[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 5, 2009 - 12:59 pm

SHales

Correct, all good stuff. I really am being forced to make some major decisions and many things come into the equation. PPOR or "the bargain of the year" with the intention of punting it on latter. You may me able to help me If you don't mind. I will go back to my accountant, but real estates not his thing. Tax deductions on investment properties, I need to get the full picture on my ROI if I go that way. The places for 135,000 are not what I would choose for my PPOR and would need to be renovated to make them stand out, new kitchen, bath, floor coverings, renovated prudently and tastefully as you say and its not that hard.

This is an option I'm considering "There are ups and downs, but you only truly miss out if you completely fail to jump on."  I feel you are right no matter what I buy as long as I can pay for it and I don't over pay  "aggressively negotiating a good deal" In fact Im looking forward to that part. It wont matter what happens in  the economic climate.  The lower end, I over heard a guy in the bank saying he just brought a few country properties, I mean way out in the bush but mega cheap. With a bit of a reno you could still make money as long as you can find the right person who likes to life that life style.  Cheap  interest rates and buyers market means to me, buy (carefully though). I feel the time may be right and provided I do the  research carefully things should work out.

More has been lost in hesitation that speculation.

Cheers
T……………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 5, 2009 - 12:24 pm

Carp
Yes, having a PPOR has many advantages as you say, and not just economic ones. However, it always been a good place to hide / Insulate you cash from inflation and taxation.  With no CGT when you well. As I have worked OS allot Ive never been able to settle in one place, should have brought and rented it out while I was away, but that's history.

I feel I can keep the business going OK ish and still buy a PPOR as you point out the obvious good points. I'm not a greedy person, very have never will be, so I will not be to disappointed if it value drops a bit , provided I buy it at a price I'm happy with, as I can't see myself being forced to sell.

The worst house in the best street. Yes, I will have to be mindful of the location and future development of the area. I intend to do a lot of shopping round in the next month aimed at places that need to be sold, I have heard that there has been a few real good buys even in my local area, which surprised me 50 – 60 k under asking price.

Thanks for your reply .
Cheers
T………………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 5, 2009 - 11:55 am

WJ Hooker

"As you say – interest rates are so low its too tempting not to buy. And with interest on savings also too low it also pushes us to buy."

After my talks at the banks I feel I have no choice as I'm not going to see my cash disappear at such low intrest rates and inflation + tax eating the ass out of whats left.  You are correct other people that went the safe option "cash" now are forced, pushed, to look for something and it will be property. Just like the government wants, to put the money back into the working economy.  

A 5% return does not get me excited at all, I mean not one bit, but compared to "cash" it's much better than a -1 or -2%. However I do feel that I am being pushed to buy as a result of the major global economic changes. I think we should make the best of the situation and take advantage of the low borrowing rates, my employment is safe (or as safe as it can be right now) Its just a matter of how much to borrow and then when & the right location to buy.

Cheers & Good Luck.
T…………….. 

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 5, 2009 - 3:06 am

SHales

Thanks mate. I just contacted the bank today re. cash investments, man forget it , the rates are that low you may be better off putting it in the back yard. The feeling in the bank is next month they will even go lower, and I agree. This puts me in a real difficult spot, as Ive invested in other areas than property mainly cash ( as Ive needed it for my business)  and I would like my own PPOR and the FHOG. So, what do I do. The uncertainty of the economy ???? falling intrest rates for cash investors and the lack of safe investment options. Do  I  go for the bricks & mortar and pay what I think is too much (current market price)  say  $400,000 and then next year when our Reserve Bank drops the rate to 2 % which is possible if not likely my house is worth 350k.  I was told my the bank today that the UK has  0 % intrest on some savings accounts.

There seems to be a consensus on this forum that house prices in Australia are too high, currently.  So, do I buy now and forget about that it will be worth in 2 years.  Or wait for a bargain to appear ( the 400k house for say 365K ) as a few people point out do exist.   I also  believe you are correct it seems to be area specific as to the price and the price drop. People will always need a place to live, affordable housing ( that means housing say 200-400k ) even if its not worth it, but, compared to 550,000 for the same place closer to the city it is worth it. So as you said the lower priced ( by comparison) homes most likly  may not fall that much more.
 Location specific:
I'm in a country area (by choice) I see the Mac Mansions for 600,000 (no way) and the ex. government small 3 bedroom places for 135,000 big difference, same town. However, the Mac Mansions sit in the window for a long, long time and if they sell its for 70-80k under asking price.

So, do I buy now and forever hold my peace if the prices fall. Or wait for the 30 -40% drops as mention on this forum. For me Im lucky as I have a choice, but like you all Ive had to work for it.  The  Global economic cricis has now made its way to Australia and what has happend in USA & UK  should happen here also. Im sure there is no clear & certain answer only opinions and time will tell.

Cheers
T………………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 3, 2009 - 12:26 am

Mrs P

Its great to have cash and no debt. However, with today's interest rate cut the banks will drop their term deposit rates with in hours of the reserve cutting the cash rate. My point is Ive had most of my assets in cash, its safe, but after tax and then inflation + paying rent you will be loosing money.  As you said building prices can only go so low. In fact the price of building materials will not go down. Try buying a kitchen sink at the hardware store for less than it was last year.

"Cash is King "  or was King, 3 months ago I go 7% today I might get 4.5% If Im lucky.  As to the talk of house prices falling 10 -20% I think you will be renting for a while till you find a place, there are some Im sure, but they where over prices to start with.

All the best with it.
 
Kind regards

T………………….   

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 2, 2009 - 4:59 am

Digger

Thanks for the reply.  I'm not in that much direct contact with the companies but hang out with a few builders and am on site often. In Victoria I have not seen that many go under. They may be in the red on paper and with any business including mine things can go up & down. I'm sure its harder for the small independent builder as they can not compete with the volume builders.

The house at Upper coomera bought for 480k sold for 280k, i am sorry but that has got to have something more to it, the agent that let it sell at that price should be lined up against a wall and shot

Yes I totally agree with you. I was going to ask William to show me this place on the net. As we know there is something out of place there.

there is a lot of rubbish talked in the media – good news dosen't sell newspapers i am afraid – and on some forums , most of it second hand info passed down through many ears and shapeshifting each time.

Yes you have to be careful how you interpret the so called info. I don't know if I'm right but you cant sit on the fence, not in my current situation anyway.  Ive heard talk of the recession ( sometimes spelt resession, resesion, ressesion) and as you said it hard to know what will happen and when. Plenty of experts but it does not help me.  I'm currently of the opinion that I have to buy now as the lower interest rates + FHOG Boost + Immigration + inflation will slow if not stop the price fall. What do you think?

Kind regards
T……..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 2, 2009 - 4:36 am

WJ

Yes I new someone would say something about it. I have 3 Degrees and still cant spell, I do have a problem called dislexia (I hope I spelt that correctly) which is a real pain on these forums as it take me ages to check. But I have discovered the spell check on this site. Im sure you will see a marked improvement.  I also enjoy your posts.

Cheers
T………

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 2, 2009 - 4:28 am

WJ
Thanks for the link, I new the index was out today and was going to take a look. So what does this mean. ABS one of the most reliable sources on the state of the economy lol. I think this is taken from an average of all the over priced place in the millions. Not sure. I made a few comments on the forum Value adding.  If you go out and try to get a house advertised for 400,000 and offer 360,000 based on the ABS stats see what the vendor says. It may be true, prices are on the down, but how much 10% here 40% in Sydney, 3 % in Melbourne.

I think the stats are good to look at for sure. However, its up to the buyer what you what to pay, what its worth to you & me to buy.  And of cource what the vendor is willing to take & how despret they are for the money. Im not going to believe the house prices will fall that much as to 20%. Ive work too hard doing the rounds of auctions & opens and I see the last boost has put people back  in the market. I think house prices are over price for sure. But Australia has been the lucky country for a long time. Try buying a house in London or NY or Beijing, Aust. is still cheap in comparison but for how long. Im sure the factors I mentioned make sense, Immigration, Lowest interest rate since Adam built the Ark. Investment options, cash rate at the bank 4 or 5 %. Surly I could not do any worse in property and plenty like me will be buying rentals with a positive cash flow. 

Thanks for reading my post & for the link.

Kind regards
T………………

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 2, 2009 - 3:24 am

Hi all
Some great comment and insight in all your posts. As to building prices dropping, National Builders (one of,  if not the cheapest in Vic.) just put the price of my house up $12,000 in Jan. Along with several price rises before: March 3k, July 9k, Nov 5k and Jan 12,000 so Ive not met any builder that has dropped the price of their product based on the price of steel and I will not.  I cant find any builders who are chronicly unemployed. The one of the major costs in a house is the labour. Until we see a real slow down in building and higher unemployment that's when we will see a price reduction. If I may where in Melbourne is it in the west as that's my area also.

Its going to punish everybody who has been responsible and saved up by making their dollars worth less.

Mark you make a great point with the above.  Im in a similar situation as you. This govenment  will continue to give out money to those freely and tell them to go out and spend it on anything. Man what kind of PM does that. And now his planning to do it again. I did not get a cent. I paid my tax bill of 5,300 just before the money was given out. I met a guy with 4 kids & he told me he was getting 5k tomorrow from the government. They sent it in about 3 days on shit, DVD players, Ipods and take away food and dope. You tell me thats the way to stimulate the economy.  Lower intrest rates, FHOG boost, Cash hand outs.  All these people who got into debt now expect the Government to help out, the reason or part of it is people have no money to spend because they owe the bank and got in too deep as you said been Irresponsible. 4 bedroom house, 2 cars, flat screen TVs in each room. and they are only 21 years old. Did our mum & dad have it so easy. No way. Now  we pay for it. 

I feel you are taking a risk by building new and selling in a short time, you are punting. If the sh-t hits the fan, who will buy it. After selling cost etc. you may loose. I'm sure you are a smart person but do your sums on this one man.

dank 78

I agree building is most of the time cheaper.  You only pay stamp duty on the land. Big savings. Every thing is new, new, new.

But don't forget the other stuff in you calculations. Drapes, shed, tank, land scaping. et al. People who have over capitalized now put thier place on the market for that it owes then but you can only sell it for what you or I will pay and vendors don't like it when you tell them that you can build the same house new of 5k more and its new. If I may, where in Melbourne is it in the west as that's my area also.

WJ Hooker

Most builders are going broke I wish that was true, I know of one on the news of late now in receivership. Plenty of houses left unfinished. Most builders are working as subies under a company and if they don't get paid thats it game over.  Might be a good sight to owner build. As labour may be cheaper. However I feel we will see more in the future.

bardon

House prices to drop 40% is a very general statement to make.  Some overpriced high end props may do this but it is hard to see how say a $350K starter home will drop to $210K in my view.

I totally agree, anyone who suggest that has no idea. This would lead to a poverty stricken country and we would be better all shifting to a 3rd world country asap. The banks would not sell them up for that. I attend mortgagee sale allot and most of the banks want more that its worth. I think we can safely say this will not happen.

I posted a similar topic in the need help section on the global recession and house prices have a look and tell me what you think.

Kind regards to all

T…………………

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 2, 2009 - 1:26 am

Well guys thanks for the replies.  The news to days is another interest rate cut tomorrow for sure, yes again. Maybe a 1% or more. Making interest rates the lowest since the 60s. Most people buy on a loan not cash. I'm sure this will bring people back to the market. Man soon the rate will be like the USA next to 1%.  If property is slow to sell, why have not the builders dropped their prices to get more work. I don't see any out of work builders. Sure things can go wrong, but I don't see the great fall of the housing market in Aust. happening. Banks wont lend money to people that cant pay because they know at the mortgage sale they want cover the loan. The banks dont do the low doc. loans as much, and they check the value of the property well first before giving the loan. They are being careful but still leaning money to people. 

As I pointed out and will stick to it. Whats the option for a cash investor. Shares, No, Fixed interest, No well I guess that's property left. Even in this harsh economic climate sellers will not sell for less than they paid. So they still believe the home they brought 2 years ago is worth 30k more and you see it sit in the window for months. But make an offer and they will not move more than 2-5 k. I know I have tryed many times.

Ive watched the market for some time now and I agree its not easy 100% guaranteed to make money on property. I would not like to be selling a home now. Or buying property as a major part of my ger rich quick plan, because you will not.

If its not the global recession, then what? 

What will make the housing price fall in Aust.?  Or why will people wait to buy? I think it is a mix of social, economical and political. But more social at the moment.

People need to live somewhere. Option: pay rent or pay your own home off.
A need to live close to where you work, people change job locations, thus shift, sell then buy.
The Government bailing people out, cash hand outs to stimulate the economy and keeping interest rates low. The bloody cause of the recession was people getting into debt with home loans and not spending money as they only had 20 bucks left at the end of each week. The Gov. will not see people out in the streets. Poor economy, need more spending = lower interest rate and more hand outs, all good news for home buyers.
FHOG  will most likely to be extended.
The great Aust. dream of own your own home.
A place to raise your kids.
Security and having an asset of sorry to say it (bricks and mortar).
Also if the s__t hit the fan and we have job losses  if you have your own home you may be in a better situation than a renter.

Im sure there is no formula for it or a mathematical sum to say what will happen. To end I think property will not fall as many have said. It may not go up and it will be dependant on location. But as an investment option it is better than other investments right now.

This is only my thoughts on the matter as this recession is on the way and it will be interesting to see what impact it will have, will we see houses for 30 -40% less or not?

Like to hear some more opinions on the subject. Thanks.

Kind regards to all……………

T……..

 

  

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

February 1, 2009 - 11:45 am

Mia
Im sure when your are playing with that sort of money, you took the contract to your solicitor first, I feel you did not, because they would have advised you to go subject to finance.  As the purchase is subject to finance.  The above comment are all good ones. When a brocker tells you to go unconditional on a contract and they have not approved you finance yet, I would be asking why. Valuation my be a concern as mentioned some of the valuations are not comming up the the price paid. 

Any way  you cant undo what you have done, if the finance falls over with that broker, give them a peice of your mind. And start looking for the money fast as you can.   Im sure you will be fine.

Best of luck.

T……………

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

December 28, 2008 - 12:16 pm

Janet

Unfortunity the big profits in real estate to be made by the average Jos like us are at an end the cycle has ended. Yes, it can be depressing to think what the hell can I do to make a financial future for myself & family. As I mentioned re. Super (soulds like you know what I mean) safe fixed intrest too low and to buy property in the current market as an investment needs serious consideration as I cant find the returns on investment considering the risk and commitment.

Janet dont jump in to a property investment with the fear you may miss out. If you sit down with people that have investment properties most of them are negativly geared, why, because they have no choice.  Do the sums & do them again get as much info as you can first hand not from someone with a vested intrest. Any real estate agent will tell you now is a good time to buy or you cant go wrong etc. If the sums dont add up then its not a good investment.  I did not mean to be too critical in my comments but in my opinion I realy beleive its dificult to get into a good investment in anything anywhere now, let alone property. 

Having said that I also beleive you need to go the research & leg work. Then if something comes your way it was ment to be. Im sure you will find the right thing when it comes your way. By the way if your still heading to the casino  stop by I will have the credit card ready.

Anyway All the best for the New Year
Kind Regards

T…………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

December 27, 2008 - 3:59 am

Spunky

Great Topic & a very importaint one. Never worry that an agent will laugh at you or your offer. Mate, it only takes 6 or so weeks to be an agents rep. So you can compair an agent with a sales person at the local weekend market. No more no less ( Im sure some one will disagree with me and try to tell me its a 4 year Uni Degree ) They have to take all offers to the vendor unless instructed not to.  They love to talk about purchases behind their back, he is a tight ass or he wants it for nothing, here he comes again with a low ball offer. ect. Its your offer not theirs. Remember they dont own the property.  They may laugh at your low offer but will piss themself when you pay 30k more than the vendor wanted. That night you will be the talk of the dinner table and the agent will be telling his colleges of his victory over you. And all the time you think he / she is the nicest person in the world. (when their nice to you this is a sigh your not barganing hard enough)

By the way they do take it personally when you let them know you have a good idear of the true value of the place and you know what your doing, some are insulted by it. Ive talked to young couples who have been scared to ask for a discount or make an offer less than the advertised price. This is why the vendor employs an agent.  Sorry to rant but remember your the boss, you have something they want MONEY.

Minster wrote, " Offer anything you feel would be at the bottom end of reasonable in 6 mths from now and then minus some again ."   This is very importaint now. Whats it going to be worth in 12 months, think about it hard. The agent wont get it and the vendor wont get it ether. But in 12 month time they will.  Ive had my last 3 offer knocked back for as less as 5 k, go figure.

Beware of faulse savings, a vendor who drops the price 50k fast new he was never going to get that price anyway and would have sold it to you for 50k less eventually.      A few things to consider:

Not all properties are over priced that much. So you may be pushing it up hill to get them down 20 or 30 %.
Get the Sect 32 & see what they paid, work out there clear profit, is its a fair mark up, would you sell for less?
Money talks & BS walks make your offer in writting & dont let them know any offers before verbally, they may play you off with another buyer.
Yes, the other buyer, the keen cashed up intrested person who is willing to pay listed price. Ive met him at each offer Ive made, Im sure you know him also. Dont ask "have you had any other offers" If you are told of an offer OK ask the price, if they tell you, ask to see the contract. They wont show you it then ask them why not you just told me their price. Will you do the same this mine.

Dont be swayed by other buyers offers. Make up your mind what its worth to you first financially then secondly the other things. No one likes to over pay but for the sake of a few grand get on with it, its small money at the end of the day. Try to let them win, eg. OK you win I can go to my max and pay $1000 more and thats it. Vendors like to think they have got every cent out of you.

Man you can do a Uni Degree in buyer behaviour but all you need to do is your research make up your mind on the price and stick to it. Put your offer in writting & tell them as little as you can and dont forget to be polite.

All the best to you with this and future offers.
Tony B would like to wish all a sucessfull and save new year & thank you for your support in 08.

Regard

Big T………………….

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

December 27, 2008 - 2:57 am

Chris

Yes first home buyer, REA love them.  Termites I have a place full of them the only thing holding the place up is the mud the ants leave behind lol.  You have to take each case on its own. Subject to ???? purchaser satifaction of P & B report. normally 14 days to get it done.  Cooling off 3 days. It no good getting it 5 k cheaper if its eaten out by ants. Treatment can last 3 to 7 years only. What type of treatment?  Get a pest guy in to check it out, may be OK. But if you have had them once you may get them again. Check what damage has been done first.  Special cons. on a contract must be tight to protect yyou the purchaser, that why the estate agent writes up the contract in their office for you to sign and not at your solicitors office & they will recomend a conveyencer not a solicitor. Get the picture.

Tony…………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

December 27, 2008 - 2:45 am

Seriousnovice

Far be it from me to give advice to others but since you asked.  First: Stop watching those reno TV shows. Second:  Stay out of Bunnings on the weekend. Third: Be realisit. re the following;

" i believe there is money to be made if i do it carefully & properly, but i don't know how." 
"i have to pay down a huge superannuation loan before i can buy & hold properties again."
 "i am willing to pay for experienced, good, start-to-finish help."

Mate the enviroment of 6-7 years ago has gone, finished & never to retune. You mentioned flip, buy, fix & sell. What, all in a year. Better you go to Crown Casino with a couple of ladies and blow your money there, that way at least you will get some enjoyment out of it.    Every one wants to be rich or has an idear to get rich.  Mate its over in property, unless you get one given to you & then sell it.  Reno can be fun OK Im with you there as a project with a wife/ Girlfriend a sence of acheivement ect. But to make money not now.

Supers down and falling, bank Intrest low & getting lower, property returns as low as bank intrest in real terms. What time are you heading to the Casino stop by and pick me up will ya. What do we do in these times sit still unless you get a real bargain & only then buy. To quote a friend " you worry you are not making any money, that is so , but at least you are not loosing any"

Sorry I could not paint a better picture but I feel thats the way it is now in Aust.

Have a Great New Year & all the best.
Regards
Tony……..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

December 11, 2008 - 1:43 pm

Thanks all
Yes you just dont know whats around the corner. I do alot of home work & I thourght they might do somethink one day but right now, man. Yes its too late to cry over it ( done that).  The plant & tree are a good idea, thanks. Yes to hold and sell not a good idea as mentioned too risky.  Will think for a few days first. This was to be my PPOR hence the big blocks, my enjoyment will be afected. Any way I will think of the positives, If I need to buy drugs late at night Im sure some of the local kids that will be hanging out at the shopping centre car park only 200m away can help out.  lol

Thanks all & have a great Christmas & sucessful New Year.

Regards
T…………………

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

December 10, 2008 - 2:54 am

Pud

No sub divishion allowed & sigle dwelling only. Cost of sub the block would out way the potential profit. Also, with over 1000 new block to choose from too much competition. Not happy camper, urban sprawel too many people living on top of each other. UGB to be increased more land to be realeased for development. Hand prices will fall.
Cheers

T………………

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

November 13, 2008 - 12:43 pm

Its not  "how many you have "  Its "how many you own ". I know many young & not so young people that spout they have several investment proterties. Having more then 1 property is not a sign or indicater of smart investing or wealth. As mentioned in Crashy post  "There is only one number that matters……..how long can I survive when (not IF) everything goes wrong?"

I would rather have 1 investment property that I own, that makes a good C.G. and Income.  Than 10 that have 0 growth and are negativly geared. Thats only my opinion, Im sure there are many others that suit diffrent investers.

Cheers

T………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

November 5, 2008 - 7:29 am

Chris
Ive had fixed intrest for many years & Ive learnt the hard way, its save but after tax & inflation you loose. Chris you seem like a bright lad think about this; 3 things can happen up, down same.  The chances of them going up like in the past is very slim (good to buy now but poor if you want an assett to go up) Going down, well its happened a bit but not like we all hopped (as buyers) for. Hence the grant. The economy in Aust. would have to go ass up bad for us to buy at 30 % off. Not likly. Stay the same. I think this is the case maybe up a bit down a bit but static. OK so if we buy now we get the new FHG, buy at a time when they are over priced, and our assett does nothing but cost us money rates, maintainance etc if we have to sell in the next 5 years you may not break even, definetly wont make money. So if you can borrow cheap (low rates) seems there on the way down then thats an advantage. You have time on your side you will see over time in the market it will increase, maybe not fast.

Buying now as oppossed to 1 year ago. Now lower intrest, softer house prices not cheap but not going up like crazy & the extra 7 K.  Bepends on your  long term plan. I think you feel its importaint to get your foot in the door but I feel ther is no correct formular to work out when to buy as we cant tell the future.

Food for thourght mate.

Cheers
T………………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

November 5, 2008 - 3:50 am

You sould like you are doing the right thing "Thinking first".  Yes mate it can all be a bit much at times "should I buy now get the grant or wait" . Its a difficult question. Its hard for young people to get a house now the prices are to expencive. But at 20 you have time and the best place to invest your money is in your education not the bank at 5%.  The bank option is a non option at present and may get worce. You are correct the real % after inflation is 0%.  IMO it shows how bad the housing market needs stimulating at cut of.75 yesterday, before 1%. More money for FHG. Share market to unstable, bank intrest too low inlation at 5%. You tell me what we should do. I dont think house prices can go much higher because no one except the rich will own one.

Mate at 20 dont be a slave to a mortgage for 30 years. We all need a place to live but think it out before you jump in & dont go in to deep. You may not need a plazma in every room a 4×4. Go with what you can afford.

All the best.
T………………..