All Topics / Hotch Potch / Don’t buy – why on earth not!?

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Viewing 13 posts - 1 through 13 (of 13 total)
  • Profile photo of JustAllanJustAllan
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    @justallan
    Join Date: 2003
    Post Count: 168

    I’ve noticed several people saying “don’t buy IP now”. If you find a +ve cashflow IP – then why on earth would you not continue to buy? Surely it can’t just be because people are hoping for a drop in house prices…

    Allan.

    Profile photo of C2C2
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    @c2
    Join Date: 2002
    Post Count: 518

    Hi Allan,

    That is exactly what some people are thinking. A bit of negativity is starting to creep in amongst some investors. Also with enough talk about prices dropping and interest rates climbing just adds fuel to the fire and creates a snow ball effect. The masses stop buying, prices start dropping and then the masses start buying again.

    C2
    IS it true the more you owe the more you grow until the bank steps in?”

    Profile photo of RubbachookRubbachook
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    @rubbachook
    Join Date: 2003
    Post Count: 288

    Just like emotion pushed some prices up, emotion will bring them back a bit on the basis of supply and demand.

    I’m ready to buy, and would do so if the numbers were right but am content to sit back a bit and see what happens.

    All those saying “don’t buy” may not necessarily be out of the market themselves.

    Profile photo of crashycrashy
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    @crashy
    Join Date: 2003
    Post Count: 736

    lol I love crowd psychology

    it reminds me of Carl on the Simpsons

    “hey that guy’s right!” (crowd all blindly agree)

    Anyone who is positive property is just realistic and normal, while anyone who is negative is a nutcase, or has some evil motive….quite funny

    People who have enough intellect to think for themselves realise that a balanced and debated discussion is important and healthy. If you knock the negatives, it just shows that you are biased or weak minded. Let the facts speak for themselves.

    “when everyone agrees, nobody is thinking”

    http://www.posigear.8k.com

    Profile photo of RubbachookRubbachook
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    @rubbachook
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    Post Count: 288

    Crashy, I agree.

    Profile photo of diclemdiclem
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    @diclem
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    “when everyone agrees, nobody is thinking”
    Great quote, crashy!
    I’d like to say I agree with what you said, but….[;)]

    Sue [:)]

    “Be careful not to step on the flowers when you’re reaching for the stars”

    Profile photo of shaunwalkershaunwalker
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    @shaunwalker
    Join Date: 2003
    Post Count: 403

    I’m not buying now, but if a deal comes along, i will. i’m also a bit more selective in my choice and adding a bit of risk management into the plan. “just in case”

    Profile photo of riffraffriffraff
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    @riffraff
    Join Date: 2003
    Post Count: 68

    Im very keen to buy but being new at investing Im scanning everything very closely making sure I do not commit to something I cant handle… must admit my cash is starting to burn a hole in my pocket!

    “patience young Kanobi”

    What the mind of man can conceive and believe, it can achieve.

    Profile photo of JustAllanJustAllan
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    @justallan
    Join Date: 2003
    Post Count: 168

    I guess I’m just wondering what the problem is that people forsee. After all – if a property is +ve cashflow today (that is, rent coming in is greater than expenses going out), then it will still be +ve cashflow tomorrow.

    Or… no!?

    Profile photo of kkowalskkkowalsk
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    @kkowalsk
    Join Date: 2003
    Post Count: 48

    quote:


    I guess I’m just wondering what the problem is that people forsee. After all – if a property is +ve cashflow today (that is, rent coming in is greater than expenses going out), then it will still be +ve cashflow tomorrow.


    Depends on how far rates go, and how close to -ve cashflow some peoples +ve cashflow IPs are. Rents eventually go up, but they never go up as quick as rates, especially when supply exceeds demand.

    The property I’m renting hasn’t had a rental increase in three years. It also sold at a loss just a few months ago (purchased 2 years prior).

    Profile photo of Fudge111Broz00Fudge111Broz00
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    @fudge111broz00
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    Post Count: 245

    We both still have 2 years left of our uni degrees, so we were going to wait a couple of years anyway, it will be very interesting to see where the property market is at that time..

    That quote is so true crashy!~~~

    Fudge111[;)]

    Profile photo of JimboJamesJimboJames
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    @jimbojames
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    I see that a lot of people have been buying for investment purposes in the Aussie market, if not in droves over the last 3 months. Apparently ~40% of property owners in Australia are investors (Reserve Bank this week in SMH).

    I remember reading posts on this forum a while back suggesting that investors don’t really influence prices (i.e. don’t cause price hikes) to any great extent, being claims that were somewhat defensive WRT to the property investor’s cause.

    40% has got to have a reasonable influence on the prices of property and, if this is the case, the impending influence will surely be reflected by falling prices if the market is not felt to be ‘right’ for investors?

    James

    Profile photo of DinoWebDinoWeb
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    As stated by Jimbo James, the Reserve Bank quite clearly believes that investors are driving the property bubble, in a manner that is unsustainable and at odds with economic realities.

    No one can predict how far prices will fall once the bubble bursts.

    IMO for anyone trying to start investing, buying a property now could have serious consequences on your future purchasing power.

    Yes positive cash flow will put money in your pocket, but the easiest way to fund further purchases is through capital appreciation.

    If you buy now, a drop of 10% or more will severly limit how much you can borrow in the future, and it may take many years before prices return to their current levels.

    Yes you may have a +ve cash flow property now which will not cause you any great grief, but you will struggle to buy any more.

    Wait 6-12 months and you may be able to buy a better property for the same price, with better cash flow potential, and which are likely to appreciate in value over the coming years, even if only very slowly, thereby increasing your purchasing power.

    That is the way I’m looking at it at any rate.

    Dino

    “If you don’t know where you are going, every road will take you there.”

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