Hello. I was wondering.
With so many people now into "property investing", do you think it's harder to find good deals?
There are many forces pushing (or that have pushed over the last 10 years) the price of property to the current levels. First home owners grants, previously low interest rates, immigration, the cost of developing land, the shortage of trade labour, the mining boom increasing average wages (particularly in some areas), the normal cycle of the economy… I could go on and on. Possibly even the widespread use of realestate.com etc meaning investors can easily review property across Australia.
Can't comment personnally on wether in is harder to find good deals now compared to any other point in time, or wether there is alot more investors. I think the question is too imprecise to be answered really – harder than when? what do you consider a good deal? I notice that many experienced and successful property investors still find "deals". Successful investors still find a way to make money in the current market. I'm struggling to find a "deal" which fits my criteria – but I have to look to myself (I believe) to discover what is going wrong. How am I limiting my own success? I have some ideas – my physical location limits my exposure to a RE market, I have a conservative risk aversion, I have limited cashflow.
My point? Don't blame the market – look to your own limitations and work on them. You can't control the market, but you can improve your own success through enough hardwork and education.
Quote:I think the question is too imprecise to be answered really – harder than when? what do you consider a good deal? I notice that many experienced and successful property investors still find "deals".Ok.
Yes, I'm sure seasoned investors still know how to find good deals.
Definition of a good deal (to me): a property that makes money from day 1, while being cheap to purchase (under $100,000).Yeah, I'd certainly call that a good deal too, if it fit my risk profile. Certainly, deals like that are unusual. In the town where I live, there is currently a 1 bed house for sale for $88K. Don't know what it would rent for. I'm not interested cause I currently have other plans.
The other thing that I'd call a good deal is anything within my financial scope, fitting my risk profile that was cash flow positive at 100% finance (I have equity elsewhere but little cash), but this is also hard to find.
I should probably add inflation to the list of things pushing the price of RE up. What is more annoying than the rise in values is what I see as a rise in values compared to rents.
I think 'deals' are still to be had.
Certainly the best time to find it is when everyone else 'panics' and are not buying.
Last year, I found an IP, bought and rented it out straight up. The agent didnt know (I assume because she never marketed it as) that the property was a development site. If she knew, she would have probably gotten premium for it as it is only 7 kms from the city.
I knew because I've been doing extensive research. The property has gone up $55k in the six months since I bought it – just got it valued by the bank. Once I demolish the house (when Im ready) and build my 3 townhouses, I'll have an equity of close to $500k after costs.
So yes, despite the many investors in the market, there are still deals to be made.
I hope this helps.
Yes, the definition of 'a good deal' is very subjective. Look at all the examples in glossy mags like Australian Property Investor and the like. Always showing articles on 'successful' people by reporting purchase and current valuation as a way to demonstrate 'success' or 'a good deal'. E.g. 'I bought a place for $250K and now it's valued at $380K' – but they rarely if ever report what it cost as an entire project and what the net profit was after ALL expenses and repaying outstanding loans, and after tax. So, I think you just have to have your own investment plan and do your own numbers to see what is a 'good deal' for you.
Cheers
Paulhmm.. i think so.. but if you just worked harder and strategies more then it would be less hard work for you.. businesses like that, the more people engage on it the lesser the opportunity to choose of having a good deal.
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