Marc, yeah, I’ll go (Marc willing!) Can you ring the number and we can get some more tickets? Someone mentioned this the other day- advertised in the SMH or somewhere. We could make it a bit of a party Marc. Of course, it would be a party with just the two of us- but why have all the fun to ourselves when we could share it around?? hehe.

kay henry

Here’s to you too, stelep! Ask anything you like! (You can only get your head bitten off- hehe)

kay henry

Is LTV what other people call LVR?? [blink]

Seems highly irregular for people to say it doesn;t matter if one has negative equity… Sure, we can just keep paying off our debt. We now have 600k of assets and 1.2million debt… Oh No! Only last month it was 700k of assets- oh well, never mind- who cares? [confused2]

Our assets are supposed to *grow* not shrink. Talk about negative gearing in a big way “Yeah, my assets lost half their value last year- that must mean i’ll get a good tax return!!”

I don’t understand that at all. Please explain?

kay henry

ggump,

Dunno who you are, but you only have 1 post here. You may be friend, foe, or stranger of westan- not sure- can’t tell from your post :0) Anyhoo, I guess you’re entitled to ask a question about a Forum member. Westan does do some spotting, so if someone wanted to know if they should do business with someone, guess this is a way to ask.

Glad noone has asked the good and bad points of kay henry- how embarrassing!! I am sure noone on here would respond with anything but kind words for westan

ggump- you don’t happen to be westan himself do ya? Having a bad day and needing some affirmation? awww )

kay henry

Nat,

I used an example- 105% loan (which a lot of forumites seek) and a percentage of lost value- I used 10% so as to not sound like a drama queen- I could have used % drops of 20%.

If prices are falling, you can STILL build equity- just add more money to your mortgage- I don’t think that is such illegitimate logic, although you might.

I am not suggesting people should buy at peak prices anyway. If one buys well, negative equity may not be an issue. Also, not borrowing 105% will help people’s financial situation. Your property may still go down 10% but if you have equity built up or building up, you’re less likely to sink than you are to swim.

kay henry

residentialwealth,

Yep- this would be happening in many places in Australia right now. Say you bought a place in docklands recently, got 105% loan to cover all costs… and your property declined 10% in value… do the maths.

This 105% loan stuff- ugh- it’s a shocker! No equity at all, and then the market changes. In a softening market, we should now be BUILDING equity, not finding ways to have 100% (or 105% debt).

residentialwealth, it’s not like the banks are going to be doing margin calls of people for the foreseeable future, but negative equity is absolutely possible. When the boom was so hot, and noone thought the bubble would burst (you’d be called a naysayer and a tyrekicker if you auggested such a thing!) notions of negative equity would only be used about Japan and other far away markets… but think about it- the decline is REAL- time to top up your equity!!

kay henry

Marisa,

You initially mentioned fully furnishing the place. I’ve thought of that strategy too, but the problem is when something breaks down. If you supply everything for the house, then you as the owner are responsible for replacing stuff- TV, DVD player, fridge, dryer… can you afford it? Sure, it might be good for depreciation, but how much does it cost to furnish a house? And even if you put cheap stuff- cheap furniture etc… you will attract a certain type of tenant. Sometimes, the kind of tenants who don’t have their own beds… don’t have them for a reason too. You either have to furnish for “executive” tenants (and is there the market there- for, say, business people on a 1-year contract, or at the lower end of the market. As for me- and I am a tenant- I wouldn’t want to be sleeping on a second-hand bed, so you have to think about that stuff.

Be careful not to overcapitalise in this market. Will you be able to recoup the 5-10k you spend on furniture, reno’s or whatever improvements you make?

You could always put heat bulbs in the bathroom- mmmm- yummy for tenants in winter :o)

kay henry

Gatsby :o)

I think PG is still overseas. He pops around occasionally, and I’m sure he’ll put your pic up as soon as he gets it :o)

PGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGG! Come back- we miss you!!

kay henry

Glen,

Back to my simplistic approach :o) Paying off IP’s means I can afford more IP’s. If I pay an IP off in 7 years, then I can use that built up equity to buy more. People say one can’t afford to keep borrowing if one has neg IP’s. But one CAN if one pays off the IP’s at a more rapid rate. In fact, I reckon it is not a snail’s approach, but a hare’s approach :o) I have always seen “investment” as something one puts *into* and I am happy to chuck my money into a loan to have it paid off more quickly. Why was Anita Bell’s book such a best-seller? Because some people still want to pay off their places- then you can keep borrowing, increase equity etc. But I do NOT have the Anita Bell practice of living like a pauper until you have your place paid off- that to me is a waste of a life.

I would hate to hand the keys back on an IP [glum] Awful. The less we owe on ONE IP, the more IP’s we can buy! [party] And isn’t that the point?

kay henry