Forum Replies Created
pipelinebuilder,
Good posting. I think many many people are thinking the same as you.
Personally, I think I was lucky to get into property as it was rising, and have enjoyed the large rises in values over the last two decades. Thus , to answer your question on has anyone enough properties to support them in retirement – then yes.
But, most of my gains are from value increases, not rent, it is only a help for repaying loans, it is never going to make you rich, it is the gain in values of the properties that give you wealth. BUT, I think this is a road to wealth from days gone by, it is not relevent to people starting out today. Whilst devo 76 is correct with regards to getting properties that will at least reach neutral and then positive as time goes past, it is a very slow process and you need to start young if you are ever going to make real gains. It is also not the best for tax purposes once you go positive and with tax rates so low now, negetive gearing is not a good tactic.
We all need to realize that yesterday and back 30 years is the past, and whilst the past can be a guide to the future, I think that maybe the next 30 years is not going to be like the last, we need a new approach to investing. However, I do not have the answer and probably no one else has it either, things will change much quicker into the future, countries will crash, the weather will get worse, diseases will increase, wars will increase, I think I will just shoot myself…….bang…………..
IP Freely,
Also house prices should also rise due to inflation and larger houses being built with more features over the years, thus large percentage of rises are not really due to land values rising as much as we think, or your existing house rising as per the medium, unless you keep adding value to your house each year. Such as adding a bedroom or shower or carport etc.Agree with Scamp regards the house price falls. But as with everything depends on where you take as your reference, IP Freely is probably correct for the houses he is looking at , but for my houses they have fallen since about 2003 and still falling in Sydney.
regards the cashed up first home buyers – yeh right – cashed up with the government grant only, how many young people do you know who have more than $100 to their name.
Agree with fishngym,
It is not practical to save money and get rich, unless you are on a high wage. But with no capital gains with housing for a long time, debt repayment is probably the best stratergy for the time being.SHales,
I have a daughter unmarried with a child and I can relate to your frustration.
She does go to work and can save money etc but only because she lives with us and we help a lot. She is saving for a house but does get lots of help from the government. I wish we had so much money etc when we started out.The problem is there is no real answer.
1. If the government didn't help them. You would get a whole lot of poor people with poor kids and thus create social problems for them and the rest of society.
2. When the government gives them too much. They don't need to work , get everything for free, creating a state of wealthfare dependent people.How do we get it just right – every person is different and everyone has different background, different ideas and dreams, different financial knowledge.
I think the answer is in the too hard basket. People who have worked hard all their lives see it as too generous, people on wealthfare see it as not enough. We all get to vote and each person only gets one vote, what a pity. …
hbbehrendorff
Yes, this guy is correct, and as he says, we all are in this delusion of not being wealthy since we see it all around us. It only hits us when we go overseas and see how people that have missed out on the great wealth that we see the truth. I think how lucky I was to be born in Australia not the Phillipines or even Aftica or India etc.Scamp,
I agree with devo76, your theories are good reading, but no one can be sure. I would have thought house prices would have fallen quicker than what they have, I still think 20% drop this year and maybe next as well.It gets frustrating waiting for it to happen, wanting to buy, but at the moment its not worth buying with no capital gains any longer, so now need rental incomes of 10% to make it worthwhile. But I suppose will have to just wait a bit longer before buying.
PosEnterprizes,
Also by not selling you grow your portfolio and can pass it onto kids when you die and allocate who gets what and no CGT as long as they don't sell, thus future growth as family grows hopefullly kids can grow their wealth etc etc. In other words I have taken it upon myself to start the family wealth program into the future, thus move out of poverty ( when I started ).Beside housing, you need superannuation, your own share portfolio, etc.. Relying on just a few investment houses is not the way to go, although it is a steady and reliable growth program that has served me very well, it has run its cause and future gains will not be anything like the past.
Another medium will need to come along now, housing growth has finished, sure we will eventually get a bit of gain with inflation etc, but you will not make your millions from now on. If you can think of what the next big thing will be then you will be rich, if you think of it just drop us a line…
Event Horizon and Posenterprizes,
Recession is starting to bight. One of my brothers who works on temporary hire has been almost 100% for last few years, now had half a day last week and a few days this week and looks like continuing downhill.
My future son in law who works at major freight company now is down to few days a week.
Friend a fork lift driver had his offsider put off last week and told he is next in coming weeks.
Bricky friend only has work with one major project, but nothing after that is finished in next few weeks.
It just goes on …..we are in for a long recession…and yes I stick by my projections of large property falls at top end of market.
skuz,
I think young investor01 is correct.
But, unsure if you may need to get a valuation done when you move in as house is rented thus your occupation is at a different time than your purchase. Also you will need to do your tax for the rented property until you move in. Lots of issues to straighten out, maybe you should check with an accountant??david_n_ property
Congradulations you have confused me with your grammar.
young investor01,
1. I/O or P&I is basically up to you. Most people would advise I/O, that way you have more money in your pocket or to invest in shares or another property later, but P&I does also have some advantages. I'm sure you know of each.
2. Depreciation schedule – I would get it after the reno's and keep all your receipts etc just to show the assessor and boost things up a bit.
3. Again with the banks its just a matter of doing your sums for the long run not the short next few years treatment. Also don't forget the fees of each especially Comm Bank they are a rip off for fees.
Sorry not to give direct answers but its like saying which horse is going to win the race, so many variables for each race as with your future plans and financial position etc.
I have read that the melting snow goes into the northern oceans changing the salt content which then changes the flow of warm currents which is what keeps the northern lands warm which means an Ice Age is coming to the northern european lands………..etc. Which ever way you look at it, there is change a coming very quickly to the Global Weather. Just look at Australia at the moment…record rain and floods up north……record draught and heat down south….
What is the answer……..the ultimate answer…..wasn't it 48 ?? please correct me if I'm wrong ( hint hitch hikers guide ).
bomis
I guess you are the income earner !
If contract has just been signed then see your solicitor quickly and advise him of your error, maybe your solicitor can get it fixed before it goes too far.
Otherwise, you could look at it from another angle, any CGT is split when you sell, if your partner gets a job later then allowances can then be split etc. You can buy shares in your partners name and offset dividends against deductions of rental.
There is always a positive to the negetive in the long run.young investor01
I was told by one of my rental agencies that blinds are the best for rentals, they are cheap, block out light etc and easy to fit and replace. Verticals are very pretty etc but I am continually paying for repairs as they are always breaking.
This is for a cheaper rental place, for more expensive rentals I still put up verticals.Tony B,
As you say – interest rates are so low its too tempting not to buy. And with interest on savings also too low it also pushes us to buy.
But, as you also say – house prices are falling so why would you buy and see your capital go down.Its all too hard.
I personally think mid range and high range houses will keep falling, but low range houses should mostly hold there values as first home buyers keep jumping in to the cheapest place they can afford.
Thus I conclude that we should consider buying cheap houses or units or townhouses that show at least 5% return, borrow as much as you can to keep them positive or neutral geared and just hang on to them for a few years. Even if house prices do fall, you still have a positive or neutral position and there is a limit on what they could fall relative to high cost housing. The land and position is always worth something.Terryw and Dan42,
Yes thanks Terry agree with that.
Dan yes you are correct also.
It was just a thought that came to my head, it may need some more thought, but it may be worth it to some people.
D,
Would be interested in putting my son onto the course in Sydney, he has just left school but is too young to get a real estate traineeship supposedly since he hasn't a drivers licence as yet…Leo,
Agree with you. He maybe a pain, but at least he does something about the sprukers and maybe saving some people from financial ruin. It could have been one of us if we were just starting out.Linar,
Thus, once you have finished claiming your IP deductions over time and payed off your loan ( all in your name ) since you are the one with all the income and wife without. You can then transfer half to your wifes name without paying CGT.
Then get another loan for an IP in your name ,again , and do the same so to speak ???
