Forum Replies Created
touche Aussierogue
Kay
I too agree with you about admiring the English as a second language peoples attempts to speak our language. This is not the issue for me. The issue was about some people seeming to deliberately place a different meaning on some of their posts in order to (in my opinion) avoid answering the questions asked of them (much like politicians do). They play dumb in other words when they know quite well what they are saying.
Secondly, although I admire these people trying English, this is a serious investors forum and not English classes.Hi all
I have been quiet for a few reasons. Firstly, same old questions and answers. Secondly, there are a few people here giving poor advice to others and whenever posters like myself try give a bit of balanced advice we get shot down. An example of this was when some people gave bad advice about what to claim to reduce tax, some months back. I felt much of this was not being done in total honesty and when I suggest this, got shot down. Lastly, I find some posters grasp of English a bit on the shaky side and get very frustrated with the grammatical errors that change the intended meaning of the posts (either intentionally or unintentionally, I cant tell).
Oh well, I guess I am just becoming a grumpy old fart!Like another wise person on this website once said
“If you are going to invest in a one horse town, you had better be very sure the horse doesn’t leave”
That pretty much sums up my thoughts too. I agree with Derek and prefer larger towns/cities.
Well I knew when I posted this that I would get a lot of resistance from those who just dont want to accept that a correction is inevitable and that this time it is not different! Make no mistake, the market in SE QLD is slowing and prices are dropping just like they are in other areas. If you refuse to accept the reality, do so at your own peril and I will not have sympathy for those who get burnt.
The purpose of the post is only to warn inexperienced investors to do even more thorough research at this time.
Aceyducey
I have an economics degree so I guess you are right – that I have a limited understaning of economics! Imagine how good an understanding those who have not done any tertiary study in the field must have!So you are suggesting that the 0.65% increase in our population from immigration (excluding the declining birth rate) will have an effect on the property market?
Seems that too many people quote the side of the arguement that suits them e.g. 15000 migrations to QLD per month – but reglect to mention that there are 14000 migrations out of QLD every months!
I used to live in Melb. (now in Bris), and remember travelling from Brighton to the Richmond to work by car. It was time consuming! Seaford is a great deal further from the city than Brigton but has a train line. You are right that it is fairly close to the sea. Seaford however doesn’t really have absolute beach frontage like other areas along the esplanade because of the big strip of bush between the road and the water, so this would impact slightly on the desirability. Other than these issues I think as long as you paid the right price you should be right in the long term as far as CG is concerned. Factor in a market correction of say 10% when doing your sums and decide if you can still afford to subsidise the place. Saw some places in API mag for about $415K if I remember correctly. Am fairly sure these would be very CF -ve.
PI is a specialised field. Some people think they are experts at it and do there own research. Others rely on professionals to do the research for them and advise them. It is not ridiculous to expect that the banks and solicitors to look after the interests of their clients with regard to valuations. It is clear from these cases that the banks (especially Westpac and ANZ) are guilty of unethical conduct here.
Furthermore, the constant pushing of RE as an alternative form of retirement income is fraught with danger and has seen too many people concentrate of this asset class when traditional avenues like Super are much more suitable for most people. It is understandable that many people are upset at the poor performance of super funds and that fact that no matter how badly the fund performs, they always get paid. This must change over time to a model that only rewards the funds and fund managers based on results. It is something that will be resisted but the change is inevitable. Once this occurs, more peoples hard earned retirement savings should be better protected and more suitably invested.
Anyone who believed that the original claim meant that these property novices could have a net worth of over $1m after 12 months is themself a novice. It is very obvious to anyone with a bit of property knowledge and a small amount of common sense that the claim was to put these people in control of $1m of property. The problem here is that everyone is looking for a freebie and not many are prepared to work hard to make it. It is ridiculous to expect that anyone with a net worth of $30K can turn that into $1m in 12 months. If you are honest with yourselves and you were prepared to take a few seconds to think about the claims you would have understood the intent from the start. Steve is a good bloke who is trying to help people and people are starting to attack him. Have you (who are attaching him including Media Watch) got nothing better to do than be stupid? Get a life!
Just to be on the careful side, I suggest you get a building inspection to determine what work needs doing and how much it will cost. As a landlord you have a responsibility to provide a safe environment for your tenants to live in. If the roof collapses and you knew beforehand that it was infested, you would be in deep strife. Insurance would not cover pre-existing situations like this. If the place became unliveable at some point, your would have to put up your tennant in alternative accomodation etc. at your cost. If however you get an inspection that says it is safe for another 12 months and keep getting one every 12 months, the liability should be shifted to the inspectors PL insuance. So factor these inspections and ongoing treatments into your CF calcs.
SIS
So you are one of the people who believe that there cannot be a bust? You have obviously come up with some good reason why this time it cant happen when it has been happening all around the world for hundreds of years?Not wanting to disappoint with regard to doom and gloom – here goes..
I think interest rates will rise to 9 or 10% and that will happen over the next 3 years. I expect that terrorism will increase now that Israel have moved onto the offensive. This will affect world stock markets and thus people will want property instead of shares to form the backbone of their retirement portfolios. This is however only worth doing if the supply and demand equation is right and one gets a reasonable yield and CG at the end of it. If the large developers continue to flood the market with new projects, this will put a huge question mark over the viability of property as a retirement instrument. An large oversupply of IP’s is my prediction and this will push yields down. At the same time prices of property need to drop by between 20 and 30% on average to return value to this asset class over the longer term. This will then in turn push up the yield if rents remain stationary. This is a complex question but I suspect that the analysts who do this for a living are probably right in the statements that it will take 10 years before another boom. It may be hard for some of you to accept but the boom is over! The downturn will probably last longer than you would like it to, no matter how much you will it not to!
Any party would have had a budget surplus over the last 2 terms of office, so to say that the Libs have done well is not really that true and yes it is largely due to selling assets like Telstra. There really doesnt seem to be a viable party that will balance things well by not wasting our money as well as improving what is important to us (Health, Education, Infrastructure). Picking the best of a bad bunch seems too often to be the only choice – how sad is it that the world has come to this.
People seem to forget that the government is only meant to be a custodian of our money and that they work for us and therefore we are their bosses. They have a form of arrogance that makes us think that they are in charge and that they will push us around and tell us what is important to us. This is totally wrong and Geoff Kennett found this out when people in Vic decided they had had enough of his arrogance. Maybe other Premiers also need a wake-up call. I also believe that the Libs need to be given a rest at Federal level now as they are also too arrogant. I am getting a little sick of Costello’s smug little smile when asked about things like taxes etc.
Well said Pisces – dont get into a confrontation with the tenants.
It is ridiculous that the tenants have more rights than the landlord. What ever happened to a legal and binding written contract being enforceable? The tribunal are obviously a bunch of communists.
I totally agree with teabagted especially the sentence “Too many silly, trendy people paid too much for their properties and created an expectation among their neighbours”
Heres an excerpt from an article from NAB which validates the above.
• Capital city house prices rose a further 6.0% in
the December quarter, the largest quarterly rise
since the late 1980s.
• However there is evidence that relatively more
sales at the upper end of the market have
biased up the median price rises in Q4.Table 1: House Price Growth – December 2003
Region Quarter YearAustralian Capital Cities Average 6.0 18.9
Sydney 5.3 15.5
Melbourne 3.8 12.5
Brisbane 12.0 35.1
Adelaide 6.4 24.2
Perth 5.1 22.2
Hobart 3.2 21.4
Darwin 6.7 13.2
Canberra 6.6 25.3Building Approvals Ease Further
Building Approvals fell by 3.3% in January, the fourth
consecutive decline. Private housing was down 4.4%
and multi-units were 3.1% higher. Approvals for public
sector housing posted the largest decline (-37.5%),
although the absolute numbers are quite small.
By state, monthly declines were seen in every state
except Victoria. The largest declines were in South
Australia (-19.4%), WA (-12.9%) and NSW (-12.8%). On
a trend basis, WA is showing flat growth, while all other states are off their peak.Policy Implications
The monthly building approvals and housing finance
data have shown consecutive declines since their peaks
in October. However the official quarterly house price
data to end-2003 remain solid, even allowing for the
compositional effects. With household debt levels still
rising, the RBA will maintain its tightening bias until
signs of cooling in housing prices and credit are
confirmed.So in summary, I can increase the mortgage on one IP property to provide a deposit for another IP or two at any time and claim this ongoing interest as a deduction. Does one have to be able to produce an audit trail of the capital flow to prove it was used for another IP and if so how (bank statements are not too revealing)?
Great post Marc.
I feel that poor people often are programmed into not performing, whether it be by their parents lack of ambition or their friends or other environmental factors. Most of them are capable of achieving so much more than they settle for.
I agree with Bruce, dont count on the higher yield from uni students. If renting to them becomes too arduous and you opt for a “normal” renter your yield will drop to the average for the area (250/w). Based on this yield I would be working out what the highest I would pay would be, say $250K to generate a 5% return when getting 250/w rent. You may feel it is worth the extra headaches having students renting and therefore pay more but I would not. I have rented to students before and as has been said, there are good ones and bad ones. One thing you can count on is that they are always changing as they graduate and move on. I would say that unless you can get the property for less than $300K, forget it. At the high asking price, your chances of CG are also not too good in the short to medium term.
