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kay henry
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May 30, 2004 - 5:20 am
Ok Pisces, I’ll go there [biggrin]
The way I see it is that you are either paying someone else a fortune, or paying yourself a fortune. So I pay 50k (some people have) for a seminar, and put that money into someone else’s pocket to fund their lifestyle, or I sell my IP for max price (what the market will pay) and get to keep the money myself.
There have been *some* investors who have made money without going to seminars (others of course have made money and the impetus has been seminars). But for the ones who have made money, learned tricks, done self-education by reading books, or spending time learning in Forums like this one… it means it is possible to play the RE game without doing the exxy seminars.
I either *sell* my IP and make money for me… or I *buy* a product, which makes money for them (and possibly me if I implement their strategies that can be found out for much cheaper). I see your “selling and selling” idea as more “buying and selling”.
kay henry
kay henry
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May 30, 2004 - 5:04 am
Glenetti,
You asked about the experience of PM’s. I see PM’s as like any other profession- sometimes people make mistakes. I imagine it’s a really hard profession- what if tenants don’t pay rent? It’s hard to get blood out of a stone. Sometimes tenants have been known to trash places. I don’t see this as the fault of PM’s- it is just events that happen. PM’s are not only sometimes dealing with difficult tenants- they are also dealing with difficult landlords. PM’s probably have no better or no worse conflict resolution skills than we might have ourselves- go figure, they’re only human.
I have had mistakes made by PM’s, but I have also had them made by accountants, solicitors, banks, and – you name it- everyone makes mistakes! Usually, these can be fixed up with a phone call, and a bit of calm… The day I expect RE to be “set and forget” is the day when I forget that RE is all about humans, with all our foibles.
I like to maintain good relationships with my PM’s, but I don’t want to hear from them that often- because the only time you hear from them, there’s something wrong.
But I still think they are dealing with two often *difficult* client groups- tenants and owners- I think I’ll keep my day job [biggrin]
kay henry
kay henry
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May 30, 2004 - 4:50 am
glenetti :o)
Don’t be intrigued by my simple way of doing the maths. I have avery simplistic approach to RE. Even using other people’s money- becomes *MY* burden- because I have to pay it back. Using a deposit – say from my equity- is still using *my* money, and I sill have to pay that back.
I know that no money down etc is a really fashionable thing in RE… but I want to get my properties paid off! hehe- call me strange I could owe 800k and have 200k equity, therefore having 80% LVR and thinking of my situation as quite sound… but really, I’d probably prefer that the OPM of the Bank was MY money, and that the OPM component was the 200k and that I owned the 800k.
It’s not like I work in cash these days- who takes a bunch of rolled up 100 dolalr notes into a bank for a deposit unless it’s your first property? So the money comes from somewhere- either my money- which I don’t owe (equity) or the banks’ money. Even when it’s my money (equity) I still then have a larger loan- that I have to pay back.
As a person who hasn’t really been able to poisitively gear for the kind of properties i want (of course we all want 10% yields- but you can’t get them on the more exxy properties), it is important for me to pay off loans. It means I can buy more properties, and not just rely on elusive booms for CG. Paying off debt has something to be said for it )
Sorry glen, if the above is different to the question you originally asked. But I believe it still has relevance in these times of no money down.
Are other people trying to pay their properties off too? By putting in additional money each week? Or are you just letting your rental yields slowly pay back your mortgage?
kay henry
kay henry
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May 30, 2004 - 4:26 am
Pisces,
I see this market change as inevitable, really. It means prices are more affordable for all. I know that people say one should never sell, RE, but I also think the boom was a good time for people to sell underperformers in their portfolio and take that CG to invest in “better” performers, however that is defined by the investor. I bet many wished they had sold earlier, instread of now having to be more “realistic” about the price they put on their property.
For any investor or homebuyer, this has to be good news. People have made great CG over the past few years, and even those selling are probably still ahead from what prices were in 1997- in some ways, everyone wins.
As to battening down the hatches, as an investor, I think it’s a good time to get in and buy- and hold!! Flipping as a *generalised* strategy is probably dead- although some who are more savvy (and play with risk) canprobably still do it. I think that for those who are financially disadvantaged, they may now be able to afford more traditional forms of finance, instead of being wrapped.
So much for doom and gloom :o) I think the cooling of the market will help many.
kay henry
kay henry
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May 29, 2004 - 5:29 am
No madhun- it’s not kosher to advertise on here. But you’ve already made half of an advertisement here by saying your dad has a property for sale, so imagine there’ll be a few orangutans wearing coats (deep pockets, long arms) contacting you by private message if there is an interest. Meanwhile, no details on here please [strum]
kay henry
kay henry
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May 29, 2004 - 5:16 am
Sure, madhun- go for it! I am sure I’m not the first person to have said or thought that about the banks Meanwhile, my signature will probably soon say “OH NO! THE BANKS STOPPED LENDING!” hehe.
kay henry
kay henry
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May 29, 2004 - 4:03 am
Marc,
As you may have (or may not have, as it seems) picked up from my earlier post on this thread, I don’t believe in either “success” as a concept, and I think status is a sad concept too. For me, it’s just about living with integrity and authenticity (that’s the “success” part), and I think status is just a comparison with others- and I think that’s useless.
In monetary terms, some people will seek both status and success. But I don’t see either of them as valid- to MY life. But for those who want them both- keep climbing! [biggrin] and best of luck to you!
kay henry
kay henry
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May 29, 2004 - 3:12 am
wezwaz- the best investment tool is definitely YOURSELF! Knowledge is power, and if we know what we’re doing, we can get told all the things in the sun, and know some of them don’t sound right or don’t make sense. I think if we are going to seminars to find out about ourselves or feel good about ourselves, we’re in trouble. Because we’re going there vulnerable, and full of hopes. It makes us in a state to probably spend money to compensate, and the possibly feel disappointed later when we realise it isn’s so easy [confused2]
I have learned SO much on here, that I feel I can do deals and not be ripped off, and that I can pull out if I need to and not be trapped (the Billings method of real estate contraception).
kay henry
kay henry
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May 29, 2004 - 2:48 am
Marc- interesting question abour status…
Let me preempt with this from Desiderata…
“If you compare yourself with others,
you may become vain and bitter;
for always there will be greater and lesser persons than yourself.
Enjoy your achievements as well as your plans.”
From Max Ermann, Desiderata, 1952:
http://hobbes.ncsa.uiuc.edu/desiderata.html
When I was young, I did a sociology degree, and we studied status a lot, and I then taught about it, many years later. Really, status is a comparison thing. It’s very much a “Jones’s” concept- about keeping up with them, or beating them or whatever.
On a grander scale, it’s probably what kept nuclear arsenal climbing- the americans and Russia were keeping up with the Jones’s- each other.
I think if one compares oneself with others, one wil always be unhappy- it’s true what Desiderata says- there will always be those with less or more. One the sociological side, it’s important for me to know that there are so many in the world who have nothing- it means I can try and fight for equality for all. It doesn’t make me feel great to know I have IP’s when so many in the world have no clean water.
kay henry
kay henry
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May 29, 2004 - 2:12 am
Coldy :o) Firstly, welcome to the Forum!
You asked about books and seminars, and you’ve probably already read a few books- good for you. The best way to get into the RE game is to.. wait for it… buy a property!! Hey- i know it sounds crazy, but do it Read more books along the way, but I reckon the 3k or 5k that you might spend on a seminar, ought be used as a deposit on your property.
As Newgen said, use this forum. Think about it- it has probably 5000 pages? Maybe more? That’s pretty good value for free. You’ll learn about all different types of strategies and perspectives on here, and the thing that you get on here and not in a book is *debate*. A book will sell you their own perspective, without critique- on here, you get the critique as well, so you can decide what’s good for you… dependent on your financial situation, your own investor psychology etc.
‘d say the first thing you could do is ask a mortgage broker what you’re able to borrow, or look it up on a mortgage calculator, and then asks heaps of questions in here.
Oh, re your off the plan question… flipping of OTP’s is now complex- in 2004, and I reckon you’d have to have heaps of inside (developer) info to do it. Personally, I think that OTP’s are marketed at max prices, and I think in a falling market, such as the one we are currently in, you would be lucky to get your money back by the time the place is built, let alone flip for profit. Not a good strategy in my opinion. [thumbsdownanim
Enjoy! And buy yourself a property! Go to realestate.com.au and check out the hundreds of thousands of properties available- it’s all good fun!
kay henry
kay henry
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May 29, 2004 - 1:52 am
I have to say as well, that when I see advice given with nothing behind it (as in no spruiking for business) I see that advice as invaluable. I also find other info great too- from mortgage brokers and spotters etc. But I think those who give advice or share information with others and who have nothing to gain from giving it- what’s not to love? An example is when I put up a post about painting a house, and learned so much from what I read, and noone had anything to gain from giving that- thank you all :o))
kay henry
kay henry
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May 28, 2004 - 12:53 pm
gmh- no problems at all :o) And please feel free to question or challenge my strategy at any time- that’s what the forum is for Whn I get challenged, it helps me to either be ble to articulate what I’m doing and therefore strengthen my belief in it; or to realise I might be better off trying something else- either way, it’s good to self-reflect
kay henry
kay henry
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May 28, 2004 - 6:30 am
hehe Terry :o) Make sure you check your next phone bill!!
Free all day seminar? Oh, what’s not to love!! Yay- i’ll get me a piece of that [strum]
kay henry
kay henry
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May 28, 2004 - 6:28 am
g7… back to your post about your mate…
Really, your mate probably might have checked the marketing before it became public… I’ve never known of any marketing to occur without the approval of the company. Anyway if it is the marketer’s fault, the public will see that, right?
I for one, am glad that a Jenman exists, and I keep up-to-date with the stuff on his site. I think he’s a nice guy and trying to do the right thing for the community. Some of you don’t think that way- well, that’s ok- the old “agree to disagree” thing He’s made a successful career out of trying to sell RE ethically- god- that’s hard to criticise. And he has a Consumer Protection Fund, funded by his RE’s, to assist people who get into trouble with RE- costs the consumers nix.
People may not agree with what he has to say, but I think he’s one of the good guys.
kay henry
kay henry
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May 28, 2004 - 5:28 am
brahms,
Your question is fine- and so politely asked, how could anyone be offended? :o)
I just do a gross rental yield like this:
Annual rental yield divided by purchase price. I am not one of those whizz kids who does all the spreadsheet stuff, which might be unfortunate.
See, the way I work it brahms… due to the location of the property… there are 30,000 potential tenants opposite (major urban university), so i am not worried about vacancy. Besides, one year leases knock off the vacancy period.
I do gross yield, brahms- makes it easier for my head I know once I add in mortgage costs, interest, QS report, landlord protection insurance, BC fees, rates, any repairs, PM costs etc etc… that my net yield will drop considerably- c’est la vie- I love my new place [blush2]
kay henry
kay henry
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May 28, 2004 - 4:47 am
Thanks Greed- looks like you got some free spam advertising here
kay henry
kay henry
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May 28, 2004 - 4:36 am
markgil,
Mike and georgis already made some of the salient points. Mike said you would be lucky to make it pozz geared- I’ll go further. As georgis said- the apartments would get $350 a week rent- that’s 4%. If your apartment value goes down- as have many in oversupplied areas of docklands, southbank, st kilda, et etc… you might be looking at losing 80k-100k off your purchase. 20% reduction on a 350k apartment is 70k- eek- would be hell to lose that kind of money!
Also, sometimes it is better to buy an apartment that is a few years old. An off the plan apartment has no tested value- only a presumed value. Once resales start occurring, you’ll find out how much you can hock it off for.
As you’d know- deposit bond strategies which use flipping to make CG on OTP’s- forget it- that strategy is, I reckon, about 5 years ago now.
kay henry
kay henry
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May 28, 2004 - 2:36 am
gmh,
I had no problems in getting a loan for my apartment in sydney- @ 70% LVR. I knew it was going to be that, and I have no problem with it- because it keeps my LVR down. I dunno about all this borrowong 100%- just means you have to pay back more!
Re your original question, it depends on what you consider a bargain. What are you looking for?
kay henry
kay henry
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May 28, 2004 - 2:29 am
Yes gmh :+P Guess you have a problem with that ) It’s a growth property, gmh. Someone has to buy city properties, and this time, it’s me. the yield will probably be 8% with depreciation schedule. Good enough for this investor.
kay henry
kay henry
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May 28, 2004 - 1:08 am
recoveryman ;O)
Timely topic for me! I exchanged contracts yesterday on a sydney IP. Definitely negatively geared, 4 year old city apartment- yield 6%. I am VERY happy with the purchase :o)
I would buy in any market, but not at inflated prices. This apartment was, in my reading of the market, price adjusted for the current conditions. Super happy me! [lmao]
As long as the bank keeps lending, I’ll keep buying
Oops- forgot to mention- this and any other purchase will be buy and hold for 10-15 years, or sell at the peak of the next boom, whichever comes first. I won’t be selling in less than 7 years though.
kay henry