Hello.
Is there a good and a bad time to be investing in property or is it just a case of doing it as soon as you can?
As soon as I put a small initial deposit on my first investment property which was last friday, the global sharemarket goes into freefall, doom and gloom abounds, recession and flat property price growth threatens. I didn't expect so much fanfare, but it does make me think twice about borrowing $270,000 on my loc from my fully owned home worth $450,000. I have a reliable tenant who will pay $350 wk – zoned 2b 560 sq – could build at the back – top of the hill – 300 deg ocean and lake views. I have agreed to pay $260,000. I can't seem to find positve cash flow, this is negative to about $70 wk. Port Kembla area an hour to sydney.
Am I just being a nervous nellie by being concerned about things like global financial meltdowns. Iguess I'm looking for reassurance – we're all first timers once.Murtle
Good news is it is the STOCK MARKET which is crashing not property. This causes investors, generally, to seek safer/less volatile investment choices ie cash, bonds or property. You would feel more of an impact if Blue Scope advised the ASX that it was pulling up stumps in the 'gong as workers & businesses supplying Blue Scope would be nervous about their long term prospects.
Property, unlike shares, are not transacted or valued on a daily basis and price fluctuations are reflected (reported) historically ie median price for last 12 months as too few compable properties are traded in a particular area within a small time frame (except for new developments).
A 2b zoning may allow greater density if you have a sufficiently large block (not sure whether this is dual occ or multi-res zoning) but it would be worth checking out before locking yourself into a particular path.
The other point is that those that have the financial education, make money in a falling market as well as a rising market – whether it's property or shares
Hi, join the club! You bought a 1st IP & you're nervous? I've bought & sold about 10 now & I still shake inside every time the words interest rate comes up.
Your investment looks very solid. Want to swap with me?
To give you more encouragement, I'll tell you this. If you're at all like most of us, you'll think, "Hey, I can save 8.7% if I pay off this mortgage". Pay attention to the 'mort' in mortgage. Homeowners hate their mortgages, investors love their mortgages. ESPECIALLY when it's in an offset account where you don't have to pay tax on any money you put back in!
Good luck,
KYHi Murtle,
I think it’s better to buy as much property as you can as soon as you can. You might need to change your strategy to suit the market at times. For example, when I first started, I just bought and held property as the market was booming. These days, without the same market growth, I look for ways to add value to get more equity out of my property.
The interest rate rises and US sub-prime market meltdown are making me nervous too but I plan to stay in the property market. I keep more money on the side for a rainy day and stick to the lower end of the market as I think they will sell more easily if I do get into trouble as there is a bigger pool of potential buyers.
Stick with it and good luck.
looks like you did good,a massive deposit helps make things more positive .
(but no one seems to mention that here )
but i am assuming you are aware of the tax benefits of making a small affordable loss and did a few sums before hand.
so it probably wont double in value over night ,if you wanted that you would have bought shares (not last night ! )
property is a longer term thing so we all wait and watch and hope that a lot of burned stock market investors choose to park any remaing funds in the "safer "property market
free advice…
main thing is to get a few payments up so you are not forced to sell due to sickness or injury
and get landlords insurance even if the tennant is your mother !
that feeling you have could be excitement !
cheers
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