Forum Replies Created
You are right, James about there being a difference between falling prices and paying less than the vendor’s asking price. I’m talking about the overall pattern. When I was buying property in the middle of last year, I missed out at times because people were offering more than the asking price. I was doing well to get $5000 of the price of one property. I’m curious as to where I could get $20-30k off, even in a boom. Not in the feeding frenzy of the Northern suburbs! I had to look at property earlier and earlier each week just to have a chance. People were paying big money for dumps. My point is it was extremely hard to negogiate a discount because there was no need for the vendor to do so. There were people willing to pay the asking price and even more. I have monitored house prices in those same areas several times a week since January and there has been a downshift in asking prices, as well as a much greater willingness to negotiate.
Regards
teabagtedThank you HousesOnly and Chan$ for agreeing with me. People agreeing with me is my favourite sound. I’d like to add further comments/info. to support my belief that official figures for growth are unreliable. I know people in the earth moving business and they were telling me that before Christmas operators of earth moving machinery were like royalty, because there was such a shortage, i.e. there was so much work. Now there is a total reversal of the situation with many operators chasing one job. At the same time, I was told by a plumber working on new houses that he had more work than he could cope with. What does this mean? Digger drivers with little work and tradesmen with plenty? It means that there are housing developments still to be finished, however the fact that so many earth moving operators are out of work means that once they have completed the earth moving, there’s no work replacing it. The tradesmen still have work because that is the next stage of completion. The unemployed digger drivers are a warning sign. You will also find partly built houses that appear to be abandoned. The framework is up but weathering, meaning work has stopped on them. Some smaller developers may have decided to cut their losses.
This does not show up in the official figures. What shows up is that there is still building going on. What people don’t understand is that the new housing market does not come to a sudden halt when things go bad. Developments that have been committed to have to be completed, creating the appearance that rapid growth is still continuing. Once again, I realise that this is based on hearsay, but it is hearsay at the coal face.Regards
teabagtedOne thing to be wary of when listening to official figures is the fact that they are not based on last week’s figures, but on figures that may be 1-2 months old or older. During a transition period from a seller’s to a buyer’s market figures that old aren’t so useful.
People talk about Brisbane’s boom as a single entity, but of course different suburbs and locations boomed at different times and to different extents. Some hardly moved whereas others doubled in price. Some outlying areas boomed very late and for a short time. As for prices rising or falling, I believe they are doing both, depending on where you are talking about. I have definitely found prices moving downwards, in some cases by tens of thousands. However I believe in those cases, the house was overpriced in the first place. Too many silly, trendy people paid too much for their properties and created an expectation among their neighbours. The huge drop in prices for some properties is just reality setting in. They asre not bargains as such, so don’t get too excited when you see them.Regards
teabagtedI was talking to my brother, who has recently returned from N.Z. about the Auckland situation last night. He was telling me that while there has been a lot of growth in the Auckland market, the locals are still on fairly low pay and won’t be able to pay high rental prices. This means Auckland property could be in for some very heavy negative gearing. He claims that people who can’t afford the high rentals have already started leaving Auckland for outer areas and are commuting in to work. He also believes that N.Z. RE people are marketing to Aussies because they don’t know the market i.e. if it is such a good buy, why aren’t local investors who live there and can react quickly to a good deal, buying them?
In addition, he mentioned that the reason why some smaller cities and towns are so cheap, making them comfortably positively geared on paper is because previous landlords have had huge trouble getting renters to pay. When you think about it, when property is cheap, anyone with their act together can afford to buy. The renters are the ones living a day by day existence. They are the sort of renter who “forgets” not to spend the rent money. I admit this is all hearsay and opinion and so it’s up to you whether to believe it.Regards
teabagtedNot to mention that Noosa has a population cap which will help sustain high prices and push them even further in the next boom. Then there’s the fact that it has a north-facing beach, which means it is warm enough to have a tourist season even in early and late winter. (My kiwi relatives often go there in July to swim!). Noosa is unique. If you sell, you may never get in there again. You may also want to live there yourself when you retire.
Regards
teabagtedThis is a very expensive property for someone who is fairly new to property investing. If all goes well, you may make good money. However, if things go wrong due to lack of experience, the cost of the lesson may be high. You are faced with a common decision – do I have a go at the big money or do I do something smaller with less risk and try the big stuff later on, when I’m more experienced? I wish you success either way.
Regards
teabagtedI don’t know if your accountant knows a lot about property investment, but there are some that have it as one of their specialty areas. It may be best to find one of these. They may be expensive, but it is important to get it right. The benefits wills soon outweigh the cost.
Regards
teabagtedYou are correct. Paul in the new testament of the Bible said the love of money is the root of all evil. I found this strange as some of the worst crimes were committed by political movements, e.g. the nazis. Then I found out how much stealing went on during that regime. The nazis stole on a scale possibly never seen before. Grand theft and money making is true of many other people and movements that seem more about ideology than money. The Klu Klux Klan for example was very popular and quite respectable in the States during the 20s. They made a lot of money by selling memberships and cheap hand guns. So it seems when you see evil being done and it doesn’t seem to be about money, you sometimes have to look deeper.
I’m fairly sure that it was the hippies in the 60s who changed it to just “money is the root of all evil.” As has been said, it is neutral. The hippies were rejecting the values of their parents, many of whom had come from poverty a couple of generations ago and had fallen in love with how rich they could get.teabagted
I personally found Neil Jenman’s book very helpful to avoid being ripped off. I also established a good working relationship with a Jenman agent. His advice has saved me money. He recently told me not to buy in his area at the moment. That’s honest advice for a guy who makes his living selling houses. He did admit that the subscription to Neil Jenman’s ethics training system is very expensive, however his company have been doing it for a while now and believe it’s worth it. Some other companies are starting to copy their ideas to keep up, raising the level of honesty, but ironically eroding their distinctiveness. Jenman’s system may have a use-by date. That is, if too many companies copy his ideas without subscribing to his system, it becomes too expensive and pointless for those who do. Neil Jenman has made himself very unpopular with wrappers by attacking wraps generally. I wasn’t thrilled about this, as I am trying to get into wrapping and have tried to maintain a high level of integrity my whole life, to the point where others thought me a fool. However, to be fair to Jenman, he may have suffered the same fate as many policemen. That is, he has seen so much corruption and lack of conscience among respectable looking people, he has become deeply cynical and tends to believe the worst.
teabagted
Hi Dan.
I Fear that you are missing the point. You are so in love with the cleverness of the idea that you are not paying attention to the fact that even if you can make it work, you are spending a lot of time and metal energy on peanuts.It’s a mistake we make when we first start thinking about making money faster. Also, if it was worth doing, alot of other people would be doing it. Leave it alone and find something that will give you a bigger reward for your time.
Regards
teabagted
