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well the cap value being underwater in 10 years was slightly disturbing too, seeing as in reality you are probably funding the IP on the way. So your investment is going bakwards, but HEY, thos rents are loooking good LOL

wow i would consider it an investment disaster. if this is the future of IPs then let me out now

or less? and vs. 3 weeks? this is a whole new ball game

rents would be the least of my concerns. I think we will see a concerted march upwards in yield from here on. the issue is more about capital values

initial yield seems exceptionally low? even by WA standards

agreed. i would never bother buying more. i wouldn't even be on this forum

this era of deflating consumer durables is nealry over. the chinese will eventully need to revalue and input costs are rising regardless. will this money be 'taken back' from housing?

i dont think he looked silly at all when places like swanbourne dropped 40%

yeh, imagine rocking up to your local eastpac branch with a proposal to build the first casino in vegas. "hmmm yes sir, we will require at least 100% debt coverage by presales, firmly secured by 10% deposits. we will also require 20% equity. Now... can yu explain a bit more about your exit...

there are so many good posts on SS at present and I have no time to absorb it all!

yes but there is an injection back - the defalted debt adjustment.

meaning? you have taken Dazz's advice? sonehting we all shoul dhave done 20 years ago?

Then I just read somehtign about the threat of deflation. arghh! can't win. the world is so confused. you need to make a bet on inflation or deflation and there seems no clear signal. personally I wll bet on inflation - seems an easier option for govts than serious austerity measures

ok so we can agree that PI outperforms if you ignore cashflow... because it can be argued that the deflating debt is a loan back to the individual that they will eventually benefoit from. Personally I wouldn't concern myself with internal borrowings other than the opportunity cost of interst on...

so ignoring tax for now... cash return deflated = $80k + $20k x 6.5% less 3% (ha ha) = $3500 year 1 IP return = debt deflation $9600 less hold costs $12480* plus cap gain $12000 = $9,120 year 1. in costs to be amortised over 30 years say. or, in other words the debt deflation covers your...

there are a lot of points to address there, but my main repsonses would be: - the CF- needs to be kept to a minimum. ideally neutral or positive. Point 5 is therefore negated. - point 6 fair enough. Comm properties probably respond quicker but they all do over the course of a coupe of years...

a term deposit deflates, as opposed to a PI which has an asset inflating and a debt deflating. term depositors are robbed.

who knows, inflation should increase housing by... the rate of inflation. demand and supply issues are separate

inflation has been used thru out history to pay off debts. hyper inflation is fatal tho. Inflatin is only good - for borrowers - when under control and predictable. a dose of zimbabwean economics and the whole thing is shot

well the growth in your property protects your asset value. rents inflate, wages inflate. the only thing that doesn't is the debt. the loser here is.... savers earning 1% in bank accounts. their loss is a borrowers gain. but they dont bear it all as a lot of money thru fractional banking is...