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2003 or 2001? Don't mean to quibble, maybe it is just a typo. Fairly significantly different periods in the boom though. Seriously a place you bought for 105K either 4 or 7 years ago is renting out for some 270 / week? Even if it was 7 years ago I find that a bit hard to believe. But okay, maybe you spent a bunch on the place making it nice.
Correct; 2001 was the year we started buying IP's. The 2 x 1 unit was bought in 2003 - our 3rd, for $105. Built in 1990. Tenant was in place paying $180 p/w. Current tenant is paying $270 p/w. The unit was bought sight-unseen over the internet (saw photos) and I've never seen it. No money spent other than normal repairs.
There are many other investment vehicles that have averaged better than that 5-6% over time and also allow leverage.
My properties have done this as I said. Our current PPoR (no.4) has doubled in value in 8 years since we bought in 2000. That's aprox 12% return over that time. But, it was purchased from the cap gain made on our previous PPoR, so our current one cost us no actual money. What's that ROI? It was not bought for investment purposes though.
Plus you can buy a lot of them in an index format which makes hitting the market over time much more likely.
Maybe; but I only know property, and it is safe which matches my risk profile.
Maybe if someone had shown you the numbers you would have tried them?
Quite possibly, but you can only do what you can do with the available knowledge.
Your logic certainly dictates you would have. For example, even after the worst share market crash in a long time if you had invested in the ASX index in 2003 you would have made about a 60% increase in your investment. You could have leveraged that of course. This would involve zero work.
No doubt there would be some work, but maybe not a lot. The actual hours I've worked to acquire my portfolio to date (not including the PPoR, which is now an IP as well), would be, in my estimates, around 100 hours per property. This involves all the research, due diligence, arranging finances, faxes, emails etc. Based on our nett worth at present, than equates to an hourly rate in the 1,000s. It was worth it.
You realise what it would mean if the average person owned two houses don't you?
You have missed the point; it was for the average person to start with just ONE house. The ABC show I'm guessing is trying to portray how hard it is for people to buy even just one.
"financially maligned"? Not sure what you mean there... I'll take a stab in the dark you are trying to say academics don't agree that high leverage is a safe investment strategy? As in they speak badly of the financial strategy.
No, I'm talking about the many academics in the world who are still broke, or, at best, own their own home - which is not an asset in the true financial sense, as it provides no income. If they lost their job tomorrow, they could not support the asset in many cases.
Seriously though, bad phrase. Anyhow I assume you don't watch much tele, every second show for the past few years has been about property investment and I didn't see many scholarly types(I exagerate but you know what I mean). I agree it doesn't make good tele though.
Correct; I don't watch a lot of tv these days, and I agree; the property shows are usually centered around the Average Joe doing the property renos. That's the demographic that tv wants to appeal to, as it is the wider audience. Academics don't watch mainstream tv much either, so it's no use putting on tv shows that appeal to them; no ratings, therfore no tv channel revenue through ads.
Finally you acknowledge my initial point.
What was your point? That property hasn't gone up more than inflation or wages. Mine ALL have, and I'm pretty ordinary.
The time spend investing time and energy into learning to invest was excessive. 2 hrs per day + weekends, are we talking 20hrs a week? You realise if you just got a second job that amount of time would have a good return. Even spending that amount of time working at McDonalds would get about 25K annual return at zero risk.
I couldn't improve my hourly rate by anywhere the amount I have in my PAYE job in my whole life. My portfolio is currently increasing (at a rate of 5% which is under historical averages) by $90K this year conservativley while I sleep.
If you had invested in your skill set you would be far better at your job. Your increased skills at your job would be more likely to enable you to weather an economic downturn.
I am very good at my job. Some jobs simply don't return a lot of money - like a nurse, which my wife is, and she is very good, but can, at best, earn around $100k per year. Besides, I don't want to keep working, and working long hours - even at good pay rates.
That is the point I tried to make originally.
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