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  • Profile photo of BennyBenny
    Moderator
    @benny
    Post count: 874

    How have Brexit uncertainties impacted your allocation of investment capital?

    Hi all,

    This thread is for discussion of this poll. Please submit your vote and your thoughts on why!

    Benny

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Post count: 315

    Im concerned that people are spending too much on properties and yields for the risk aren’t worth it anymore but at the same time TINA (There Is No Alternative) is forcing me to purchase yet another IP as otherwise I’m going to go cash flow positive on current LVR’s.

    This said I think Australians are paying are too much for their mortgages to Australian banks as interest rates elsewhere around the world are far lower and at the end of the day we….not the renters and not the banks are wearing all the risks.

    Lol sometimes I think I should just be investing in Australian bank stocks…..

    Profile photo of BennyBenny
    Moderator
    @benny
    Post count: 874

    Hi Dean,

    Applause for the clever acronym:-

    at the same time TINA (There Is No Alternative) is forcing me to purchase yet another IP

    Benny

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Post count: 315

    Not my acronym…… :)

    But I am starting to wonder as I watch 10 year yields in Europe go negative etc that this is all simply a case of “mis-allocation” and that people piling into negative bond yields (and ever lower property rental yields)….because “that’s what you do”.

    I’m starting to wonder if our investment dollars each month (about 10k after personal expenses) wouldn’t be better off going into “startups” (heck possibly even going into actual lottery tickets) as the yields we’re getting in Australian property rentals seem to be getting worse and worse even though we are the ones taking the risks eg banks aren’t taking any risk at all and they are collecting 4.5% (or over 2% profit with .5% operating costs and under 2% cash costs).

    But with inflation continuing to eat into cash (eg real inflation and not the bullshit figures the government is giving us)…..what to do….what to do?

    Profile photo of Jason StaggersJason Staggers
    Participant
    @jason_staggers
    Post count: 43

    what to do….what to do?

    Good question.

    I remember Steve writing “Property Investing” on a white board in 2007 and asking, “Which of these two words is more important to you?” His point was that we are “investors” first and “property” may or may not be the best asset to hold.

    Eventually there will be a tipping point where people are no longer willing to take such great risk for so little return. If term deposit rates were not so low (thanks to the RBA) no one in their right mind would accept such low rental yields.

    But it seems for now interest rates will remain low for who knows how long. I think an important question to ask could be, “Where will capital go if/when people lose faith in central banks and fiat currency? I think that will happen unless central banks change course and start raising rates.

    But the conundrum they find themselves in is that doing so would also increase government borrowing costs and leave fewer dollars/euros/pounds/yen for entitlements, interest and operating costs. Oh, then there’s that need to pay back all the debt. Seems the only politically expedient solution is to inflate it away, which seems to be the order of the day. It will work until people realise what they’re doing. That could take a while. Or maybe not.

    Tricky times.

    Jason Staggers | PropertyInvesting.com
    http://propertyinvesting.com
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    Profile photo of CattleyaCattleya
    Participant
    @cattleya
    Post count: 120

    Hi Benny,

    My strategy is not on the options you provided.
    Mine are:
    – rough waters ahead, stock up on cash and make sure my finances are lean
    – keeping an eye out to future expenses and cash flow
    – also get ready to buy if there is anything ‘interesting’ comes up

    So essentially – uncertain times ahead, lots of people going to get in trouble. So I am making sure I can survive it and if possible, take advantage of good opportunities coming my way.

    Thanks,

    Cattleya

    Here to learn the ropes of property investing & share knowledge, not trying to sell anything at all.

    Profile photo of DpriceDprice
    Participant
    @dprice
    Post count: 0

    Try nz. Better roi and yield. Thank me later ;)

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