investment property is it a good idea

[Trevor 57]

Originally Posted by Syndrome

In the end Dave289 was banned from this forum and the thread was locked and deleted.

In before the lock.

love your style

[ebxr8240]

Keep in mind .. Sydney prices are STILL 10% under Beijing market..
There prices are for shell .. You have to add electrical, plumbing etc..
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If Dave sold his property 6 years ago and rented.. His rent would have gone up a decent amount and his term deposit interest rate on return would have come down heaps.. Just great financial planning ...

[GTPete]

Originally Posted by xxx000

Imho it's a bad time to take on a mortgage
rates are low, prices rising rapidly
a correction like 1987 is almost inevitable leaving people with huge repayments on something worth less than they paid

XXX000 what have you based your opinion on?
We have a housing shortage, low rates, relatively stable economy, what will drive such a huge market correction?

[GT0132]

Originally Posted by Syndrome

I suggest you go to the following website:

www.australianpropertyforum.com

Dave289 started a similar thread to this one on AFF many years ago which ended becoming very lengthy and the posts were very heated. In the end Dave289 was banned from this forum and the thread was locked and deleted.

In before the lock.

Wonder what Dave calls himself these days.

[Syndrome]

Originally Posted by GT0132

Wonder what Dave calls himself these days.

I am not Dave289. Looks at his old posts and you will see the writing style and topics are different to mine.

[mr smith]

Originally Posted by ebxr8240

If Dave sold his property 6 years ago and rented.. His rent would have gone up a decent amount and his term deposit interest rate on return would have come down heaps.. Just great financial planning ...

Not if he sold in, Tas, SA, any country town or now pick any mining town. Agree on the TD but rents have come down in a lot of places as well as some house prices. Sydney and Melb are not the only towns on oz.
The bubble is about to pop as the mining boom is over, big manufacturing jobs are about to go and people are going nuts on interest only loans that they can barely service.
It used to be a healthy property market was underpinned by a healthy economy and jobs base, now the property market has become the economy and that's dangerous.

[GT0132]

Originally Posted by Syndrome

I am not Dave289. Looks at his old posts and you will see the writing style and topics are different to mine.

I know I was just putting it out there.

[tregs]

Wow all this over asking for advice sorry if people end up with their feelings hurt.

I'm now looking to buy a house and land package in the town I live in. No train station here so that's out but it is in a new development area so all new houses near the lake so I'm hoping that's a bonus.
I'm waiting on the company to ring me back I'm going to try and knock the price down and see if my brother can do some work as he is a plumber and roofer.
I will keep you all updated on how I go.

[Syndrome]

Originally Posted by tregs

Wow all this over asking for advice sorry if people end up with their feelings hurt.

I'm now looking to buy a house and land package in the town I live in. No train station here so that's out but it is in a new development area so all new houses near the lake so I'm hoping that's a bonus.
I'm waiting on the company to ring me back I'm going to try and knock the price down and see if my brother can do some work as he is a plumber and roofer.
I will keep you all updated on how I go.

It is a very emotional subject. Look at www.australianpropertyforum.com and you will see the nonsense that goes on between the two sides.

[xxx000]

Originally Posted by GTPete

XXX000 what have you based your opinion on?
We have a housing shortage, low rates, relatively stable economy, what will drive such a huge market correction?

low rates can't and don't stay low forever: low rates mean low returns for our retirees/investors with money in the bank and it makes our banks unattractive for overseas $

and yet many people are jumping into the market because at these rates they can afford to borrow more

housing market is becoming overheated as people panic and rush to buy now thinking they better buy now before prices rise further.

Sydney/Melbourne house prices can't keep rising at these rapid rates forever

Ore prices have crashed to a fraction of their highs

I watched the 'good times' end for so many people end overnight in 1987. People were overcommitted, they had to sell up and move to cheaper areas and locations. They sold the luxury items they bought thinking nothing bad could happen but it did.
I'm no pessimist, in fact I'm a glass half full guy but reality is eventually things will change and rates will go up and more and more people these days have more to lose

[razbarb]

This is tongue in cheek, but I'll be devastated if I have to sell my home and move to the beach!
Which is my plan if the poo hits the fan. Provided I can sell my home of course.

[ebxr8240]

Originally Posted by mr smith

Not if he sold in, Tas, SA, any country town or now pick any mining town. Agree on the TD but rents have come down in a lot of places as well as some house prices. Sydney and Melb are not the only towns on oz.
The bubble is about to pop as the mining boom is over, big manufacturing jobs are about to go and people are going nuts on interest only loans that they can barely service.
It used to be a healthy property market was underpinned by a healthy economy and jobs base, now the property market has become the economy and that's dangerous.

Exactly but .The conversations have been on city prices.. In my case Sydney as its where I know .. We all know country is slow with little capital growth.. Nothing new about mining towns either... Don't see population growing there like Sydney, Melbourne , Brisbane ..

[Ovakil460]

Originally Posted by ebxr8240

Btw my younger brother lives in Naperville nr Chicago US . He has rentals there.. UM?? Due to mis management of banks etc over there.. He is just recovering from 2008 prices.. What saved him, rents went up big time ..
Yep Yellow Festiva have friends in late 60's and have no financial planing whatsoever ! Some don't even have a house !! I'm 61 myself .. Seems only yesterday I went for my first job interview.. It gives you incentive to work.. If your the sort of person who is happy to work 40 hours a week and don't want to do some accountancy and home maintenance it's not for you ... I worked extra hours knowing I'll get the extra tax back.. If it wasnt for landlords and negative gearing ? The public housing could NOT supply enough housing .. They can't keep up now ..

I had thought about buying a row of houses in detroit for like a $1000 each.
The repayments were like $8.00 week.
Figured it would be like buying a lottery ticket each week.
Never know what may happen in 10 yrs time. Some big time asian company might want to take over.

[DoreSlamR]

I'm currently in the process of selling my investment property, I was tossing up if I should refinance or just sell.

My property has only just come back from the what I payed for it back in January 2008...right before the GFC

My personal feeling, particularly here in WA right now, is the bubble is close to bursting again, the devaluation of iron ore, massive job cuts in the mining segment, property prices in towns in Port Hedland dropping dramatically and a massive drop in advertised jobs is the reason why I believe this.

I don't believe it will be anywhere near as bad as 2008, but many are in for a rude shock.

If the OP is still around and looking for advice, I would say wait for 6-12 months before thinking about getting an investment property, sit back and watch what the economy does for a bit.

Property isn't going to sky rocket in that time.

That's my plan if my place sells, pay off some debts, and probably invest some for a short term (1-2 years) gain, and hopefully have a decent deposit for next property.

[FairmontGS]

Originally Posted by tregs

Wow all this over asking for advice sorry if people end up with their feelings hurt.

I'm now looking to buy a house and land package in the town I live in. No train station here so that's out but it is in a new development area so all new houses near the lake so I'm hoping that's a bonus.
I'm waiting on the company to ring me back I'm going to try and knock the price down and see if my brother can do some work as he is a plumber and roofer.
I will keep you all updated on how I go.

Can I be so bold as to ask which town/state and how much you reckon you're going to spend? My wife's family is from country VIC and went down the same route with fairly crap returns over the years. You need to divorce yourself from the emotional attachment of where you live..

[ebxr8240]

Just so you know where I'm come from guys..
I moved here interstate from NZ in 1980 .
I have said before my investments etc..
I am a self funded retiree.. I have enough to comfortably live on mainly due to purchasing property along the way.. The time and where you buy is most important .. It can be a lucky dip!! But what isn't ? NO ONE. Looks after your finances more than you... We have lost money in gardigan finances, mortgage estate, the latter I was lucky to take out pretty much the whole lot to purchase my first house.. So from way back I've never had confidence in some financial adviser .. See how I feel with super ? Now it's in pension mode ...
Just do something !! Don't be negative...

[ebxr8240]

Originally Posted by Ovakil460

I had thought about buying a row of houses in detroit for like a $1000 each.
The repayments were like $8.00 week.
Figured it would be like buying a lottery ticket each week.
Never know what may happen in 10 yrs time. Some big time asian company might want to take over.

Maybe not good ole Detroit but my bro says they are nearly back to where they were in 2007 in Chicago... Strange they sign up tenants in summer , not much moving in winter.. Snow mters high at the front gate... Lol deffenatly a two level living style in US ..The haves pay sfa tax while have nots, middle class seem to pay it all... Sending manuctering o/s doesn't help.. Even over there..

[ford man xf]

Originally Posted by xxx000

low rates can't and don't stay low forever: low rates mean low returns for our retirees/investors with money in the bank and it makes our banks unattractive for overseas $

and yet many people are jumping into the market because at these rates they can afford to borrow more

housing market is becoming overheated as people panic and rush to buy now thinking they better buy now before prices rise further.

Sydney/Melbourne house prices can't keep rising at these rapid rates forever

Ore prices have crashed to a fraction of their highs

I watched the 'good times' end for so many people end overnight in 1987. People were overcommitted, they had to sell up and move to cheaper areas and locations. They sold the luxury items they bought thinking nothing bad could happen but it did.
I'm no pessimist, in fact I'm a glass half full guy but reality is eventually things will change and rates will go up and more and more people these days have more to lose

So Dave289, I mean xxx000..
What makes you think the bank will loan more because of low interest rates? They take a lot more than that into account to determine how much they will lend out, the biggest factor being income.

[Trevor 57]

Most banks are being very responsible these days (post GFC) coz they got burnt as well, we are going through the process now and they are far tougher this time round

[GT0132]

Regarding super , I'm a big fan...Yes you pay a 15% contribution tax going in but the contributions, up to certain limits, are made from pre tax dollars, unlike the money needed to buy property and shares which has already been taxed.

Also only 15% tax on earnings, and no tax at all on withdrawal if held until 60 and you can choose the mix of investments within which you want the fund to invest your money ranging from no risk to high risk with income distributed accordingly.

Only downside is you can't get to it which for some is probably not a bad thing.

[Dash_XR]

You don't know that there will be no tax at 60, by the time I get there retirement age will be in the 80's. That's if there is any left after the next gfc or the one after that.

[xxx000]

Originally Posted by ford man xf

So Dave289, I mean xxx000..
What makes you think the bank will loan more because of low interest rates? They take a lot more than that into account to determine how much they will lend out, the biggest factor being income.

I don't recall suggesting banks would loan more

individual people however would be more likely to borrow up to their limit when rates were low vs more likely to borrow less when rates are high

[GASWAGON]

Lets all wait through the rest of this year when 'The Federal Reserve' in the U.S start to actually raise rates again after being 0.00 for 6 years now...

Well thats what some news is predicting???

[tregs]

Originally Posted by FairmontGS

Can I be so bold as to ask which town/state and how much you reckon you're going to spend? My wife's family is from country VIC and went down the same route with fairly crap returns over the years. You need to divorce yourself from the emotional attachment of where you live..

You may be bold. I live in Hamilton vic the house prices are low right now. I'm looking to spend around $320,000 as I can cover the cost without tenants if need be. I can build a 4 bedroom house for this price. I'd like to start my investment properties here so I can get a feel for it and where I want to build is a new big playground for kids and a big lake to walk around.

[Trevor 57]

Originally Posted by FairmontGS

Can I be so bold as to ask which town/state and how much you reckon you're going to spend? My wife's family is from country VIC and went down the same route with fairly crap returns over the years. You need to divorce yourself from the emotional attachment of where you live..

You are aboslutely spot on, if you are serious about making some coin you need to buy in a high return area or where the punters say you are going to get a high return. Places near major universities is one place that is said to be good

[Trevor 57]

Originally Posted by tregs

You may be bold. I live in Hamilton vic the house prices are low right now. I'm looking to spend around $320,000 as I can cover the cost without tenants if need be. I can build a 4 bedroom house for this price. I'd like to start my investment properties here so I can get a feel for it and where I want to build is a new big playground for kids and a big lake to walk around.

I am also from Country Vict, I live in Shepparton and it is down quite a bit right now as well, house prices are low for a reason, not many people have too much confidence, fortunately for us we have a high migrant intake and there is a need for low cost rental properties

[usernametaken]

I was going to take a Govt job in Hamilton... The Missus and I went down to look at some properties just before Christmas and it scared us just how desperate some where to sell. A house that had been advertised at 520k was being flogged to us at 400 - beautiful old Victorian in the best part of town.

Ballarat would be as country as I would go If I had to buy an investment property...

[FairmontGS]

Originally Posted by tregs

You may be bold. I live in Hamilton vic the house prices are low right now. I'm looking to spend around $320,000 as I can cover the cost without tenants if need be. I can build a 4 bedroom house for this price. I'd like to start my investment properties here so I can get a feel for it and where I want to build is a new big playground for kids and a big lake to walk around.

Thanks for sharing the info. My wife's family ended up owning a fair slice of Numurkah (near Shep) because they, like you, wanted to be able to see their investments. We ended up selling all of it for not much more than they paid years later and most of the tenants were lay-abouts or family friends on mates rates. They did however have the foresight to buy a few properties in Yarraville and Port Melbourne which we kept and they are worth 5 times the purchase price, never vacant once in 25 years.

I've been through Hamilton and it's a lovely place but I would never invest there. It's a town that is at the mercy of economic cycles. If you must, then buy commercial property that people want to rent, like the shop that houses the Telstra dealer or CBA Bank for example.

But if it were my money then it would on a 2-bedroom unit as near to the Melbourne CBD as your money will let you. Must be within walking distance of train or tram. Think Thornbury, Eltham, Footscray. You'll get capital growth, higher rent than a house in Hamilton and constant tenancy.

And don't go too far out from the CBD looking for a good 2-bedroom - drop back top a 1-bedroom to stay in the desirable areas if you have to.

Thanks.

[FairmontGS]

Originally Posted by GT0132

Only downside is you can't get to it which for some is probably not a bad thing.

It's one of the best things about it. Enforced saving - the government should whack it up to 15% of your gross wage I say.

[Trump]

Originally Posted by CoolBFWagon

Lets all wait through the rest of this year when 'The Federal Reserve' in the U.S start to actually raise rates again after being 0.00 for 6 years now...

Well thats what some news is predicting???

The Fed will kneecap what is left of the US economy should it raise rates. What has passed off as an economic recovery has been fuelled by QE (quantitative easing).

When the US sneezes, the world gets a cold. But the US is showing signs of economic ebola...