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July 12, 2011 - 11:25 am

Consider also the season. It is likely there are less people looking to move considering its in the dead of winter at the moment.

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July 12, 2011 - 11:18 am

ummester wrote:

So housing that is more affordable isn't good?

What exactly is considered 'affordable' in the year 2011?

Consider the following:

1. Distance to CBD (eg. Melbourne or Sydney, NOT a major regional center)
2. Distance to schools, shops such as food, cafes, shopping strip or shopping centers, transport, employment (ie. walking, cycling, driving distance and if so, how many minutes)
3. Distance to parks, beach/ water's edge or other open space
4. Distance from busy main roads, commercial or industrial establishments and train lines (but NOT train station)
5. Size of the house (ie. single/ double storey, detached, townhouse, terrace, unit or apartment, number of bedrooms, bathrooms, living areas both inside and outdoors, study, type and size of kitchen, garage or carport, swimming pool, tennis court)
6. General state of repair of the house (ie. well-maintained, in need of renovation or in need of detonation)
7. Size of the land on which house resides (ie. land size in square meters)
8. Crime rate (ie. in terms of crime statistics as listed on RACV. For example, crime rate of 35 means one in every 35 houses is burgled each year, and crime rate of 75 means one in every 75 houses is burgled each year)
9. Street aspect (ie. tree-lined, quality of neighbours, general state of maintenance of houses)
10. Price range (include an explanation of why this price range is considered 'affordable')

Not a 'complete' list by any stretch, but consider the above for a start.

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July 11, 2011 - 12:23 pm

Johnny1974 wrote:

…its only money and you can't take it with you when your'e dead.

On that note however, some have humorously noted that the only thing worse than death itself is being broke before death. Ultimately it may be better to have the riches, even if you can't take it with you.

We're interpreting all this in the absence of religion of course.

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July 11, 2011 - 12:17 pm

'Perception' usually lags behind 'reality' when it comes to reading market cycles. That is, we could perceive the market to be 'rising' when it has already 'peaked' or is in the process of 'correcting'. Or we could perceive that the market is 'crashing' when it has already 'bottomed' or beginning to 'recover'.

In retrospect this would all become crystal clear. But at the time itself things are always a bit more murky. And when large sums of money are involved and the asset being discussed is considered an 'essential', things do get heated indeed.

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July 10, 2011 - 5:16 am

emptyvessel wrote:

Johnny1974 wrote:

Hi all Just my thoughts…… I to agree the world financially is pretty toxic at the moment and has been since 2006. Seems everyone, every sector, in every country is being hit hard. The only shining light is the worldwide mining industry. We have strategically sold down our portfolio of six properties to two since 2006. Taken the profits and walked away We now have no debt, work less, have less stress. Hard work and property gains have enabled us to do this. For now I will keep all that cash fixed at 7% in the bank, don't have to worry about tenants, rates, insurance, repairs and the possible removal of negative gearing tax breaks. Maybe its time we all looked at other avenues to invest?

Nice, well done. I would love to have that much cash. I am guessing inflation doesn't factor much into your strategy for now?
Strongly suggest you do look at those other avenues. I have been doing them for years and haven't done quite as well as you have with property. That said, made much more than I lost, which is doing pretty good.

To a certain extent, this demonstrates people in different stages of their 'investment career'. In one of Michael Yardney's books, it talks about these 'stages'. In an investor's early life they are in the process of 'acquisition', growing their portfolio, while towards the end they put their portfolios through a stage of 'consolidation', selling down to take profits or otherwise convert a 'capital growth' portfolio into one of massive positive cashflow.

So obviously neither is the right or wrong choice. It depends on where each individual is in their 'investment career'. With that in mind, I am personally in the stage of acquisition, but when ready to retire, I will similarly perform consolidation. Of course, depending on your outlook for a particular investment, you could go against the grain of your own plan, temporarily at least, to realise greater fortunes.

Truth is, everyone wants the money without the associated stress of ANY form of investment. But you've got to start somewhere and it often means doing the hard yards first and enjoy the fruits of your labour later.

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July 7, 2011 - 11:20 am

bythebay wrote:

hello, just wondering if you have any more information on the proposed industrial park north of corio? "There was an article in The Age not too long ago that talks about a proposed industrial park north of Corio, which I presume is an attempt to compensate for the dwindling car industry." is there a link to this particular article? .

Good thing I kept the articles. It helped me track it down online. Here it is:

http://www.businessday.com.au/business/property/a-ring-of-confidence-20110405-1d2v7.html

Also have a read of this earlier article about Geelong becoming a popular alternative to those wanting to live on the Mornington Peninsula:

http://theage.domain.com.au/real-estate-news/the-other-peninsula-20110321-1c3bw.html

Hope it helps.

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July 7, 2011 - 10:45 am

ksherwell wrote:

Hey guys I'm in Point Cook and some agents out here haven't had a buyer inspection in 2 weeks.

2 weeks, I can't believe this.

Point Cook…there are clear reasons why I never bought there. Little wonder now, looking at the state you describe it to be in.

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July 7, 2011 - 10:43 am

simple wrote:

So, if one to estimate current market value of something you have to compare it against basket containing number of valuables:  hourly pay rate/OIL/Energy/Gold/Silver/cost of food, add on as you wish. Measuring against average of other valuables you may get a somewhat reasonable indication of value of particular item.

Correct, and this is why someone mentioned (sometime back, and probably on a different thread) that it's not surprising to see property prices going up the way they have. Our hourly pay rates (don't know about you, but I did get a 1.9% payrise in my old job last year, after which I promptly resigned, got a new job and secured a 30% pay rise in the process), prices of oil, energy, gold, silver, cost of food etc have all risen to some degree in recent years and going by the news, our cost of living is set to go even higher.

So, how can all these 'basics' get more expensive and property not? This statement is not directed at anyone in particular but I'm just trying to say it's hardly surprising that property is becoming more expensive as the years roll on.

simple wrote:

fword:
Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

This is only the true between commodity/property  ratio. You cannot take it out and measure in fiat – you may not get the same result. In other words, at the moment property prices are still going down if measured in GOLD and may reverse soon. This does not mean that you will see rise of property pricing in AUD and it maybe THE GOLD loosing value instead. Therefore AUD/property will remain the same.

Likewise I think the graph posted earlier is simplistic. It seems to suggest property is losing value in comparison to gold. Really, what it probably means is that property has not risen in price as fast as gold, and in so doing is in a bit of a flat patch or going through what the bears like to call a 'bust'. And this could be due to economic conditions. When economic conditions deteriorate and things are uncertain, gold of course goes up in value faster than property does. What I meant was that when this happens (as is happening now), then property has the potential to play a 'catch up' game in terms of value and potentially be in a position for more rapid price growth.

simple wrote:

And as someone mentioned, evryone talks, but who HERE actually have any significant money in the game? I am in, with 90% of my savings in the game. Playing only  with what I can afford to loose.

Glad you are, and so am I, and a number of others here. But believe me, there's also others who just talk and sit on their hands.

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July 6, 2011 - 12:30 pm

MikeLewis wrote:

Then the music stops.

And it will. But as surely as the sun will rise, the music will start again. Hence it is all called a 'cycle'. No boom or bust ever lasts forever.

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July 6, 2011 - 3:36 am

lifestylez wrote:

And think about it, they have practically 0% interest rates there at the moment.  If interest rates dropped that low here, my property would immediately become hugely positive cashflow.

So I would actually be receiving more income whilst I wait for the property market to recover

If interest rates dropped that low here, I'd be fixin'!

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July 6, 2011 - 1:42 am

emptyvessel wrote:

Usually by the time everyone is talking about buying something specific around the watercooler, the time has passed to get in.

Precisely right. And this is why I so sarcastically questioned in a previous post whether anyone has actually already bought gold or silver. Looking at the graphs it appears the boat has long since sailed. I find it very humorous to read some of the posts here by the property bears who consider other alternatives to be better investments, or they would have bought property before a certain date and didn't. Or maybe they wanted to buy a certain share, or short the AUD at a certain SOMETIME.

Trouble is, they 'wanted' to do so but didn't actually 'do it'. It's easy to talk about things that have occurred in the past. But it's harder to actually commit money and put your butt on the line to actually do something productive.

Here's another point we should probably consider. If gold or silver, or some other commodity has had such a good run recently and property is actually starting to look comparatively cheaper, then it's property that is yet to see a boom, and the comparative investment has yet to see a bust.

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July 6, 2011 - 1:34 am

emptyvessel wrote:

That said, I am currently spooked by all this talk about the government removing negative gearing. This would seriously damage my cashflow situation. See my other post on this in the finance area.

And that's a fair enough concern. People who know me in person would say I'm an absolute stress head. However in situations like this, I try to think along the lines of 'live and let be'. We can only make a decision based on whatever information we have had at any one point of time. And of course we plan for success, not plan for failure. Whatever the govt does tomorrow is beyond our control. But it would be very interesting to see what happens when negative gearing is removed.

Personally, I have done my sums and will manage even without the benefits of negative gearing. I'm sure that likewise, plenty of other investors also can. Investors that rely heavily on their tax witholding variation forms to survive day-to-day are geared to the hilt and probably shouldn't be so heavily invested anyway.

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July 5, 2011 - 11:22 am

xdrew makes very good points about both localities. Personally I like both areas but feel somewhat partial towards Geelong. It needs to get over the 're-assignment of industry', which could be a significant speed hump. There was an article in The Age not too long ago that talks about a proposed industrial park north of Corio, which I presume is an attempt to compensate for the dwindling car industry.

Geelong is starting to resemble Melbourne itself, IMHO, albeit much smaller and several years behind, but arguably better planned and no trams. I don't have a crystal ball (much as I wish I did) but it's not hard to see Geelong becoming really 'hip' within the next decade. When I first visited Geelong a number of years back, it was a sleepy town. In reality it was a real 'sleeper', and anybody who bought back then, especially close to the water's edge, would have made an absolute fortune. There's simply more happening on the streets and waterfront in Geelong these days. Affordability is a big plus as is proximity to the bay.

Considering also the infrastructure and proximity to employment and Melbourne CBD (via train), many of the houses are bargains (3BR house on 600-800sqm block for less than $250K…anyone?).

I received a newsletter from Buxton in Geelong and here's a snippet of information that you'll need to research further to either prove or disprove (especially because it's from a real estate agency):

"…the vacancy rates of rental properties across the region continue to be below 2%, and most rental properties are achieving a very solid return of around 6-7%."

Be sure to research each of the suburbs individually. To buy 'in Geelong' is a bit of a generalisation because Greater Geelong covers a sizable area.

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July 5, 2011 - 10:54 am

Andrew_A wrote:

I like the following similar saying

'When the time comes to  buy… you won't want to'

Which leads to another principle.

Q: When is it the best time to buy real estate?
A: When you can afford to do so.

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July 3, 2011 - 12:37 am

simple wrote:

Better than gold, can be only SILVER
Problem is you need a trailer to move it around, bloody heavy in significant QTY's.

Yeah, and after that is aluminium.

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July 2, 2011 - 11:54 am

So…who's already bought gold?

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June 19, 2011 - 12:31 am

Might be a good idea to chat with an accountant regarding depreciation on a new property that you are considering to sell in 15 years time, especially if your tax bracket is anticipated to be higher in 15 years time compared to now. I'm not an expert with tax, but from my rudimentary understanding of it, the depreciation improves your current cashflow. But when you sell, you have to 'pay back' that depreciation at the time you sell, by subtracting it from the cost base of your property before calculating capital gains tax. There might be another ruling that actually forces you to do this, even if you never actually claimed any depreciation on the building (but were able to do so).

Again, I would ask a good accountant about this.

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June 17, 2011 - 10:52 am

naughtyj wrote:

If I'd chosen NOT to buy, I could have saved money – but had I waited until the "bottom" two years later, I would not only have risked missing buying at the bottom, I might not have been in a position to buy it.

Anyway, that's just my 2c.

This is why perhaps, some people say that 'time in the market' is as important as 'timing the market'. It'd be great to be right on both counts however.

People can sit around waiting for the crash to happen. But when it does, the vast majority of them will be making water in their pants rather than going out and buying. Public perception always lags behind reality when it comes to investing.

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June 13, 2011 - 2:49 am

Currently I have an IP in Geelong as well that is being managed by Buxton. Their fees are similar, save for a let fee of 1.5 weeks rent. I don't believe there's such a thing as 'standard', and some of these fees are potentially negotiable. But as most of us have read, don't always find an agent based on price alone. A larger agency may charge more, but if they have greater 'presence' and experience with the local area it will positively affect the kinds of tenants you get and how quickly the property can be let.

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June 6, 2011 - 1:55 am

emptyvessel wrote:

Seems to be some very angry people out there that hate property investors. They think we are all rich land barons crushing the will of our poor "serfs" through our unbridled greed. Angry little people.

Well I've read this many times before: it is investors that drive up rents and homebuyers/ owner-occupiers drive up house prices. Then there are a number of people that also say they've not had a rent rise in yonks. The corollary of all this is: both renters and their landlords are hurting…well, owner-occupiers are too, but it is actually owner-occupiers that compete with renters and are their greatest enemy, driving up home prices and preventing would be FHB from getting a foot in the door.

It's easy for renters to fall into the perception that they are servants and paying the mortgage for their landlord. The truth is that it's a partnership. Landlord and renter both have a role to play. Landlord provides the housing, renter pays 'boarding fees'. I've also read this before somewhere: to earn a million dollars, you have to provide a million dollars worth of services. It is the landlord's responsibility to provide a service to renters, and boy do I know it.

When bees invade the roof, I respond to my tenant's calls and get pest people out. When a big tree branch falls, I respond, get quotes to get it removed, or apply for a permit to get the whole tree removed. When I know the carport might be rotting and potentially unsafe, I respond and get it repaired. Carpet is breaking down and floorboards rotting? I respond again and get it fixed up. A responsible landlord is precisely this: to respond to the needs of tenants.

So tell us, who is the real servant? No, there is no servant at all in this relationship. It is a partnership.