Calling all property pro’s.
Us beginners would love to hear some strategies for the future of property investing now that the cycle is changing? I am sure there are many proven experts lurking on this forum, so please let us pick your brains.Hi Scotty,
Certainly not claiming to be an expert but before we can answer your question Scotty – we need to know what you would hope to achieve through property investment.
It is certainly a case of ‘different strokes for different folks’ and as such your preferences etc could create a different plan of attack.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Thanks Derek,
Look I just want to fasttrack my learning in any way possible with property investment, i have no set strategy or format. Whatever it be from developement, to renno, or pos gearing, whatever i want to learn more about it. At the moment I have a block which is intended for units, but I still look for quick cash deals as i have a bit of equity to play with. Anything to point us in the right direction would help, and when i say us there are many beginners out there just begging for dierection.Cheers
Scott
For me, just waiting and watching, ready to pounce if the market takes a dive, ready to jump of a cliff if the market rises, because I don’t own anything at the moment.
Basically I think the market’s got to come back a bit and would then be looking for bargains.
G’day Scotty
You and I sound like we are in similar boats…sort of just starting out and hoping to emulate some of the bigwigs on these forums.
my stance is that if u buy property and just sit on your arse hoping it rises in value or hoping u get tenants, then odds are it wont. especially not in 2005! I think if you buy something with a plan to either renovate, alter, subdivide etc etc, then you will probably do ok. In my very humble opinion its the ones who buy and hope that are in trouble in the future.
But then again i drive a 1994 Hyundai Excel so I am obviously doing great!!! [biggrin]
Coops
coops t
whats wrong with buying property and then sitting on your arse and waiting for the value to rise? Easiest way to make money provided you choose well located properties with scarcity value and you are able to service the debt comfortably with appropriate risk management e.g. interest rates, vacancies.
Bill Zheng (finance guru) showed a chart with median prices for every 10 year period for the last 40 years. Averages roughly 10% growth pa. median price in 1994 was 144k. 2004 is 368k. 2014? over 900k!! Sounds bloody good to me as the future is just a repitition of the past.
Obviously adding value accelerates your wealth. But again I ask, is sitting on your arse and waiting for the value to rise such a bad approach?? Its worked for my family and friends older than I and will continue to do so in the future.
Oscar [suave]
For the last 150 years, property has doubled every 10 years on average. Find a brand new property (that say cost you $350k and it costs you $40 – $60 per week to hold). It’s like a forced savings plan. With the right finance and tax structure after 10 years the property is now worth +$700k. You should have made at least $350k from “putting away” that $40 – $60 per week over the 10 year period and you wouldn’t have more than $20k by investing in other methods like baking etc) The idea is to keep adding properties when you can afford. (Just one example of thousands, you need to choose whats right for you and your situation.)
This is a long term approach as 80% of investment property should be.
Best of luck.
AshOriginally posted by ahooker:For the last 150 years, property has doubled every 10 years on average.
AshSource please.
And mustard!
Sorry, couldnt help it
kinks
In theory, there is no difference between practice and theory, in practice, there is….
Hi guys
I hope you are all right and capital gains continue to go thru the roof and the future emulates the past, however as they say ‘different strokes for different folks’ and for the moment i cant afford to lose money on a house every week and hope it goes up (which i know it wil eventually but WHEN is the $64million question???).
great call too from InvProp Finder about doing whats right for you and your situation.
Cheers
Coops
Scotty,
Not a prop pro yet, but working towards that goal, as we all are I suppose…
I’d be looking for props that have a large land component – over 85% of the list price, and cashflow positive to boot – so that you don’t have to chip in.
That way, you get the maximum amount of growth from the land and you get it for free.
Hard to find – yes, impossible – no. Anyway, that’s what I’m doing at the moment and it seems to be working pretty good. Best thing about the strategy is it works on both up and down markets.
It’s not all beer and skittles though. There is bookoo organising and arranging things with tenants / contracts / leases etc.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
heya Scotty- and welcome
Be wary of always assuming property doubles every 10 years- it depends on where. There is a story on Jenman’s webpage (jenman.com.au) about a guy who flogged off property he bought for something like 18k in 1994 and sold it for 55k or something in 2004- problem was that the land is still only worth 18k in 2004. Capital gain? Nothing- except that he was trying to two-tier sell it. Lesson to be learned? Not ALL property will double each 7-10 years, and if it doesn’t, perhaps it is better to invest in something else. As with all things, research will be they key – whilst past performance doesn’t indicate future performance, it can still be a guide.
There’s been some good articles around lately warning people against overcapitalising on reno’s- in a flatter market, reno’s need to be done cautiously, I reckon.
I had lunch this week with a friend of a friend. She bought a 700k unit in camperdown (decent inner-west suburb of sydney). She hasn’t had a tenant for a short while, and the lack of cashflow is hurting her, so she’s selling up. The most she has been offered is 600k- meaning, basically, that she’s lost 100k on her investment. People seldom talk about how much they have LOST, but are happy to discuss their CG’s.
Sorry for sounding doom and gloomish here… I know people might still be rakinhg in money on RE, but just be cautious in this bearish market.
If regional house prices go down, it might be a bet to invest in these… still cheaper prices, but rents are often quite poor. Many of us would have started out in a flat market, buying cheap places, which have escalated in price over the recent boom. The “never sell” guideline is a bit passe- in my book. Sell at a high, before prices sink, if CG has been good. That’s what Steve has practiced also. I sold a property towards theend of the boom and bought anoher for the same price- but which yielded double the rent and has achieved very good CG, whereas the one I sold has only maintained the value I sold it for- there’s no brain surgeon economics in that- it’s pretty fundamental.
Also, I’d be cautious of getting a 105% loan… these were popular for 5 minutes.. but only really work in a rising market- where everyone wanted to but into RE… but now they may owe much moire than their speculative properties are worth- exuberance can be good in a flat market- but it seems more like a manic spending spree at peaks.
Hope you don’t mind the “don’t do” tips- they can be as valuable as the “do do” tips [baaa]
kay henry
Hi Scotty you are getting some good advise here.
I suggest you build as much knowledge as possible, the more you learn the better you will be prepared when your time comes.
Don’t be in a hurry mate, money is made over time not over night.
Phil
Hi Scottybe,
Kay’s raised some very good points and as resiwealth has stated, there is no need to feel in a hurry. Best of luck to you mate.
Regards,
Gatsby.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
