By: ecchi.gaijin
27/10/2009
3:29 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
Al
I was rely pointing out your misuse of the word "own".
"All it requires is the price going up, and if it doesn't, who cares, it has only cost $50 a week."
$50 a week is $2600 a year. If the property never goes up then that is all lost. Perhaps not a lot but as you said, you could have put that elsewhere for a better return.
"I put out about $5000 in tax and conveyancing, which was borrowed on a VISA at mortgage rates."
You might want to check before claiming interest costs on paying your taxes as they are generally non deductible. |
|
By: mentawaisurf
27/10/2009
3:29 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
If Landlord believes 'property ownership' is paying a mortgage to the bank, he is mistaken. If he believes speculation leveraged on the back of equity is property ownership then that is a dangerous definition. Leverage works beautifully on a rising market, but it will destroy you on a falling market.
Without going into my personal background, the mid-late 1990s was the ideal time to take on debt and buy property - when few were interested in doing so. When the investment mania, and paradoxically prices, peak then that is the time to get out.
My concern has always been for those who were lured (via property spruikers, vested interests and government bribes) to buy into an historic housing bubble with a heavy mortgage burden. Marginal borrowers are always the last buyers into a market before it peaks. Unfortunately, too many FHBs fit that description.
There will be an ideal time to buy property again. But that time lies years off. |
|
By: almurrie1@y7mail.com
27/10/2009
3:17 pm Yahoo! Profile:
almurrie1@y7mail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
Echii
why would you want to own the property? That would be stupid, you would make much more even after tax by putting it all in the bank. Leveraging at a few hundred thousand percent is much more sense. I put out about $5000 in tax and conveyancing, which was borrowed on a VISA at mortgage rates. If the house goes up by anything more than the interest it will be money for nothing! ie. a 10% capital gain will give me about 4% which would triple my investment of $5000 (which I borrowed). All it requires is the price going up, and if it doesn't, who cares, it has only cost $50 a week. I know people who gamble 10 times that evey week!!!
Al |
|
By: almurrie1@y7mail.com
27/10/2009
3:04 pm Yahoo! Profile:
almurrie1@y7mail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
That was with a $0 deposit using equity on a house that cost $260,000 5 years ago, now valued at $400,000. I can't imagine the banks would be happy making a 100% margin loan on shares worth the same value. And this frees me up for making some on the side in the market. You do tend to spend the excess when renting and this way you have to pay the mortgage which leaves you poor but asset rich. renters are asset poor and act wealthy!
Al |
|
By: landlordcity
27/10/2009
3:03 pm Yahoo! Profile:
landlordcity Did this message offend you?
Sign in to report abuse |
Reply to this message |
-landlord and jay, you guys are just braggers. "i own four houses"... "my property in queensland's gone up by soooo much".-
Bragging???? Why would we want to "brag" about being "delusional" enough to buy property and let someone else pay it off?? Indeed, why would you consider such an (according to you) invidious and "foolish" position such as property ownership to be something anyone would "brag" about? Better get your logic straight old son. |
|
By: ecchi.gaijin
27/10/2009
3:01 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
"Jay, the point being, we will come back to these basic rules again as market forces rebalance over coming years (as they always eventually do).
Then that will be the time to buy a house - when we'll all look back in hindsight and realise just how foolish and deluded we really were"
Menta, why would you buy a house when prices are at equalibrium? Unless long term you only wanted to get back what you paid? |
|
By: ecchi.gaijin
27/10/2009
2:58 pm Yahoo! Profile:
ecchi.gaijin Did this message offend you?
Sign in to report abuse |
Reply to this message |
Al
The $50 a week method means you never own the investment property, just the deposit and any increase in capital value. |
|
By: cxxxx@rocketmail.com
27/10/2009
2:57 pm Yahoo! Profile:
cxxxx@rocketmail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
| landlord and jay, you guys are just braggers. "i own four houses"... "my property in queensland's gone up by soooo much". Well, what about today? And one of you thinks there's "always been a high amount of renters in australia compared to many other countries"... need to get out more... happily hooked on property, the drug of the nation, it's a sensation. |
|
By: landlordcity
27/10/2009
2:54 pm Yahoo! Profile:
landlordcity Did this message offend you?
Sign in to report abuse |
Reply to this message |
-Then that will be the time to buy a house - when we'll all look back in hindsight and realise just how foolish and deluded we really were.-
Gee, I didn't realise what a huge mistake I'd made buying property until I read Mentawaisurf's advice. I'm so pleased he has set me straight. Oh dear, I don't know if I am going to be able to sleep tonight given the fact that I bought all the property I own in a "delusional" state. How "foolish" of me. How could I have been so stupid?
You didn't answer my question about renting one of my properties. You must consider yourself very lucky that you are able to take advantage of foolish people such as myself by paying off our properties for us. How stupid must we be to have allowed ourselves to get ourselves into this horrible position of property ownership!?!?!?! |
|
By: almurrie1@y7mail.com
27/10/2009
2:54 pm Yahoo! Profile:
almurrie1@y7mail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
I am really annoyed too. It is costing me $50 a week to own an investment property, and prices haven't gone up yet! I don't know how much longer I can survive!
Al |
|
By: mentawaisurf
27/10/2009
2:46 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Jay, the point being, we will come back to these basic rules again as market forces rebalance over coming years (as they always eventually do).
Then that will be the time to buy a house - when we'll all look back in hindsight and realise just how foolish and deluded we really were. |
|
By: landlordcity
27/10/2009
2:38 pm Yahoo! Profile:
landlordcity Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Oh, and to answer your comment about better investments elsewhere. Yes, that's true providing you pick the right stock. I actually use the rent money from the properties I own outright to invest on the stock market and have done ok, but property has proven to be an easier for me to make a quid. |
|
By: landlordcity
27/10/2009
2:33 pm Yahoo! Profile:
landlordcity Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Hey Christo, no need to apologise. As far as I'm concerned, the more people who think like you and Mentawaisurf, the merrier for me!!! I own four properties outright and am paying off three others (with the help of tenants). If it wasn't for people like you, I would probably still be renting myself! Quite honestly, I couldn't have done it without you! Thank you!! |
|
By: jaymarcel
27/10/2009
2:30 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hey Christo,
Each to his own mate, I wouldn't mind knowing where & what sort of return your getting.
Property in the super corridor between Brisbane & Ipswich went up over 30% in 2007, 20% in 2008 & so far this year (year is not over yet) 12%.
But are you talking about investment or a place to call home? |
|
By: christo_newton
27/10/2009
2:21 pm Yahoo! Profile:
christo_newton Did this message offend you?
Sign in to report abuse |
Reply to this message |
| I'm sorry landlordcity, but I tend to agree with Mentawaisurf that it's better to rent at the moment... and rates are only going in one direction. I'm happily helping another person service their mortgage while I have my money invested elsewhere for a much better return. |
|
By: landlordcity
27/10/2009
1:47 pm Yahoo! Profile:
landlordcity Did this message offend you?
Sign in to report abuse |
Reply to this message |
The word "discombobulated" was invented for the kind of logic presented by Mentawaisurf.
I have a two bedroom house that is coming up for rent soon in Brisbane. Mentawaisurf, please send me an email if you are interested in renting from me. One year lease only, you take care of the gardening, no pets allowed, no holes to made in the walls for paintings, etc. Inspections take place every three months. Bond is $2,500, rent is 650 per week. It will be a pleasure to have someone as intelligent as yourself helping me pay off the mortagage. Should you prove to be a good, responsible and reliable tenant, I have another property on the Gold Coast. You may have family who might want to pay that one off for me. |
|
By: jaymarcel
27/10/2009
1:05 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
Obviously it is cheaper to rent than to own, you are not buying anything. It is cheaper to rent a tv than to own one but how many people rent a tv?
'a safe mortgage is a maximum of 3 times the buyer's yearly income on a minimum 20% deposit'
Some one tell him he's dreaming!
A first home should be on the bottom rung of the ladder an apartment or town house, in a less popular suburb, further from the city & priced around $300,000 if in Brisbane, this is affordable to a working couple.
Menta you have to stop making this rubbish up & stop reading the junk you get off the "I want to slit my wrists" websites, get out there & see for yourself whats available. |
|
By: mentawaisurf
27/10/2009
12:52 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
House prices will fall in Australia simply because prices are dangerously high compared to incomes and rents. History, and common sense, shows a safe mortgage is a maximum of 3 times the buyer's yearly income on a minimum 20% deposit. Experienced landlords know a safe price is a maximum of 15 times the house's yearly rent. Yet in many parts of Australia, especially all our major cities, both of these key safety rules are still being ignored. Buyers are still borrowing 6-8 times their income on only 5-10% deposit, and sellers are still asking 30 times annual rent. Renting is a cash business that reflects what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that prices will fall, and for a long time before balance is restored. Anyone who listened to the housing bulls, or were lured by the government bribe, and borrowed heavily to buy a house because "now is the time to buy" are setting themselves up for a very painful fall.
It's still much cheaper to rent than to own. Yearly rents in Australia average about 4% of the average purchase price and mortgage rates are around 6%, so it is cheaper to borrow the house than it is to borrow the money. Worse, total owner costs including taxes, maintenance, and insurance come to over 8% of the average purchase price, which is twice the cost of renting. Renters win and owners lose! Yet the biggest danger in buying into an historic housing bubble with record high mortgage debt during uncertain times is the real risk of future capital loss. Unfortunately, too many Australian's have ignored the basic rules and have placed themselves in a very precarious situation. |
|
By: hdmausguy
27/10/2009
9:30 am Yahoo! Profile:
hdmausguy Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Prices will drop when they address the unprecedented world debt. The hyperinflation gun is loaded. Jobs,house prices,spending,saving & debt are all related. While governments of the world continue to artificially prop up economies the unprecedented debt continues to grow.In the meantime the Australian economy continues on fairly normal for most people. People continue to buy and sell houses. Prices increase in some areas & decrease in others. People into property can only operate on what's there on the day. It's the same with the stock market. If you can guarantee me that Hyperinflation won't happen by allowing the worlds debts to perpetuate then I'll guarantee you that house prices will remain in their current range. THE $64 TRILLION DOLLAR QUESTION IS NOT IF BUT WHEN? |
|
By: almurrie1@y7mail.com
27/10/2009
8:24 am Yahoo! Profile:
almurrie1@y7mail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
Must wear glasses when posting!
Al |
|
By: almurrie1@y7mail.com
27/10/2009
8:22 am Yahoo! Profile:
almurrie1@y7mail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
HD mouse
you are exactly right. Property is where it should be and we have all been screwed over by passively accepting pay rise cuts to the point where we are now under paid about half of what it should be. Reserve banking causes inflation, then we are told we must be conservative and not ask for enough to cover inflation. So we are al now poor! No wonder people desperately scrabble for some way of doing better, like investing in houses, getting second jobs etc. Of course for the Capitalist system to survive we have to keep selling. So our standard of living has to come down to allow our high end products to be sold to the poor counties otherwise no expansion. China learnt this but chose low end products. Best Capitalist in the world yet it is Communist!! Welcome to the new world order!
Al |
|
By: christopher_mck
27/10/2009
8:16 am Yahoo! Profile:
christopher_mck Did this message offend you?
Sign in to report abuse |
Reply to this message |
So when exactly are we going to see the prices drop? This thread was started months and months ago and all we have seen is increases.
Should I sell or buy more?!?!?! |
|
By: almurrie1@y7mail.com
27/10/2009
8:06 am Yahoo! Profile:
almurrie1@y7mail.com Did this message offend you?
Sign in to report abuse |
Reply to this message |
Bulldog
In my experience people want to get back what it cost them when they sell. This means adding the interest cost AND the taxes. Keep interest low and remove taxes and you will see prices modestly increasing. 16% would see prices go through the roof. People have to have accomodation and what do you think rents would be like at 16%. You obviously did not think this one through.
Al |
|
By: jaymarcel
27/10/2009
8:05 am Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
From my understanding there has always been a high amount of renters in australia compared to many other countries, this is a choice thing for the average wage earner & happened well before property price rises (which is being given as a reason for people renting now).
Could it not be possible that property prices are at their nominal level & have previously been undervalued along with the australian dollar & australia as a whole 'in the world forum' but is now changing due to our success in the global crisis. |
|
By: jaymarcel
27/10/2009
7:59 am Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
What I find interesting on here is the same people talking of interest rates going through the roof are the same people shouting that we are heading into a double dip or that the crisis is not over.
Well if the crisis isn't over or we are headed to a double dip then surely interest rates are going to come down.
Any chance the RBA are pre-empting this & are raising rates to give them leg room for dropping them later if or when the next stage of the crisis arrives, this gives us a head start on the rest of the world who can't drop their rates any lower as in what happened at the start of the crisis. |
|
