Forum Replies Created
reeco : don't buy before january 2009. By that time, lots of mortgages have fallen, and we'll have seen some increase in foreclosures. Basically a good time to buy is when noone talks about real-estate anymore, when everyone's down and noone is interested in RE because almost everyone they know has been punished for lending too much : Then it's a good time to buy.
Basically another way to find out when to buy is to find a nice area you like, and when the amount of houses being offered is on the decline, but houseprices are still low, then you can start looking to buy something.
don't EVER get in a financial adventure with family.
And in this time of crashing houseprices, it's even worse.Don't do it.
elkam wrote:May I ask what sort of investment property you have/had in Holland Scamp.I have a Type A PI in holland ( a safe, mostly paid off mortgage ) which I rent out to students.
I have evicted the students and am selling now, as the bubble is about to deflate here in about a year or so. We're seeing a final rush in the property prices going up ( quite usual in the end of a bubble ) before the bubble completely dissipates. I want to have my money in gold before it turns to dust.And yes, the Scamp on GPHC is me. Read some of my posts there to get a good impression of what is going on exactly. It's never a bad idea to get views and opinions from both the Bulls and the Bears.
I'm a bearish investor , I know when to pull out, although this time is the first time that I am actually a bit anxious about being able to sell the house. Which is why I sell it this summer instead of december ( when I am expected to come to Australia to buy a nice property for a deflated bubble price ).It's a good idea for the readers on this forum to go and have a look on the 'other side' like we from GPHC do on here and somersoft forums :
http://www.globalhousepricecrash.com
Read the posts there, and please feel free to reply to our posts, we love to hear the bullish side of things, we hardly ever see a bull anymore.
Have your house valuated by at least 3 real estate agents. Don't tell them you want to sell it ( because they won't be honest about the real price ) , just tell them you want to use the equity for a new house.
Chances are that the real estate agents will be honest to you and tell you that your property 'might devaluate' to 20% in the short term and advise against getting equity. Also talk to your bank before you do anything, ask them if it's a good idea to buy a house from equity at current interest rates. Don't 'just buy' , get informed about the real value of your house, not what a real estate wished he could sell it for ( they earn more money if they sell your house for more money ).Especially talk to the bank, they usually love it when you come to them to ask them for advice, instead of morons coming in with huge plans and then 2 years later have put themselves ( and the bank .. ) in debt unnecessarily. Don't speak with a housing guy at the bank, speak to the mortgage guy. ( usually the ones in black suits in the back of the bank in little offices with Ikea furniture and a coffee machine on the desk ).
If the bank truly believes in you, and is happy to give you a loan on your equity in these circumstances, then you should think about orienting on the market. If the bank is hesitant or tell you that it's better to wait a little bit before you do anything, then take their advice and wait.
If you decide to take up the equity, then get a 10-year fixed mortgage rate. This rate will reflect the risks of the future. The more risk, the higher the interest rate. There's a reason the interest rate is high at the moment : There's big risks in housing investments at the moment.
There's also the risk of inflation , which might cause you to get unemployed if it gets bad. Talk to your bank, have a coffee and take your time to get a real valuation. Maybe even get your house details and the details of the investment property with you : the more you discuss with your bank now, the less trouble you might get into at a later stage. You won't make friends with the bank guys, that's not their business, but you might get their support because they see you as a sane and trustworthy, smart investor, which really helps in the long run.
Oops.. didn't read this part : He has no other assets, but has credit card and tax debts of $20K
Omg… tax debts ? Credit card is bad, but tax debts are as bad a hitting a police officer, it will get you in trouble fast and it only gets worse : you get on the taxpayer blacklist. There's no reason he should have a tax debt, if he owns a car and boat and stuff, SELL IT. If he needs it for his job, buy him a second hand car, or a bike.
Oh you're in so deep that you will be lucky to get out of it at all. Why do partners get themselves into so much trouble ? I'm sure he did it out of love for you.You obviously aren't compatible with him. If you can't agree with him on a financial side, break up. I had the same with my ex, and my new girlfriend had the same with her ex… it's a terrible , terrible situation to be in , people spending YOUR money from YOUR investments on silly things like cars and luxury items.
They are living on your investments, leeching on you. My guess is , you haven't been married to him for long, because if you were you'd already have divorced him. Sorry for my utterly direct posts, hate me if you want, but please just take my advice and save yourself from the miserable position that both I was in and my girlfriend were in before we both took charge and chose for ourselves instead of our leeching exes. We're very very happy together, we agree on everything , both financially and in everything, in 3 years we never had a fight about anything, and I am sure it's because we don't have financial troubles at all.
I wish that you make the right decision, get your life back soon.
Good luck Lisa.Well if he's your husband you're in deep trouble. If he can't pay , they will have YOU pay for him, it's really as easy as that, no questions asked. If he gets in debt, there will be no questions asked to you, you will be foreclosed together with him. The joys of marriage.
He sounds like an irresponsible money-spender, the type that's usually female. A personal tip : if he's on drugs or alcohol, ask for a divorce now that you still can. Back to the housing issue : Judging from his comment about being selfish, he most probably will take you down with him. Beware of people telling others that they are selfish , usually they tell this because they themselves are selfish.
I presume his uncle made up a contract about those 150K , and NEVER.. EVER … EVER… NEVER !!.. get financial business in the family. It *WILL* lead to a breakup of the family. That's another tip.Anyway, that's too late now.. he will need to cough up enough money to pay off his house. There's a reason why the bank didn't lend him all the money, it's called "risk factor". If the bank doesn't trust your hubby with that much money, then you SURELY should not, because banks usually look on the bright side of things, and usually are wrong( they lend too much ). So yes, you're in trouble.
Sell the house if you still can, put it on the market for 390K instead of 450K , so it sells quick and gets your hub out of debt.
In 1 year from now, you don't want to be reading this if you haven't sold.
Houseprices will not go up, more and more people have the problem your hubby has : fixed rents going up from 6% to 10% late this year or early next year. This will cause a flood of foreclosures, people in the same situation as you are in.
NEVER .. ever put yourself in this position.
Not making profits is less bad than making lifechanging losses : Sell the house for 390K, take the WINNINGS !!.. ( you earned 40K on it, be happy with it ) and don't go for 450K just because you think you can take more winnings : you won't.
Get out of trouble before you're in too deep : Now the choice is still yours, soon it will be the banks choice, and believe me : they won't be as nice as I am to you.
Show him this post , show him reality, tell him to take his profits and get out of the housing business until the crash is passed, then get back in for a cheaper house.
oh my god this is the dumbest thing I have ever seen anyone done. You are food for the Ponzi scheme, it's what the whole scheme is relying on. What do you want to do man, buy a median price for 400.000 at 10% interest ?… that's 40.000 per year just paying off rent. Let me calculate it for you , in the WORST of cases ( which you SHOULD take as the basis of any healthy investment :
– You will become unemployed within 2 years
– Interest rates will go up to 12%
– Your house will devaluate 50% in 2 years.
– Your house gets squatted by drug addicts and they burn the house down.So , from this perspective, do you think you would buy the house ? No
Now, from the absolute BEST perspective you possibly can get ( unrealisticly positive )
– you earn 50.000 p.a GROSS of which you will keep 35.000
– you spend 2000 per month on food and taxes etc ( this is very low )
– your house will devaluate only 30% over 2 years time.Let's say you buy a shithole instead of a median house, for 200.000. This is the shithole of shitholes, prolly you will have to evict the drug addicts from the place and replaster the whole place, and if you're lucky you won't have termites. That's 20.000 for an absolute dump per year just paying off rent.
You earn : 35.000
You pay : (2000×12)+20.000 = 44.000In other words, even in the BEST of BEST cases, buying the cheapest place available, you still cannot afford the place. In the worst case, you will be bankrupt in 1 year even.
Just look at it realistically, don't just buy what these investors tell you , they will tell you you get tax benefits and rent incomes : that's bollocks : Take my advice, rent , don't buy yet.
Read my post about the crash. Put your property on the market, get a valuation, and end your adventure there when you get a valuation of 20% less than it was worth 8 months ago.
Now is the WORST time to buy. It's crashing, and still has to go 50% down before the end is in sight.
Don't buy. Read the news… read up on the crash, get realistic valuations and remove 50% from that value in order to get a near real value of a house. So : Valuation – 50% = roughly correct price.
My post was made to warn you about a coming crash. It's already happening just take a look at the news items : – Sydney house prices dropped 50% ( this is actually not true, they only dropped 20% )
– Worst is to come ( talking about the crash )That's 2006 data. Plenty of houses unoccupied. Plenty of houses , yet there's a shortage.
If you want the 2008 results, you take immigration / emigration / deaths / births etc… plus 100 more factors and you got your data. And.. wow, no housing shortage.the 'shortage' is a rampant lie, as a last resort to stop the crash. In effect, it will make the crash worse : Rudd is about to build more properties even. Crashing investors sell off their holiday homes, their unrented places etc… Australia doesn't have a shortage : it's got a massive oversupply.
Ofcourse, everyone wants a CBD unit , plus a summerhouse ON THE WATERFRONT. Yes.. then I can see some people 'think' there's a shortage. There's a shortage of Ferrari's too, everyone wants one but they simply aren't enough of them on the road : A shortage ?.. not really.
I'm not bearish, we're past that point : I'm right.
It's already happening, just look up news.com.au.
If you just put your moneyinto property , then I'm sorry for you, because you just wasted a lot of money.If you haven't : Then take my advice : do NOT buy yet, save your money, buy later ( January 2009 ) and offer only 30% in January 2009.
If you buy now, I suggest you ask at LEAST a 60% discount , because that's what we're talking about : a crash. A correction..
Don't worry , I know a lot more than you think about the australian housing market. People are people.
Yes , I know your goverment is corrupt and your housing minister has 14 investment properties
Yes, I know you think (wish) there's a housing shortage, but in reality there are 800.000 empty dwellings. It just shows you haven't done research.
Your market is just like any other market, it goes up , and it goes down. It went up twice as hard as it should possibly have gone without government help ( tax incentives etc ), it will fall twice as hard as anywhere else.
Your market relies on money from outside coming in and buying the expensive houses. Poms are having a house crash as we speak, they won't buy the houses… who will ?
Prices won't crash as long as people don't sell. Ofcourse, we could all together agree with eachother that we don't sell ANY houses for less than 1.000.000, however that doesn't work when people start 'cheating' their way down because of panic.
The housing market in Australia is not a supply/demand market at all, it's a fear/greed market.
In a boom ( upward cycle ) it goes like this :
The fear of not being able to own a house, the fear of missing the boat and being outpriced for the rest of your life, the greed from sellers who want more more more, the greedy who were too eager to make profit too fast and too irresponsible.
In a crash ( downward cycle ) it goes like this :
Sellers fear not being able to pay off the interest rates, initially they fear not being able to sell, this turns into fear of losing money, this turns into fear of going bankrupt. The buyers on the other hand are greedy : They want MORE discount, lower prices, better locations and better quality houses.
Which cycle do you think Australia is in now ?
My harsh comment was made to grasp people's attention. It did, and I'm sorry if I offended some people.
I'm sure there's smart people around here, I'm a PI myself, I'm about to sell my 'boomed out' properties in Holland where a boom at this moment is unlikely ( prices haven't boomed enough to cause people to be in massive debt ).
However , unemployment, high fuelprice and the prospect of a new war between USA and ( fill in random oil country like Brazil / Venezuela / Iran etc ) will not yeild more revenue on the short term.I'm on my way to Australia myself, hence my interest in Australian property, and was shocked that people see 8 times wages as 'normal' to lend a home. It's not : It's exhuberantly much, bordering on silly.
I'm sure people on this forum are a lot smarter than that, but having viewed 20 overenthousiastic posts I didn't want to reply to all of them that making profit on anything ( let alone a crashing housing market ) is a risky and dangerous area.Don't stick all your money ( and your future ) in something that you haven't researched properly and is bound to crash soon : That's all I wanted to say. But saying it like that , it would have gone unnoticed. It's not allowed to go unnoticed anymore.
As a tip : property is worth 4 times the person's average wages per year.
So if you earn 50.000 dollars, your house should be worth 200.000.Seeing that average property prices are 400.000, and average wages are 50.000… It's more than evident that the market is 50% overvalued. Take this from a seasoned property investor.
Another free tip : the real value of your house is what you can sell it for : Not what banks tell you.
If a fool buys it for 500.000, then it does NOT mean it's 'worth' 500.000. It just means it's worth whatever the NEXT fool will give you for the house ( that might be 1.000.000 or 200.000 ). Seeing that fools are running low on money, you can bet that property prices aren't going up , but down.Like I said, get the average wages of people living in an area, multiply by 4, and you have the average houseprices. If the sums don't add up, at least you will know which way the prices will go.
