on the IP.
I do think of retiring over there somedays for reason of strong AUD against MYR. Then again, I might not be used to their way of life anymore.
Corruptions and poor building standards are rife. We do have some degree of the same problems here. But no one can iron them out irrepective of where you buy. Here’s where insurance comes in. That’s is entirely another topic.
CT
Thanks for a great thread, mcubed.
Most replies you’ve got here are precise and hit the nail on the head. The legitimate question arises when we face with 2 or 3 bedroom in the outer suburbs or a one bedder in the inner suburbs for around same price. This is even more pertinent when one is trying to get a foothold into the property market.
There are two opinions on this; either never buy one bedder for its limited potential (I’d like to see some stats for that), or buy one bedder in inner suburbs only.
I agree in future there will be less demand for MacMasions. But I do distinctly remember reading an article about the success of the Baby Bonus scheme backed up with unprecendented birth rate.
Interestingly the shared equity comes into play and may distort it even further. Just heard form the wireless that government is also talking about getting their hands into shared equity with home buyers.
Would be great if someone in the know can compare figures for the two scenarios for yield and growth for buying for keeps [inlove].
CT
Hi Paul
I’m not an expert in shares but a self paced student. If you are serious about shares investing (although your endeavour sounded more like speculating to me), I’d recommend doing free online courses with the ASX, you’ll have the answers ….. and more. [wink2]
Cheers
CTShOw_Me_ThE_MoNeY, not sure if you have sorted out your dilemma on the issue of aspect of a property yet.
I’d recommend a good reference book – Warm House Cool House by Nick Hollo (Choice Books) is available at most good libraries. It’s a basic guide to Australian designs for low energy housing for comfort year round. It contains clever designs and plans to accommodate for extreme climate state by state.
Good luck.
CT
Hi Suzieq
I’m wondering if you’re aware Malaysia has a two-tier market when it comes to purchasing properties generally (and other social issues I won’t go into here). So it’s highly probable you pay market price to get in if you’re not a Malay by descendent, while the generous concession is allowed to the others.
Also, there is no Small Claims Tribunal, or similar Tenancy Tribunal, over there to deal with tenancy disputes (arrears in particular). The tenants can virtually do a lot of damage before the legal system catches up with them at the Magistrate Court. Trying to get a landlord insurance is another issue – it’s unavailable. Their legal system is draconian, and the Bar Council ensures the legal fees are not discounted by competition. A conveyancing fee can be easily three times what we pay here regardless of how straight forward the transaction is. CGT for OS investor is another issue you need to consider if you wish to sell later.
If you’ve done your research and it proves a goer; get a good property manager. Their fees are usually negotiable. I know Calvin Saw from Dowell Realty as I dealt with him for selling a property over there. He was one hand picked from list of 30. With his experience and connections with property developers, he may point you in the rigth direction and advise you better than I can.
Suffice to say I do not share enthusiasm of property investment in Malaysia until there are significant improvements on upholding the lanlords interest.
Irrespective of where you buy, Suzieq, I wish you all the best.
CT
Much obliged, Terry, for your answer. Somehow, I’m slow to compute.[blush2]
CT
Qlds007 wrote:
The normal structure we establish for our clients depending on the circumstances is:1) Interest only home loan linked to a 100% offset account.
2) LOC against the PPOR to 80% LVR to be access solely for investment purposes i.e deposits and acquisition costs.
3) Interest only loan – stand alone against the security of the IP.
held in an HDT.No loans X Collateralised if possible.
Not all lenders allow this form of structure and the terms, conditions and pricing vary considerably.
Qlds007,
Can you help me understand “stand alone against the security of the IP held in HDT”?
Is this a 100% lend or with Percentage LVR? I thought for a first timer, the bank would take a security of sort, eg. a term deposit of equivalent amount in lieu of 20% deposit for 100% lend. Afterall, I’m not in the big league that they’ll fall over to get my business.karlm63 and Babara,
On the issue of Offset – I’ve taken on board the suggestions of MBs here and now have a keycard linked to only my Offset account. The amount of interest saved is sizeable and it does not interfere with tax deductibility of the loan interest as the loan is not paid out each time you deposit into it, or draw down for personal use. Much better than an LOC, that’s purely my opinion.CT
Dr Spock
Just came across a great comprehensive website Understanding Money.
http://www.understandingmoney.gov.au/content/default.aspx
It has a useful budget planner, a financial calculator, and suggestions and links to help manage money better at any stage in our life cycle.
It is unbiased and educational. For me, it’s time to set things in motion for 2007.
Cheers
CT
