L.A Aussie, thanks for reply on my calcs…
Your explanation makes sence if long term considered. This is what I am interested in so i will have to redo my calculations and practice a bit to see what figures do I getOriginally posted by L.A Aussie:Originally posted by elkam:“To be on the conservative side, I always underestimate expenses, over-estimate returns/income. It is a successful rule that I live by, and I wouldn’t quote blown up figures to ill-advise ‘simple’. “
Hello L. A . Aussie
I’m a bit puzzled. This is the second post that I have seen you say the above. The first time I just thought that you had mixed it up but now I am not sure.
Don’t you mean
I always over-estimate expenses, underestimate returns/income.
Sorry, I’m not trying to nit pick. Maybe I am missing something?
Thanks
ElkaSorry everybody – this is a typo.
You are correct elkam.What I want to do is make sure I expect more expenses than I receive; I over-estimate expenses.
I also want to make sure I get more in come than I expect; I under-estimate income.
This is part of my number crunching when I am researching a property, and it ensures that I don’t encounter an unexpected short-fall of cashflow after the purchase.
Cheers,
Marc.
[email protected]Marc sounds like Sydney early 2005.
In 2004 the market had topped out but many beleived it was the pause that refreshes. Sorrrrrrrrrry.
Hi all,
Well i think the next 90 days are going to be very interesting reading indeed, i would like to re-read all the gurus preditictions again in 2006 especially the ones trying to push the market up.
Xmas is here and like the property market consumers will get carried away in the freinzy of buying on credit cards and start getting the depression pills out in Jan 07 when the statements come in.
As i said earlier in another post – Australian Credit Debt will hit 40 billion dollars in or around feb 2007 – why is this important – mums and dads are already feeling the pinch of the mortgage rises and de-valuating of the family home, now add the credit card to the payments and woska!! ouch what do we do now??
My second preditiction (next to credit cards) is the mums and dads and first home owners still have plenty of pain to go before the gains start coming. As for Perth well, “we told them but they didn’t listen”
Best time to buy realestate in 07 is ???????
Buy low sell high – take the profits and reinvest …
D
As someone here mentioned the real impact will be is when people will come out of fixed interest period after 3-5years. Then they will get hit by sudden 2-3% increase. This is when snow bal action will take place. If we consider 5year fixed period, than those people still have 2 years to go. This will really top up the market with “extra†properties for sale. So, let’s wait and see [strum]
Wealth agree, I am hearing the term in the US of “negative wealth effect”, sure we will hear it here next year.
Simple agree, but also think there is a lot of pent up demand for sellers who are bleeding and waiting for the spring sale period. that should be very interesting, as many can’t hold on much longer.
As for Perth Wealth, don’t worry as Cartman said when trying to get into the “special” olympics…..”but Mummmm you always said I was special”.
B & S Shrapnel those fools who predicted a topping of the RE market also predict that by the end of 2007 the resourse boom will be over and some commodities will come off by 60%.
This follows stats last week about the US consumer market slowing, (neg wealth effect) investment being hauled back in China, a slowing world market and a decline in demand for our commodities will follow.
Perth will make great watching
Just wondering how slightly charcoaled property sells, my house is on the market at the moment, I was eating my lunch reading this forum when every thing around me went black. We live in the Perth hills. I have just spent the last 4hrs packing photos and fighting fire. Luckily we are o.k. Not so lucky for our neighbours though, one house gone and talk that another has. And one neighbors window was broken to get the dog out when the end of the house caught on fire.
Just thought I would share my day with you, hows every one elses going.Originally posted by Tracy Lee:Hi Tracy
I heard fire trucks going past my place today and poked my head outside to see the fire in the hills (I’m at the base). My brother lives up in Lesmurdie and friends in Gooseberry Hill so I kept an eye on developments ready to run up the road.
The bush across the road from me caught fire about 4 years ago and I came home to a house that I coudln’t see across the lounge room – luckily the fire was stopped on teh other side! But I was cleaning up soot for years (I think it was filtering down from up in the roof space and of course the dust from the bush – which is now houses)
I feel for all those people over east going through this ordeal – must be heart wrenching.Fire trucks are still moping up, the owner that lost the property went with the chaplin and the people with the badly damaged house stayed with neighbours, Looked like a war zone inside hard to imagine without seeing. The dog which was once white is now 2 shades of grey and was put on oxygen, owners very happy to have her survive. All due to a 53 yr old bloke burning off in a total fire free zone.
Nice to know you live so close Cam AmTracey I try to mix humour with sarcasm but that aside, glad you are okay, sorry to hear about your neighbours.
Personally in the old days that sort of incident would drop the price. these days their are so many specualators who will guess this and may rush in you may get a real bounce in price.
Seriously though at times like this money and wealth creation don’t seem so important.
Agree with Can Am, the clean up is painful. Had a fire on the floor, ten years ago, and fine sort came in through the air conditioning, it was everywhere. in desks photocopiers computers etc etc.
Originally posted by simple:Some simple mathematics here, some one please correct me here as I cannot get my head around this!
IP in our area cost for example $300K has return of $300/w minus expenses land and running cost you get about 250/week if lucky. Which is about 4.5% return on capital.
If I put the same money on my bank account I get over 6% return.
Now the big question, why would you buy IP if market is flat or growing anywhere under 1.5% ??Well, if you put $300K into the bank getting 6% return, then your return is on the $600K, yes? If you purchase property using the $600K as deposits (at 80% LVR you could purchase up to $3M worth of property if you could service it OK), and then you get your return on $3M rather than just your $600K. You could therefore stand to gain lesser as a percentage on the $3M property portfolio and still come way out in front than getting 6% on just $600K.
Andrew.
Originally posted by wealth4life.com:Best time to buy realestate in 07 is ???????
Dunno? 2107 maybe?
Originally posted by Tracy Lee:I was eating my lunch reading this forum when every thing around me went black. We live in the Perth hills. I have just spent the last 4hrs packing photos and fighting fire. Luckily we are o.k.
Good to hear, Tracy. Over here the eastern half of Victoria is currently in near-darkness (well beyond dusk), and it has been since 2pm. Eerie and a little scary. Worse given I’m about to jump in the truck and drive towards the fire for a few night-shifts of ‘asset protection’…
Stay safe peoples… and no burning off – ‘kay?
F.[cowboy2]
Hi Guys just back from a little xmas break and getting ready for new years eve – i hope all the fires are sorting them selves out and the recovery process is painless.
I have been speaking to lots of people about property 2007 and there is a common denominator that people seem to be cashing up ready for the next big spending spree, most of the people i spoke to were interested in Major Coastal towns for a long term buy and hold … what is your view on this …
D
Ok, some info on Xmas sales. They do not spike as they used to 5 years back. This new-year in upmarket retail resulted in been 20% higher than normal times but still FLAT.
Conclusion: Wealthy people smart and do not spend money any more, or simply run out of them ??!!
[whistle]I suspect a lot of the recent interest rate rises have stopped the ‘pay check to pay check’ brigade from going mad at xmas. Another interest rate rise, petrol rise and an increase in the tax on smokes and grog will make things interesting.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
I am not sure about market crash but i put together some statistical data from CBA on my website http://sog.shopinthemall.com/2007/01/04/australian-real-estate-investment-opportunities-in-2007/
and it still seems that 2006 was not that bad year after all.Of course looking into 2007 some price drop should be expected IMHO as interests are high people wont be borrowing and buying as much.
On the positive note though, I reckon 2007 could be a good time to look into some bargains for investors who are cashed up and dont need to go to 80%+ LVR finance.
[smiling]I am not sure about market crash but i put together some statistical data from CBA on my website http://sog.shopinthemall.com/2007/01/04/australian-real-estate-investment-opportunities-in-2007/
and it still seems that 2006 was not that bad year after all.Of course looking into 2007 some price drop should be expected IMHO as interests are high people wont be borrowing and buying as much.
On the positive note though, I reckon 2007 could be a good time to look into some bargains for investors who are cashed up and dont need to go to 80%+ LVR finance.
[smiling]I notice interesting tendency, I wonder if others will agree on it.
It seem like in Brisbane most of properties been sold are purchased as owner occupied. This seem to create number of properties that been sold still at “high†price as owners base decision on “feel’ rather than commercial since.There are also seem to be few people who selling there’s IP in order to reinvest funds in other areas than real-estate.
Hi all…
I’ve just finished writing an article from a Gen-Yers perspective (a bit big for a forum post, but still only a few hundred words!)
Take a look at http://www.digitalfish.com.au/property and let me know what you think! [suave2]
Well I guess the first property is the mast as the way to reduce your living expenses. Once played out you cost of living reduces significantly. If you will rent – cost will always be there. This is the way I see it.
And anyway, If you more or less reasonable concentrate on repaying you will payout in under 5years. After this you have a lot more money in the pocket as you don’t rent for the rest of life…[biggrin]
Hi Guys,
I have not responded to this post for a little while because I wanted to see what the market was doing … anyway, as I see it nothing really very positive.
I believe we have not bottomed (IMHO) as there appears to be much uncertainity still unless some one else sees it different.
The outer suburbs are still finding it tough in Sydney with valuers confidence at a all time low … credit debt is at its highest … elections will cover the news fronts offering lots of cash incentives to attract voters and an increase in interest rates after the elections is on the cards.
Am I reading this market correctlty or do you have another view ??
D
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