Interesting thoughts Benny. I tend to agree that we’ve allowed the issue to become very politicised. I don’t trust either side. I think both the left and right are motivated by greed and desire for more power.

Whether climate change is natural or man-made, it just seems to make sense to me that we should care for the environment. Fossil fuels lead to unclean air and other pollutions. Petrol smells bad and breathing while riding my bike on a street in heavy traffic sucks. We should be mindful of animal habitats and preserve environments of species that could become extinct. These things seem obvious, and remain true regardless of why the climate is changing.

I’m looking forward to the day when I drive my electric car with solar power absorbing paint. The future is bright – pardon the pun :)

Actually, the car will probably be driving me.

That depends on the area. If demand overall is relatively strong, #2, although it wouldn’t necessarily take longer to sell. If demand is weaker, #1, or it takes longer. So the risk is, if the market moves against you, your duplex may be harder to sell for the price you want within the timeframe you want because the target market is smaller. In the meantime though, you would be getting a higher yield.

Duplexes tend to make better income properties than growth properties (unless in an area where land is appreciating at a rapid rate), but that said, a mate of mine built a duplex in Albury two years ago on a corner block and just sold it for about $100k over his purchase price. He was very smart with his design with the attached granny flat facing the side street. An investor from Sydney bought it and was happy with a 5.7% yield.

• This reply was modified 7 years, 3 months ago by  Jason Staggers.

They are all looking for ways to shore up capital to meet new APRA requirements that are just around the corner.

Thanks for the heads up. Another thing to watch out for is insurers’ deliberate attempts to minimise payouts. I was recently working with an investor who was told the damage by his tenant was not “malicious” even though it was clearly beyond normal wear and tear. Finally, after pushing and pushing and talking to three or four different people, he finally got them to admit it was “malicious.” I wonder how many people don’t bother pushing back and leave insurance money on the table. It’s a shameful practice, but I’m sure one that saves insurance companies lots of money.

Having personally coached hundreds of investors, I’ve seen firsthand the importance of educating yourself before buying an investment property. Find someone who has done it themselves and who is not trying to steer you toward a deal through the learning. Investing a few thousand dollars in your education on the front end can save you tens of thousands in mistakes down the path. All the best.

Great input here all around. I would only add that it’s best to first decide whether you are primarily an income investor or a growth investor. Commercial is great for income, but not so great as a growth asset. That said, I can understand why you’re looking elsewhere than Aussie residential property for generic growth.

DeanCollins wrote:

what to do….what to do?

Good question.

I remember Steve writing “Property Investing” on a white board in 2007 and asking, “Which of these two words is more important to you?” His point was that we are “investors” first and “property” may or may not be the best asset to hold.

Eventually there will be a tipping point where people are no longer willing to take such great risk for so little return. If term deposit rates were not so low (thanks to the RBA) no one in their right mind would accept such low rental yields.

But it seems for now interest rates will remain low for who knows how long. I think an important question to ask could be, “Where will capital go if/when people lose faith in central banks and fiat currency? I think that will happen unless central banks change course and start raising rates.

But the conundrum they find themselves in is that doing so would also increase government borrowing costs and leave fewer dollars/euros/pounds/yen for entitlements, interest and operating costs. Oh, then there’s that need to pay back all the debt. Seems the only politically expedient solution is to inflate it away, which seems to be the order of the day. It will work until people realise what they’re doing. That could take a while. Or maybe not.

Tricky times.