Forum Replies Created
Foundation – I see exactly where you are coming from, I am just trying to look at things from another perspective.
In regards to your question:
I am not necessarily looking for massive capital growth or even cashflow returns, to my way of thinking, we as investors aim to generate wealth using Other People’s Money (OPM). Let’s say an investor buys a property for $100k (to simplify things). He puts down a deposit of $10k. He borrows the other $90k on a 25 year loan. I know there are investors on here both for and against positive cashflow over capital gains, so lets say the IP starts out -geared and at the end of the 25 year term it is +ive cashflow, but overall it is neutral. The investor has not made a single dollar in the way of cashflow, but he’s not out of pocket either. Let’s also assume that the property did not grow in value, not one bit. So at the end of the day, our investor has a $100k IP that he paid $10 grand for. If he did this 10 times, he has paid $100k for $1m worth of property, and what would be earning a relatively comfortable income for many people, even though his property did not grow in value (CPI adjusted) by the 1.9% we have seen in the last 30 odd years.Age doesn’t negate effort – you can never be too young or too old.
Foundation, you raise some interesting points. BUT, you again revert to averages and overall results and statistics – with direct reference to Melbourne. I don’t see how the AVERAGE CPI adjusted growth rate of property in Melbourne over the last 33 years can have any impact on a single property in that market. It would mean absolutely nothing to me if I were to purchase an individual property in Melbourne.
To my way of thinking, averages are for average investors.
Age doesn’t negate effort – you can never be too young or too old.
Hi Kirsten, and welcome – I am currently going through the purchasing process on my first place which I will initially live in to get the FHOG. These are some of the costs involved that I know of: (They will vary depending on a number of things – mainly purchase price)
1) Stamp duty – NIL (only if it is your first home purchase in NSW.) I understand there are similar concessions and discounts in other states.
2) Building inspections about $150, (I think) depending on the builder and the property.
3) Solicitors fees – between $1500 and $2000 for an average contract, but can be higher depending on purchase price and complexities in the sale contracts.
4) Lenders Mortgage Insurance (LMI) – I am not completely sure how it is calculated. Obviously based on the amount you have to borrow, but I would suggest speaking to your bank manager or a mortgage broker.
5) There is often a loan application fee – can be huge or it can be nothing. This pays for things such as the bank valuation on the property you intend to buy etc. I think this is around $600 for a loan I am looking at, however, the interest rate is lower than most.These are just a few – I would consult a mortgage broker if I were you – they usually charge you nothing for a consultation and they have access to heaps of different lenders.
Age doesn’t negate effort – you can never be too young or too old.
I know I am delving into what could be a very “edgy” subject here, and leaving myself open to a bit of criticism. I am, however, quite comfortable with this for a couple of reasons:
1) I don’t actually own any property yet, so I’ve got nothing to lose.
2) I am keen to learn, so I’d like to open myself up to the views of people who are already at the point where I want to be.Of course, as has been stated, you place yourself in a good position if you are able to buy an asset at a low price and sell it much higher – that is commonsense. I do not, on the other hand, see any reason for investors to completely abandon the property market or even stop purchasing more properties.
There is always going to be a “general” consensus about the state of the market. i.e. – rising or falling, good or bad, however this doesn’t mean that there are absolutley no more good deals out there – whether you are looking for high cashflow or high capital gains, or even both.
I just don’t agree with the idea that investment decisions should be made purely on the “overall state of the economy”. Like I said before, there are so many individual properties out there, owned by so many different individuals, in so many varying circumstances that there will always be one good deal on the market. On the flipside, there will always be someone out there in the position to take advantage of that opportunity. If that person is to be me, I don’t wan’t my decision to be clouded by an article on the “general” state of the market.
Age doesn’t negate effort – you can never be too young or too old.
Thankyou for your interesting and varied responses. In a nutshell, what I was trying to get at was that IMO it shouldn’t matter too much if you buy in now, because (if you are a long-term investor) it’s unlikely that you are going to want to sell any recently purchased property in the next few years anyway. A few years during which property prices are expected to receed a little, or remain flat at best.
Woodsman, I cannot agree more with your comment about emotionally charged headlines about the state of the market here and now, and their ability to generate sales. Especially when it comes to the tabloid papers.
Age doesn’t negate effort – you can never be too young or too old.
Thank you Leila for your quick reply.
One thing I have noticed, however, is that, after a couple of days I have not received a “yes” or “no” common-sense response to my inquiry about my chances of gaining finance, or why a colleague (who is under the same employment arrangements) is able to do what he has done.
Perhaps I should change my profile signature to: “Why is it called Common-Sense when it is not common at all?” (Especially when it comes to lending “specialists” at the major banks.)
I know this sounds a bit negative, but I don’t apologise for that.
I’ll achieve my goals sooner or later, like I said, I’m just too impatient. So, to anyone who has been in my predicament before, I promise that I’ll one day make the banks wish they’d given people like you and I a lot more money, a hell of a lot sooner.
Age doesn’t negate effort – you can never be too young or too old.
Hmmm, Thailand – if you’ve got enough money for the local constabulary, there are no Government Regualtions!!!
Age doesn’t negate effort – you can never be too young or too old.
You’ll only need contents insurance on the stuff that you own – if you are renting it out fully furnished, then I would say full contents insurance is a good idea.
Landlord insurance is like most other forms of insurance – it is not necessarily a legal requirement, but it’s a bloody good idea.
Age doesn’t negate effort – you can never be too young or too old.
Didn’t you just hate it when you were a kid and you’d get a toy for Christmas that required batteries, but alas, no batteries to go with it. Then you’d play with it anyway, you’d get over it by the end of Christmas Day, probably break it on Boxing Day and then by the time the shops are open again and you can go and buy some batteries, the thing didn’t work at all.
P.S. I see I have an extra star next to my name – I take it that’s my Chrissy present from Steve and Dave. And it doesn’t need batteries!!!
Age doesn’t negate effort – you can never be too young or too old.
More to the point please – it’s such a hole it echoes!!
Age doesn’t negate effort – you can never be too young or too old.
Hey Devil,
You could PM me with the area – after all, I live in a place called Gumly Gumly (yes, it’s out in the sticks) and I know for sure that there are a lot of pre-conceived ideas surrounding here. With 4000 people it has to be a step up for me!!!Cheers,
SpankAge doesn’t negate effort – you can never be too young or too old.
Can I suggest you persist with the AFR and get to learn those big words – they are straight out of the dictionary of the filthy rich. Even if you don’t understand everything the articles are saying, just familiarising yourself with the concepts might just put you in a better position one day.
Spank
Age doesn’t negate effort – you can never be too young or too old.
I reckon buy long term put options in listed property companies. Like you were saying aussie – the property “bubble” is more than likely going to pop at some stage in the next 5-7 years, (Probably before 5 even) and the sharemarket has to s@#! itself at some stage – it always does.
Just my thoughts, whaddya reckon?
Spank
Age doesn’t negate effort – you can never be too young or too old.
I think it depends on how rich you want to be – the more you know about various types of investment, the higher the chance you’ll make a lot of money out of them. On the flipside, the less chance you’ll get burned. My father spent $11k on ONE futures trading seminar. And that wasn’t the most expensive one available!! I wouldn’t put a specific figure on educating yourself – I would be more inclined to simply be learning all the time. View topics on the forum and then study them more. If you are just starting out, people are generally happy to give you advice for free, as I have found with many finance specialists and even solicitors.
Age doesn’t negate effort – you can never be too young or too old.
I have done a little bit of labouring here and there for a builder/landscaper. It is an excellent way to learn, not only the nitty-gritty of using the equipment you’ll need, but also how to avoid being ripped off by tradespeople. Not only did I learn a hell of a lot, I got paid to do it. As they say, “more than one way to skin a cat”
Cheers,
SpankAge doesn’t negate effort – you can never be too young or too old.
SKM – may I suggest you get a FT job somewhere, anywhere. Find the highest paid job you can get, but remember, it’s not what you are earning – it is how much you can save. You will undoubtedly have to make sacrifices. I am saving a massive proportion of my weekly income because I am still living at home, which I assume you are too. I say full-time because I am working on a casual basis, and while the money is good and I am getting regular shifts, I am struggling to get finance to buy a property.
I think you should read “The Richest Man in Babylon” by George S. Clason and as many property investment books as you can (Steve McKnight, Peter Spann, Jan Somers etc.) If you are on a really tight budget (which sounds like the case) you might be able to borrow a lot of these books from your local library.
Cheers,
Spank.P.S. Please keep me posted on how you go with everything – finding a job, looking for property, saving etc…
Age doesn’t negate effort – you can never be too young or too old.
I would offer $100k too. If you have read Peter Spann’s latest book, he says how he has seen many properties sell for much less than they were passed in at auction for. Staple a deposit cheque to the offer as well – just tempts the vendor a little more. If they say no, who cares? You’ve got nothing to lose and everything to gain.
Cheers,
SpankAge doesn’t negate effort – you can never be too young or too old.
crj, I don’t think lynchy was implying that country folk are slow – more to the point they are manipulating rental yields in an effort to sell their property to an out-of-town investor who thinks they are getting a cashflow +ive deal, when in fact the rent that specific property is getting is way over what it is really worth.
Age doesn’t negate effort – you can never be too young or too old.
Originally posted by marsden:What are your ideas on property investing in this atmosphere?
Since nobody picked up and answered this question for Marsden, I thought I’d throw my two cents in:
Buy nursing homes.Age doesn’t negate effort – you can never be too young or too old.
I doubt it could be that successful – with this whole craze about +ive cashflow properties, the competition for them would drive the prices up further. If you are prepared to locate these properties yourself and invest your own time doing it, you can find such properties for free over the net. Yes such a concept would be handy, but straniero, I think you would make more money buying such properties yourself, rather than listing them on the web for all to see. After all, if you’re going to go to so much effort creating such a database (ie finding all such properties) you may as well take full advantage of them yourself.
Just my thoughts.
Age doesn’t negate effort – you can never be too young or too old.
