Hi,
I just read Steve’s second book and have been reading all the posts on the forums. This is all new to me and a bit overwhelming but I am committed to building my family some financial security so its full steam ahead from here. At the moment I’m in the research phase (which includes convincing my husband that this isn’t crazy!).
We have a mortgage and two kids and have clearly missed the boat with regards to CF+ deals on a plate but I’m willing to do the hard yards. I’m really excited about getting started but want to do all the prep work I need to first. Would anyone have any advice on this? I am a total beginner so am guessing we’ll need to talk to an accountant and of course our friendly mortgage broker.
We live in Canberra and don’t want the burden of an ongoing amount of finance in the current environment so after alot of thought we’ve decided we need to work within our comfort zone of rennovating before branching out to rental properties. So I plan to hound the local agents for good fixer uppers that we can renovate quickly and hopefully sell for a profit. My gut feeling is that these type of properties don’t end up in the Saturday realty guide. Hopefully after a few years of this the market will be in a bit better place and we can look at buying some rental properties for passive income.
Well if you’ve read this far you’ve done your good deed for the day! Thanks for letting me do some thinking out loud.
Cheers
Veronica Jean
Hi Veronica,
I’m new to the forum too, and find it a great place to learn.
If there is a specific topic you are interested in, you can go to ‘search’ under ‘forum boards’. I find this turns up heaps of info.I’m sure hubby will see how great +CF property investing is as you go along, but yeah, a bit hard in todays market (some say not hard[blink]).
Don’t be afraid to step outside the comfort zone as you learn more & more. You can do it!
I love renovating too, and have done a couple in recent years. Great fun![smash]
‘Hounding’ the local agents is a great idea, ring them once a week, take them out for coffee on a quiet day (your shout of course[biggrin]) etc. Once they get to know you are a serious buyer, they’ll call!! They love a quick sale!
If you like reading, let me know I can recommend some really good books… you can send me a PM if you like.
All the best.
Regards, SharonSharon
Wow – Reading this forum is a real eye opener. I can’t believe people are ready to jump in at the peak of the biggest asset bubble the world (yes it is world wide.. Ireland, US, UK, RSA, NZ) has seen. Guess you don’t want to be left out when you retire and swap “loss” stories at the Nursing Home.
I am shaking my head in utter disbelief.
Look up the investment clock / cycle. Try to work out where we are right now.
Look up the history of % rates and see if our historically low % rates will stay so very very low.
Look up OS % rates and learn that ours is actually quite high.
Look at job statistics and research how they are manipulated (they are your tenents)
Ask yourself. Will my husband be happy with a decade of negative equity? ie will my husband be happy that I pushed him into owing the bank more than our properties are worth?
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Torachan,
It is possible to make money at any stage of a cycle. Obviously it will be more difficult over the next few years, but thats hardly a reason to sit on your hands.
Regards
AlistairAlistair,
Yes its possible to make money at any point in the cycle. Its just that you won’t make much, if any, for a few years.
e.g. You buy a +ve CF house for $50K and rent it out for $150 a week. Sounds great hey, and there’s still heaps of these out there! So in simple terms you put $10K down to secure and pay $50 a week in interest on the $40K component. All still sounding good. Factor in all the other costs like PM fees, repairs, vacancy etc and that’s probably another $50 a week. Now interest rates double and you’re up to $150/wk costs.
So now you’re neutral, bummer. But now the bottom falls out of the market and that place is worth only $20K. No big deal if you’re happy to hold. But your $10K is sitting there locked in to a mortgage on a place which is now worth $30K less than what you paid for it. You’re not making a penny in cash flow and you still have all the heartache of managing the place ongoing and doing the sums at tax time. If you’re lucky your tennant will sit tight and not loose his job, and eventually the price might come back too. But wouldn’t it have been better to buy it at $20K in 3 years time?
Just be aware that markets change, and you better have a really compelling opportunity to enter at the peak of the market. And an iron stomach to ride through the next few years.
My 2c? Put your money in gold, or lock down a fixed rate of return at a big bank. Wait 2-3 years or maybe longer until the recession passes, then buy up big in property before it bounces back again.
Cheers,
Michael.Hello all,
I suppose it all comes down to were you are investing. North queensland is certainly a place to pick up a very nice investment and still for only a fraction of what it is worth. Particularly old queenslanders which people up north seem to hate, but southerners love!! Everything is a bit slower up north [blush2]
NQ prices might be lower, but have you checked out the capital growth in Townsville or Cairns prior to the recent boom? Pretty close to zip.
welcome vjm to the forum. like you im pretty new also, and learning heaps. however it views like that of torachan which lead to confusion im afraid. whatever happen to the golden rule of property investments which says that it should be a long term investment, 10-15 years or more???? if thats the case it surely shouldn’t matter that you buy at the top of the cycle or at the bottom?? torachan believe me when i say that i respect your opinion, however i think your wrong on this occassion. and besides everybody has different risk profiles. dont be discouraging people from doing something positive for their family.
neo25x5
Nice post! But to discount the market when investing is a mistake in my opinion. You can still find good buys in the current cycle, but they’re a lot harder to find than a few years back. And with prices falling, they’re only getting better. A prudent investment at the moment would be to invest in a fixed return investment and wait for your identified market segment to bottom, then invest in it.
The market definately cycles, and if you enter on the slide then you’re only going to reduce your total earnings over the long term. Of course, over the long term you’ll still be positive, just not as positive as you could have been if you’d done a bit of research and understood the market dynamics.
Cheers,
Michael.
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