Forum Replies Created
- SmartGenY wrote:
At the end of the day the reason why I joined this forum is not to say Property Investing is wrong or doomed, as I have been perusing it for a few years. It was to give a genY perspective rather than let the belief flourish that we are all lazy whiners looking for spiteful lazy gains.
Then it would seem that you are a minority. The vocal amongst the Gen Y sometimes paint a completely different picture. Anyway, I'm a Gen Y also.
SmartGenY wrote:Also it's interesting to note that instead of 25yr a 30yr loan is a better option. I would be willing to bet that if new/extended growth does come from the real estate sector it will be from an increase in the duration of the loans now that the reduced leveraging option has generally been eliminated.Perhaps I should clarify. A 30 yr loan is not a better option than a 25 yr loan per se. Of course, a dedicated home owner who can pay off their loan sooner will save more interest. Therefore someone paying off their loan in 25 years makes greater repayments but overall pays less interest than someone paying it off over 30 years.
SmartGenY wrote:Lastly IMO buying a house on an interest only loan is done on the same investment principle as investing in gold and therefore one maybe subject to be being called a "Jerk" from Charlie Munger. Maybe that is why there is such an Us vs Them mentality on this forum :p.Again, another thing I should clarify. Some people advocate buying a house on an interest only loan, but having an attached 100% offset account. By having your paychecks deposited into this account, and using this account to hold all your savings, you can effectively make 'principle and interest' payments even though your loan is interest-only.
The difference is that the money in your offset account can be accessed as you would from a normal savings account. This is very important of course, because in an emergency, you could access all the savings in your offset account at a moment's notice. However, if you were paying a principle and interest loan, you cannot easily draw out the 'principle' you have paid in the last few months or years.
Consider this example:
If you have a loan of $450K with an attached 100% offset account with $50K of savings brings your effective loan down to $400K. You are paying interest only on that $400K.
If you then get lucky and get an inheritance, you can put a full $450K into your offset account, which reduces your effective loan to $0, and you pay no interest whatsoever.
In essence then, money in your offset account (if it's 100% offset) earns interest at the same rate as your mortgage rate, and tax free. This money is always accessible like it were cash in a savings account. This is an excellent thing to take advantage of.
Hence, someone could choose to have a 30 yr loan, interest-only but with a 100% offset account attached. The more money they save in that offset account, the less interest they have to pay on their loan. This is an important motivator, because the home owner can then see the true effect of them saving even a few dollars each week.
Not sure if I stated this clearly enough. As you can tell, I'm not a mortgage broker, but I sorta get the gist of it.
SmartGenY wrote:I feel this forum has a real us vs them attitude. "Us" the financially responsible, hard working property investors vs "Them" the lazy, free loading, whining have nots.Absolutely spot-on. On the other hand, the FHB have the same attitude: 'us' the struggling, cheated and frustrated FHB who cannot afford a thing, vs 'them' the greedy speculators in a Ponzi scheme who rob the poor of their wealth.
Resentment begets more of the same. Unfortunately, the government and all their 'red tape' is probably their true enemy.
SmartGenY wrote:Interestingly the private ownership of property has been brought up in relation to common land. Property at the moment is currently a stock, sold to the highest bidder. Food is another stock that has resulted in famines due to misappropriation when food has been abundant in the local region.Now I am sure that we would all agree that the avarice storage of food by the wealthy during these times, is not a humane notion.
If home ownership is such an ingrained right in the human psyche, would not the above pertain to this stock aswell?
I am putting forth the challenge that home ownership is not necessary, just as much as I am putting forth that a neo-liberalism mindset if unchecked is unhumane.
Nicely said. Unfortunately I did waste a few years of my life being concerned about what things 'should be' instead of looking at what things 'are'. These days, I prefer to focus on the latter and find a way to deal with them. Just because I think something is 'wrong' doesn't mean it has to change so that I can be comfortable with it. However, each of us has our own moral standards to help navigate us through the way things 'are', rather than simply hoping things will return to what they 'should be'.
ummester wrote:fWord wrote:Maybe so. But perhaps they'd prefer to bad-mouth something that they cannot afford, rather than to put in the hard yards and work towards it.This is an interesting comment.
I agree that people should work towards the things they want but they should do that first buy saving a reasonable percentage of the purchase cost first. There is too much easy debt extended nowadays for anyone to have to truly work towards anything.
Lets say it isn't houses. Let's say its big TVs. If you save your 3k to buy your massive tele – good on you, you deserve to sit back and enjoy it. I can't shake the feeling that getting extended the entire purchase cost of the tele with no money down somehow undermines the 'hard work' involved in purchasing one with savings.
Of course most people can't save the 300-400k required to purchase a first home (should cost 250-300k to be inline with wages IMO). But they should be required to save 20-25% of that purchase price. That is the hard work.
100k of savings for the average working Aussie is hard to achieve. 50-70k is a bit more reasonable – it's a years average earnings (which means you should be able to knuckle down and put it away in 4 to 5 years if you budget correctly). It would alos bring stability to the housing market and disable much of the speculation.
Then the problem is with the banks, is it not? It is the banks that choose to loan 100% of the value of the home. We need to stop the banks from providing 100% loans to people. But how?
I personally did save 20% of the purchase price for my home, but then again, I was investing in the stock market for over 12 years and working full time for nearly 3 years in order to get that kind of savings. If anything, this proves the benefit of starting early, and becoming financially savvy early in life.
Nevertheless, if people can get loaned 100% the value of their first home, then they really don't need to save anything at all. They can just go out and buy tomorrow. All they need is money for their closing costs, which should be no more than $30K for a home selling at $450K or so.
What 'housing affordability' problem is there if people can simply borrow all that money and pay later? In any case, 100% loans have existed for ages on things such as televisions. Buy now, pay later…or 13 months interest-free…or something to that effect.
ummester wrote:Rents didn't sore during the depression:) You are reading spruik in a book, it seems.
Haha, good one. But a spruik in a book, from an author who actually dared to get themselves published (rather than sit around here as a nameless face, spewing endlessly), is far better than 'stuff' from nameless people who are calling them 'predictions'. BTW, I'm not saying such 'predictions' are wrong or impossible. But by George, if you believe in what you say, and there's good sense in it, you could get it published and have your own spruik in a book.
Anyway, read the book, then tell me what you think. No use shooting at me, I wasn't the one that said it!
ummester wrote:That's not really true – generally when property crashes unemployment becomes high. Rents are entirely wage dependant. Do you really think in times of high unemployment that people will have lots of money to spend on rent?No, they don't. But when you have a choice to either pay the rents or be homeless on the street, I think we all know which is better. It's about choosing the lesser of two evils really.
And besides, you make a very good point: high unemployment when the property market crashes. Those hoping for a crash or attempting to predict one had better be prepared to lose their jobs. Again, it's down to a choice between the lesser of two evils. Do you want high house prices? Or do you want to lose your job with little hope of getting it back?
ummester wrote:Property in Australia crashed big time in the 1890s (which is within 175 years) and it also crashed to lesser degree in the 30s.
My knowledge doesn't go back that far to the 1890s. However whether there was a 'slide' or a 'crash' in the 30s is subject to debate. Prices didn't 'crash' 50-, 40-, or even 30%, if I remember correctly. Pity my short-term memory, and lack of access to a book I just returned to the library yesterday. Going further however, rents soared during the same period.
There's a wonderful graph in the book titled 'Mastering the Australian Property Market' by John Lindeman which shows exactly that: when house prices slide, rents increase. The more drastic the slide or 'crash', the more exorbitant the rents become. Presumably its the tightening of credit during periods of falls in house prices that forces even more people to rent than to buy, because a FHB simply cannot borrow enough to buy themselves a place.
A property 'crash' isn't all bad, fortunately.
ALF1 wrote:Instead of all the doom & gloom why not provide this forum with solutions or alternatives with your acute and astute financial brain?Good point. Furthermore, Matt should write a book with all the predictions in the first post and get it published. It'd be a bestseller when these predictions start to play out.
ummester wrote:I'm not trying to claim that removing NG will fix the problem – just that removing NG won't create the nightmare rental scenario that it has been politically expediant to try and sell as the truth for the past quater decade.Apologies, I wasn't referring to you as an individual. I'm referring to the individuals who preach 'end negative gearing' like it were to be taken as Gospel and the thing that solves the problem. It's a comment I see quite often, angry folk who believe negative gearing is the source of all their woes.
ummester wrote:…they show a subtle yet growing change in what people are willing to believe about the asset class.Maybe so. But perhaps they'd prefer to bad-mouth something that they cannot afford, rather than to put in the hard yards and work towards it.
ummester wrote:fword,Singapore has something related to housing requirements that Australia does not – an actual land shortage.
Oh, Canberra has the 99 year lease thing also. Being landlocked, ACT can argue it has land shortages.
And ultimately, re the FHB strike, what does it matter? If the property market is so stable – what difference will it make if a majority of new entrants decide to opt out? Investors can flip with each other and pretend their asset values are solid foirever, can't they?
Arguably, government 'red tape' and regulations have caused a virtual land shortage. And the high cost for developers may then contribute to a shortage of new projects. We then have a shortage of affordable housing. If this is indeed the case, then people need to start moving their 'rage' to a different target. Abolishing negative gearing ain't fixing the problem. People should be lobbying the government to provide better public transport and infrastructure, decentralisation of services and amenities away from capital cities into smaller 'satellite' cities, and provide government subsidised housing.
And no, we're not worried about a FHB strike. I think the key issue at hand is that FHB don't know who their true enemy is and property investors are being called greedy punters heading a ponzi scheme.
We all know that if we want answers, we should ask the correct questions and also not bark up the wrong tree.
ummester wrote:What's the book?
Renton's Understanding Investment Property, if I remember correctly. A thick and stuffy book, but covers some of the basics.
SmartGenY wrote:@fword – There is more to buying houses than just supply and demand, there is also opportunity cost. (Not to mention that demand is dictated by credit).Good point. Availability of credit is very important. I'm no economist, but basic knowledge tells me that a tightening of credit would cause house prices to take a fall. However at the same time it reduces the amount anybody can borrow to buy a house. Tightening credit would not help a FHB as such.
Opportunity cost: it's great, no doubt…to be putting money into a mortgage. However as we have seen, being able to own our own home is an important issue for many. What exactly is the price we put on owning our own home? A book I read made an interesting point: humans are by nature, a territorial creature. We'd rather take an empty double seat on the bus than share with another. We also have our own private space which when invaded, makes us uncomfortable. This happens whether we're walking on the street or driving on the road.
It is this territorial nature that in part explains the reason why people need their own home, and preferably with a good sized backyard, because everyone wants their own personal space which they may even choose to personalise and decorate based on their own tastes.
As such, without adding more complexity to an already complex issue, home ownership is an interesting thing to consider, with many variables in the picture, tangible or otherwise. As such, whether the opportunity cost is really too hard to bear depends on other factors, including emotional factors, which as we know are sometimes responsible for people's actions.
SmartGenY wrote:Let's say a 500K house rents for 20k pa.
-If this 500k house is a home i.e. owner occupied the owner will need to pay about 40k per year for 25 years to own the house.Most banks will give a choice of a loan term of up to 30 years, and this is what more cash-strapped buyers should be looking at. It would be better to have a 30 year loan term and an associated 100% offset account. This way, if things get tight, it's easier to manage the repayments, but when times are good, more money goes into the offset account, which reduces interest on the balance of the loan and effectively reduces the loan term.
On that note, repayments of $40K per annum on a $500K house on a 30-year loan term equates to an 8% interest rate on a loan of $450K, which is 90% of the value of the home (ie. 90% LVR), or a 7% interest rate (closer to the rate today) on a loan of $500K, which is 100% LVR. Alternatively, most buyers are recommended to have a 20% deposit and borrow 80% (80% LVR) of the value of the home, hence avoiding mortgage insurance.
So even at an interest rate of 8% (currently you can get less than 7% variable interest rates and 5-year fixed rates are still less than 8%) on a loan of $400K, we're looking at less than $36K pa, not the $40K pa we were originally considering, but certainly close enough. Just doing some figures for the benefit of those who might be reading/ looking to learn a little more.
Consider also that if you choose to pay weekly rather than monthly, you will save even more on interest and shave more time off the loan.
SmartGenY wrote:-If this house was rented and the renter invested 20K pa at a rate of return at just 5% in 15 years the renter would have enough invested to live financially free from rent. Obviously this doesn't include tax or inflation but a ROI of 5% is conservative enough IMO to account for this.Perhaps I am misunderstanding your statement. But let's also consider that the said renter has to put this $20K pa into renting a house. That means the $20K is not available for investing. So in tying in with the above statement, the choice is between renting and having $16K pa left over to invest or otherwise paying $36K pa over 30 years to own the house (at 8% IR on a $400K loan), assuming rents and interest rates don't change, but rents generally do increase in line with inflation, if not more.
Of course this doesn't take into consideration other things such as costs to maintain the house (which an owner or landlord has to foot), and the fact that, if a renter decided to rent rather than put down the 20% deposit to buy his/ her own home at $500K, then he/ she has $100K in the bank from the get-go.
However if the 'owner' of the house is really a landlord, then he/ she in reality is out of pocket for a much smaller amount each year in order to control the property. Assume for this example an interest-only loan on $400K for this house, which works out to $32K interest per year (for simplicity's sake, excluding cost of repairs, maintenance, rates, insurance). Rent is $20K. Landlord is $12K out of pocket. Now, just getting out of my depth for a moment (as I'm not an accountant), a landlord on a marginal tax rate of 30% will hence be able to claim back 31.5% (30% tax plus 1.5% medicare levy) of this $12K in the form of a tax deduction, which is $3,780.
In reality, this landlord is out of pocket $8,220 pa to control this property. Naturally we have neglected to consider capital gains. Assuming he/ she has bought well, there is substantial money to be made (ignoring inflation again for a minute, which affects the returns of any investment regardless) which would subsidise his annual out of pocket costs, and more. And the landlord can choose to sell the property nearing the end of the 30 year loan term to pay out the loan and take profit. Or if he/ she is lucky enough to have two investment properties, to sell one, pay out the loan of the other.
Notice we're talking about negatively geared property here. Some folk buy into positively geared property and it makes money for them from day 1. For the landlord, this can become a substantial form of passive income.
SmartGenY wrote:-Alternatively if this is a IP and negatively geared it therefore only cost 10k pa to service the loan(please correct me if I'm wrong here, I understood roughly 50% tax claimed back on amount paid to service the loan) then the ROI will be around about 5% (Not taking into account the increase in house value).The size of the tax deduction is dependent on the marginal tax rate of the landlord, hence it is NOT a 50% tax deduction across the board, and you can only claim a deduction on the interest portion of your repayments, not the principle portion.
There is an equation that I remember reading in Steve's book, which seems to more accurately quantify the values you'd be dealing with when working with an investment property. I would try to quote here (with some changes to the terminology) and digest, if I may (cash down meaning the deposit plus closing costs):
Net profit percentage = [(cash back + expected annual capital growth) / cash down] * 100
Let's assume again these figures:
House purchase price: $500K
Loan: $400K
Deposit: $100K
Closing costs (allow 6% of purchase price): $30K
Rent: $20K pa
Costs to control property (loan repayments on 8% IR on interest-only loan): $32K (assuming no benefit from tax deduction, or if negative gearing were 'abolished')
Expected annual capital growth (assume conservatively 6%): $30KTherefore,
Net profit percentage = [($20,000 – $32,000 + $30,000) / ($100,000 + $30,000)] * 100 = 13.84%
That is, every $1 invested in this property yields $1.1384. The figures above are rather conservative however, but it is just an example to show that your returns are closer to 14% pa on this property, assuming rents and interest rates don't change. And higher interest rates usually bring higher rent.
Let's do another example, this time with figures I know we can achieve (because I've seen it done on average property):
House purchase price: $449,000
Loan: $359,200
Deposit: $89,800
Closing costs (allow 6% of purchase price): $26,940
Rent: $18,720 pa
Costs to control property (loan repayments on 7% IR on interest-only loan): $25,143.96
Out of pocket costs (after tax deduction): ($25,143.96 – $18,720) * 0.685 = $4,400
Capital growth this past year (using bank valuation): $51,000Net profit percentage = [(-$4,400 + $51,000) / ($89,800 + $26,940)] * 100 = 39.92%
Of course we cannot assume this level of capital growth each year (which is only 11%, BTW, not the 20% that some suburbs have achieved in the past year), but just a real life example showing the numbers.
Feel free to correct me on any of the above figures if there's been a mistake.
SmartGenY wrote:I think it would be a fair assumption that shares would go up reasonably in sync. with houses over the long term therefore making the two investments fairly comparable but a mortgage is a large commitment in comparison to shares/savings/bonds and could be argued with the current debatable housing bubble and rising utilities/rates a more riskier investment in light of the recent pop of the share market bubble.I do not disagree that house prices are high, and neither do I disagree with the possibility of a correction. However some people are of the simple belief that the prices have to come down simply because they are high. They may be right, but I believe that unless it becomes very uncool to own your own home, or Australia becomes very unlivable (whether through war, natural disaster or economic chaos), or economic chaos elsewhere, house prices in Australia are not simply going to crash to the tune of 40-50%.
House prices in Singapore are stratospheric, and there have been 20+% falls in prices, particularly during the GFC just past, but it is another case in point: prices don't just drop by massive amounts because they are high. Big drops are caused by events that occur at an international level, and even so, not by 40-50%.
SmartGenY wrote:In the coming years there will be a record numbers of retirees. I am willing to bet my future that there will be enough of them with negatively geared IP who wont have the option of holding and will "realize" their gains, resulting in an over supply of property on the market. Are you willing to bet there wont be?This is a good point, and the movement of the baby boomers will causes changes to the property market. However it begs the following question:
How many of these retirees actually have negatively-geared property? This is a figure that is not easy to work out, unless there is a census somewhere that gives us the figure. Bear in mind also that these baby boomers may have bought their investment properties many years ago, and they are now already positively geared. If the income is substantial, they have little reason to sell. IMO, even a retiree needs a good amount of passive income to support their lifestyle. Relying on savings alone, unless you have huge amounts, is risky.
When the baby boomers move, there is a potential for a reduction in prices in some of the inner and middle suburbs, as John Lindeman alluded to in his book. But we also need to consider the underlying demand from people who are waiting to buy into these desirable suburbs. Is it then possible that the demand for such properties will continue to hold prices up?
Also, if the baby boomers move out of their inner and middle-ring suburb homes, they WILL have to move somewhere else. And where would they move? John Lindeman suggests some locations in his book, for example, the Mornington and Bellarine Peninsulas in Victoria.
Essentially, the change of lifestyle for these baby boomers will have an effect on property prices for sure. But in essence, the early signs are already telling us where to buy.
SmartGenY wrote:Alternatively if I'm wrong my "opportunity cost", I'm sure will be minimal, will yours if your wrong?Ultimately, in this world, it's 'Yer pays yer money, and yer takes yer chances.'
Each should do what they think is right. But ultimately, in instances of polarized opinions, someone will be wrong, and the losses will be great, actual or opportunity cost otherwise.
This is why I think the doom and gloomers have it easy: no investment of time or money, yet the chance of a spiteful gain if they are right in their predictions. While people who work to earn their right to their own home unfortunately have a lot to lose if this is the case. Of course things could very well go the other way, and homeowners will be well-rewarded for their efforts, and justly so, and the naysayers will be left with nothing but hindsight for their children and grandchildren. Such is just the reality of things.
Additionally, on the topic of public housing…in Singapore, where I was born, house prices are very high indeed. To aid FHB onto the ladder of having their own home, there is government subsidised housing from the Housing Development Board (HDB): relatively small apartments in blocks of several hundred each. FHB that qualify for a HDB flat must meet strict requirements in terms of level of income, amount of assets, even marital status.
These HDB flats are sold by the government to qualifying buyers on a 99-year lease. Read: After 99 years your flat is worth $0 if you're left holding that hot potato.
People who originally bought HDB flats from the government and then looking to upgrade to a condo or landed property may sell their HDB flats to buyers on the 'open market', buyers who don't meet the government's strict requirements but cannot otherwise afford a private condo or landed property will have to buy on the 'open market', where prices can be double of what was actually paid to the government.
Not to mention that Singapore has amazing infrastructure and a public transport system that runs like a well-oiled machine, is comfortable and relatively inexpensive, although albeit crowded because of Singapore's burgeoning population.
Of course it's needless to say that with such housing policies in place and well thought-out infrastructure, a tiny island can support a population in excess of 5 million.
It also ensures that while there are properties costing more than $35 million for a bungalow on Sentosa, to a below-average landed property (eg. corner terrace in the 'suburbs' on a tiny block of land) selling for over $1.8 million, there are plenty of Singaporeans who can still afford their own home. Those who can't simply live at home with their parents, even take care of them as they age. It's considered part of the culture.
At least they didn't sit around and whinge and try to start a FHB strike, for crying out loud.
However I once raised the issue of such 'HDB' flats being built in Australia for the sake of discussion and it got no response. The only responder said 'no', citing that he/ she didn't want gangs and ghettos in Australia.
FYI, HDB flats in Singapore are NOT ghettos and there ain't no gangs around there because of the strength of police presence, which in turn generates a life where you could feel safe walking almost anywhere at night.
My point is this: if we want affordable housing, the government should get its butt into gear. But the rest of us will need to get used to high density housing near our homes. Instead there's the Not-In-My-Backyard attitude. C'mon, we can't have it both ways.
Even if such a scheme materialises in Australia, I'm betting my bottom dollar that people will still be whinging that they cannot afford to buy that McMansion in a tree-lined street, minutes to the beach, CBD, trendy shops and cafes, that has a triple garage, four living areas, 5 bedrooms and each with an ensuite, Olympic sized pool and a massive entertaining deck.
Of course I'm exaggerating. But the problem is not actually 'unaffordable housing'. It's 'property envy'.
ummester wrote:Don't you think, however, that providing public housing for down on thier luck citizens is a government responsibility?
It is, but only at our (ie. tax-paying workers) expense of course.
I've said this before and the information comes from a book I read at the library:
Negative gearing was once abolished back in 1985, only to be reinstated two years later. The attempt to remove negative gearing actually led to a rise in house prices and rent. When negative gearing was restored in 1987, house prices and rent increased yet again!
Considering what an epic fail it was in the past, I challenge the government to do it again. More to the point: can you (yes, all those who think negative gearing should be scrapped) stomach the potential increase in rents and/ or house prices? Can you truly tolerate the resulting negative fallout (which falls on renters and would-be first home buyers) from something you're proposing?
As is so often said: Careful what you wish for. You might get more than what you bargained for. 'Never eat anything bigger than your head', and don't try to paint complex issues in a simplistic manner.
TKline wrote:If these campaigns works as the organisers plan, property values may reduce to more sensible levels whereby decent hardworking Australian families can once again afford a reasonable home.So? Are families that are living in a 'reasonable' home and paying off a mortgage considered not 'decent' and not 'hardworking'?
What a crock.
The 'Get Up' campaign should imply just that: Get up, get off your butts and earn what you desire in life.
Instead it is breeding contempt amongst a group of people who would rather blame everyone else in the world for their own mediocrity than to look into more productive self-improvement. Campaigns like this generate huge interest because it allows people to vent their frustrations for NOT being able to succeed, to give excuses, wasting precious time in the process, when they could be considering how they can work to improve their current state.
Why should we allow mediocrity to proliferate? On the contrary, we should be applauding those who are willing to 'Get Up', work hard, get some substantial income, incorporate basic saving habits and financial discipline, make sacrifices in the name of delayed gratification, in order to buy themselves a home.
But no, we have a group of people who EXPECT prices NEED to come down so that they can buy a lovely mansion that is minutes to trendy cafes, the beach, the CBD and their workplace for like $50,000. Get real folks. There is a law of supply and demand.
Consider this for a moment. Let's say some catastrophic force resets the prices of ALL properties in Australia (regardless of location or size or finesse) to say, $50,000, without actually reducing livability or population. In the end you still have a huge number of people wanting to live in a small number of desirable locations. Huge demand, short supply.
And the way decent people sort out who buys and who walks away is not by having fist fights. It's by waving their chequebooks. That's how prices of housing in desirable locations skyrockets and is eventually branded as being unaffordable.
In short, prices of houses in some areas doesn't go up just because it does so for fun. It does so because demand is greater than supply. Even in the world of collectibles this principle is very clear. A painting, coin, stamp or any other collectible that is particularly rare will likely sell for increasing prices everytime it goes for sale. Whether the new buyer makes the purchase out of greed, for bragging rights or prestige or just for happiness is debatable. But it's an important concept to understand.
Money talks in this world, folks. And money doesn't grow on trees. I don't like it either and I wish somebody would sell me a beachfront mansion that is walking distance to a capital city for $50,000. But while we're still alive and on this Earth, we better get used to the reality of things.
Geez. What a waste of time.
This is a good point, however not all Asians would pay attention to numbers. I gladly bought a house with a number of '44' as it was my opinion that research regarding the area, potential growth, rental figures and likely demand were very positive for the property. Furthermore this same house has a central kitchen, which is probably considered a plus for most locals but is actually bad Feng Shui, from the little that I know.
In the mind of some Asians there are other 'inauspicious' numbers such as '24', '124', '64', '164' or '58' and '48'. However, '13' is good, and so is '84', '128', '168'. Of course, you have the well known doubles and triples of '8' and '9' which some Asians love.
On that note, I'm not the superstitious sort and don't believe in all this stuff.
This might sound like a useless answer, but I'd seek advise from an accountant who is experienced in dealing with property investing. The choices are indeed many, but an appropriately-experienced accountant can give you advise on how to grow and protect your investments, the use of trust structures, talking about implications of tax and other major issues.
ALF1 wrote:Ok Stringray, I read about your Housing Price Crash on the link and I was suitably unimpressed how lacking the article was in fundamental economics – something I have a undergraduate degree in. I have read, heard and been dictated to this kind of dribble through the 80's when I had an 18.4% mortgage. I heard it from these armchair experts in the 90's through the recession this country had to have. I heard it from the uneducated who said Australia's economy is doomed because the rest of the world fell into an economic heap. I bet my Grandfather heard this same BS during WW1, the Great Depression and WW2. I bet my father heard it when there weren't enough men to do jobs needed in this country post WW2 when so many young Aussie men paid the ultimate sacrifice. Yeah, the doomsters and soothsayers will always look for that big soapbox to grandstand their uneducated, uninformed attempt to justify their mediocrity. This is Australia and here, we 'give it go' and articles like that 'be damned'.
Anyway Stingray, you sell up and one day you'll be sitting down with your grandkids, with all the hindsight you can handle, telling them how you made one of lifes biggest decisions based on lack of emperical evidence but solely on hype and emotion – the things good, intelligent investors leave out of their decision making..Whoa, strong response. Well-said.
ALF1 wrote:…Little River get swallowed up, Corio is next on that list. You are going to do well if you maintain a 'buy and hold' philososphy.
Kind regards,Little River has potential. At least a few weeks ago, I remember seeing an acre property near the town center selling for less than $500K (on Jolyon Court). I don't know how functional the train station is, but considering the position, proximity to both Melbourne and Geelong (which will no doubt expand further), the airport, affordability (especially for the land size, a real 'lifestyle' there), views to the You Yangs in some parts…Little River is all poised to go.
Qlds007 wrote:I dont now about 5 years but certainly over time.I arrived in Australia from the UK 17 years ago and bought my first place in Albany Creek, Brisbane.
Now some years later i still own the first property and another 39 of them.
Helps that the Pound was strong when i arrived but with structure and careful planning it is certainly possible.
Cheers
Yours in Finance
Geez, that's buying more than two properties per year. That's fantastic! I was aiming for one a year initially but struggled to even meet that target.
bardon wrote:Is it not better to say that they could be getting a better ROI by raising rents.Yes I wasn't 100% serious when I said landlords should raise rents but I agree with it to a certain extent. Perhaps they should, but it will be at the tenant's expense of course.
