Forum Replies Created
“deeper desire to grow”
AHHHHHH Manic
You’ve utterly nailed it!
Wanna be my new best friend?Absolutely and totally.
Kaye, I hear ya about the things going on in the world that we feel powerless to stop.
The richer I become the more power i will have to change the world for the good. Money is just another form of leverage. A poor person is too busy surviving to change the world. A rich person can pick a million ways to help the world.
joy to the world
>My personal
> believe is that for a passive investor, property is usually better, because of
> leverage. Most who buy shares usually buy them outright, whereas most who buy
> property usually borrow to do so. Whilst the underlying investment (I’m
> talking buy & hold – not trading) over a 5-10 yr period will perform
> similarly, the property investment will come out ahead due to the leverage.Hi Rod,
so we both have our personal preferences and both have given reasons,
so far so good –> Comparing buy & hold property investing to share trading is foolish, they are
> two different things.Yeah, but buy and hold let’s say compares to blue chip, IPOs to off the plan deposit bonds (speculative) and trading, well, compares to property trading.
I get that much….>B&H property investing is more akin to long term holding
> of blue chip shares (diversified) and I suspect the returns are similar
> without taking leverage into account.That’s where I disagree, because I have found a niche market within the asset class ‘buy and hold properties’ where I believe returns outperform blue chip buy and holds. Part of the reason is that you can manage your investment and make it better, i.e. you have control. Buy and hold blue chip shares, the only control you have is to sell them. With a property you also have that control, and many many many others.
You can effect how that investment performs.
Man, I sound like Dolf De Roos 101.So here’s my niche market, which is in NZ currently, though I expect it can be found all over the world. It’s: buy undervalued, (on a global scale, that is how many x the annual rental yield to get to the purchase price. In Australia it’s currently 58, with a long term average of 31. In NZ, we are buying for 6’s and 10’s!! A long way to go (upwards.)
Call it fundamental analysis, if you like…!!!So. Then, within an entire undervalued property market ( a country or region or area) I have targeted lower priced properties as I believe that demand for them is sustained in all economic climates. Inflation alone means that each year houses will go up, even if there is ‘zero growth’ in real terms, forcing ever-downward pressure on the market.
There is an excitement for a lower-priced property that there just isn’t for a higher priced one, and I’ve seen this over and over again.
And it’s no coincidence that it’s the lower-priced properties that show excellent rental yields.Add to this the pure potential you have with a property deal that you just don’t have with shares – and I’m sold. Why, i can renovate (lots of emotional satisfaction here, passed on to the tenant as appeal – turning your property into an in-demand one, and thus an even better investment. You cannot subdivide, renovate, put a bathroom heater into (etc) a share. You cannot ensure the priority management of your property by your property manager with a share. So I also enjoy the degree of control.
I also enjoy the passive long-term nature of the investment (once it gets going! Before that it is anything but passive!)
>However shares do require more
> “monitoring” and this where property comes out ahead for the average punter,
indeed> active share investor (not a trader) can use this to their advantage and
> easily move from one share to another, a property investor cannot do thisand this is actually a backwards advantage to property. It means you can be a bit slower to respond and still get away with it. The boom doesn’t start on friday and by the end of the weekend it’s bust. it doesn’t even start in february and end in october. It’s years. This is why experts can’t even tell whether the bubble has burst, is bursting, or won’t burst. If a suburb is hot and number one this year, it will be number one, two or three next year. It won’t be number 127 like what shares can do.
It’s the s-l-o-w ness of the peaks and valleys that gives investors with a finger on the property pulse ample time to react without having to watch it all the time. less time spent watching an investment, more quality of life…>and
> the average share investor doesn’t either (they just watch their share value
> plummet and complain about the market or their broker).Yes, but why are you allowed to say this but when I point out bad things about shares, it’s criticising?
> You have clearly done very well with your investments over the last year or
> so, but you don’t seem to acknowledge that there were risks involved in your
> investmentsI soooooooo did!!! on another thread though, here:
http://propertyinvesting.com/forum/topic/12108.html
I talked about the risks and what they were I’d worked them out to a dollar amount. My Dad is an accountant and he made me work out my worst case scenario (100 percent vacant) and how much that would cost me. It turned out to be around $20 per week worst case, which I could handle. That wasn’t actually realistic. Realistic worst case was 1/2 the current rental, or 50 percent vacancy. look the properties all would have still made ten percent yields on only 50 percent occupancy – i,e, I was purchasing 20 percent yields. THAT was my risk mitigation and another way was not leveraging to reduce holding costs instead. I also mitigated risk of vacancy by perfectly maintaining and decorating my houses to ensure appeal. It Worked!!! And that was when interest rates were low and everyone was buying like mad, so you’d think that rental demand was not as strong then *and it still worked!* Now rental demand is even stronger.>and that just because your returns are good now they may not
> always be so.
too right, they’ll be better!
rents are indexed for inflation. If rents have still gone up in years where everyone is buying (such as when interest rates were low) why won’t they go up even more when nobody is buying (cause interest rates are rising and property prices have risen) – My little example of a 1991 purchase for 5K rented for $20 renting for $130 now and worth $50K – that’s 13 years, and well over the length of a property cycle. Why shouldn’t I expect my returns to get better and better over time?>Many investments have shown great returns one year and negative
> the next.define ‘great’ and explain this. Because I want to check what you mean before I debate it!!
> You are clearly knowledgeable in NZ regional investing and have helped many on
> this forum with information on NZ (I have NZ investments as well and I’m
> grateful for your contribution).cool
>Why do you continue to criticise share
> investingOK. I have a friend who inherited 200K and didn’t think she had ‘enough’ to buy a property to live in in Sydney. OK. (i know, buying a place to live is not the only option, you can borrow, etc etc) – So she thought, I can afford to buy shares. Invested in shares and recently lost 30k of it. (don’t ask me how, through a broker or what.)
This is TYPICAL!!! Even Wayne’s site has articles there that say something like ’75-95 percent of people lose some or all of their capital’ (on the stock market). Casinos??? “all but a tiny percentage of gamblers eventually lose” – is a tiny percentage around 5 perhaps?
So I – when I am financially free which I can see quite quite clearly – don’t want to be alone on my rich island with all my mates broke and lost all their money on dodgy investments they didn’t have the time or skill to do well at, or the control. So why not ‘evangelise’ on what I believe to be a no-brainer passive stable easy low risk strategy?
I want to try and help the 75-95 percent. I am not so concerned about the 5 percenters (obviously Wayne is one of them.) !!!!
So now you know why I ‘criticise’ shares (no differently than you have just been ‘criticising shares’.
>Australian property investing (compared to NZ) when you admit
> your knowledge is thin on both?
As to why I criticise Australian property investing, I don’t criticise *Australian property investing* per se, I criticise the intelligence of buying a property in a market for cashflow where the rental yields are too low. And I also criticise the intelligence of negative gearing for capital gains in a market which is *currently* overvalued and might go down in value. Surely that would be lose/lose? Lose money holding the property (negative cashflow) and lose money with capital loss potentially? All with an asset you can’t sell quickly, like a share?I’m *sooooo* going to be buying in to property in Australia, but I’m building up my wealth in a different market (NZ) while this one goes down a bit more.
That’s just an opinion of mine of course, but even if it stays flat that’s OK because meanwhile while it’s flat here I am getting 24 percent cashflow returns ‘over there’.
Don’t say I know nothing about the Aus property market, because as you know I spend a lot of time here, and I live here. I probably travel around Australia more in one year than most Australians who have lived here their whole life.
I’ve lived in each capital city for weeks or months, I’ve driven all over – taking in places like Traralgon, Bathurst, Gympie, Lorne, Ballarat, Goulburn, Cooma, Yallingup, Alice, Gove, Bundaburg, Mackay, Marg River, Darwin. And that’s only a tiny fraction of the places I’ve been to in Australia. And of course I always look at real estate prices, locations, yields. remoteness. Amenities. I’ve visited national parks, several offshore islands, tasmania. I know the best place to get a coffee from Rockhampton to Fremantle. I’ve driven the hume highway, the great ocean road, the ‘end of speed limit’ road out of Darwin heading South. The only place I haven’t had a lot of experience in is the ‘outback’ because I have mainly been to places where there are actually people. i.e. properties. Plus, I know plenty of Australian investors. I get the magazines….I know Australian bird-dogs who I keep in close contact with to compare notes. (And they’re specialists. but where do you think they are buying at the moment???)> The real value of a forum like this is for members to contribute knowledge
> about those areas they are familiar with, not just to bag things which don’t
> appeal to them.So – hang on, I’m confused. By bagging someone who’s doing something that doesn’t appeal to you for bagging something that doesn’t appeal to them, aren’t you….ahm,,, never mind…..
Oh and a final irony. If the title of this thread had been ‘there’s better investments now than Australian property’ I would have written ‘yeah – NZ property!’ and maybe left it at that. The whole property vs shares thing I think is a red herring, because most people I think would be talking about ‘AUSTRALIAN property investing’ vs shares.
Do you think that is a fair assumption?cheers-
Minijoy to the world
this is a wacky one, but you could go to a hypnotist or hypnotherapist and try and get regressed to when you were back in the taxi, and then *look* around the taxi -from your subconscious memory- to see the taxi number. Because actually the memory of the wallet and what you did with it and when you last had it is still within you, and the taxi number even if you just glanced at it is there – you just need to access it!!
You could at least then pinpoint the driver and cab.
However, I guess you still couldn’t tell if the driver had it or if the next passenger got it….
cheers-
Minijoy to the world
I can’t WAIIITTTTT for the book!!!
By the way Leigh, ‘in the can’ is a film biz term,
35m film is in cans, and when you’ve wrapped the film, it’s ‘in the can’ ready to be processed…cheers-
Minijoy to the world
Hey Squash,
sorry about thinking you weren’t an investor in NZ. Thanks for some good discussions and everything is clarified. Plus, I lost the bet so, err, here’s my ass!
cheers-
Minijoy to the world
“At the end of the day an individual will invest in their preferred area/s – and ultimately it is their expertise, or otherwise, that will largely determine the degree of success they enjoy (or not)
“well said derek.
my enormous amount of words was me just saying basically ‘my individual preference is for property.’ – and my reasons why, which come down to my experience, guidance, interests, risk profile, personal and financial goals, and successes. it is my “expertise” that means that *my* properties will outperform shares *for me*.
With two of my properties now showing 24 percent cashflow yields and add to that values now 70 percent higher than the cash I put in the deal, I’ve outperformed the ‘average’ shares or property investment several times over.
If I had leveraged the properties to 80 percent I could have got 15 properties instead of 3, and if they’d all gone up 70 percent in value, the leverage would probably mean that my cash on cash return was something stupid like 35 times my money back in a year.
And all the while in the (considered) lowest risk asset class.
cheers-
Minijoy to the world
YES
joy to the world
Hi kp,
everyone else, sorry i again smooshed all replies into the one email without breaking it up into who said what
> Mini, I wish I could be transported to NZ to check out whats going on over
> there.your wish just came true, as they have these flying chariot things with tiny little waitresses, tiny plastic knives and tiny seats at tiny prices
> You’ve just about convinced me…
OK, it’s only 24000 frequent flier points return….
Or $300 bucks going freedomair.co.nz or virgin> Are you on the North or South island ?
north> Seriously, is there no topic you won’t hijack to tell everyone how good NZ is?
> regards,
> Rodrod, seriously, no….
well, not on a property investing forum, anyway…..> Mini said:
>> What do you reckon the property will be worth in >5-10 yrs time?
> around 150K or more”
> _____________________
> Mini, why do you think your property will be worth 3 times what it is worth
> now, in 5-10 years. Most stuff I have read suggests that property doubles each
> 7-10 years.many reasons. One is that the increased rent will backwards capitalise into increased purchase price. One is inflation. One is comparisons with a similar property over 13 years in a similar town.
Purchased 1991 5k
rented $20 per week
Worth in 2004 50k
rented for $130 per week(this is not an unusual property! This is a commonly available property.)
You do the math…
Oh, oK, I’ll do it – that’s going up in value ten times in 13 years.therefore I think that going up in value 3 times in 10 years was me being conservative.
Why don’t you calculate how much cashflow that property made it’s owner over the 13 years. One has to ‘make up’ at what intervals the rent rose from $20 in 1991 to $130 in 20004, but the way I did it was to increase it by 2, 5, i.e. smaller amounts each year for the first few years and then increase the rent by $10 or so each year to come to $130 (today’s price.)
NZ is undervalued…..blah blah blah
Kaye, most ‘stuff I have read’ suggests that the average capital gain is 5 percent per annum. In the world. But everyone knows that you can outperform that (q’land over the last few years?) – actually everyone in Aus has been outperforming that for the last few years. And NZ investors are outperforming now. And Australian investors (mostly) aren’t….Swings and roundabouts.
Of course you can also underperform the market too if you buy (i.e.) brand new apartments without much land content in an oversupplied market
Most ‘stuff I have read’ – even about the towns I have purchased in – says the median properties did this or that. but my properties have outperformed the median. i think I have explained why this is a zillion times already…
To sum up…my properties outperform the market.
>Do you think only CF+ properties such as yours, will triple?
Yeah. ones similar to mine
> It is in NZ and 30k from a major regional town of 44000 where the property
> managers managed it from, as well as other properties in the small town
> It is a few Ks from the sea
> By that description I’d say that your major town is Wanganui and Palmy Nth is
> your Int’l airport.Last time I name – checked a town on the forums, it started a boom.
If I did name-check the town I was buying in, especially now that I am a bird dog for NZ properties, it might seem like I was trying to manipulate a boom! In reality, our bird dog clients of course have to know where we are buying, but I wouldn’t want to name-check a town of a few thousand on a website with 30000 plus property investing members….
>As a side note it might not be classed Int’l if proposed
> customs legislation goes through with mutal border control between NZ / Aus.I see the side-note, and I see your agenda.
The rest is just…well, hah, there are two issues here. For Aus and NZ not to be ‘international’ they would have to be one ‘nation’. Good try, but I don’ think that’s just gonna be a sub-clause of your ‘proposed customs law’ (sic).> The lower west coast of the Nth Island is going through some good times as my
> olds just sold their home in a lazy beach town which is an hour and half from
> Wellington. The brought it for $68K or thereabouts in 97 and sold it for
> $193K.It’s not just the ‘lazy’ lower west coast of the North Island which is going through “some good times”… I make it my business to be on the pulse of not just current ‘good times’ but planned and predicted future ‘good times’….
> Whilst I’m pleased that you picked up a good deal and there are still many
> more to be had, I’d be careful and ensure that you do your DDOkay…
> as I have
> several mates / family in the RE biz in NZ who are sooooo happy that ppl from
> Oz are buying without looking at the IP’s –define ‘look’.
I know of a blind property investor who bought a portfolio of about 50 properties to do up. He couldn’t ‘look’ at his properties….
>like stealing candy from a baby
Sounds like you don’t approve. well, tell your family and mates to stop it then
> Also be careful as some Ozzies are buying at slightly inflated prices –
> example one old school mate told me was how a couple from Brisbane brought a 2
> bedrom unit for $75k in a wee town and the vendor’s reserve was $44k. GV was
> $39k and rent well that depends on the season as the unit was never rented and
> the area only really has farm / seasonal work. Maybe they’ll get someone!
> Moral… be carefulLook, while I appreciate you trying to educate me as to the ins and outs of buying in NZ I would bet my ass that you don’t have any properties there yourself.
I have heard all this kind of *stuff* and more for a year, ever since I started buying there – from people who don’t really know, other than by hearsay. memory is selective. if you don’t have properties there, you will only hear and remember the horror stories which support your market position (out of it! -you don’t speak like someone who is in the market.)
I, however, am in the market. So I have a different ‘filter’. I filter out hearsay stuff from people who don’t invest (and therefore have no clue even though they think they do.)
I filter out tenant from hell stories if the properties were managed by the owners. (i.e. I got a call to fix the toilet in the middle of the night).
This does not even compute, as I live in another country and my properties are professionally managed.I filter out all stories such as ‘ straight after they bought it the roof started leaking and cost 5k and the insurance wouldn’t pay out when theplace burned to the ground because their fireplace was illegally fitted.’
Because I do builder’s and LIM reports on my deals.
>Oh, and yes whilst NZ is small, remember all things are relative!
Like, that there are some things bigger than my ass?> I would love to compare notes in 5 yrs time. Lets say Aug 2009.
OK> Lets compare where your at and where I am at in Aug 2009.
OK, but can we do it offline? I am serious. email me!
It’s not about ego or anything, I reckon it would be fun to have an ‘opposite investing’ buddy. Kind of like by being exposed to and keeping track of someone who (from previous posts) so obviously does things differently, there would be value in doing that.> If I am going to renovate a property I would rather a return of $70k on a
> surburban property than a $20k return on a rural property.Too tired to talk you through it properly. Suffice it to say that I ‘get’ the paradigm that you’re in, which sounds like ‘only Australia, only negative gearing, only in a boom, only in suburbs, only in cities, only if you can make min. 70k for your trouble, only above a certain price-range’. That is so fine and I’m sure it has worked for you. If it continues to work for you then great, but I suspect you are not doing anything at the moment investing-wise and I would suggest that you should read the book ‘who moved my cheese’. Because it explains how people who can’t change when the market does, are stuck, inactive.
> I am gainfully employed and can afford to buy growth properties that require
> some cash from me first up when purchased.
AKA Negative gearing. Good for you. I hope for your sake that the property market continues to rise, and never crashes, slumps, goes sideways, or other. because otherwise your negatively geared properties will be making you a loser twice-over. Once with the cash you put in, and one with the capital losses.Ah well, I guess your answer to that will be ‘I don’t mind about losses, because they’re tax deductible against my income’.
I could scream…
cheers-
Minijoy to the world
smooshing replies to everyone in the one post
> Nah! It would take too long to firstly correct the misconceptions.
if ever?? hehe
> It’s funny to note the proselytising fervour on both sides of the fence.
> Who really cares anyway, as long as what we do puts groceries on the table
> plus a few frivolities.indeed, but I just don’t care for shares right now, and I have my reasons which I outlined.
If someone can break down some of those reasons, I’d be inclined to look at it again…
>>> Shares are stressful (because of the risk.) burnout, grey hair, suicides,
>>> bankrupt – don’t know too many property investors with those conditions, but
>>> there sure are a lot of shares casualties.<<
> What bullshit hollywood movies have you been watching?None, but I really want to see Fahrenheit 911….
No really, I do know some people who went grey and prematurely aged in other ways (well compared to me anyway, hehe) through trading jobs, (ones where you trade millions of dollars for i.e. a bank or a fund or something.)
they didn’t last long, maybe a few years. It was those people (two people I know) that told me about the high burnout rate because of the high stress.Why stress?
Because of the risk…
I rest my case on that topic….they were also the ones who told me about the suicides. OK maybe only one suicide….
re bankrupt, friend’s boyfriend was a grain trader, quite bigtime I suppose, he’d make 60-70k on a good day trading with gahd knows how much capital.
The cheese moved….his commodity that he traded changed market conditions, and pretty soon he was gone. Is now a delivery person with own business and very very happy. (grey hair though in the last year, since all that stuff happened….)> Come and spend a week with me Mini! You may get bored but you’ll see how low
> risk it is!
> http://www.tradingforaliving.infoI might take you up on that….seriously. Can you help float my company on the stock exchange? or else that mini-market that they have? We’ll do an IPO. Give me about 5 years though, ok??
> It’s an addictive combination of online gaming and gambling that takes over
> people’s lives and makes them have shiny glazed eyes with dollar signs in
> them…I know people that got consumed by shares, to the point of all day,
> every day.
> So exactly like gamblers and online gamers….
> feel free to argue awayjet,
> Sorry I can’t write that long, but comparing share trading to gambling is
> cowshit.no it’s not….I see exactly the same body language from my friend who works from home in his studio, but has to stop and log on to his shares every 2 hours to check what they are doing, etc – and I have seen him rubbing and clapping his hands with excitement and saying’YES!’ just like people at the casino do. And I see what that makes him wanna do next….just like I see what a win at the casino makes someone want to do next.
> I love property as well that’s why I am here, but I also love the excitement
well, there you go, if you can agree that gambling and the stockmarket are both ‘exciting’ (sic) then there’s one similarity. Which means what I said is not horseshit, right?> Mini, here is some of my scribblings on trading and gambling.
> http://tradingforaliving.netfirms.com/article_2.htmthanks!!!!!
> It sounds like your “friends” are merely gamblers who are using the market as
> a casino.How else is it supposed to be used?
i mean, aren’t you supposed to pay in, wait to see if you made money, and try not to mind too much if you lost? isn’t that also what you do at the casino?> Gee Mini that was quite an answer, but wasnt it a property crash that occurred
> before the 1929 stock market crash.It was only in Florida.
http://www.investopedia.com/features/crashes/crashes4.aspIt wasn’t a crash really because the prices from one year to the next were pretty similar, if you ignore that they went up to five times their value and then back down again in between…hehe
The stockmarket crash is no comparison, because people lost 90 percent or worse, their shares became 100 percent worthless. Also it took 25 years for prices to recover.
Shares can crash….. their value can go to zero and never recover. Just gone down the toilet. a property just can’t do that, because it is a tangible thing with land…. That is because I believe it is impossible for property to crash.
>The idea that owning part of a company is like owning nothing is an interesting >thought,
>but I guess Rupert M, Bill
> Gates Etc feel they own something.Yes, they do. But what do you own if you have a share? nothing. I mean, you have a piece of paper which says you own something, but what is it? What can you do with it? I mean, the fault with it is that it’s linked to all the other bits of the company which means you are at the mercy of other people. Plus, you can’t DO anything with it. A property, is a THING plus you get the piece of paper to boot.
Businesses come and go, crazes, fears, greeds, fortunes, booms, busts – and people lose everything (their share portfolio) but they STILL need a place to live. Therefore in my reasoning property will be the last thing to crash!
>I have no problems with people who say they
> prefer property and dont like sharesgood
>but to spread information about shares
> that isnt true is not right.Yeah, well, stop doing it then!!! everything I am ‘spreading’ is true, because it’s my opinion. I find shares boring: true.
>I had to pick someone up onI enjoy a good debate but lets try and stick to
>real facts instead of an uninformed put down.If you’re allowed to say ‘i enjoy a good debate’ then I’m allowed to say ‘I don’t enjoy shares’.
And then I bothered to explain why not.
at out dinner table growing up, one was encouraged to have opinions but one was expected to be able to back it up with one’s reasons.it was the reasons that were debated. Often, the opinion would change.
> The only thing that worries me about this thread is that it is people who do
> are uninformed who are being negative about shares.
> DO SOME RESEARCH!!!!!
> Cheers,
> AceyduceyAceyducey, I apologise for being sooooooo bored by shares that that will never happen.
Look, I’ve read a book or two (Matin Hawes) and a magazine or two (shares) trying to get my head around it. Subscribed to tipsheets (rivkin, and the junior gold guy, forget his name) and paper traded. (starbucks. well, hey, i drink coffee….)
I did it with dedication (the same dedication I have transferred to property) for 6 months so. Even in my yawning teenager homework kind of boredom I probably managed to pick up (being the bright spark that I am, and how sweet of you to notice) more about shares than most people do in their whole lives. And crashy, wayneL, acey, westan, are not ‘most people’.
> P.S. This PROPERTY vs SHARES debate is getting pretty stale wouldn’t you all
> agree???……I mean, come on….drop it already!!!! Can’t we just agree to
> disagree (or better still) respect each others views!!!!if thy right eye offends thee, rip it out.
we’re having fun, and the bored ones can always wander off and have a life…> be understandable, that this is a property forum…
indeed
so am I now allowed to prefer property over shares? Cause I do, so there, nyah nyah na nhay na *sticks tongue out*> to be many negative thoughts and ideas to share trading… i honestly do
> believe, with a little bit of share trading knowledge and placing the better
> odds in your favour… share trading, will quickly make you forget about
> property….not all property deals are equal. I could imagine that some lame-ass share return could be much better than most people’s negatively geared nightmare lame-ass going down in value nightmares. i truly could.
but i don’t do those kind of property deals. hahaha> the reason most people fail in share trading, is simply they havent got the
> psychology, discipline, money mangementsee, I’m bored already –
if you are trying to sell it to me –>and neither have they planned, their
> entry and exit strategy for the particular trade… (planned there trade)
> these people, are who we call gamblers (or pigs, because they squeal, when
> they get burnt or lose money…)a bit like people at the casino when they lose. Now can you see the similarity you were arguing with me wasn’t there?
> share trading, does allow you to minimise your risk and you are in control…
> its up to you to pull the trigger…sure, but so does property….
>if you cant do any of the above, you
> should not play the market, ask experience traders, and they will tell you how
> low risk share trading is….You obviously must know different ‘experienced traders’ than I do.
> and the property gurus also admitting that property is
> not a good investment at the moment…yes it is!! At the moment!!!!!
Just not in AUSTRALIA.!!!! DUUUUh!!I unfortunately assume that people know that.
And people unfortunately assume that if I am talking about property I must be talking about Australian property.I couldn’t care less about Australian property, other than renting my 800k palace for a pittance from my poor negatively geared landlord.
> id hate to admit it, but, if you look at the richest people in the world, they
> own the biggest share holdings positions… (billions were talking)
> honestly, i dont know any property guru or investor, whos properties into the
> billions…Well I hope you meet one soon, otherwise, they obviously won’t exist in your world, and nothing i can say can convince you otherwise.
“i’ve never seen steve wonder, and therefore he doesn’t exist.”
(he’s never seen me either, but that’s beside the point)
thank god for westan –> there are heaps of Billionairres who have made their money from property.
> For starters try Frank Lowey, he owns the Westfield Property empire his
> personal wealth is Billions. I remember reading the BRW top 100 wealthiest
> Aussies its amazing how many of them have joined the list through property,
> you should get a hold of it and have a look.> Hey i like shares but, name one who have made the list from share trading ?
> There aren’t any.thank you westan
> And the real reason people fail at trading is because its not as fool proof as
> the publicity material you read.thank you westan
>Sure there are some winners but there are
> losers also.
> as far as the richest people in the world I think you will find that Bill
> Gates made his fortune buy owning Microsoft and taking the company public,yes, as I mentioned above, I am planning on doing that myself.
!!!I read that people go nuts for IPOs, not even caring what they are buying.
(people into shares, that is)So if I float my company, that sounds like pretty easy money.
I am semi-jokingly serious….>not
> but investing in shares. Sure Buffett has done well, he is a legend and you
> and i might do well by studing his investing strategy, for the record Share
> trading is NOT one of them.thanks westan
> I haven’t really followed Lowey et al. But I suspect that their billions
> weren’t strictly from property investing (in the context that we here practice
> property investing) either. It is also in the practise of running a business,
> publically listing, development and other corporate toings and froings.Yes indeed, I believe that property and “running a business, publically listing, development and other corporate toings and froings.” is a much better bet than ‘buying some shares’.
yet I am counting on – and comfortable – being in the minority here.
I’m glad – it means there will be lots of people who will buy shares in my company, once I float it, because they believe that shares are a good investment (especially the ones that love IPOs.)Like i said, semi joking serious, but give me 5 years!
joy to the world
PS I think this wa a new record for the longest post ever
Jars!
you legend, go Erskine!
You look really nice.
cheers-
Minijoy to the world
I found the way of valuing property interesting, 58 x annual income being the current (‘ludicrous – sic’) price in Aus.
That would mean a house renting for $100 per week would sell for 301,600.They say the long term average is 31 i.e. the same property should sell for 161000 if rented for 100 per week.
Comparing it to my NZ investments, I have a house which rents for 130 per week.
In Australia it would cost 392K.
According to the long term average it would cost
185k.But in the current market in NZ it would sell for about 42K say, or, only 6.2 times the annual rental yield. Meaning also, a 16 percent return.
Now there is a long way between 6.2 and 31, let alone 58.
This could be a way of calculating how long the NZ property market could safely go up without being overvalued . I guess the average wage and things like that would come into it, but the way I see it, this means that NZ properties could go up quite a bit before they were even close to being as overvalued as Australian properties.
My conclusion is that it’s Sooo the right thing to do to buy NZ property now if you are buying any property now, and definitely don’t buy in Aus right now as an investment.
joy to the world
I am a PROPERTY investor.
People will always need a place to live, no matter what the economic climate.
Shares to me are ‘BS’. Meaning, no matter what a company’s stocks SHOULD be doing based on fundamental or technical analysis, it’s stuff like PERCEPTION and HYPE, ADVERTISING, FEAR, GREED etc that make prices go up and down, I reckon.
Shares are boring. I realise some people think they’re great fun, but to me, time spent watching, trading, reading financial papers, would be hell.
(Unless of course it was my company which was floated, in which case I’d suddenly find it very very interesting….watch this space!)
Shares are time-consuming. I don’t need another job. if they’re not time consuming (blue chip buy and holds) then their returns are lame.
Shares are stressful (because of the risk.) burnout, grey hair, suicides, bankrupt – don’t know too many property investors with those conditions, but there sure are a lot of shares casualties.
It’s an addictive combination of online gaming and gambling that takes over people’s lives and makes them have shiny glazed eyes with dollar signs in them…I know people that got consumed by shares, to the point of all day, every day.
So exactly like gamblers and online gamers….The returns on passive buy and hold property are way better than passive buy and hold blue chip shares
I believe that properties will always go up in value as long as the population of the world continues to increase, because that means you have an ever increasing demand for a finite supply of land. Building costs rise, housing density increases, and land values go up. Diversions and dips in the UP trend are mellow and there has never been a property CRASH like there are frequent stockmarket crashes.
Property is trending UP, baby, worldwide! always has done, and always will do, unless a lot of people in the world die en masse, in which case the sharemarket won’t be in much of a fit state either….
property has a lot of things you can DO to it to change it, make it a good investment, it’s a creative THING you can effect with your management. it’s a tangible asset, which has an intrinsic value, unlike a piece of paper or a ledger entry on a computer somewhere which is basically worthless. You can add appeal, you can increase the value of your investment by making your property more emotionally appealing to tenants and buyers, not to mention increasing the value of your investment to you and another investor you might sell it to, from the financial results of the ’emotional improvement’ you did earlier.
property has more end-users….almost everyone lives in a property!
cheers-
minifeel free to argue away
joy to the world
I calculate the gross yield like this:
rent per week….times 52 equals….
divided by the purchase price.
i.e. for a 52k house where the rent is 100 per week
100 x 52 = 5200
divided by the purchase price = .1.1 means ten percent yield
.05 means 5 percent yieldetc
i.e. I skip the ‘x 100’ bit and do that in my head cause I know what the decimals mean
joy to the world
bb,
“I thought your intelligence was away ahead of going to anyone’s seminar.”
thanks for your kind words.
*thinks: reinforce positive behaviour, ignore other*
Yep, the learning outweighed the costs (it’s all tax deductible anyway, hehe, which is why NZ BirdDogs just happened to have a business meeting in Melbourne the day before!) and the fun outweighed everything. I figure, at the end of my life I will remember the experiences I had and the fun I had and the people I met, I won’t remember the amount on the bill.
cheers-
Minijoy to the world
Yack –
“Is (+ve CF) that the only reason you have decided to invest in that town of 1500.”I invested in a town of 1500 a year ago with no property manager there.
BUT…It was not an Australian remote town. It is in NZ and 30k from a major regional town of 44000 where the property managers managed it from, as well as other properties in the small town
There was high rental demand and still is
It is a few Ks from the sea
It is within 3 hours of a major city
and 1 hour from an international airportThe yield was 20 percent at the time of purchase
NZ as a whole on a global scale was undervalued, and there had been huge positive publicity about NZ, so I figured it was never going to go down, and had a chance of going up
The surrounding towns were showing improvements and growth
I did not expect it to go up in value because the world was full of ‘yacks’ telling me it wouldn’t.
I was happy for it to hold it’s value and knew that the value and rents would at least go up in line with inflation, as history has shown.
“There is more to investing in property than positive cashflow.”
yes, there is risk. i thought that given the points above mine wasn’t going to be that much of a risk (also the property was only 27500 and needed NO renovation!!)
and the grief factor was good too as I didn’t have to renovate, got it professionally managed, and have still never been there a year later!!!!
“Do you earn enough postive cashflow to make it all worth your while.”
I did ask myself that, and figured with holding costs, insurance, vacancy (if any, I allowed 3 weeks) and rates, and management fees, i would end up with about a 10 percent return clear.
That to me was twice what my term deposit was doing at the time, plus there was the CHANCE that the property *would* go up in value. At least, I knew it would hold it’s value over time unlike cash. And I thought I would always be able to get at least ‘today’s equivalent’ of 27300 out of the property again.
A year later the cheapest house on the market in that town that would be comparable (corner section, subdividable with two street frontages, street appeal, big palm trees, tidy condition) would be at LEAST 50- 60K.
but you won’t find any statistics that tell you the median price in that town has doubled, because i have found that growth at the bottom of the market is always higher than at the median or top. And because the median and top price properties are so much more the data is always skewed towards what the higher priced properties are doing price-wise.
>What do you reckon the property will be worth in >5-10 yrs time?
around 150K or more
“Having a property manager able to manage my property is a MUST for me.”
I agree.
“But I dont invest in regional or rural areas.”
I wouldn’t invest in AUSTRALIAN regional or rural areas just now unless they were similar investments to the NZ ones in terms of price, risk, yield, and demand as outlined above.
Why not? Aus regional – I reckon is now too overpriced as we’re still just past the top of a boom, prices haven’t dropped to a reasonable price/yield yet
rural – way too remote, often one industry towns, unstable rental demand, too high risk for mebut I feel that small country towns still can be fabulous. You just need to go in with your eyes open and know the answers to yack’s questions about your own investments like I do about mine. You need to know the answer to all the what if’s, and know what the worst case scenario is for that property. I had no repayments as I bought cash, so my only liability after I purchased and paid closing costs and insurance was the rates at $250 per quarter, which I could have funded out of earned income if necessary. So my worst case scenario (no tenant) was only $20 per week approx, and i could live with that. As it happened I got tenants within 2 weeks, the rental manager didn’t take the first people who applied, she waited for an employed couple who wanted a place for 3 years, and it has been tenanted ever since.
“Can I ask – have you read more Books than 0-130 properties in 3 1/2 yrs?”
I think yack wants you to read the book he has read, called ‘negative gearing, negative thinking: why I stopped investing in property’
yack, I wish you could magically be transported to NZ to have a look for yourself, or failing that just start getting our bird dog deals mailing list and see for yourself what kind of properties you can get over in NZ right now for what kind of prices/areas/demand/condition/yields/potential for growth and future demand. You’d be amazed…
it really is a different kettle of fish over there.
Just remember, not all CF+ve properties are equal.
cheers-
Minijoy to the world
Misty,
it’s hypocritical to try and make someone else honest, by using a dishonest “some lame excuse”.
The professionals use things like credit checks, references, bond, and rent paid in advance to minimise the risk of tenanting your property.
I suggest as others have that you either use a professional manager, or if you insist on managing the property yourself, do it professionally and with integrity. otherwise you will attract the very tenants you want to avoid.
‘Our landlord lied, so why do they deserve our honesty?’this behaviour is not making the world a better place. we were all born innocent.
cheers-
Minijoy to the world
PS monopoly, I think Kaye was joking. That kind of ironic dark humour.
I’ll finish it off for her….’and after I take their picture and fingerprints, I get a document ready in Adobe Photoshop marked
WANTED: in big letters. I make four copies. One goes to my solicitor, one to a private investigation firm who will use wire-tapping and other surveillance to keep an eye on the tenants, one copy goes to the local police station so they’re ahead of the eight ball when the crime I am convinced they will commit is finally carried out, and one copy goes to the printers ready for pressing of the posters.!!!!!!!!
It was just another way of highlighting the ridiculous lose/lose-ness of carrying that kind of thinking to it’s logical conclusion.
are their names Fiona and Adam by any chance?
hahahhhaaa
Seriously,
I know the BEST handyman company in Sydney. They are super fast, and they seem to happen to have everything they would need for multiple jobs in the back of their trucks. From specialised cupboard corner hinges to sheets of roofing, they are seriously total pros.cheers-
Minijoy to the world
ah well, I’m certainly not one to kick and opportunity in the teeth – I just sent him the info sheet for NZ Bird Dogs!
joy to the world
In my opinion, the newer the place the less ‘value’ you will be likely to get. After all, buildings depreciate,(not meaning tax strategy – meaning, get older, need maintenance, get worn out, get outdated, go down in value) land appreciates (that is the thing that makes your property go up in value, not the dwelling itself.)
Two identical properties land-wise and pretty close rent wise, but one is 1988 and one is 1978.
Both need 8 k redecorating and updating. but the 1988 is selling for XYZk more because it’s newer and investors (like you perhaps) believe it’s a better deal cause they can depreciate.But if both properties have the same land area and location and if both properties could rent for the same amount if you painted, new carpet, spotlights, new kitchen cupboards etc, then I reckon the one that will be a better deal is evident after working out whether the money you save on price buying the cheaper one is more than the tax discount if you buy the more expensive one.
I bet the older property will turn out to be the best deal.So you have to work out if you are ‘going broke saving money’ or really saving.
cheers-
Minijoy to the world
yeah, manic, do it.
I reckon Sydney is to Auckland as Melbourne is to Wellington, anyway.I think Greville St Prahran is like Cuba St, Wellington….
Wellington is a fabulous place. OK, I’ll try to compare to Sydney, though it’s really hard…cause most of Wellington has great views but Australia is so flat that you basically have to be quite near the sea to have great views.
Nah, *chews pencil* can’t do it. Can describe, though…
Oriental Bay is the dress circle. One by one the little original San Francisco colourful wooden houses on the beachfront are going, and being replaced by blocks of multi-million dollar apartments of the would-be Ivana Trump slightly too bling bling for my likin variety. right on the harbour right by the city. walk to the fun end of town.
Mt Victoria is a fabulous suburb too. Closest thing would be paddington, but with larger freestanding houses instead of terraces. In NZ they don’t really ‘do’ terrace housing, or if so, it’s a new version. Up above oriental bay you get great views, and on the other side you’re so close to town you’re probably in town. One of the desirable places to live if you’re a student. i.e. hip, and close to everything.
Kelburn. Ditto. desirable as has the best views in wellington. Quite Woolahra-ish, Toorak-ish.
Also you catch the cable car up to Kelburn from the city. The University is in Kelburn so students love living there too, though they probably can’t afford it.Students are more likely to be found in Aro St, or the Aro valley area. Quite close to town still and close to the uni (though a hell hill to walk up) it also has a lot of the original weatherboard old picturesque houses left. up the top of Aro St are fragments of the remaining hippies, but the hippies are all being priced out.
Seatoun I think is the loveliest suburb of wellington with it’s adjoining bays worser bay, scorching bay. Sheltered in a southerly, wellington’s prevailing wind, it has become more and more desirable as the years go by and 7k from the city doesn’t seem that far any more. It’s close to the airport, but doesn’t get any of the noise as it’s on the other side of the Miramar Peninsula.
miramar is up and coming i suppose, but you don’t get the views and you get airport noise. Still, a lot of the ugly ex-state type houses trendy up quite well if you whack a deck on the front and stick some nikau palms in terracotta pots to accessorise it a bit. Very first home-owners. Ditto Strathmore. Ditto Vogeltown. Newtown is a bit like Newtown in Sydney but with more of a pacific flavour. Berhampore is the poorman’s newtown, and Island Bay is up and coming, as is Breaker Bay, and Lyall Bay, even though they have terribly icy winds that feel polar as they’re facing the ‘wrong way’ (south) the coast is rough and exciting rather than the other bays mentioned before. Still, it’s like Alaska, but 8 ks from the city! I shouldn’t knock Lyall Bay, it’s the closest thing to a surf beach that wellington has! Up and coming area as not only it has a beach, but there is a mega shopping centre going in and it’s right by the airport.
Karori – boring suburb with nothing going for it except views of itself, colder than the rest of wellington as it’s in a valley, and where you buy if you have pretensions but can’t afford Kelburn. Some new homes there and some of those English style white ones with the panes in the window. But also a lot of middle-management. Middle class middle of the road, with an absense of stylishness. More stylish is Wadestown, and more expensive, cause of the views. Wadestown would be in between kelburn and Karori as far as prestige goes, I reckon. Then there’s Wilton which is a cross between Karori and Wadestown. But seems a bit more remote.
thorndon is fabulous, or probably was, before they carved into it with a motorway, ruining it. The best part of Thorndon is the Tinakori Rd area, and the hobson St area, and the area just above Parliament. Lots of Embassies in Thorndon.
Hataitai is when you can’t afford Roseneath, the next one out from Mt Victoria. Part of roseneath faces north (the harbour, the good way) and half faces the not so good way, then you’re into hataitai, which is a poorman’s version of Mt Victoria, minus the views. Evans bay is OK, and some of the houses have one-man cable cars to get up to their perches at the top of the cliff, but the planes fly past there all day which somewhat ruins it I reckon.
shelley bay, one of the best spots in Wellington in my opinion, was hogged by an army base for ages, but I think they are selling and developing it like they did in Seatoun, but more apartments i think. Which should lift Miramar considerably.
Above it is Maupuia, spoilt by the planes much like Evans Bay, and the fact that the prison is there. the houses are newer, but mostly nothing to write home about.
seatoun heights is fantastic as you could imagine… going out of wellington, you get johnsonville, first home owner kind of place, but then it gets more and more suburban, with places like Tawa where my mother swears she got suburban neurosis when we rented their while our house was being built when I was a kid.
You just get further and further out through all these suburbs, meanwhile the hutt valley divides off and does the same thing – burbs and a train line.
but then suddenly, going direction hutt valley, you are in the country and desirable wine growing holiday home farmlet countryside in the wairarapa.
After the suburbs inland on the other main highway north out of wellington (you can’t go south in wellington other than across water) you suddenly hit the sea again and it starts to get lovely. Pukerua Bay, Paekakariki, Plimmerton, Titahi Bay, even Porirua are all up and coming like mad. Then the Kapiti Coast is just nuts now. So pretty. Raumati is the best spot I reckon.
OK I bet you’re all bored now, let’s change the subject…
joy to the world
