Forum Replies Created
I think you’ll achieve your goals standing on your head.. sounds like you’ve already done very well and know where you’re headed.
Cheers
rpersonally I’d clear the mortgage, so you can replace bad debt with good debt when you re-use the funds for investment. I wouldn’t be in a hurry chasing quick CG in this market. Patience is the key.
What’s the zoning on your acreage near Bundy? Can you develop it in any way? I’d perhaps look at utilising that for cashflow if possible, maybe subdivide, sell some and keep some to build on and raise some capital/create cashflow…
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rhi cousinwooly,
get your self-confessed bad spending habits under control… sock away your cash in an ING or Citibank online account that give 5%+ interest. Save up for at least 6-12 months. Don’t be in a hurry because deals bob up all the time. Sure they might not all yield 10.4% but they’re good none the less. If you’re struggling to find something, just sit tight, because in 12 months or so I reckon better and better deals will bob up as property continues to be “on the nose” for the majority.
Also, ask yourself, why would investment partners give you money if you have no experience and a poor financial record? I certainly wouldn’t.
cheers
rcousinwooly, use the search function and spend some time reading through the posts… you’ll find answers to your questions in no time. What Steve wrote in his first book is out of date in that you can’t drive to a regional centre and pick up a 40k house and rent it for 120pw, but the principles of establishing fundamentals to find decent places to invest don’t ever change. Don’t rush it.
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rIt’s worth paying for good advice and getting the job done properly. Don’t try and cut corners. I’m using Dale’s mob to set mine up at the moment. Wish I’d done it a few years ago, but c’est la vie.
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rBruham
I don’t work in current affairs, but to blame newspapers and the likes of TT and ACA for a softening market is a tad simplistic. We don’t do those sort of stories in the 6pm news… if interest rates go up, we report it, if clearance rates are down we report it etc etc. We don’t offer comment or try and add fuel to any so-called fire.
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rI re-read my original reply and wanted to add:
Can you give any more details as to your circumstances, re: earning, age, why you haven’t got any savings? What are the details of your number crunching that tell you this is a good deal? Did you go to Kalgoorlie and look at the place yourself?
I wouldn’t recommend jumping into property investing straight after reading a book if you haven’t managed to get the savings bit down pat first.
Also, if you miss this one, there’s bound to be another around the corner.
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rdo you know anyone (family especially) who might help you out or go partners?
(by the way, $6000 non-genuine savings? please explain)
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rgreat stuff nat. well done.
you must have reasonable jobs/salaries to have achieved all that at the age of 23 considering you squeezed in uni too.
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rhi again steph
Let’s say a house costs $350k.
Most people might be able to save $50k over time to pay for 10% and costs.
That leaves $300k to borrow. At 7.1%, that’s $410 per week in interest.
At 7.5% it’s $432 per week, at 8% it’s $461 per week.
That’s a lot of money to be paying out per week in non-deductible debt. No wonder most couples have to work these days to keep the cashflow going… what happens if one loses their job, what about those buying on 5% deposit? yuck
Cheers
rI think the basic answer, steph, is easy credit. And I reckon the out of control credit situation here in good ol’ Oz has the government rather concerned, because I think (my opinion only) that there is a heck of a lot of people, who have bought a heck of a lot of stuff, that they really didn’t need, with money they can barely afford.
People looking at 350k-400k places for their first homes should be looking a few price rungs lower… I don’t understand this mentality that many people appear to have that the first home has to have all the bells and whistles… it seems a lot of people don’t like taking stepping stones any more, they over extend themselves in one big jump, and a few will fall in the pond with a very big splash!
Case in point, my wife’s sister and her husband set up a LOC on their house out in Knoxfield, which is a bit of a battler suburb here in Melbourne. Like everywhere, it’s price has gone up a lot in the last 5 years. They used this CG to establish their LOC from which they paid for a new kitchen, new car and new television, and then wonder why they’ve all of a sudden got this big interest bill that they have to pay back. She is a school teacher getting paid stuff all, he is not working at the moment. Yes, we know it’s stupid, but I tried to explain to them why they shouldn’t do it etc etc … there are a lot of people who have not been able to restrain themselves in such situations. I mean, who really needs a big screen TV and home theatre system costing thousands?? I’d love one, but there’s other priorities.
If you do a google search, you’ll find a similar situation in the United States… too many people going to see their “equity mate” without understanding what they’re getting themselves into. It’s a house of cards that won’t take much to blow over IMHO. Mind you, I’m no economist, just an average joe.
Cheers
rfoston,
that should read “allegedly” positive cashflow properties. Do your own research and you won’t get burnt. Don’t rely on anyone else… it just gives you someone else to blame if it all goes sour… by all means investigate the companies yourself and ask lots of questions if you’re not sure about them, just don’t blindly accept what they say.
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rI agree Wayne, they have to come back quite a bit more… and I’m confident they will… a 30% drop is a price reduction of $400k to $280k… places in some of the suburbs I’ve been keeping an eye on have already dropped from around $420 to mid 300s… it’s not outrageous to think they’ll come back more.
(by the way I’m surprised this thread hasn’t generated more of a response… just how closely are people watching things in their respective areas? I would have thought serious investors would have their finger on the pulse… oh well)
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rHowdy,
In a bid to add some flesh to your post, what steps are you taking to “bullet proof” your portfolio? Also, while prices have definitely eased, I don’t think a 6 year boom will unwind so quickly… I reckon better bargains will be around mid to end of next year.
Cheers
ryeah sure brendan, have some of my hard earned equity and borrowing power… don’t think so mate… your time might be better spent learning a. about property investing and b. how to become less money poor.
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rOriginally posted by zen:I have been saying to myself that property prices has gone up way too much in the last 2 – 3 years but finally I thought I should joint the “crowd” and get an IP.
Did someone say HERD? Zen, that is not a very good reason to make decisions that could cost you dearly.
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rFWIW, I have never seen Steve recommend buying in tiny towns solely based on yield, but so many people come on these boards screaming out to be told where the cf+ deals are, and get put on to places like Rosebery Tasmania… from what I recall he says the indicators he looks for as well as yield, are other development in terms of Bunnings, regional unis, hospitals etc… if the jobs/students are there, there is an accompanying tenant pool. If there are bugger all jobs in a town, or industries/employers are moving away, the tenant pool goes down, and your risks go up greatly in terms of vacancies. A property can have the best yield in the world, but it doesn’t yield anything if there are no tenants around to fill it. And sorry to disappoint some, but it takes a bloody lot of research finding out whether an area has the fundamentals to support your investment decision… there’s more to it than just looking at a few real estate websites. Sometimes you have to fork out for airfares etc to travel to the city/town itself to suss it out, rather than rely on someone else’s say-so. It’s your money, YOU have to do the work and YOU have to bear the responsibility for your decision’s failure or success. Don’t look for easy answers because there are none.
Some people hear the 11 second rule and then tune out… there’s a lot more to it than that, and a lot more research to decide if a property is a good investment than just looking for 10.4% yields.
These yields are not around any more in decently sized cities for RESIDENTIAL homes in towns IN AUSTRALIA (there you go Mini), period. They can however be created… the Mappers have proved that.
Horses for courses.
My two cents
rI agree Monopoly, it’s not a time to be alarmed, it’s a time to be licking ones lips if one is prepared. I wouldn’t say we’re at bargain basement time just yet, but there’s certainly some red spot specials about… it will be interesting to see the impact of a couple of small rate rises (even half a percent)… but then again, the fixed 3 year rates at some banks are lower than the current variable rate. I don’t know what to make of that.
Cheers
rHi
What are the stats? Purchase price v yield? I’d also go to http://www.somersoft.com/forums and do a search because redcliffe has been mentioned many times there. Don’t rush, there will always be another opportunity if you miss out on this one. Make sure you’ve done your homework first…
Cheers
rspot on yack, I agree.
r
