What if I made a mistake in buying?

What are you worried about? Everyone knows property doubles every 7 years…..

I think you'll find that there are plenty of investors here who have "gone wrong".

Not all will admit it directly, but some will, and have.

Oh, but you haven't been around long enough to know that, and you're too busy telling us all the sky is falling to read back through older posts to see who has done what.

Most will attempt to educate the less experienced in the dangers that exist, and guide them down a safer path using the benefit of their experience and mistakes without actually saying "don't do what I did".

I am one of these people, but I have fessed up to some mistakes in the past.

My mistakes are numerous, but have all been minor (thankfully), and I have come out the other end in a very good position and have learned from my mistakes.

You, on the other hand, are simply a nuisance, without any past experience that we are aware of, with nothing constructive to add other than wild predictions.

Oh, I forgot; you said to buy gold.

Thanks for that pearl.

Re Reddys' question: I strongly recommend some "boring" points:

Have an investment strategy. Reasons to invest in property include, 1. for cashflow, 2. for capital growth. (3. both, it is possible!)
4. as a tax write-off (negative gearing, write your losses off and hope for capital growth to make it worthwhile in the long run).

This way, you'll know if your property is performing according to your strategy. If not, probably time to sell! ie if its making a loss. 
As Steve would advise, its not that easy to buy positive cashflow, so what you buy needs to be able to have value added by you. ie choose carefully to buy something you can improve to meet your target.

As Scamp would love to say, property CAN drop in price eg Western Sydney, has dropped by about 25% over last few years. But what he (she?) won't tell you is that it is most unlikely to drop on a hurry. Whereas gold, or share prices, can drop much more quickly than it climbs (see sharemarket charts, and compare!).  Boring strategy no 2. is, have a stop loss (for shares) or cut off limit for property, eg if it drops by more than 7.5% in value, I'll sell.  By this time, your investment by definition would then be a LIABILITY! Value is a bit subjective, but even a valuation by 2 different real estate agents (free!) will give you a fair indication.  You also need to have a time-line in mind. (Few properties in suburbia will appreciate by much in 9 months, Reddy!)

The only 100% sure way to know which area will be good for capital growth is hindsight (applies to sharemarket too).
But you can increase your "luck" enormously by reading and learning. We have all made some mistakes along the way, but generally not disastrously, just enough to learn something! But cheaper to learn from someone else… read Steve's last book, and listen to CD. 

The worst investment choice is arguably NOT to invest.  Currently you may actually get better interest with money in  the bank, but this is quite uncommon! Mostly, bank interest is less than  inflation (before bank fees), so not a good investment.
The start of a good investment is to buy a property with good potential, at a bit below the market price.
 
All my opinion, (and learned from others), but it has worked, and is working for me!

quickchick.    
 

god of money : I think blogs was being sarcastic
Everyone knows that property cannot double every 7 years. The simple reason ? Because wages don't double every 7 years, and they have a direct relationship ! It's really that simple.
That said, I agree with most of what Chick says, except the fact that houseprices cannot drop quickly.
The whole problem is that people see too late that their house has dropped 50K-100K, they only notice 1 year later, and by that time, it might have dropped another 100K already. The only 'benefit' to this, is that starting investors or 'suckers' will buy up the house are the already too high price. Something that has been done for the last 20 years. Up till now, there was no problem since economy does well, oil was cheap, immigration was high and you could borrow more and more. On top of this, it was 'common knowledge' that houseprices always double every 7 years, so it didn't matter what you bought : 7 years later you would be a millionaire anyway. This led people to get themselves in debt over their heads, and the first few people are now starting to feel the pain.

The times have changed : House prices no longer go up, and are no longer an excuse for banks to lend you more than you could afford. On top of this, oil is hugely expensive, stock market is dying, war between USA and Iran is looming ( hence I say gold is a good investment ) and inflation is crazy. On top of all this, the whole financial system is in a huge collapse as we speak, and we have a huge credit crisis.

I don't mean to say "the end is nigh"… but I think anyone who thinks about it will see that indeed "The end is nigh" , financially speaking at least.

HI,
Tony thank u for your suggestions i BOUGHT that PROPERTY on private sale for $227000 and i am living in there now, i borrowed 80% loan. Now i got offer for $242000 after expenses i am getting $235000.by selling it NO GAIN and NO LOSS because i was sub letting for students.

The rental yeild for that property is 5.4% but the capital growth is not worth, i thought to invest in better locastion for good capital growth.

regards
Reddy

Hi Reddy.
Just read your last entry, seems like a reasonable idea.
Try one of the Porperty investment magazines in your newsagent, they often have  a guide in the back of recent (ie monthly) compared to yearly prices in areas across Aus. Helpful, but not prescriptive.
I have found that an area that has gone ahead eg 10% average cap growth for last 4 yrs, may not keep this up consistently. eg then you buy it, and it goes back 2% that next yr! Sometimes wise to look for areas that have gone ahead, then buy in a surrounding (but not overinflated) area a suburb  away (See Steve's latest book.)
Be aware that the areas regarded as string capital growth are traditionally closer to town, ie more expensive, and rental return may be worse percentage wise, than  outer area eg Hoppers Crossing.

Good luck (always an element of luck involved!)

Quickchick.  

Sorry couldn't help getting sidetracked a bit, but you sound like one of those gold bugs lol… The biggest fuel for Gold prices right now is fear. Fear is basically the main driver pushing gold to its recent high. Underlying demand for the commodity itself isn't really there. Its not a bad thing to invest in for the short term, but I would get the hell out of it once the US markets bottoms out.

Personally I'm waiting to go long LEAPS on gold puts once volatility stabilises.

http://www.news.com.au/business/money/story/0,28323,25076961-5013953,00.html

Seems like I wasn't far off after all eh. It's 19 feb now and goldprices are at 1569$ already.
My next tip is that it will only go up from here.

I hope you guys took my advice in July 2008 seriously and didn't invest in shares or property.
I can fill this post with bad news about property but I think it's clear to all that property will fall 50% total at least after this whole circus is over. ( and guess what : It hasn't even started yet )

Scamp,
            I agree with devo76, your theories are good reading, but no one can be sure. I would have thought house prices would have fallen quicker than what they have, I still think 20% drop this year and maybe next as well.

           It gets frustrating waiting for it to happen, wanting to buy, but at the moment its not worth buying with no capital gains any longer, so now need rental incomes of 10% to make it worthwhile. But I suppose will have to just wait a bit longer before buying.