Well I can only go on my experience.

Back in 1997 my wife and I only had $10k. Now we have equity worth over $500k. And over $100k in redraw facilities – access by netbank.

I find it hard to believe anyone could have started in 1997 with $10k and have over $500k in shares now.

Why its property and only property for me –

1. Look at the friends of your parents. All the ones who drive nice cars and live in beautiful houses have invested in property.

2. Property generates a higher value return. With my initial investment of $10,000 I can generate a greater return on property than shares.

Here is an example. You buy a $100,000 property with a $10,000 Deposit. Its worth $105,000 at the end of the first year. This is a modest return of 5%. This means your $10,000 has generated $5,000 in the twelve months.

Lets compare this to shares. You invested your $10,000 into blue chip shares and managed funds. You made a 20% return. Any fund manager who makes that would be very happy. So your investment is now worth $12,000. That means your $10,000 investment has generated $2,000 in twelve months. Your property investment has generated $5,000 – which is better than $2,000.

3. Time Value of Money

When I buy a property today that is the price I pay for it. In 5 years time you will think how cheap that price seems today. You will say I should have bought more of those properties. It looks so low today compared to what a similar property costs now. Do you remember as a kid how many mixed lollies you got for 50 cents. You can also compare the cost of that property to what your income is 5 years later. You will be able to service that debt easier as your income would also have gone up in 5 years

And I have another 15 reasons why – maybe its time I write a Book.

<<<<As I said sometime something has to give>>>>

I agree that something has to give. In my opinion its gotta be House prices. We are at historical Highs. House affordability is worse than when interest rates were at 17%. Property yields are too low. Household debt is too high.

For the benefit of the economy and the people in it, its best to reduce house prices and reduce household debt. Thats why interest rates must go up. These must be at manageable long term levels. They are heated at the moment.

If you were driving the economy – what would you do?

I saw the other thread and I would love to receive a $5k holiday/gift when buying a property.

The issues I have are as follows;

1. Your paying for the gift anyway. Someone had to pay for it so its built into the purchase price of the property.

2. Are there any tax implications? My guess is that there would be. eg. Price of Property $250k, price of holiday $5k. Therefore the cost price for property is $245k. So you may have some capital gains implications. But I am just surmising. (is there such a word).

There may be some people interested in this deal. For some people on good incomes its certainly easier to buy a property than save for a holiday. So these people may be interested.

My advice would be to see an accountant. I assume this unit is not your PPOR – You do have a capital gain of $70k which means you have to add $35k to your salary.

So in effect you will be paying tax on a taxalbe income of $61k.

However if you have another investment property there may be deductions that could come off your taxable income.

Go seek some professional advice.

You better check with your accountant – as you only had the property for less than 12 months you may be able to offset the loss against other income as you may not be able to carry forward the loss against future capital gains.

I am not expert – so go check.

Its the market that determines rent.

You need to get independent evidence to present to the property manager. Its a little difficult being far away but you need to see what rent other properties with your features and in your position go for.

Maybe you can gather this from realestate.com.au

Thats how i present my rent increases to a property manager and they have no come back.

Its upto you, but I would prefer to keep a regular paying tenant at $5 below market than incurr the hassles of a tenant leaving just for a few extra bucks a month.

If you dont mind the possibility of getting a new tenant, go for it. If you are comfortable that a $10 increase is the market rent and the tenants wont get a better deal elsewhere, go for it.

I have no idea either. Maybe many people think that they can get positive cashflow in Tassie and thats all there is to investing in property in the long term.

I dont expect that to continue. We will get back to fundamentals in a few years. Tassie will show little if any growth, as interest rates rise recent investors will question whether the few dollars in their pockets is worth the stress and effort.

For locals who had properties 5-10 yrs ago – you can expect more bargains in the future.

I personally dont like new housing developments on the outskirts of a major city. The closer to the city you can invest, will result in better capital gains in the long run.

I dont invest in towns for the reasons given by greatpig – I want to be able to sleep at night.

The conditions outlined in the book are from the past and not in todays environment.

I recall when I could have bought a house in Nth Frankston for $60k and rent out for $120 per week. That is not the case today but was in 1996/97.