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Of course. i was making the point that the rent is a sperate issue to whats happening with the loan over time and that what the banks do to cover inflation. Ok, hypothetically, say you put the rent in the pokies but had enough money in a bank account to pay the loan interest every month...

Mate, the fact that the rent pays the inflation component of the loan has nothing to do with whats happening with the loan itself. You could put the rent in the pokies but you'd still ahve to pay the inflation component of the loan. How were you not proven wrong?

What danc said is still correct, what happens with the rent money is an entirely different matter. As i said to oracle, you're right about the rent but that wasn't the issue at hand. I think you're moving the goal posts after being finally proven wrong.

But we are not discussing whether its a concern or not, but whether it exists. Let alone other factors like rent etc. I get your point but thats a separate issue.

You have forgotten to add the inflation component of the interest you have paid over 20 years. If the bank had a type of loan where that could be capitalised onto the loan instead of paid monthly for 20 years, you'd be shocked. *Lets say that part only equals 3% per annum. 3% OF $200K = $6K...

Well SF. I brought this up with a financial advisor friend of mine and he didn't have a clue what i was talking about. The inflation component is built into the interest rate.

yes, we agree on this. The money in property investing is made with leverage. I have borrowed 106% many times and you cant put an ROI multiple on that because i only put in $100 cash deposit. Well you can but it would be huge so its an academic figure. But the problem is all the expenses...

We are talking about how people say my property has gained in value say 20%. (Now, thats just on paper as they wont know the value till they sell it) But they never say it has gained in value 20% minus 10% expenses. Its like on-paper house values are real but expenses arent. In fact, its...

Because people dont take into account ALL expenses plus inflation. If inflation is 4%, neg gearing 2%, insurance, maintenance, management, interest, strata levies*, rates, water, yada yada in the other 4%. Easy Peasy. And depreciation is not really a gain as its added from the cost base at...

Dont think so :rolleyes:

It comes with experience. Most the gains in investing come in short time periods. Whether youre in the market for a long time or only for those short periods. Thats why im anti neg gearing. As it dilutes your overall results when times do turn good as you have to factor in the neg gearing...

I dont think so. The successful and experienced and investor knows that you dont have to be active all the time. It just dilutes overall results. The know when to sit tight and wait for better times. Mom and pop investors think the need to be buying, buying all the time. Sometimes its...

But an experienced, successful investor will tell you it isn't.