hiphop,

You’ve seen a variety of opinions and perspectives on here. I am sure you’ll take them all into account in deciding what’s possible for you personally. Some people are negative doom and gloom naysayers about nsw exit duties, others have different priorities- it depends on where you’re coming from. Personally, I think Steve’s ability to buy 130 props in a short period of time was enabled by a differing property market, 4 people working together, and using wraps to provide deposits via the 7k first home buyers grant of 7k a pop. Obviously, what Steve did was possible- hence the book!

IP loans are considered most suitable when seeking CG. If you are buying CF+ props, then mostly, people would access P&I loans. Remember, in interest only, you are paying off *interest ONLY*- no principle at all.

One of the things we do at work is work on “reality checks” for some of the people we are assisting. Understanding the climate we are working in, we realise that some of the people are hoping for unrealistic outcomes. As they come to us for advice, we would consider it negligent to not provide them with what we think are objective realities for their situation (based upon precedent and existing policies). Some people don’t like hearing that, but most of the people we work with like knowing what their personal situation is, and then being able to work out best case scenarios for them. Sometimes we work with people who choose not to undetake our advice, and then the worst situatoin occurs for them. In these situations, we’ve done our best, and we can do no further. Of course, the RE and investing climate is different, and people can do extraordinary “unthinkable” things!

It just depends on your personal circumstances. Sometimes imagination is not enough. It also takes knowledge(in this case, knowledge of the market), income, and savvy. Then great things can be possible.

kay henry

What has changed for me is, I would still think about buying in nsw, but I will really be preferring post 1987 properties forthe depreciation allowances. So the tax man giveth in one hand (dep allowances of 2.5%) and taketh away, in another. A big reason (aside of dep allowances) for me thinking of buying newer properties, is that now my buy and hold notion, will be for longer than ten years- it will hopefully be buy and hold forever. And whilst some older houses will live forever, some places won’t. Hopefully, now that I have a bit more knowledge than when I first started (wouldn’t be hard!) then I can be a bit choosy about buying those “forever” properties.

kay henry

Well, Gatsby, as you probably know, you can access smh.com.au online (the owners also pwn the Age, so not much point doubling up) and news.com (the owners own the Australian too, so no point doubling up there). Campus Review is a free rag in all Universites, so you can pick one up by just going and visiting one and asking the Union for a copy. The AFR (afr.com.au can’t be accessed online, so you have to buy that one. That’s the newspapers covered. All regional newspapers are generally free and accessible online these days.

Say, Gatsby, that you wanted to know if Toowong (for example) had any infrastructure happening, you could go to google.com.au and go to the “news” section and type in “toowong” and see what’s happening. If anything at all is happening in Toowong, it would have made the newspapers, so that’s an easy way to find stuff, instead of having to look through individual medium.

abc.net.au is another source to find out what’s happening regionally. However, the google.com.au “news” section will include abc’s coverage too.

Remember if you type in “victoria” into google.com’s news… it will probably come up with a million articles on victoria, canada, because google news is an international search, not an aussie one. So you might need to specify your search. For places like Gundagai, you can be safe there’s only one of those in the world.

Hope this helps :o)

kay henry

Steve,

First of all Happy Birthday! Also, congratulations on doing something you love. I know you hated accounting, so it’s good you’ve moved into an area that you’re passionate about :o) Everyone deserves to do something they enjoy in life.

Hope you had a happy birthday

kay henry

Pisces,

Your phone calls to me to arrange dinners and flights to meet forum members – yes, interesting… you sure do have a rich inner world, Pisces.

kay henry

westan,

I did the pre-midlife crisis thing and bought the red sports car early- nothing wrong with an early-life crisis, if it means you have a fun car to go along with it

kay henry

watchful, good question. You’ve asked if prices will be driven up “artificially”. I think if there has been demand, then there is no such thing as artificiality. Demand is a real concept.

However, it will be interesting to see how the prices of CF+ hosing stock goes now that the market has changed somewhat. The RB has officially declared the “bubble” over, and vendors are being urged by RE’s to ask for more “realistic” prices for their properties. If middle-range properties (say 250k) fall back to 200k, I wonder what will happen to 50k properties. The simple answer is “well, if the 250k property might have a 20% fall, then so will the 50k property, so it might now market for 40k. Well, that’s one perspective, and has its own validity. Anyone got any ideas about what might happen to cheaper properties in a less active market?

kay henry

Fern said:

“What really causes a crash?
Mainly I’d say people hurting is the main cause.”

Fern, I agree that is one aspect. The other is, I reckon, fear and panic. The thing about fear and panic is, that it doesn’t necessarily even require hurt, and the same result will occur- decisions made that are not necesarily in the person’s best interests.

I am pretty amazed about how people reacted to the new exit duty in nsw. You could see the whites of people’s eyes, and people freaking out. It’s that kind of response that can harm the market more than any actual policy/legislative change, I reckon. It’s not so much the *event* but the reaction to the event. I don’t quite understand it.

As others have said, it’s probably the more short-term “fashionable” investor (i’ll term it the “market-chaser”) who will do more poorly when conditions change. Longer-term investors (and I don’t mean new investors- I mean those who intend to stay in property) will be fine. Having said that, it’s probably still a good idea for people to check their LVR’s against their serviceability in changing times.

What do people think the definition of a “crash” is? Anyone got any figures they’d like to venture? (ie 40% drop in prices across 40% of the region?) If we could measure a crash like we can measure, for example, a drought, that would be good

kay henry

fifi- an 8 *bedroom* house????????? Or was that 8 rooms? sheesh, if it’s an 8 bedroom house, that;s some motel you have there!

Ultimately, it’s not up to your PM to be reluctant. He isn’t paid to show reluctance. He is only paid to show us love ) hehe. Seriously, tenants for 5 years with no rental rise- they’re doing fairly well. I lived in the same shared household for 12 years. In that time, we had NO rent rises. Then we got a letter saying the rent was going to rise from $170 to $180 (for a 4 bedroom house), and one of my flatmates screwed her nose up. I said “oh, come ON! We’ve had it so good for all these years. This is nothing!”

I think sometimes it takes people a little while to adjust to these things. I didn’t raise the rent for my tenants on my coastal property either, but they had very part-time/casual work. I don’t think I would feel guilt pangs (former catholic) having working tenants.

And fifi, your rent rise is incremental- it’s not dumping on them in a huge way. It’s also still less than market rental.

kay henry