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This might be a little of topic. I'm 30 and have about $75,000 super currently invested in growth which i believe is about 75% Australian equities. In a sharemarket slump should i be putting it in something safer like cash or since i dont intend on touching my super for atleast 30 years, i should just ride it out. Any thoughts.
Sounds good up there. Wish i bought a IP in brisbane instead of south coast nsw. Well i guess im learning the expensive way.
Just a thought. If things slow down next year like many predict. Does that mean that many who buy now in south east queensland at these higher prices leave themselves exposed to a price drop. IE negative equity. If you jumped in a while ago and already have equity well done. But what about people buying now or in the near future.
L.A Aussie wrote:devo76 wrote:I am 30 and only just starting to head down the investing road. 6 months ago i believed that if you bought a house it will double in value every 7 to 10 years. Now i know there are other drivers that control prices and none are looking that great for the next few years. But if i was given the chance not to buy my IP 6 months ago i still think i would have as my goals are long term and im more concerned of its value in 10 to 20 years. My immediate plans are to pay my PPOR of completly in the next year and also pay about $50,000 of my IP in the following year thus making it cash flow neutral and not a burden on my personal cash flow.My job is very secure and i may have kids in say 3 to 4 years.If the above plan happens a bust will not effect me greatly and i should be in a position to snap up a bargain if one presents itself. I considered jumping in now to buy another property but i feel reducing debt at the moment would be a smarter move for me.
I have no other debt like store cards,credit cards or car loans.
I owe $100,000 on my PPOR and $300,000 on my IP at the momentGood plan Devo, except I think that as soon as you are able to SAFELY service another I.P you should do it. Make sure your PPoR repayments are never in jeopardy though.
(by the way; is your name from Devo – the band?) Whip it good!
I am 46 and I think I'm one of the oldest bas***rds here, judging by what I read about the gloom and doom of the future in property.
I started buying properties in 1984 (first PPOR @ $92k) and have seen some monumental disasters worldwide, high interest rates (Bob and Paul era), 2 property booms and 2 "busts', wars, 2 stockmarket booms and crashes, high unemployment, droughts etc, etc. All stuff to make you worry.
At the end of the day, property was always hard to buy for the first home buyer, petrol was always too expensive and the wages never seemed to go up in line with the cost of living.
But one thing has always kept happening; well positioned, good quality housing (units or houses) or land, always went up in price. This is because it is a life necessity; people need it whether they rent it or buy it. The 7-10 year double in price rule still works.
I agree, there are horror stories of people going to the wall through property, horror media reports on market slumps, but this is usually "operator error"; they over-extend, or get over-exposed in LVR, pay too much, don't factor in life in their expenses, their money habits are bad, buy an off-the-plan speculative apartment at the wrong time etc. No-one forced them to buy, but for various reasons they have to sell, and sell low.
Market demand and "ability to buy" will always determine the price – nothing else will, from my experience. When credit is tight and the buyers disappear, prices slow down for a while. When credit is easy, jobs are plentiful, prices go up.
The wild card in today's world is the (consumer) debt levels. Personally, I think this will only affect the market short term like any other factor I've mentioned. There will always people with out of control spending and no financial intelligence (sadly; 90% of the population) and there will always be people who are financially solid.
The finacially challenged will crash and burn as always, have to sell their homes, or be evicted for not paying the rent, or just continue to scrape by, living pay check to paycheck.
But the housing will still be there and there will always be someone who can afford to buy or rent it.
Hi there. The name refers to my own name STEVEN. STEVO, DEVO. i also have a few other names from my friends but there probably not appropriate ha ha ha.
Great post, makes me feel a little better as i feel the same way. Population is growing and they all need to live somewhere.
I also believe the people that suffer in a slow down are the ones skating the edge of survival in the first place. If they have nowhere to move then they are going to fall. Very sad. I personaly feel i will be safe as my PPOR debt is very low even if i dont pay it all off and my IP is in a very desirable central location leaving me with the feeling it falls into the safer catagory of property investment.So i hope i will ride out any wild property ride in the near future and be ready to expand when i believe its time.I will add i bought my PPOR 5 years ago and up until 6 months ago i paid NONE OFF, NADA ZILCH. I wasted my money but had a ball doing it with no regreats. Life is for living. But luckily another investment has paid back what i have wasted and now im getting ahead.If i didnt stuff around i would own my house now but i have no regreats, I have a circle of friends that i have done amazing things with.now its time to get ahead
Sorry i forgot to add i have another asset that i will sell reducing my PPOR to around $50,000 in a couple of months.Still probably a bit optimistic but thats the plan im trying to achieve.$200,000 i wish. About half of that
There is a house in my town that has four bedrooms,three bathrooms,a sun room, Then out the back is a self contained granny flat with another big room with water connected above it. All have there own entrance. Asking $400,000 but has a lot of potential.Centrally located too.
Thats the sought of thing im looking for although i dont like what i see. Thanks foundation. Any other interesting graphs ??
I am 30 and only just starting to head down the investing road. 6 months ago i believed that if you bought a house it will double in value every 7 to 10 years. Now i know there are other drivers that control prices and none are looking that great for the next few years. But if i was given the chance not to buy my IP 6 months ago i still think i would have as my goals are long term and im more concerned of its value in 10 to 20 years. My immediate plans are to pay my PPOR of completly in the next year and also pay about $50,000 of my IP in the following year thus making it cash flow neutral and not a burden on my personal cash flow.My job is very secure and i may have kids in say 3 to 4 years.If the above plan happens a bust will not effect me greatly and i should be in a position to snap up a bargain if one presents itself. I considered jumping in now to buy another property but i feel reducing debt at the moment would be a smarter move for me.
I have no other debt like store cards,credit cards or car loans.
I owe $100,000 on my PPOR and $300,000 on my IP at the momentI have a few thoughts on this.Although it may help some people who are ready and should buy. It may also allow people to purchase a property when maybe they really shouldnt. And this may also push the prices up a bit again.If the difference between buying a property and not affording one is the doubling of the FHOG then i would be carefull.
It was a misunderstanding. Thanks for bringing it up again. Ha Ha Ha. But i would also be interested in hearing a bit of a break down of how you did it.
I agree. Sell at the end of the year. If it goes up more,well i still made over $100,000. If the market drops,i have timed it well.I guess the key is if i pay my house of dont sit around doing nothing. Get in and invest some more.
No it does not produce a income but its holding costs are insurance only at $400 per year.My thoughts are as you stated. Hold on while the rise in value is more than the interest cost on my PPOR. At the moment it is easily doing that.
I guess you could call it cash flow neautral but showing good capital gain.I guess i should add, My car is a holden hsv walkinshaw with 9,000 klm from new. Not bad for a 20 year old car.Most people in the know agree this is the new breed of collectable car from the 80,s selecting it as well as the vk brock to be the most sought after in the future
From what others have said on this forum. The 11 second solution is not relevent in todays market. Maybe some mining towns but you must research as capital growth may be little.
The general idea for positive cash flow seams to be to find a property bargain that with cheap renos would enhance its rental return markedly. ( maybe a coat of paint,carpet,garden tidy up) therefore turning a cash flow neutral or negative property into a positive one once increased rent from renos and tax deductions are taken into account. Plus over the following years your rent should increase also. So i guess the trick is finding a undervalued property that can be improved cheaply. Cheers.wealth4life.com wrote:Hey Devo76 or should i say … no not at the moment,Any way you grubby disgusting little man or who ever you are CRAP on you … why are you on this site attacking people for achieving their goals … I/we have been investing for over 25 years how about you big boy or are you a dreamer still living with mummy … go away we don't need people like you here and if you want the challenge I can prove my assets but lets have a wager first if you're man enough …
D
OOPs probably should have quoted you as my apoligy is directed at you. I hope you believe i never meant to offend. I was truly impressed with your portfolio.
PS I have 1 IP and that happens to match about how many dollars i currently have in my wallet..Im a long way of reaching the heights you have reached. All the best. Stevewealth4life.com wrote:Hey Devo76 or should i say … no not at the moment,Any way you grubby disgusting little man or who ever you are CRAP on you … why are you on this site attacking people for achieving their goals … I/we have been investing for over 25 years how about you big boy or are you a dreamer still living with mummy … go away we don't need people like you here and if you want the challenge I can prove my assets but lets have a wager first if you're man enough …
D
OOPs probably should have quoted you as my apoligy is directed at you. I hope you believe i never meant to offend. I was truly impressed with your portfolio.
PS I have 1 IP and that happens to match about how many dollars i currently have in my wallet..Im a long way of reaching the heights you have reached. All the best. SteveL.A Aussie wrote:Devo,
you're outta line. Instead of saying CRAP, you should be asking; "how did you do it and can you help me do it?"
I know a guy in L.A who owns 30 apartment buildings. He employs 2 full-time realtors just to look for properties for him.
Just because you haven't done it doesn't mean it hasn't been done.Hang on hang on hang on.You have both taken what i have said the wrong way. CRAP as in HOLEY CRAP !!! was ment to be my response as i am shocked and amazed at someone building a portfolio that size. I was not referring to you being full of crap. I believe what you have stated thats why i said well done.I apoligise and i hope you believe me when i say i didnt mean to offend. I am genuinely impressed.Like many have said before. A forum can not put across all points clearly sometimes as clearly my points were taken the wrong way.
wealth4life.com wrote:37 at the moment …D
CRAP. Is that how many IP,s you have or how much money you have in your wallet. Well done.
sunsetred wrote:Hi Devo & Freeman,
Thanks for your reply, Yeh there are a lot of ifs involved in this isn't there.
Sometimes it hard to know what to believe, Can I ask you guys what you mean by protecting yourself? Do you mean insurance wise or an escape plan?
My hubby is a bit of an extreamist, if it's loking bad it's like the world will end so he's of the opinion sell as soon as it looks like the recession is coming, but I agree with you guys, I would rather have a plan in place that doesn't involve selling as the prices of houses in Rocky have gone ahead in leaps and bounds and I have great equity already after only 1 year.
And you did make a great point Freeman which has hit home with me, I'm not sure just how far house prices will fall if a recession does hit but I think it will by far a better option to keep them if we can.
Then again like Devo said, what if it never comes , I went through the last one and I can't ever remember a time when I thought jeez this is tough. But then I didn't have property either.
Thanks again for your opinions and idea's
Kind Regards
SunnyTo me, protecting yourself does not mean selling your IP,s. Sure there value MAY drop but at some point after the drop they will claw back there value and then be ready for the next boom.To me protecting yourself means being able to sustain your debt in the bad times. What if interest rates rise. What if your IP,s were vacant for a lenth of time. What if you lost your job. If you can answer these questions. That will tell you if and for how long you could handle a downturn.I now little about housing in mining towns so comments on this are my personal view only.The mining boom will end just like it has in the past. But at some time in the future it will start up again. If you were lucky to get into mining town IP,s while they were really cheap then you might say bugger it. Its paid itself of plus made me a fortune, ill keep it ready for the next boom. But if you paid top dollar like many in recent times then i would consider off loading them as your money would be better spent elswhere.
I am not as clued up as some people on this forum but after hearing all the info thrown about i too believe we are heading for a recession. As for when, thats the hard bit. I believe if it wasnt for the resources boom and a few other key things we would be in one now.People are going to be for ever poping up saying its only six months away and sooner or later someone is going to be right.But remember a recession isnt the end to all life on earth. Infact if you properly protect yourself and keep your job you will be in a great position to buy bargains. recessions dont last forever.
My guess is 2 years. The economy should hold it back until then.
