Forum Replies Created
I absolutely agree, Devo76. I also dispute that having wealth over a certain threshold qualifies a person as an expert judge of the economy, or even as an expert at acquiring wealth. There is that old saying about wealth and dynasty. One generation builds wealth, the next holds onto it and the third blows the lot. Just because someone is "Rich" doesn't necessarily, on its own mean they are worth listening to or following.
I keep hearing this "rich people are selling…" claim. Can you tell me what substantiates it as fact? What are they selling? Is there really a conclusive movement to sell amongst the most well off people? Or are just some of them selling? Are some buying? What are they buying?
See, I see rich peoples real estate on the market (ie top end housing and holiday homes), and I can put forward a couple of solid possible reasons for them to sell, despite any dire prediction for the RE market:
1: Lending secured via the sharemarket. Falls in their equity level might trigger a sell in order to improve the debt:equity ratio. This may be voluntary or it may not.
2: Lower profits = less reason for tax deductible negatively geared investments like holiday homes, rural retreats and other tax dodges. No need for a tax dodge if you're running a loss, hey? Especially when consensus is that capital growth will return slowly, no ones expecting a RE rush or anything when the economy returns to stability. Housing is still too unaffordable to accomodate much growth in RE value without any growth in wages. (inflation…..).
3: Well aknowledged economic principles that during times of down turn, elite products etc suffer more than bread and butter products. IE Rich people probably don't just own their flash houses, but might also have a portfolio of base level renters. They know they'll cop a greater cap loss at the top end of the market, so they sell that now to mitigate losses.So my question is, how do you know rich people are selling now, what are they selling and what is there to suggest that this is proactive strategy rather than reactive damage control that any of us are capable of?
SRichard and Terry,
This is what I was sort of getting at, though I thought you might be able to explain a little better than me about how this can help achieve the positive cash flow goal better than paying all those extra payments off the actual loan. I'm aware of the theory but haven't used the I/O structure myself yet, so didn't want to give the wrong information.
SYou have a bit of land for sale in Townsville, don't you? Where is this one?
Sno, not yet. But we had some fencing that was made out of asbestos sheets. Gave me the willies!!
SI shy away from such developments in the Townsville CBD when the retail heart there is dead, the best shopping is in the suburban shopping centres, and the hospital is a fair hike from the CBD. I'd be more interested if you said Douglas or Aitkenvale.
SBuilding equity by repaying debt quickly is, I think, always a smart move. However, it won't necessarily result in positive cash flow all on its own. You should talk to a finance broker about your plan, and get some advice on the best way to accomplish what you have outlined.
good luck
sMMmm. Personally, I think lying to the banks is pretty dangerous. Your lender is using their own formula to work out how much they think you can afford to repay. Are you better at working out what you can afford to repay than they are? There are lots of ways to get more money than the bank wants to give you, but when the bank starts saying NO, that really should raise some warning flags for you. Are you trying to get in to more debt than you can really afford. Who valued this house at $330K – a RE agent or a valuer. A RE agent opinion isn't worth anything in your situation. Only pay attention to the opinion of a valuer. Even they can be wrong, but at least they tend to be conservative, rather than over valuing the property.
Sometimes, when the world makes a plan too hard, it is trying to tell you something. Reasses your plan, your options and your affordability. Perhaps you should just pay a bit more off your mortgage, or sell your unit and buy this house. Your mate's offer might be attractive, but what's the point if you bury yourselves into more debt than you can comfortable afford. Rethink.
STry David Koch's website, somewhere on Yahoo7. He has a heap of info for small business there. I've never really used websites re business, though as I have a fair bit of training and experience myself. The ATO has some useful pages explaining your obligations under GST, Pay as you go withholding and superannuation law. If you buy a business, you should be able to get a fair bit of help off the person selling it. Be aware,though, there is alot more money in building a business from scratch, then selling it, than there is in buying and running a business.
SDon't either of you go thinking you can plan the kids thing quite like clockwork! Kids are great, I absolutely agree that it is best if you don't have to go back to work full time when they are babies. We've been very lucky in that regard. But when child no 1 is 2 or 3 years old, you may be thinking about child no 2. and so it goes. Make the best decision you can today for today, plan for thhe future but remember. Man (or woman) makes plans and God laughs.
SBTW – I love business. If you've got a good idea, do alot of research, build a business plan and get some good quality professional advice. Think about market timing for that too – just as important as for real estate. My husband and I have our own business and a young family, and it all works really well.
spagey23 wrote:things are yet to bottom here, but with jobs losses I can see some desperate sellers in the next year or so.Here is your answer. You see, your fear was not just being a big wuss, it was your education kicking in. Good on you.
SInteresting. We haven't deliberately changed our friends, but we have noticed that success has changed our friends. I've noticed that we are closest with those friends who also have their own businesses, and who are pretty savvy financially. And friends who have not had their own success (with one notable exception), have disappeared from our lives.
SHi Nic and welcome,
Market conditions are somewhat dependent upon where you are. Personally, I'd wait a little longer, keep watching and pay off as much of your PPOR as you can. The market bottom will come at a different time in different places, and for different classes of real estate within the same area. It is pretty hard to pick when it is, easier to see once it's past (naturally). Wait, unless you can find a property that is well enough positively geared to put your mind at ease. Young marrieds? What about when you plan kids? What if one of you loses your job? Follow your gut. When the right opportunity comes up, you'll know it and you can pounce then. Better to miss the bottom by a little than to jeoporadise your situation by getting too highly leveraged now. I reckon you've probably got a bit of time up your sleeve. I'm keen to buy too, but waiting. The good value deals are too few and far between. I'd like to see a little more pain out there, and a little more value, before I sign up again.
Good luck
SFair enough!
We have a young bloke who sort of works for us sometimes. He's not even 20, drives an old Landcruiser ute. Just bought a brand spanking new 5.5 metre plate boat. He lives 500km from the ocean. Boat would have cost over $30K.My sister, mid 20's. Earning 98K, single, no kids, share appartment in Melbourne. Wastes all her money on her racing car. (Proper track racing licence and everything).
Our friend, early 40's, mine employee (or was), redrew the equity on his home as soon as it got to $20K and bought a Harley Davidson motorcycle.
Ahh, the boom time stories.
Thanks for that Scott. I'll have to find out if similar legislation applies in QLD ( I can only assume it does). I wonder at what point it become necessary to comply with such legislation? My idea is to provide something that really targets that market and meets their needs, but I may not choose to rent to the over 55's solely. Perhaps I'd like the option of putting someone else in one day. It's just a seedling idea at the moment. I still can't make up my mind which hospital to centre things on.
SYeah, he's got me thinking how I could carve out a similar opportunity for myself. But then, success doesn't necessarily come from copying other people.
My Dad gave me some great advice when I was choosing a degree and a university. He said to choose something that broadens my options. I ended up studying a B Com at USQ via correspondence, maj accounting, and left early with an Assoc Deg in Commerce. The course covered a wide range of subjects, and as a business owner I use that broad introduction to law, marketing, economics, human resources, finance, and my more in depth education into accounting all the time. The degree would have given me choices between Accounting, and related roles, and a wide range of management roles, as B Com is a popular undergraduate management course. I'm very glad that I didn't major in Human Resources, or Marketing, because my accounting ttraining is more valuable to a small business owner than specialist HR or Marketing knowledge (the introduction I got was very useful). Choose a course that gives you choices. Finance and accounting and economics are useful fields for any business person. Double majors make you a little more marketable. Eg, B Comm double maj accounting and IT is a good combo for employment or self employment in the IT field. Do you want to be an employee or an employer though? My course gave me excellent tools for use as a self employed person and an investor. When choosing an undergraduate degree, choose something that opens opportunities for you, rather than shoving you down a narrow career path. You can specialise more distinctly with post graduation qualification when you have a better idea what you want to do with your life, career etc.
cheers
SIt has been said in t he past that with a rapidly growing retired population, who are living longer and have different needs, requirements and wants than traditional retirees, there exists enormous potential for people who are able to think outside of the box in terms of property solutions that cater to this market. While I'm not interested in nursing homes or retirement villages in the conventional sense, surely there are other accomodation types that might suit this growing market. One idea I have is to hand pick a duplex (or maybe 4x2bed or something similar) in the suburb next to the hospital, quiet suburban street, small backyard and shed for each unit, good security, close to amenities, fixtures and fittings to suit aged and disabled people. Taylor make some accomodation for the group of people who are not necessarily ready for the nursing home thing, but no longer want to maintain a full size property. Other like minded tenants / owners in the same complex can only be a good thing for older people. Security is important, especially as a large section of this part of the population travels alot and needs to feel like their home base is safe while they are away. I'm just not sure if I should pick the suburb next to the private hospital or next to the public hospital. Funnily enough the real estate is cheaper near the private hospital. Comments on my idea, and other ideas about how to cater for this market outside of the conventional nursing home / retirement village would be terrific.
SWelcome Clint,
Congratulations on your success.
S
