Ok, so it seems like the general consensus is that property prices will fall marginally or perhaps stay stagnant for the near future. I guess all the "success" stories I read in API magazine about people acquiring 10 properties in 5 years is probably gone for the time being. But is it truly that gloomy?
I was hoping to buy PPOR worth about $350k with a $30k deposit ($320k loan). Live in it for 6 months to get the FHOG and then rent it out for about $300-$320 per week. I'm in Victoria so unfortunately my FHOG will just about cover my stamp duty. Is this a good strategy?
I plan on holding onto the property long term and eventually move into it at some stage in the next few years.
Is it advisable that I just wait to save an even bigger deposit to put towards the loan and minimize LMI even further?
Is it better to opt for apartments or units that generally have higher rental yields with respect to property value compared to more expensive houses that lower rental yields but greater long term capital growth and development potential?
The more I read these forums the more confused and cautious I'm becoming. I originally wanted to buy a house with decent sized land but from what I've seen, the rental income is not as high as it is on houses and this will make the loan harder to pay back. Any advice/opinions would be greatly appreciated.
If I was starting out I would buy cheaper so that I had some hope of paying it off. If you are not living in it it doesn't need to be in a $350,000 area. Can you put up with a 6 month commute from Geelong or Cranbourne?
What is the real reason for purchasing property for long term? My idea would be to get access to money in the future when you do need it either through equity or selling if you really have to get cash in your pocket. Sometimes you just have to listen to yourself and do what will help you not others.
skuz wrote:Ok, so it seems like the general consensus is that property prices will fall marginally or perhaps stay stagnant for the near future. I guess all the "success" stories I read in API magazine about people acquiring 10 properties in 5 years is probably gone for the time being. But is it truly that gloomy?
Well, that's NOT what I'm seeing across the ditch in NZ. Yes, we've had some price falls, but that's been happening for the past 2 years, it's not last week's news!
From the amount of people signing up to my "Deals To Order", I would say there will be a LOT of investors buying 10 properties in the next 5 years.
Prices have come back, up to 20% in some NZ towns, interest rates are the lowest we've seen for years with further drops predicted and rents continue to rise. Sure, money is harder to get that it was a couple of years ago, but people able to get finance are getting some great CASHFLOW POSITIVE deals.
I am regularly finding good 3-bedroom houses in good neighbourhoods returning 9% or more, and you can get a 5 year bank mortgage in NZ at 6.5% today. March 12th is the next OCR announcement in NZ, and rates are expected to go DOWN again.
So…. as Warren Buffet would say
Be fearful when others are being greedy.
Be greedy when others are being fearful.
From what I'm seeing here, it's time to be GREEDY!!
Happy investing,
VickyI don't think current predictions of 'gloom' are based in any reality what-so-ever.
Firstly we do know that every other country with booms like Australia has had have since fallen over, Ireland, Britain, Netherlands, Spain, Sweden, US. But the difference for Australia is that the prices seem to be justified. Other counteries (mainly Ireland, Britain, USA) had homes costing a higher and higher amount of average income. We all hear the stories about how australian houses were 4x the average income but are now 7x the average income. But this is just pure lies. The ratio has been constant and consistent since 1991. The higher prices have come simply because wages have moved up in line with them, completely different to the other counteries, where people with lower wages started to lend more money.
Secondly there hasn't even been a downturn. The rate at which property prices are increasing has reduced, but the prices themselves haven't and are unlikly to now that interest rates have dropped again. Brisbane has been at 20% per year since the year 2,000 and slowed abit to about 10% when the interest rates were up at 8%, now the prices are moving back up again. The rental vacancies are the lowest ever. Yields are going up. If you do the math you can hold an average $280k house for about $50 per week today. Melbourne has tradiontional been the worst and isn't set to change. I would invest anywhere where population is set to explode, mainly NT and SE QLD.
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