I have heard people talk alot about selling of all their IP’s While the interest rates are climbing and buying when they reach their peak. What does everyone think of this stratergy?
“Earn money every time someone pays their phone bill” ask me how http://www.redapplepartners.com/brett
interest rates probably have peaked, so I think it’s a shocking strategy. Your entry and exit costs would more than exceed any small gain you may potentially make.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
I sold my three units just over a year ago.
Reason. Everyone was on about the pending property bubble bursting.If there’s too much talk about any one subject,then, people will talk the situation into happening.Over supply of units, rents will fall,prices of units going to crash etc. Doom on top of gloom.
The only investment property I have is a dual occ. I very pleased to have it.
My new strategy is to “procure” more dual occ’s.
Not just yet. Waiting to see if things do slow down even more than at the moment.
Deep down inside of me I think I’m really a pessimist at heart.That breaks my heart!!bruham[wacko][withstupid]
Hi Brett
i agree with John, when you work out agents fees, stamp duty, capital gains tax the market will really have to drop to be able to buy back in at a better price.
Having said that as i’ve mentioned often here on the forum that i have sold about 20 properties over the past 18 months because i’m using that money to buy properties that will show better income and better capital gains.regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Originally posted by Brett2:I have heard people talk alot about selling of all their IP’s While the interest rates are climbing and buying when they reach their peak. What does everyone think of this stratergy?
Hi Brett,
Are you confusing prices and interest rates?
Either way this strategy is littered with high hurdles in your path.
Not only do you incur high buying and selling costs but you also need to time the market – something that even the experts find difficult to do. There were a few who sat on the sidelines in the last two years waiting for the ‘crash’ predicted in all the daily papers.
Property is not a short term investment and as such you are better off extending your time line in recognition of this.
From a strictly growth focussed point of view here are some statistics that may assist you in your deliberations.
1989 2003
Sydney $199K $474K
Melbourne $135K $361K
Brisbane $ 94K $305K
Adelaide $ 96K $222K
Perth $102K $217K
Canberra $115K $303KThis period coincided with the high interest rates of the late eighties/early nineties when housing was not very affordable and included the ‘crash’ (t’was a wimper in some places) of the early nineties and also the flat period in the mid nineties.
Brett,
I’ve heard about this as a shares strategy- using the curves to purchase and sell… but for property? I think it would be a disaster to buy when IR’s reach their peak. Imagine buying when IR’s are 17%- you’d be likely to end up with negative equity- or, if you were imagining that RE would be out of dashoin if IR’s were so high that you could buy cheaply, then you’d be losing your margins on the cost of repayments.
I think the best time to buy is when IR’s are decreasing or stable. Watch the economy for hints about IR’s. They become more predictable when you check out the macro state of the economy.
kay henry
Hi Kay,
Funnily enough the last peak in median prices roughly coincided with the peak in interest rates and the ‘crash’ started with forced sales caused by high interest rates and rising unemployment rates.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Derek, I think flatter IR’s and flatter prices is the ideal combo. Like 1997- affordable prices and affordable repayments. I think the thing about buying when IR’s are low, is that you pay back as much as you can before IR’s rise.
I don’t like buying on foreclosure conditions. I’d rather buy in bearish conditions, but not when people are really hurting.
kay henry
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