Appreciation vs Rent?

Hi karan

what you are saying is the generally held rule. this is, properties that have a low yeild will grow in value quicker than higher yeilding properties which will have lower capital growth.

i think these popularily held ideas are a load of rubbish. they may have been true up until 5 years ago but the rules have changed. i bought in many low high yeilding areas that have show incredible growth. those in Adelaide will testify that the northern suburbs of elizabeth which are very high yeilding have show incredible capital growth i know someone who bought 4 duplexes there in 1997, for $21k to 25k, One sold late last year for $93k. another example is in Steve’s book he mentions properties in Wendouree West he bought for 45k 4 years ago, these high yeilding properties are worth Over 90k now (an educated guess). I could give many more examples to prove this point.

regards westan

I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]

The rules have not changed. Your just basing your argument on the last five years. Its the dripple effect. Now that the prices have increased the yields have gone down now. We are also in our largest period of growth in our australian history.

So dont expect too much now. The rules have not changed.

hi all

sorry guys but you can’t deny the facts that high yielding properties have appreciated at a higher rate than the low yeilding properties in the capital cities.
Yack what do you want me to base my arguement on? Deny the last 5 years? pretend they didn’t happen? No i can’t do that i have to look at the facts and understand them even if they contradict what is commonly accepted.
the reason the rules have changed are for the following reasons
1.More and more people want to secure there own financial independants and have discovered property as another way of doing this appart from Superannuation. People are investing in property for the yeild they receive. 5 yrs ago no one was talking about cash positive properties, everyone thought negative gearing was the way to go.
2.more and more people are returning to regional areas for the lifestlye change, even the government is promoting it in Victoria. it will be the old laws of supply and demand. inceased population will result in increased home prices. I believe that areas like Ballarat, Bendigo, Warrnambool will equal if not better the capital growth of Mebourne.

yack and simon i’m not saying the boom will continue you are putting words in my mouth. i am saying that Low yeilding properties in my opinion will not out perform high yeilding properties in Capital growth. there may not be any capital growth for the next few years. thats exactly what i think will happen, those who have been on this forum for a while will know that i’ve actually been selling my properties i’ve sold about 12 in Australia (1/2 my portfolio).

regards
westan

I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]

Hi simon

you aren’t the only one to get caught up in the tech boom. But Gee it was fun watching those shares rise, my best one was Star mining bought for 1cent and sold 2 days later for 4c. But it wasn’t much fun seeing it disappear[:0]. i saw Robert Kiyosaki on “Late Line” a matter of days before the NASDAQ went south, he warned to get out straight away, i was a little slow, saw Davnet go from $6 to $2.40 when i sold, but today those shares are worthless.
now i’m going to get into more trouble by saying “things were different then.”
And i think they were, i don’t think this huge property boom is the same as the tech bubble though. there was really no value to most of those stocks. If anything come close to the overvalued prices it is those inner city units in Melbourne (that will really make Yack happy).

regards westan

I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]

Simon I couldn’t agree more.

As a matter of fact, I think it is a reliable sell signal when people start with this sort of comment.

It’s all part of a cycle.

Wayne

http://www.tradingforaliving.info

hi guys

Yack, i suppose we have to do what we feel comfortable with but by adopting your approach you have missed out on some incredible opportunities. properties in regional cities/towns have been fantastic to me. i’ve mentioned a number of times on this forum that in 1996 my net worth was only 25k and my income was about 30k per annum, but today i’m effectively retired aged 39. I could never have achieved that by buying expensive inner suburban properties. i can’t agree with you that the “hassle” is not worth it. I’m now holidaying/investing full time in NZ its great not having to go to work but wake up, walk the kids to school, have morning coffee with my wife, yep i’m glad i tried the approach Steve has so well explained in his book.
regards westan

I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]