Yack,

Given that you have been around for a while, you’d *know* the past performance doesn’t indicate future performance. Will your properties continue to grow at 20k per annum for the coming years? Remember, there’s new people on this forum, and I think they benefit from a shot of reality, as much as from past success stories. If you buy *now* and hold a property for a number of years, I think you’ll find the gains will be more modest than a 20k return per year, although it depends on the price yhou pay initially. Guess a multi-million dollar property will find 20k gains a blip in the ocean views…

Having properties far from oneself doesn’t mean much “hassle” if you have good PM’s. I am not sure that drive-by’s are a necessary part of property investing these days. If we had shares in a company, would we need that company to be in our neighbourhood? All matters relating to property can be dealt with by a good property manager.

kay henry

Jason

This might be the way to go NOW- as in, increasing equity means you can borrow more etc. What happens for those starting out now, though? where the CG’s might be much much slower?

Also, equity doesn’t necessarily increase serviceability. The only way to increase serviceability is to get a pay rise, increase rents etc. And rent increases aren’t infinite (nor should they be).

What advice can we give to newbies getting into the market right now who haven;t received the CG’s others might have? What about the sleep at night factor? []

kay henry

Jason- hey there

No experience at ALL in this area, but I’m thinking if you did a search on google.com.au (australian sites only) and types in “kit homes” or any variations of what you’re looking for, you could find out all the info you want- costs, processes etc etc. Best of luck with it!

kay henry

Here’s a reference to that story:

http://www.abc.net.au/news/newsitems/s1065616.htm

Problem is… abolishing stamp duty for *first-home buyers* homebuyers relieves that group. But a $2k duty for each home (including IP’s presumably) for each year of the property’s existence? That’s a lot of moolah.

kay henry

Yack, I’ve been trying to find this article on two-tiered marketing that I recall had figures of nearly 50% of properties in the Gold Coast being tt-marketed in 1998. Found it!!

http://www.google.com.au/search?q=cache:ZcEEqwC44xwJ:www.apimagazine.com.au/downloads/features/TwoTier.pdf+two+tiered+marketing+real+estate+queensland&hl=en&ie=UTF-8

The article is written in 1999, so it’s slightly aged, but it shows the incredible amount of tt-marketing in Australia at around that time. I know it’s not fashionable to discuss that form of marketing, given that we’re now in a RE boom, but I’m sure if you speak to some investors who bought property around that time, you’ll find it was rampant.

And yes, I’m in for the long haul. I’ve been doing it for 9 years now- it’s not a lifetime, but I’m only 37- gimme a break ;O) As with desiderata, never compare yourself to others… there’s always lesser and greater…

kay henry

yack, you said:

“eg. Income 5 yrs ago $60,000 Amount Owed $80,000 Value $100,000
Income Now $80,000 Amount Owed $80,000 Value $130,000

Now look at it in another 5 yrs.
Income $105,000 Amount Owed $80,000 Value $169,000″

That’s easy enough to say in a RE boom, but remember, properties in say, QLD, didn’t really rise much between 1990 and 2000. In fact, given the two-tiered marketing, prices were overvalued and dropped during that time.

Your assumption is that prices rise 70% over the ten-year time period. But recent history was not that at all. Some of the two-tiered people are just getting their money back with a little profit- that’s on places bought in the late 80’s/early 90’s. I almost did that too- watched the video, but was too chicken. [?]

Whilst I believe growth properties are great (who doesn’t?), I think we need to not only look at the *current* cycle, but at previous realities.

So for example, would I project a 70% growth onto a docklands property in 10 years? I don’t think so, but please correct me if I’m wrong in ten years []

kay henry

Melissa, overvalued by 100%? Those kind of thoughts can have our dea little RE market crumble to the ground! [?]

What is overvalued? I see “value” as what the market will pay. Why, for example, do peoplepay $1 million for a shack in sydney that will have to be pulled down? It’s the land “value”. How is the land valued? From what the market will pay… We can argue that the land, in 1949, was worth blah, add on inflation, and come to a conclusion… but try telling that to the vendor.

RE is worth what people will pay.

I remember looking at an IP of mine and I couldn’t help but think it was still worth what I paid for it 9 years down the track. Fotunately, I waited until I had more of an “investor’s mind”, to sell it, and realised that it was worth what the market would pay. “Value” is in the eye of the beholder.

kay henry

Beerboy,

One 3-br unit costing 44.5k? Ummmm, you won’t get much better than that. I say go for it! [:o)]

kay henry

Redwing, I’m not yack, but I only woke up a few hours ago, and I’ll be up all night, with you and Bec as my only company- deja vu!

I see an investment as me putting money in… the way I figure it is that my tenants will eventually pay off my IP’s from rents, but meantime, and if I want to pay it off sooner, then I can invest my OWN money, and I will own something of great value- paid off by tenants, myself and the great tax god. Funnily, I never really got past the Somers way of investing.

I have no problem in putting my own money into property- it’s why I work. I think if we get obsessed with CF+, then we will end up with a bunch of dodgy houses- sure, they will be paid off more quickly by tenants, but at the end of the day, I want to be able to feel proud of my purchases- you want 1 picasso, or 1 million pro harts?

kay henry

I remember reading about some agents in western sydney who said they’d sell houses at a flat price- I seem to recall it was somewhere around $2500- because that was what they knew it would cost them to sell it. I remember reading that they got death threats from other agents!

kay henry