[Jason StaggersParticipant@jason_staggersJoin Date: 2006Post Count: 61]

April 10, 2019 - 11:35 am

Interesting thoughts Benny. I tend to agree that we’ve allowed the issue to become very politicised. I don’t trust either side. I think both the left and right are motivated by greed and desire for more power.

Whether climate change is natural or man-made, it just seems to make sense to me that we should care for the environment. Fossil fuels lead to unclean air and other pollutions. Petrol smells bad and breathing while riding my bike on a street in heavy traffic sucks. We should be mindful of animal habitats and preserve environments of species that could become extinct. These things seem obvious, and remain true regardless of why the climate is changing.

I’m looking forward to the day when I drive my electric car with solar power absorbing paint. The future is bright – pardon the pun :)

Actually, the car will probably be driving me.

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March 13, 2019 - 10:12 am

Hi SBH. The question of whether to buy a PPR is not as objective as making an investment decision because there are personal and lifestyle motivations (not just financial goals) driving the decision. Here are a few questions to consider…
– Is it more expensive to own than rent in the area?
– If so, will buying a home restrict your progress toward your investing goals? Will buying a home lead to cash flow pressure that would restrict lifestyle in other areas?
– Are family/lifestyle motivations stronger than financial motivations? If so, and you can comfortably absorb the costs of owning, then the financial concerns are secondary.
– How long would you own this home? The longer you intend to own, the less the current state of the Perth market matters in the decision.

Hope those questions can set you on the right path.

Jason

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July 20, 2017 - 11:15 am

That depends on the area. If demand overall is relatively strong, #2, although it wouldn’t necessarily take longer to sell. If demand is weaker, #1, or it takes longer. So the risk is, if the market moves against you, your duplex may be harder to sell for the price you want within the timeframe you want because the target market is smaller. In the meantime though, you would be getting a higher yield.

Duplexes tend to make better income properties than growth properties (unless in an area where land is appreciating at a rapid rate), but that said, a mate of mine built a duplex in Albury two years ago on a corner block and just sold it for about $100k over his purchase price. He was very smart with his design with the attached granny flat facing the side street. An investor from Sydney bought it and was happy with a 5.7% yield.

• This reply was modified 6 years, 9 months ago by  Jason Staggers.

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July 19, 2017 - 11:26 am

Steven wrote:

they increase capital growth at a much slower pace than a normal single dwelling house.

Hi Steven.

I wouldn’t necessarily agree with that view, as the majority of the value of any property is in the land, not the dwelling. So in part, it comes down to the demand for land in the particular area. That said, your dwelling does narrow your target market for resale, so with a duplex, you’re aiming to sell to…

1. an investor
2. an owner-occupier who wants an aging family member nearby
3. a first homebuyer (or anyone for that matter) who wants a creative way to pay off their mortgage faster (by renting out the other side, assuming it’s legal in that state).

Given the smaller target market, you could conclude that you are carrying greater resale risk (in lower demand areas or if the market turns against you), but that’s not necessarily uncommon when getting a higher rental return. As Jaxon inferred, you need to first work out whether you are a growth or income investor.

Hope that helps.
Jason

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March 21, 2017 - 12:37 pm

They are all looking for ways to shore up capital to meet new APRA requirements that are just around the corner.

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October 21, 2016 - 1:05 pm

Hi Pat. It sure seems like there’s never been a better time to sell, but that’s not to say next year won’t be even better. With interest rates so low, it’s really hard to say. It would be tough to let it go though with potential subdivision gains to be had. But I can also see why you’d be keen to move on.

Happy to catch up for a chat if you want to discuss your situation in more detail.

Jason

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October 6, 2016 - 3:29 pm

Thanks for the heads up. Another thing to watch out for is insurers’ deliberate attempts to minimise payouts. I was recently working with an investor who was told the damage by his tenant was not “malicious” even though it was clearly beyond normal wear and tear. Finally, after pushing and pushing and talking to three or four different people, he finally got them to admit it was “malicious.” I wonder how many people don’t bother pushing back and leave insurance money on the table. It’s a shameful practice, but I’m sure one that saves insurance companies lots of money.

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September 29, 2016 - 1:17 pm

I expect the Fed to cut rates back to zero, which would put pressure on the RBA to continue cutting rates. But that could continue to fuel home price rises, so APRA will need to help out by preventing an excessive amount of new credit from flowing into housing. This would come in the form of capital controls of sorts on banks.

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September 28, 2016 - 4:13 pm

Having personally coached hundreds of investors, I’ve seen firsthand the importance of educating yourself before buying an investment property. Find someone who has done it themselves and who is not trying to steer you toward a deal through the learning. Investing a few thousand dollars in your education on the front end can save you tens of thousands in mistakes down the path. All the best.

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September 28, 2016 - 3:42 pm

I’ll go on record to predict 1.0 percent by the end of this financial year :)

But not without some help from APRA…

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September 22, 2016 - 11:02 am

Great input here all around. I would only add that it’s best to first decide whether you are primarily an income investor or a growth investor. Commercial is great for income, but not so great as a growth asset. That said, I can understand why you’re looking elsewhere than Aussie residential property for generic growth.

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September 14, 2016 - 4:00 pm

“Success comes from doing things differently.”
– Steve McKnight

“Pay yourself first.”
– Robert Kiyosaki

“Small fish taste sweet.” (In reference to smaller profits on quick-turn deals)
– my friend who’s a builder/developer

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August 31, 2016 - 10:09 am

Love your attitude Colin!

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August 26, 2016 - 4:53 pm

Colin Rice wrote:

I reckon we will get close to a zero% cash rate within 2 years or less!

Agreed. But I don’t see your job getting any easier. They need to do something to stop the flow of all that new credit into real estate.

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August 26, 2016 - 1:17 pm

That said, I don’t think our regulators want real estate prices to go much higher.

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August 26, 2016 - 1:16 pm

Benny wrote:

Booms go for FAR LONGER than they should

Especially as central banks are suppressing interest rates. No telling how far this run with go. Still potentially 6 more RBA cuts. Then QE? I sure hope not, but anything is possible in this day.

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August 26, 2016 - 1:14 pm

Colin Rice wrote:

“Be scared when others are greedy and greedy when others are scared” – Warren Buffett

That is a great one. Thanks Colin!

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July 20, 2016 - 4:44 pm

Good luck. I don’t think they can afford it. Gotta keep their share prices up while also meeting soon-to-come tighter capital requirements.

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July 7, 2016 - 1:05 pm

DeanCollins wrote:

what to do….what to do?

Good question.

I remember Steve writing “Property Investing” on a white board in 2007 and asking, “Which of these two words is more important to you?” His point was that we are “investors” first and “property” may or may not be the best asset to hold.

Eventually there will be a tipping point where people are no longer willing to take such great risk for so little return. If term deposit rates were not so low (thanks to the RBA) no one in their right mind would accept such low rental yields.

But it seems for now interest rates will remain low for who knows how long. I think an important question to ask could be, “Where will capital go if/when people lose faith in central banks and fiat currency? I think that will happen unless central banks change course and start raising rates.

But the conundrum they find themselves in is that doing so would also increase government borrowing costs and leave fewer dollars/euros/pounds/yen for entitlements, interest and operating costs. Oh, then there’s that need to pay back all the debt. Seems the only politically expedient solution is to inflate it away, which seems to be the order of the day. It will work until people realise what they’re doing. That could take a while. Or maybe not.

Tricky times.

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June 22, 2016 - 4:44 pm

Anything to add @terryw?

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