Yack,

Let’s not kid ourselves (and I know you won’t because you have a strategy similar to me)… self-funded superannuants (as opposed to govt pensioners) are NOT going to be moving to your average country town. Sea changers and lifestyle seekers are going to be moving to places that are almost as exxy as their regular city homes.

There will be some market for other “lifestyle” places- such as golf course apartments (and I am not just saying his because I have one[blush2] and other places of leisure. I really don’t think the self-funded will be moving to country towns, unless those places are like Lorne etc- which are also hugely exxy.

The prices of property may change, but superannuants are not going to be isolated and away from major services and hospitals etc. Your average non-bourgeois country town will still maintain the same demographic, I believe.

kay henry

Bill,

I have a few issues with some current trends in RE borrowing. One is the ease with which people can get a 100% or 105% loan these days. I think there is a trend towards people being higher and higher geared- wanting to increase their gearing above 80% or 90%. I wonder what will happen if IR’s rise (and they are bound to at some stage- but my prediction is not for a while- say another 5 months).

Another trend is the use of LMI. I think – given the current conditions of a flattening market- that it is a waste of money- because it will not be covered by CG- over the next couple of years. Of course, in a rising market, the above two strategies- 105% loans, and LMI- are reasonable choices.

I am more a turtle in the RE game. I have kept the same strategies for as long as I’ve been looking at RE (which is only 7 years). I have learned so much more than I knew then, but I still work on the same fundamentals. I don’t do high risk, I want to keep working in my job, so that I can maintain my properties if sometrhing goes wrong and the bottom falls out of the tenancy market, for example.

Speaking of tenancy, I think that IP’s with tenancy desirability is going to become a very strong fundamental in this flatter market. Can our IP’s keep their tenants in what may become a more competitive market? As the market changes, some tenants may move to other towns (such as happened in places like much of the south coast during the 1990’s- people on work projects- tradies- had no work and would just shiftand leave to where the jobs were. Think about a flatter market- it means less IP’s being built, less market activity in general- that can have consequences all over the place. If a few of our tenants up and leave… will we still have the money in our bank accounts to cover a few rents?

Bill, one of my strategies has ALWAYS been to have a job to back up my RE investing. I feel that with a job, I can survive interest rate increases, a tightening tenancy market, falling property prices- whatever!

I’m going to be in RE for the long haul- despite any market conditions… but I’ll still keep working, so that I can’t lose the shirt off my back if things go wrong.

And yes, prices have certainly cooled- but we always knew they would. But Bill, I don’t see that as an issue. If prices increase, the investor wins out with CG. Sell up a few and enjoy the fruits of the investment. If prices decrease, one can afford to buy up again. The market can’t lose- for me- because I see the positive from both outcomes.

kay henry

Yackster :o)

I have bought 3 houses in the past 9 months and sold one. That for me is doing what is right *for me*. I did have a plan (or a thought) to buy one place a year, but then, with the kinds of places I seem to be developing a taste for, this isn’t really possible (I don’t think- I guess I’m not quite sure- i never really do a financial analysis).

I have a belief that it’s not about quantity… after all, if one buys a 500k IP, it is pretty much equal to buying 10 X 50k IP’s. Sure, the yield is going to be lower, but it depends on one’s strategy. The whole “how many IP’s do you have?” thing, is really like comparing apples with pears. It all depends on what the properties are worth (if you have a growth strategy) or how much income you are getting (if you have an income strategy).

kay henry

Lucky I am not a financial adviser I only know I like reducing my mortgage. Any personal debt, I tend to worry less about- I know that’s upside down, but it’s my psychology. Mortgages are so HUGE, ythat I try to get them down in every way possible

kay henry

Suzie,

I do NOT believe the tenancy tribunal will favour the tenant in this circumstance (you will not be going to court, but to the Tribunal). They will follow the laws of tenancy. Make sure you read what you need to do and follow the process *to the letter*. If you react and do something outside of what you are legally entitled to do, then it is more likely that the Tribunal will offer the tenant another opportunity, due to your acting outside the Tenancy Act. Document any evidence you might have. The police will probably not have much involvement as they usually have other things to do than become involved in this kind of thing- unless the tenant begins to act criminally.

Do not threaten the tenant, or send her letters until you have gained advice about this. A property manager might help you out on this side of things (and then I think you should hire a PM- the $20 you save per week by not using one isn’t worth it). Just seek advice and then do what you have to do. Sometimes landlords do things that are out of line, and the Tribunal will throw the book at them. But for those who do the right thing, you can trust that the Tribunal will follow the law and deal with the situation.

Best of luck!

kay henry

Melody has asked a second question. Can someone who has some knowledge of the area please give her some ideas? It might help her more than this useless machismo act.

kay henry

Thanks babu for posting that info :o))

Thing is… what I reckon is… the day is free. So it means I wouldn’t be forking out maybe thousands to hear the same stuff. And FIDO asks how much is 9.5 hours of one’s time worth? Well, given that it is a *weekend* then my time isn’t worth a dime. It’s kind of a weird point to ask how much an audience member’s time is worth.. it’s like suggesting we should be paid an hourly rate to go there?? hehe- doesn’t quite make sense to me.

The Property Expo was free too. I didn’t come home with an OTP… I just think anyone who has a sense of self can go there, enjoy the day, and maybe pick up a tip here and there- why would anyone sign up for some hokey course or product?

I still haven’t got a ticket- oops! But I’d be happy to go for a day. I still think free things can be good value for money [biggrin] If people don’t like what they hear, then they’ve only wasted time, and not money. And who says these folks don’t have as many “secrets” as all the other spruikers?

Again though, babu- thanks for the post. Believe me, I am as cautious as the next person, but free is free )

kay henry

David,

If you already have one IP, then you probably already know a bit about what you’re doing. If you have an income of 150-200 bucks a week, I presume you are on Austudy or at least on some very minimal part-time work. I presume this doesn’t include your rental income, as that would be going to service your current loan. I am wondering how, unless your current property is positively geared, you are paying off your property? 175 bucks a week is subsistence living, so I presume the loan is paying off itself. I also assume you’re living at home, given that 175 bucks would be eaten up by rent and probably leave you living on 2-minute noodles for the week.

As your original post says you wish to complete a double degree, then it seems like you’ll be at Uni a while longer yet- maybe a few years.

You asked if you could get a loan… you might be able to get one of those student-deferred personal loans from a bank, to be paid off when you graduate. I did when I was at Uni. But your investment situation right *now*, would be marginal, in my opinion. IP’s are expensive, and require extra cash in case anything goes wrong… and things do go wrong. In your financial situation, the property you bought would have to receive a very high rental yield to cover up your current lack of finances.

I doubt you’d be able to get an IP loan, although with the deregulation of the mortgage industry, it may be possible. I think without a greater income, you’d be struggling. You may have to defer your IP plans- realistically- until your financial situation improves, unless oyu want to buy a 25k property… in which case, you’d probably have lots of repairs to do anyway.

I’m not trying to be the killer of dreams here, but unless you provide more details of your situation, it currently looks (to me) like paying back a mortgage would be unserviceable.

kay henry

SupaFreak and all :o)

Ok, I’m done with the mullet chat [offtopic] but image is a really interesting thing. I think having a sense of “style” and developing that is more important that wearing clothes that one *isn’t* comfortable because one thinks that is “professional”. For example… if I see a woman wearing those dreaded court shoes… I just think she has bad taste- even if she might be wearing a suit with it *ugh* But I really find it hard to cope with court shoes… so what may be seen to be “style” for one, is seen as something very different for the other person, who might be seeing those court shoes. (Apologies to women who wear them… oh dear).

Someone mentioned ugg boots… but can we distinguish between the old ugg boot look and the new 300 buck ugg boots that are so new york now? Or do we just think “oh, ugg boots- how awful!”?

At my workplace, you can distinguish between who are the academics and who are the evening part-time mature-age students… The students carry brief cases and wear a suit.. but they ARE still students… the academics often wear sloppy pants, crumpled shirts, and can look AWFUL! So what one wears is not necessarily indicative of power or status.

The head of IT in my University wears loony tunes characters- different ones each day- on his tie! I really love them and compliment him on them- they’re great! The head of another major service on campus wears black shirts and dark purple ties and stuff- very mafioso look- he looks great too. The Vice-Chancellor wears a pair of pants and a shirt like every other dude on campus- they don;t *need* to have a particular look- and the respect they receive is not in what they wear, but in the work that they do.

I thik the point I am trying to make is… don’t try too hard. Develop your own style, and enjoy it. There is nothing disrespectful for the head of IT to wear Donald Duck on his tie- that’s who the guy is, and I like it- it’s a bit of eccentricity to add colour to a work environment.

kay henry

ok mr rogue- I’ll go there about RE implications. I just bought an apartment without parking. Mad, some people might think! But it is in such an urban centre, that the kind of tenant it would attract would probably not have a car, not need one. The area is high in public transport, and it’s in the city. Why would one need a car?

As for me, I do have a car (most of my colleagues don’t). I live in public transport land, and my car sits in its little car cage 5 days a week. I do love my car [inlove] but really, actually owning it, when I walk to work and back, and socialise mostly in my neighbourhood… well, having it is almost questionable.

My “rule” in the past would be to buy a place with an undercover carspace… but with the nature of urban development, and with fully supported public transport, and the location of my IP… I don’t need one!

kay henry