A surge in property for sale I reckon. There's no way property will go up for 3 more years, they have already gone down 10% to 40%, and will continue to plummet. More and more for sale, very few buyers ( if any ) and when sold, they are usually sold at 10% under the discounted asking price.

Can you provide a link to the news item ? Or was it some spruiker TV commercial disguised as a news item ?

Property will not go up for at least 2010. The bottom will be around January 2009, and prices will only reflect this bottom around 2010 – 2011, and the prices of 2010 will only be reflected in 2011 / 2013.

Well, that's my personal opinion anyway.

Yes, a great strategy as long as the stock value goes up. What happens what the stock value goes down ?
You're basically betting on a losing horse in order to keep a dying horse alive.

Tam : Do you know what a covered call is ?… Do you realize the risks of it when stock goes down ?
Apparently not. The only thing you say is : they generate 3% on their investment each month.
What happens when stock dives ? ( I refer to something that happens every 7 years )
People take a nose dive.
I'm sure you will come up with another even more risky way to make money in order to keep your stock AND your interest payments up… but it's all ending soon m8.

It really is that simple. Just call the local bank in the town ( or close to it ) where your house is, then ask them where the mortgage-guy of the bank is. Usually they are in the local office ( 1 or 2 guys specializing in mortgages ) and sometimes they're in a big office in a bigger city.
Banks are made up of people. These people are easily accessibly, they love to help you , because that in turn helps them to earn money on you. Having a good relationship with your bank ( I have good relationships with 3 banks here in Europe, when I call them they recognize me, ask how things are going etc.. ) really helps in getting things done without the hassle of paperwork. If you are considered a serious investor, the banks will treat you real well, with open doors and few hassles. Ofcourse, if they think you're just a hassler or someone without money, then it gets harder.
Banks ( unlike individuals ) have more money than time, hence, you need to have money for them to give you some of their time. If you have no money, it can be hard to persuade them to give you their time.

What you should always do when you go to a bank meeting :
– wear a suit ( silly, but it's needed. It's like courtesy )
– be prepared, have all the papers ready, have your disposable income all set out on paper, ( this is what they are really after )
– In general don't waste their time. Time is money.

700$ a fortnight is 18000$ per year of loss.
Devaluation is about 2% per month now, so that's another 24% of 350.000 = 84.000$ loss per year
You're losing about 102.000AUD$ per year keeping a 350.000 house.

I'm sure in 2010 the house will go up again, but by that time you will have lost 204.000$.
For it to go back to old prices, you'd need to keep it about 20 years for it to become positively geared, all that time you will lose money.

I understand you say "we accept the losses" but 20 years of losing money sounds like crazy to me.
Save it up in an account, and you can buy a 1.000.000 ( million ) dollar house in 10 years, CASH, without mortgage. Just for selling now, in current climate.

Thinkruss :

Try and look at it from the other side. Don't start out with "I want a 4 bedroom home" but start out like this :

Figure out how much money you realistically could spend on a house, with mortgage. I think if you're a starter, this could be anywhere between 120.000 and 240.000 AUD$.
You can do a few things with this money :
– Find a fixer upper home.
– Find a townhouse with 3 bedrooms
– Find a cheap home in a bad neighborhood close to university or hospital or close to CBD.

Consider renting out 1 or 2 of the bedrooms to students of starter workers that want to live away from their parents but don't want to pay premium rents. You can ask 90$ for the room per week , and share bathroom and kitchen for instance. If you do this for 2 students, you can get 180$ times 4 = 720$ dollars per month. Another benefit is that you can ask them to share electricity / water and council taxes with you ( don't share the tax benefits though ).

Another thing you could consider is buying a bit bigger fixerupper home for 200.000$ and divide the upper floors from the lower floors. Put kitchen / shower etc both up and downstairs, make some outside stairs to the first floor and rent out the whole first floor for 200 or 300$. This way you have privacy, but share the mortgage.

You can even decide to stay at home while you rent out both upper and lower floor for a positively geared investment.

That's what I did when I started out investing in homes, I had 3 students for 6 years in my own home. It can actually be quite cosy ! Make sure you only get girls, and make up a clear contract that they can't make a mess in the place though, and no parties ! There's a lot of students who actually study and don't party, and they are all looking for places where they can have a good sleep and not the common studentparties etc.

Good luck.

You know about the new highway they are going to build in Ipswitch right ?
More traffic jams and more noise if you're close to it. ( see Sydney West suburbs scenario )