Forum Replies Created
my call:
The bottom has passed.
A flat period will ensue with a few up and down blips on the radar thanks to media sensationalsim.
The prediction is a slow start and then steady growth starting in 2 years
Then a period of wise direction and decisions due to the recent memory of this crash.
America will be treated like the greedy teenager it is.
Europes financial stability will be the rock.
Asias progress will be the growth driver.
New Government and Industry focus will be the key.
And if i am wrong ….
everyone loses.
"I was watching an american economist on the business channel the other night who said that modern capitalism was now fundamentally changed – for good. Easy credit is over and with it so too will be societies based on consumption."
I hope so too ummeister … Paying for other peoples consumer bought credit is bad for everyone concerned.
We need a better foundation for the system – otherwise all of our individual wealth creation is a waste of time and in danger.
What do you think financial independance will mean if our country becomes poor.
How would Australia be like to live in if things really turned bad?.
No one really wants that .
Consumers definately need to be protected from themselves. And society needs to be built on good basic economics.
And hopefully those of us that took advantage of the easiest credit conditions of all time and can hang on for the long term will live a bit better lives for the risk …. and within a country that improves it's overall wealth and quality of life over time.
I think thats a worthwhile goal for all.
….
As terry and others have said , "crunch numbers"
I'm in similar spot…. some loans locked for 2 years at just under 8%
I think rates will drop downto a low early mid next year for a short few months and then gradually come back up …
I doubt I will save much more than break costs in the two year period remaining even if I picked the bottom and re-fixed for 2 ..
possibly more of a dangerous gamble than a wise investment decision.
It would be nice to pick the interest rate bottom and then lock for 5 years ….. however look at the 5 year fixed interest rates – still quite high.
Also compare some of these low introductory rates which actually have comparison rates that are very high when you look at total fees. wolves in disguise.
I think you may have left the call to break too late marie07, with todays further 1% cut which a lot of financial writers are calling an over -cut. with only minor corrections to follow.
2 – 3 months ago would have been the window of opportunity for those who fixed at 8% plus.
Possibly Yesterday for those who fixed at 7 % plus.
Now I wouldn't bother.
Nasty pill to swallow though, if you had of fixed a few months ago.
However I think anyone who did was possibly backed into a financial corner and had to do so to avoid selling… In such circumstances I still think fixing was the right thing to do at the time.
Unfortunately the correct Investment decision on the day doesn't always end up paying off.
Hindsight sucks.
MY HOT TIP
(anyone on variable loans, lock in a 5 year rate at 6% or better if you can get one in the next few months. History of last 20 years should make this a winner)interesting thread.
I still can't believe that the entire world economy is falling due to the credit binge in the US. Surely this wasn't the only foundation for modern civilization.
Neither do I understand the solution offered by the governments of the world: ..
..that the way to improve things is print heaps of cash and throw it at the people to buy more consumer crap they don't need and is basically worthless.
What the hell is financial stimulus going to do when handed to consumers dazzled by shiny techno gadgets? The very people who caused this trouble with credit they couldn't afford.
And the savings comments here mirror my own thoughts.
Surely an economy needs to be built on value adding industries and valuable assetts that actually have lasting worth and add to the progress of the world.
How does buying worthless junk with credit people can't pay for become the underlying foundation for capitalism,?
or is a high number of transactions just the easy way for governments to tax to the max.
F F's sake.
Stu
A lot of financial advisors are not cheap – they charge nothing.
These amazing individuals will take you into their office and seem like the best friend you ever had, then they will give you a few options with some amazing graphs of the returns you will make, because the last 3 years they have done well.
What a wonderful world investing is, we can all sleep at night.
WRONG – ba baaaaa.
What has actually happened is you have been duped into god knows what investment, and the advisor have just a scored a commision in the form of thousands of dollars – and surprise, surprise they recomended the product with the best return … – for them. The highest commission.
Don't worry a lot of mortgage brokers (not all, there are some great brokers out there) are the same fish.
A genuinely good financial advisor is usually independant and makes no commission, – how can they make a living you ask if they get no commission. Well – you pay them.
The going rate is approx 3 – 4 thousand dollars. Some super funds offer this as a service, which can be paid out of your super too…. probably best option in my book.
If you are still thinking "why should I pay money, when i can get it for free" , you are better off not doing anything at all… you will be better off.
Personally , I don't pay for financial advice, as I do as much research as possible and make (hopefully) informed decisions.
However this takes time and effort.If you are too busy, or too lazy to do this, then You are doomed.
As far as i can see, there is no free ride to wealth. And there are plenty of sharks with big smiles to fleece you on the way.
Who the hell am I ? , What the hell do I know?
………………..good, now you are getting the idea.
Are you serious???
You wan't to borrow at 20 something per cent on a compounding interest credit line to start a property portfolio?
You would be wiser to throw all your money and clothes you own into a river and then sticking drugs into a boogie board bag while travelling Overseas –
at least this way you have half a chance.Anyone can get a lot of credit, making money is a complete different game.
Cut up your 20 what? per cent credit card now, save a bit and study up on the fundamentals of money.
Only use high interest credit if the returns are even higher (PROPERTY RARELY RETURNS 21 PER CENT CONSISTENTLY WITHOUT MASSIVE RISK OR MUCH EXPERIENCE)
mecu traditionally very conservative with high loan interest rates. Sometimes they do weird things like with their car loans, they will require many conditions on your ownership of the car. like the insurance must be up to their satisfaction whereas every other bank would simply lend based on your income. – so watch out for pain in the ass fine print.
However, I've been watching them the last year or so and they are coming up with some competitive products- basically a regional area type of lender.
PLUS – because they have traditionally been so conservative they are less likely to ramp up rates above and beyond the reserve bank rate increases (UNLIKE BANKWEST WHO SIGNED UP ANYONE AND WHO ARE SCUM)
p.s. Bankwest are slimy scumbuckets.
as a sparky, an apprentice is taught on day one, to always test any wires before touching them.
This is all you have to do to avoid a boot….. basically trust no-one except your tester . – (and always test the tester itself before and after testing).
Never rely on somebody else who has said " it's off", even if it is the supervising sparky.
The other tip which they won't teach in class is as duckster mentions, the back up plan.
Even having tested the circuit and confident the correct isolations have been made, you can brush metal (pliers) across live terminals to earth to confirm it's dead. If it is live – usually you'll just get a spark and a blown fuse/cb. You can also brush the back of your hand across the exposed copper quickly, – in theory this will only cause you to twitch away.
Personally, I make a point of not touching any copper with my hands – just use pliers. Or if I have to – only for a short time.
When you understand how you could get a shock – the fear goes and it becomes just a process.
Easy.
In Vic, You must give 120 days notice to vacate if you have no reason to evict, and this must fall on a date after the lease expires. So to have access in June, you'd have to give notice 4 months earlier.
The rights of the tenant to live in house are very well protected by law, doesn't matter that it is your house.
…if it is a single mum or a family living in hardship, it could be a very long time before you get access to property.Maximum rent increase is 5 or 10% per year too.
If you are desperate, you could negotiate with tenants and offer to pay their relocation costs if the deal is still very profitable.. they may choose to move out earlier than they are obligated.
you have to make a decisive action at some point.
procrastination will only delay your rewards.
In my experience, jumping in before you feel ready results in only one real result……………. real life correction and the best education available.
…hey, you will never know it all. But in time you will regret not taking action earlier. This I promise you.
Just do it!!!!
Live, Learn and GrowLifexperience
lock them in the cellar….. problem solved!
cant name banks, it is like swearing or kicking grannies when they fall over cracks in the pavement that they wrote a letter to council complaining 2 weeks ago.
Socially unacceptable, PC and all that jazz.
I spit at them, (although I will take their money)
John
What is the maximum LVR on the reverse mortgages you refer to.I’ve heard they are a pitiful 20% or something?
Live, Learn and GrowLifexperience
hi terry,
Have you seen what investors direct are doing, what do you think?http://www.cashflowmortgage.com.au/cash_flow.html
It looks like they will continue to capitalise interest past the limit and even if the house drops in value!
arrowsmith, ctaing
You guys are wise to weigh up the pros and cons, risk and benefits of an investment and the alternatives.I hope that I didn’t mis-represent property for newcomers. It is not difficult, you buy a desirable residence in a good location, and keep it. As long as people want to live in it, you will make money!
Some of the more advanced methods of making money from property, are sometimes hard-work and sometimes complicated, but you don’t have to do these things. If you do, you will make even more money!
this hard work that you speak of, has made me 10 times more money per hour than my regular job pays me per hour.Property has a lot of benefits,
* generous tax deductions,
* the ability to borrow a lot of money from the bank(although lending for shares is much better).
* is a good stable component of a diversified portfolio (yes, there are other good investments)
* less likely to crash (compared to sharemarket)
* you have a lot of control over the property, you can paint it for instance to get more rent and have the bank revalue it and then borrow more money for more property.If you do buy property as a buy and hold, you have to keep a long term view 5 years at least, so the capital gain overwhelms the entry costs.
There are stocks that contain property. ALE Group for instance. These stocks do quite well too. Commercial Property Trusts are good earners too with annual returns of 15-30% common.[thumbsup2]
One thing with property that is great is when the property goes up in value, you can borrow money against it for personal or lifestyle expenses. This is virtually tax free cash. If you have enough property, you can live of this money year after year.
The great thing with this is that you become richer and richer because your properties continue to appreciate at the same time!!! howzat? [thumbsupanim]DLPP,
The closer to the CBD the better, however new home owners will live in the outer suburbs just to get a start in the market. This can be an hour drive or longer.
The South Eastern and Bayside suburbs are generally more desirable Brighton, Elwood, Caulfield, Sandringham are a few examples.
The North and Western suburbs are little more difficult to get to in some cases, a crash or truck broken down on the WestGate Bridge causes Havoc in peak hour regularly.
However there are really nice suburbs dotted all over the city.
Live, Learn and GrowLifexperience
i think you may be talking about Investors Direct.
This particular product can be a dangerous if the property does not appreciate at a good constant rate as you can actually end up owing more money than what the property is worth….
I have a few investment properties and rent.
In Melbourne Rental is about 3% in a lot of nice areas, so you are getting somewhere cheap to live.(If I was living in an area with a rental yield of say 7%, I’d definately buy as it would cost the same.)
I think of it as finding the cheapest way to live, and then putting maximum cash towards investments.
Your home loan is non-deductible, and so I consider it to be bad debt.
The great thing with property is the ability to manipulate the value (renos, subdivide, vendor finance) and also the high gearing ratio available. 95% LVR is quite easy to get from banks, and if you venture into the world of wraps and lease options, it is possible to gear against future values, effectively giving you LVR in todays values of 120% or more!!!!!
I will continue to rent while investing in property, it is working well for me even in the flat market of the last few years.
It is during the years when property jumps 30% or more against a highly geared portfolio that the big money is made in property.
Live, Learn and GrowLifexperience
Best of luck to all of you battling through tough emotional and financial times. Chin up and know it can only get better.
I understand that property investing can become difficult for the partner who has to pay child support. Any positive geared profits must be paid to spouse and Any negative geared losses are COUNTED AS INCOME and some of this paid to spouse. So it costs twice as much as usual to hold an investment property.
Neutral geared property seems the only answer, or other non-geared capital growth investments that don’t generate income (shares) and can accumulate wealth silently (as far as tax returns are concerned, which child services count for income assessment and maintenance payments). Just sit on such a nest egg until the last kid hits 18.
I have a friend who went from a multi million dollar portfolio down to a very small PPOR within months of divorce.
His only option as he can see was to sell up the ip’s and to put money into his PPoR. extensions, reno and maybe upgrade to a more valuable house.Don’t get me wrong, i’m not suggesting that anyone should be deceitful to cheat their own kids out of money, it just seems that the system hamstrings the separated spouse that has no custody of kids from gaining any wealth, no matter how hard they work.
Nathan, I have to disagree with you on the idealistic notion that once together, you should stay together. Bad relationships that can’t be fixed are unhealthy for both partners, and can be very damaging to any children exposed to such conflict….. sometimes you have to do what is best, even if it hurts.
My thoughts go out to anyone going through such a time, I can only imagine the pain…
Be positive, and you’ll do fine,[thumbsup2]
restumping, rewiring and other structural repairs rarely add any value to a house.
Cosmetic improvements do, like painting.
I agree that you are better off doing a minor makeover with tile paint and new door handles than magor structural works.
I would only consider an extra bedroom if it could be done by changing existing internal walls or the like…..
If you want to make money from renos you need to think like an investor, and not like a home owner.
Don’t bother trying to make the house perfect for you, simply give it a superficial makeover for the most value from the dollars you spend.
Research the meaning of the word “over-capitalising”…..
And remember that you can’t claim much of the initial renovation as a tax deduction, it is just added to the capital cost..
Also remember that you usually have to use cash to pay for this renovation. This cash may be better used to leverage into a second property.
Some things to consider.
I’ve done 3 – 4 reno’s in the past am still feeling burnt out from the effort, it will be about 4 times as much money and effort as you first envision….. be prepared for stress if you are goingh to go overboard.
Put your time and effort into getting the dual occ. permits and go from there!!!!
Quote
“The single piece of advice I can give you is to leave your wallet at home and not make any decisions on the night regardless of the hype and promises they might offer.”
My god simon, you’ll put millionairres out of business!!!!
