Tried and proven Bell Ringer say’s the game’s over

Hi Bill

I thought that was very interesting and will endeavour to do this research.

Only one thing

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ps. I loathe the “due dilligance” phrase… from here on in…it’s doing your sums, your homework, your research. An excellent tool for those just beginning…it will keep you out of the market.

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You put up a helpful suggetion and then end it with this “stuff”. What are you really about?

Cheers
Leigh K[]

Carve your own path and lead the way …

Hi,

What Bill is proposing here is basically the technical analysis(or charting) of rental data.

I don’t know why more people don’t do this….apart from the fact that it is cumbersome and difficult to do.

I think the same should be done with price data, both house prices and rental prices, (a little easier to do) and one would see the corelation of rental vacancies/rental rates/house prices.

It’s all a cycle folks as quite a few on the forum have pointed out.

The wheel turns….

http://www.tradingforaliving.info

hi all

if you sold as you are suggesting was a good stategy in 1993, it was the bottom of the market in most major cities in Oz. the peak was in 1989, and if you sold then you would have missed the in excess of 100% capital appreciation since then.
hey i’m a seller in the market at these prices (because i’ve got 30 properties) but for most people a buy and hold stategy is always the best.
history shows that property has never failed to recover from downturns and exceed previous highs. in the future who knows, if i was an investor with only a handful i’d hold on. people who make big money in real estate hold.
westan

Bill

This is all very interesting and of the moment – being in Canberra myself I just noticed on the weekend that there were a fair few withdrawn properties in the paper and also that quite a few have been advertised for a few weeks in a row. Even two months ago, there were barely any lasting longer than 2 weeks.

I’ll now add your criteria to my market watch. Thanks for the insight.

Sam (hoping to snap up a +ve cf IP in the next 12 months)

“people who make big money in real estate hold”

i agree with this. Everyone who is talking about selling high (i.e. now) is approaching the RE market like one would the sharemarket – trading.

I see (as more than one real estate educator has said) that property is a long term investment. I think people who aren’t set up to cope with holding for the long term – either by overcommitting, not picking the right deals in the first place, not having a buffer, getting caught by vacancies or rising interest rates – have themselves to blame if they are forced to sell in a diving market and then lose money. They didn’t think long term and go over their ‘what if’ and ‘worst case’ scenarios.
And i don’t have any problem with the phrase ‘due diligence’. I think it’s just an investing term that’s shorthand for a bunch of individual things it stands for – from sums and the things that bill mentioned like research and number crunching to also getting a council land report, building inspection, pest inspection, and the lawyer stuff.

Anyway. so if you can’t find any +ve CF properties with yields of more than 10.4 percent after costs, don’t buy now. well i wouldn’t. You wouldn’t wanna be buying for capital gain now, either. (well i wouldn’t!) . if this long-predicted correction comes, after that’s when +ve CF properties will be popping back up all over the place. Exactly at the time when everyone has long gone off the idea of property cause they all got burned, the time when everyone thinks CF+ve is a stoopid fairy story, that’s when they’ll be found all over the place and when it will once more come into it’s own.The only thing that stops any rental property being CF+ve is that the purchase price is too high. If prices come down again, then bingo. I’ll be buying. here.

In the meantime i’m still buying, but in a market that i think is about 2 years behind what’s starting to happen in Sydney, and where there are still yields to be had of 20 percent and beyond. that’s enough buffer for me to feel i am prepared as much as anyone can be….touch wood.

cheers-
Mini

Hi Bill

I don’t disagree with the thrust of your argument but I do want to highlight that the markets you refer to are generally very volatile markets.

It has always seemed to me that country areas are much more prone to market turbulance, with a complete lack of demand when the cycle turns against property. From personal experience I don’t find that the median properties in Sydney (the only place I invest) corrects to any major degree. The market tends to simply sit at the same price for a long period. I have allways put this down to property, in the main, being an emotional purchase and because the median houses are generally ppdr’s, people will simply sit and wait it out. In fact the best bargains I have picked up are just after the market starts moving and all these long term sitters suddenly see an oppurtunity to get out at slightly more than they paid (forgetting completely the purchase and sale costs actually make a lose in current dollars as a result). By this time, in real terms, thay are bargains with the real move still to come.[]

Westan – absolutely agree – as far as people thinking they are going to trade property they are only fooling thenselves. Generally they entered the market to late and have bad experiences with holding property. Speaking personally I have made money because I have held, in fact been in the IP market sinnce ’85 and have never sold a property. Why would you sell and pay 25% tax on the CG and then still pay all the transaction costs ($25k stamp duty on a $1mill purchae)

Cheers

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still pay all the transaction costs ($25k stamp duty on a $1mill purchae)

Cheers

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Where do you live? Where I live it is substantially more than that. I just payed more than that in agents commisions to sell[]

http://www.tradingforaliving.info