Forum Replies Created
- Originally posted by YoungBumble:
put another way.What are some of the ways that people deal with peer pressure from freinds to spend money on luxuries now, rather than investments that build positive cashflow?
How does one comprimise and at the same time keep those relationships?
That’s better!!![biggrin]
Unfortunately YoungBumble, all too often people (regardless of their age) find themselves critisized by friends and family for many things that they themselves do not subscribe to. One such example, is as you have detailed, in being told to not worry about the future, enjoy life while you are young and live it up so to speak. This is in a round-about way valuable advice for you should not sacrifice every bit of fun, but for the long term, is not of much value and shows the lack of consideration for your dreams by the person(s) giving this advice.
It is hard to have to battle with family and friends who disagree with your investment goals, we all have been there, and some of us, face it regularly, not so much by family and friends, but through the disinterest or disdain from people who do not share our investment goals and thereby restrict the social interactions embodied by same.
Sometimes the best you can do if people don’t wish to discuss your plans is not to, but rather steer conversations away from such topics. These pressures do test friendships, and you may even lose the odd one or two; that’s life (it happens) but overall, it helps to sort out the acquaintances from the true friends, and as for family, if they really love you, they will (albeit not necessarily agree) be supportive.
Finally, participate in forums such as this, including SS (Somersoft) and attend investor meetings to meet like minded investor types, who share your goals to make financial future a priority.
Cheers,
Jo
P.S. APerry, there is no problem wanting to, or indeed, mixing with people you own age, I fully recommend it. But the way the original post was made, almost implied a “looking for similar” young people for ventures other than investment, and thereby would not be taken seriously by genuine posters!!!
Originally posted by aussierogue:
i think if the market does drop another 15-30 pct then you are alot better off having cashflow type asstes rather than capital gains onesHi Aussie,
May I ask, as you saying “another 15-30%” on top of the drop already or in total??? Because if you expect another 15-30% on what may in some areas already be by as much as 30% that would make see them down by a whopping 45-60% and I think this scenario is highly improbable. [eh]
Cheers,
Jo
Originally posted by Michael King:Monopoly: you seem very scathing about cashflow-positive property investment. I agree with you that capital growth has worked as a strategy up until now. I have done very well out of it myself. The question is how best to use your cash and your equity, and whether your unrealised equity should be converted into cash (by selling the property), thus locking in your capital gain and also reducing your interest payments if you were to buy a property of the same value the next day. The main benefit, however, is that your serviceability improves and you can then borrow even more funds. Have you read Steve’s article on this subject?
FYI Michael, ALL my properties are cashflow positive, hence why would I shoot (belittle) the goose that lays my golden eggs???
I understand your logic and where you are going with it all. It is mostly because I am your typical “buy and hold, and hold, and hold” type of investor, only selling when performance of same is bad, and/or financial circumstances change, forcing the sale of IPs.
And finally with all due respect, I do not share Steve McKnights philosophies, although I respect his achievements. If anyone, I would have to agree with Peter Spann’s theories which resemble my own strategies.
As for my comments, I was being sarcastic not scathing, but hey that is your perception of my post and is perfectly understandable. Basically, I think you should do what is right for you, and to that end wish you every success.[biggrin]
Cheers,
Jo
Originally posted by booboo:Does any one else believe as I do that rents are due to go up[on the gold Coast and Brisbane]at least 20% in the next 12 -18 months?
Not likely!!! [blush2] Booboo you obviously have investments in these places, which is great, and although I believe slight rent increases will be experienced in most OZ cities over the next 12-18 months, I hardly think they will be as extravagant as 20% especially in the current market. To that end, I daresay IF house prices drop any further encouraging more investors to buy and thus creating an oversupply, the likelihood of such increases will be even less.
Such increase in rents occur as the result of several factors, one of which is due to IR skyrocketing, forcing people to stop buying, tightening affordability to such an extent that those once considering entering the market return to their original option of renting, and hence creating a bigger demand for rental properties. This is simply not the case at the moment, as although affordability is an issue even now, IR are still amongst the lowest in years and hence will stagnate rental yields at worst, or encourage slight increases at best.
But hey, no harm is hoping; like you, I can but wish!!! [biggrin]
Cheers,
Jo
Waprincess,
I am assuming your “realtor” is your Property Manager (PM) and if that is the case, let him/her do that on your behalf. Most PMs do reference checks as part of the tenant screening and selection process. If you can’t trust your PM then you should reconsider getting another one that you can feel confident in, and that will act in your best interest.
It is simple, either you do it yourself and save your money and not employ a PM, that is you self manage the property yourself.
OR..
You leave it to the PM to conduct the necessary checks as part of the service that you pay them for.
I think you will find if both you and the PM do a check and the potential tenant learns of it, it would make them less likely to want to proceed with their application; no one wants a paranoid landlord/lady.
Cheers,
Jo
Hey Lisa,
Make mine vote no.3 for DON’T DO IT!!! [thumbsdownanim
If you are going to buy in a rural area, for pete’s sake have the good sense to find yourself a property manager, otherwise you are flirting with danger.
Please re-consider, perhaps not the properties (if you are convinced of their potential) but certainly the (long distance) self managing prospect.
Cheers,
Jo
Originally posted by Aafreen:We’ve made the mistake of telling the agents how much is our maximum! and now when we ask them what will the vendor take, they would say, they might consider your maximum price.
Easy fixed, tell them you have re-calculated your budget, and the “sums” don’t stack up as they did, hence what was once a top purchase price of 315 is now 300, or 290 etc. YOU are in control of this, not the agent, and if you allow him/her to take the lead, then you do so as a result of your own weak will. Be firm, and say “no, this is my top dollar, anything above this figure, don’t even bother mentioning” and stand by this, otherwise if you say it, and then agree to look at a property above this quoted figure, the agent will see he/she can manipulate you, and will do so.
Also, we’ve ask the agent how much was a certain property sold for and he would say, around the asking price. So ask him “which was???”
As for prices acheived on recent sales, you can also try http://www.domain.com.au and see what the latest Auction results were and some properties in “Sold” section will nominate the actual price they were purchased for. And it is free!!
Sorry been frantically running around with last minute “Christmas” [winking] shopping to notice [upsidedown] well that’s my excuse and I’m sticking to it!!! [laugh4][laugh4][laugh4]
No seriously, I hate shopping at the best of times but this time of year ESPECIALLY!!!! [wacko]
Jo
Aafreen,
According to latest domain property review figures:
Median house price: 315k up 10.5% with a 23.3% upward trend.
Total clearance rate between 2003-4 = 75.4%
Hope this helps.[biggrin]
Cheers,
Jo
3. Quality property, that will provide a modest (at this point in time) rental yield, but with ENORMOUS Capital Growth potential.
I buy for the long term, and as such, immediate high cashflow returns (albeit worthwhile and always welcomed) will not necessarily sustain the lifestyle I currently enjoy and wish to maintain.
For me, cashflow is not king, although it does have a place at the royal table!!! [biggrin]
Cheers,
Jo
Originally posted by booboo:Hi
My first post for a while.
My question is,does anyone have the figures that tracks rent increases after property price booms.I am talking about the biggger booms which seem to happen every 14 years or so.
My reasoning is that if rents tend to go up lots 2-3 years after a big boom then now would be a good time to buy a few proerties that are maybe just not positivly geared knowing rents will rise soon.
I feel rents have risen only 10-20% sine 2002 and most property has at least doubled.
So things are out of wack a bit .
Any thought on this?Booboo,
I don’t know where you get your information, but I suggest you recheck your source as your speculation and data analysis is grossly out of whack!!! Anyone who knows the property market will tell you that rental yields have in fact declined significantly in the last 5-10 year, and at best remained stagnant in most major cities.
Of particular concern, whoever told you that rents increase after major booms, is seriously IMO nothing short of a salesman/woman trying to flogg you a property using this fallacy as a major selling point!!!
Jo
Originally posted by resiwealth:
i’m getting tired of answering the same (80%) questions … sort of.Then stop answering them!!! Too easy!!! [biggrin]
If people are too lazy to make use of the “search” function on this site, what hope do they have in making educated investment decisions, aside from picking the brains of people like you and me in the hope that we will make such decisions for them???
Resi, when you’ve had enough, like most of us….you’ll stop answering. Thesedays, I still reply to PMs and emails, but in time, this too will wear thin, and I will resort to disenabling both functions.
I’m a great believer in not feeding someone a fish to satisfy their appetite for one day, but rather, teaching them to fish for themselves, and sustain their own future.
Jo
Hi Summer,
Yes I know Gould Street, but not being a “local” I was not aware of it being referred to as “long island”….thanks for the lesson. My understanding is that anything on beach side of the Nepean (which obviously includes “long island”) tends to have higher growth potential, but equally higher price tags. Nonetheless, not all “beachside (of the Nepean)” properties cost mega $$$ and there are some that albeit old and in need of TLC, are still reasonably priced.
Good luck in your quest!!! [biggrin]
Cheers,
Jo
Hi Summer,
If you do a search under Frankston I think you will find a thread or two which people such as myself, Yack and Richmond have contributed to, which detail some of the pros and cons of Frankston & Pennisula (bayside) suburbs.
I myself have an IP in Frankston Heights, and believe that with both the new Marina in conjunction with the Mitcham to Frankston freeway will see huge change for the Frankston CBD and surrounding suburbs. Remember also, that any property near water is always worth considering.
I have included a few links that may help in your reserach of the Frankston area; I trust they will be of interest.
http://www.id.com.au/frankston/forecastid/default.asp?WebID=10&MnID=1&PgID=1
http://www.id.com.au/frankston/commprofile/sitemap.asp?WebID=120#AreaLinks
http://www.dse.vic.gov.au/planningschemes/
Frankston has been tipped for some time as one of the next growth areas, however this doesn’t mean that all parts of Frankston are a “good buy” hence if you do decide to buy there, choose wisely and only after extensive homework. Be aware that Frankston North, albeit still very affordable, is still largely Ministry of Housing properties, and as such growth will be actively slower than say sections like Frankston Central and/or Frankston South.
Cheers,
Jo
P.S. Long island??? [blink]
Yack,
Why pay for landlords insurance for the sake of public liability which is part and parcel of most building insurance cover???
You could be saving yourself some money.
As for rent defaulting, I don’t take out landlord insurance solely for this reason (in fact, I could not care less about this aspect) it is more about “malicious damage” which many insurers do not cover, or if they do, it is not adequately enough for my liking.
Cheers,
Jo
Originally posted by wayneL:Serious? A tad off ridiculously overpriced isn’t bargain basement.
Even Aussies 30% still won’t be bargain basement.
Reasonable value maybe, but not bargain.
Okay, what in your opinion is “bargain basement”???
How LOW would you go???
But I take your point, prices were over inflated, so the “correction” is bringing property back to more realistic (depending on who is doing the interpreting here) figures. However, let’s assume that a house over blown to 400K, now selling for what you and I as investors would like to see as the starting point of 280K….(oh yeah hang on, that isn’t good value right?) ok let’s pay 200K…50% red spot special??) and then in 10 years when property approx doubles it will go back to being worth 400K. So in 10 years we have come full circle (but on a more “realistic” note)….are YOU serious???
I am an investor Wayne, not a joker!!!
I am not so naive as to think that I will be able to pick up a property, which or may not have experienced an over inflated value price, for the same market value that it was achieving 10-15 years ago….such an expectation, albeit would be absolute paradise….is not within the realms of possiblity/reality, and is IMO nonsensical to say the least!!!
But hey, if you can do it…I take my hat off to you!!! [specool]
Cheers,
Jo
Originally posted by Greg F:I’m thinking of a few scenes before those comedy classics, when the father made his daughter stick her backside out the back window to go to the toilet? Ass out in the cold indeed…..Very, very funny.
Can’t think of the first one off the top of my head, but the one mentioned above I watched only recently yet still can’t think of the name [blink] something about a race…yes it was very funny; loved it!!!IMO? = In My Opinion
SANF? = Sleep At Night Factor
Did the cops get them? Any prosecution? Or did they escape your vengence with some lame excuse?
Yes they were prosecuted and jailed (not for long though; I remember thinking they would be out in less time than it would take to build my new home) [glum]Can I be cheeky and suggest that your maths is a bit skewed? I KNOW you’ve got more than one property in your portfolio Jo (congratulations!) Surely all of us have got to do our actuarial calculations like the insurers do (ie, over the long term, and across our whole portfolio). We can only beat them by doing it the same way they do, right?
Yes Greg you are quite correct, and yes the figures were relative to ONE IP, and that when you do the math for “multiples” it adds up to a pretty penny.Okay chief, let’s run with that…..let’s assume UN-AVERAGE investor with a sizeable portfolio of say 20 x IPs @ $220 each annually x 20 years…shocked2]WOW!!! Yes it’s a sh**load…a staggering $88k…(or a nice little deposit on another IP, if not another IP depending on where you buy) but don’t forget, insurance is a claimable tax deduction, so that changes things slightly.
When you are calculating cost of annual premiums for multiple properties don’t overlook their tax deductiblity (tangible savings) as well as the obvious SANF (non tangible saving, to one’s sanity!!)[wacko]
It is always easier to see the advantage of money saved while all is going smoothly, but it’s only when your hand is forced into your pocket that you really appreciate the benefit of having stitched up the lining in your pants early!!!
But at the end of the day it is up to the individual; the ball(s) are in your court; play it as you see fit!!! As long as you play by the rules that satisfy your peace of mind, then you are a winner every time IMO. [sunny]
Cheers,
Jo
Hi Greg,
Long time no speak!!! [biggrin]
Okay okay, back to business…..with regard to landlord’s insurance and the question of “is it worthwhile”??? Let me paint a picture for you:
I was an 18 year old kid eager to tissy up her first property (initally PPOR) thus spent a fortune restoring the old girl back to her original glory; it was National Trust material!!! Anyway, after a while I decided to keep moving forward and turn it into a revenue generating IP to recoupe some of the money poured into it. So far, all sweet right??? Wrong!!!
First lot of tenants ever, and just my luck, I landed the tenants from hell who after much legal intervention I finally managed to have evicted, but not before they took it upon themselves to leave me a parting gift…by totally trashing the property, and I mean REALLY TRASHING it!!! To the tune of 11k and whats worse, if that wasn’t bad enough, the next day they came back and finished the job…torching it to the ground; it was a total write off!!! [bawl]
Needless to say, building insurance covered the fire damage and most of the internal fittings / fixtures but not the malicious damage/vandalism which meant I was going to have to cough up the difference of about 9k!!! [blush2]
So now you tell me…that is, let’s do the math:
If I had paid (lets say as per Flash’s example of) $220 per year x 23 years I would paid approx. $5060 which is still alot less than the 9k I had to fork out. Furthermore, not only would this cost have been considerably less (as the premium would not have been 220 then) but I would have been even better off because the lost rental income for (at least part of) the 6 months would have been reminbursed by the insurer.
But hey, I know you’re thinking it only happened once in 23 years of investing; so guess I was lucky (although I didn’t feel so at the time). IMO a small premium like $220 per year is good value for my peace of mind (SANF). After all, it only takes one major event such as this, to illustrate the value of adequate coverage.
To that end, if you are going to be complacent for the sake of saving a few dollars, then that’s fine but just remember, don’t bitch about it later when (and if) tragedy strikes!!! Remember too that you are playing russian roulette, and that the larger the portfolio the greater the risk exposure which in turn can leave you with more than your ass out in the cold if the weather changes!! [eh]
Cheers,
Jo
Murph,
Did you inherit the property??? [blink]
Sounds like something I was told back when my mother passed away, and solicitors threw this “2 year period” at me during probate stages of settling her estate.
If so, you may need to check with a legal eagle, as I believe the 2 years has been reduced to just one.
Cheers,
Jo
Congratulations LifeX,
At least you got off your butt, did your homework and PURCHASED a property, which may well be worth less (careful how you read that) in 2005 (who is to say for sure) but sooner or later, IF you have done your homework and investigated adequately its growth potential; you should end up the victor.
My sincerest congratulations to you……Well done!!! [thumbsupanim]
Jo
