I think the points I am making are very compelling and make the medium term outlook for property look shaky - as a result I make you uncomfortable and I get the hostile posts like the one I've quoted above. If you don't like what I'm saying then don't engage with me - that is fine by me.
Yield,
the arguments you raise are not as compelling as you think. We already know of the factors that will make an investment go south.
Risk of loss due to a number of factors is part of investing. Affordability, or lack thereof, is one of these factors. Are we aware of it? yes. Do we think that property prices might stall due to the prices being way above what people can supposedly afford? yes.
But, we all learn to manage that risk by selecting a property based on our knowledge and experience, the same as a good share investor learns to hedge against a crash.
And, as I've said, there have been several far more knowledgeable people than me on this forum who have tried to help you change your closed mind throught their experience. But you keep on with the same stuff.
I am happy to engage with anybody on this forum, as long as they can realise their position in the game; if you are inexperienced, have never done it, or are scared to do it, then those people should come on the forum
and be humble, ask for help and learn from the masters.
Those who have been there and done it are in more of a position to put forward the knowledge, offer advice and state their opinions with authority - they deserve to. Those of us who know less can argue against them, but for how long? My view is once, then if the argument can't be proven, then maybe it's time to listen up and learn. I've found that this strategy has served me well in my life.
You haven't learned what your position is; you have no practical experience in property investing, yet you continue to sprout all sorts of stuff and argue against the experts.
I could do the same on a shares forum as I have little knowledge of them, but I bet within 5 mins I would be told to p*ss-off by someone if I kept arguing the point with someone who had made a million out of them.
Anyway, enough of this point; I wanted to make a comment about the post you made earlier;
Originally Posted by yieldmatters
Why not just levelling off at 2007 prices? Because once the CG stops (or drops back to inflation) and investors begin to believe this then they will have no reason to hold properties that have a poor market yield.
I have 3 properties that have doubled in value since 2003, and as such the rental yields have dropped a lot compared to the current value. If I was in the market to buy them today, I wouldn't buy them.
If the values dropped by 30% overnight the rental yield would still be a bit ordinary based on that new value, but the properties' values compared to what I paid would still be very good, and the rental yield won't drop with the property value (thankfully).
I have no intention of selling these properties in either scenario as they are providing a good return based on my initial investment. Also, selling a property incurs significant taxes and costs, that eat into my returns, as well as the lost future cap growth.
In my opinion, investors who compare the current yield to the current value of a property they own and have owned for a good while are not looking at the investment correctly.
The return on investment for an I.P is a combination of rental yield, cap growth and tax benefits. I think that you should always look at all 3 at the same time to evaluate your investment return.
