[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 13, 2008 - 1:15 am

dublin_101 wrote:

Or should I just jump in with the mentality of "all propery doubles in 10 years" and hope for the best.

No. You should approach this in a balanced and measured fashion, much as you've already started to do here.

give90 wrote:

doesn't the money that you input from your pocket get carried over as a loss against the profit?

No.

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 12, 2008 - 2:57 am

I can get you suburb by suburb averages for Sydney. But I think you're in Melbourne? There you're battling a tight and mean state gov't, so no, you can't get this info for free (unless you know somebody from Land Vic, for example… )

F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 10, 2008 - 4:00 am

marcadrian78 wrote:

you have to wait for a number of things to happen first:

1. Interest rates need to drop further
2. Economy needs to be proven to be sound, not just talk from politicians
3. Credit needs to flow
4. A *severe* housing crisis needs to occur. This has not happened yet – you can still rent for a decent price, and you can still shack up with mum and dad who probably live in a 4 bedroom house with plenty of space anyway.
5. People need to forget how much money they lost post 97-03 boom

6. Prices need to fall. A lot.

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 10, 2008 - 3:58 am

Oh.

In that case, knock it down and see if the roof sags.

A saggy roof almost certainly means it is was structural.

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 8, 2008 - 2:45 am

Quote:

As I have just had a baby and am on maternity leave I don't want to overextend my self as we will have to pay double rent/mortgage for at least 6 months.

Missing the boat for me would be in terms of the grant – I guess technically I'm probably not entitled to it now, but I definitely won't be soon as I am getting married early next year (I know it's naughty but it doesn't seem fair!).

It's not "naughty", it's outright fraud.

It would be fairly easy for the PTB to discover that you were faking a single life while living a de-facto one. Little things like… oh, I don't know, THE BABY!?! And it would be pretty easy for them to check and find you were engaged…

The illegal bit aside, how much would it cost you in interest/insurance/maintenance/etcetera to hold the property for 6 months? Then add in the selling costs. If this totals to more than $7k, then you'd be behind, not ahead. Stamp duty is irrelevant as you don't get it back at sale. You can't even add it to your capital base because you will have bought as a PPOR.

 

Cheers,

F.[cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 8, 2008 - 2:32 am

crashy wrote:

have rents gone down to where they were last November?

No, but they're still woefully inadequate to make property purchase anything other than gambling. I'm an investor not a speculator.

Quote:

who said anything about capital gains? my post was CLEARLY discussing positive gearing.

Strange, your proposition was "this situation has created massive opportunity". My stated opinion was that it has not. Seems entirely on-topic to me? And if your "massive opportunity" relates to positive gearing, I'm afraid that there isn't much around that can be positively geared to the extent that it will offset current and impending price declines.

Care to share just one example of "massive opportunity" with us? You know, actually contribute constructively to the discussion?

Quote:

but hey, dont let that stop you from posting condescending arrogant irrelevant negative dribble.

instead of looking for opportunities, lets all join Scamp & F(wit) & co at a wrist slashing convention……….

Nice. You sure have a unique view of life – one where my measured post is "condescending" and "arrogant". A view of life where my measured post is "irrelevant negative dribble", where calling me names – "F(wit)" and making an irrelevant sarcastic remark about a " wrist slashing convention" is somehow contributing to the conversation!

Believe me, I'm far from negative. I'm excited by the opportunities that the current turmoil has already thrown my way. My superannuation is UP over the last 12 months, 18 months and 24 months. Every single one of my investments is UP over these same periods, and has meanwhile provided significant positive cashflow (with the exception of precious metals and collectibles which were never intended to do so). And I'm finding plenty of bargains to buy right now. But right now property is simply so overpriced as to be not even on my investing radar. Not for at least a couple of years. I simply can't be bothered "looking for opportunities" when those same opportunities are getting cheaper by the month and will be much cheaper in the future. I'm positive about that!

 

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 7, 2008 - 10:42 pm

IP Freely wrote:

The general form of construction for home units is that all walls are load bearing

How can it be load-bearing if it is only 1.5m high?

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 7, 2008 - 10:36 pm

Huh? This only takes interest rates back to where they were last November.

Prices are still ridiculously high. Affordability is very low. Yields are still very low. The inventory of unsold homes sitting and stagnating for months on end is very high and continues to grow. Credit is tight. House prices in countries with similar economies and smaller house price bubbles are proving quite dramatically that prices can and do fall, and often fast at that. We're almost certainly headed for recession.

As an investor, I see "massive opportunity" in investments that provide me with a decent return on my money. Homes don't right now. If I was to buy on the hope of capital appreciation, to me that is not investment, but speculation. Given the outlook, I'm afraid it might be more than mere speculation, it might be abject idiocy. So I'm not excited by the rate reduction.

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 7, 2008 - 10:03 pm

Scamp wrote:

Thanks foundation. I guess your fundamental value of the 15k gross yielding asset would be closer to my property valuation of 250k than a property valuation of 570k.

In a word: Yes.

I bought some shares in a well run, profitable company which operates with zero debt, is recession-resistant, has grown earnings and dividends every year for the last 5, whose management is busy snapping up their own shares etcetera early this week. For a $15k dividend (and slightly higher NET earnings) I would have paid a little over $100k. My parcel was smaller than that, but you catch my drift I'm sure.

I bought this stock because I believe it is undervalued. Too cheap. A bargain. Double the price and I reckon it's fair value.

Quote:

Although, I think you won't even get close to 200k ( just a guess ). My valuation wasn't based on the 15k gross yielding. To expect to sell it for 570k in this market is just silly and ignorant.

I disagree. In this market a house priced 10% below other similar ones around it (which are not selling and only growing in number – what is it with houses in WA? They seem to be breeding like rabbits!) will sell. And in 12 months when the other sellers have got sick of holding/waiting and reduced their prices by 10%, somebody who prices a similar house 10% below their (lower, but still wishing) prices will sell (while the others don't – this is simple market economics). The important thing in a declining market is to sell early. Selling today will still bring a price that is completely disconnected from fundamental value.

It is a brilliant time to be a seller, regardless of media tags like "buyer's market". Sellers have never been able to sell at prices so far above fundamental value. There may never be another opportunity this good in my lifetime!

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 7, 2008 - 6:16 am

As far as asian markets go, the SSE is currently sitting at 2163, down from 6092 last October. Either the market is wrong, or they're headed for recession along with the rest of us…

Cheers,

F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 7, 2008 - 3:28 am

gibbo1 wrote:

You state that prices are falling, the house in question is located in Perth. Perth has some suburbs that are falling, some that have fallen but have started to turn around, some that are pretty flat and others that have continued to increase (although at a decreased rate) during this whole cycle.  I think its imposible to make an acrose the board recommendation without considering all the other factors for this one particular house.

Ehm…

Let's look at the facts as we've been given them:

• Nat herself said "the values in the area have dropped by about 15% in the last 18 months".
• Nat herself said "we could expect between between 550 000 and 570 000 to sell" and "at the height of the boom the value was 700 000". That's a drop of between 18% and 21%.
• Nat herself indicated that she expects prices to fall further: "…as well as capital losses".
• From Nat's figures it looks like this house was renting for around $15k per year and valued at peak at $700k. A gross yield of around 2.1%.
• At $550k, assuming the $15k rent is about right (plus NG & depreciation bringing it up to $25k) the gross yield is 2.7%

Considering all these "other factors for this one particular house" as you put it, it's pretty easy to draw the obvious conclusion that the property is fundamentally waaaay over-valued (ditto for every other dwelling in Perth IMNSHO). If there's any positive in all this, it looks like there's a chance that Nat might still sell it to a greater fool for more than its fundamental value (I'm not going to personally disclose here what I think the fundamental value of a $15k gross yielding asset is… trust me, you'd heave up your lunch).

Cheers,

F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

October 6, 2008 - 3:38 am

The best advice I can give somebody in your situation is to panic.

You have on one side a guaranteed:

• depreciating asset
• negative cashflow

on the other side:

• hope/prayer for capital gains in an economic climate that is worse outlook-wise than any time in the last 70 years.

Sorry. I'm just not seeing the silver lining in the cloud.

F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

September 2, 2008 - 2:29 am

benderfile wrote:

i wait  with baited breath……

That's kinda disgusting… 

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

September 2, 2008 - 2:24 am

http://sqmresearch.com.au/graphs/graph_vacancy.php?postcode=cairns&t=1

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

May 21, 2008 - 6:03 am

You're welcome! It looks like you're getting the gist of it already – must be a fast learner, eh? [wink]

Let me know when you're ready to move on to the appropriate use of capitalisation…

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

May 21, 2008 - 12:49 am

full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP full-stop Full-stop FULL-STOP?

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

May 14, 2008 - 6:27 am

stormpoint wrote:

I would appreciate input on how I can effectively invest indirectly in property (either via a property trust or through purchasing shares of an undervalued developer) – I would be looking for a property trust or listed developer who specialises in high quality homes, in premium residential real-estate areas such as Falls Church VA, Alpharetta GA, Prior Lake MN, San Clemente CA, Malibu CA, Woodland Hills CA, Bellevue WA, Medina WA etc. etc.

Don't take this as advice, but futures based on the case-shiller indices are selling 2009/2010 contracts at as much as 30% discount to current prices….

Cheers, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

May 12, 2008 - 2:59 am

I hereby bid $1.75 for these two tickets (postage to Vic at your cost). Can transfer money immediately. Let me know ASAP.

Regards, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

April 15, 2008 - 1:37 am

"and make sure that i put extra into the home loan"

Perhaps I did not make myself clear. Let's try this instead:

thanx for you're questions doublek.

take mortgage to pay the mortgage.

sound good tko me?

no i don't.

There, that should be sorted. Regards, F. [cowboy2]

[foundationMember@foundationJoin Date: 2005Post Count: 1,153]

April 14, 2008 - 5:27 am

Where's the equity coming from? Presumably not your PPOR because borrowing that to pay down the mortgage would be… well, unproductive to say the least. If you're borrowing against an IP to pay down your PPOR mortgage, be aware that you cannot then claim a deduction for this portion of the interest payments, so again, I can't see the logic.

Did I misunderstand?

Cheers, F. [cowboy2]