Boom or Bust

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From: Neil Smith


I am new to all this & just thinking of getting into property investment.
With property prices having been up for quite sometime does this mean we are approaching the top of a boom-bust cycle, meaning that if I bought now, I might be paying out on a property that might not be going up for some time ( I've just been reading "More Wealth from Residential Property"). I'm 48 & fully own my home & realise I probably need to get moving on this fairly quickly to achieve much before a poor retirement sneaks up on me.

Thanks for any help
 
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Reply: 1
From: Rolf Latham


Hi Neil

There are many crystal balls out there. The market was "supposed" to slow a little, problem is someone forgot to tell the market.

48 to 55 is not a particularly long investment horizon, though 60 certainly is.

You are obviously looking for a financial investment because your super is deemed insufficient ? At age 48, if not property and not now, then what ? Superannuation, geared share portfolios etc ?

Not having personal debt makes for some very interesting choices, you could do a bit of it all .

Ta

Rolf
 
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Reply: 1.1
From: Silver Ghost


Neil,
You could do a lot worse than going to a Steve Navra seminar.
SG
 
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Reply: 2
From: John P


Hi Neil, as Rolf said, 48 - 55 (if this is applicable)is not a long investment horizon so if you "are" intending to purchase an IP, how much longer can you afford to wait?. What if the property cycle does'nt do what you were expecting it to? I've always liked the Jan Somers theory of buying when I can afford it. This does'nt however mean that I do not do my homework first.

Regards


John Poulos
RESI Home Loans Representative,Kingsford NSW
Winner - Mortgage of the Year for 2002
"Your Mortgage Magazine"
0412 588986
 
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Reply: 2.1
From: Always Learning


I think that now is a good time to start looking, start planning. Many on the forum have good experience buying, renovating, renting and holding. Others like me are planning on buying, redeveloping, renting and holding. Others are looking for quick bargains or finding innovative solutions to property "problems". Learn to stay above the curve in the investor market! Imagine starting now to build your knowledge and skills, imagine you got to know your target market better than others and could buy IP just a little cheaper than average, seeing undercapitalized value whilst avoiding the money pits, buying in a suburb that is you have researched to be "underpriced", buying a house/unit that with some "cheap" cosmetic renovations will give you lots of rental $ "bang" for your investment buck.
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Investigating ways to get more money out of the rental property eg. saving 5~7% with self management. What about finding finance that is cheaper than "retail", 0.5% or even more.
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What about innovative holding structures such as family trusts and "Hybrid Discretionary Trusts", the protect your assets and offer excellent tax advantages.
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All of the above and more having been doing, are being done now, and will be done in the future by members of this forum.
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My point is now is a good time to start learning, if you can "stay above the curve" I personally cannot see that you will be taking much of a risk, risk is being uneducated. Failing to plan is planning to fail. You are here on this forum, surely just being here puts you in the top 10% of the population, now all you have to do is move another 7% up to being in the top 3%, those who can declare themselves financially independent! (My 10 year goal is to be financially independent in 10 more years)
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<li> Unless you change how you are, you'll always have what you've got.
<li> To have more than you've got, become more than you are.

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Reply: 2.1.1
From: Ross Sneddon


Hi Neil

When do you start. The answer is now and strive for a get rich slow 10 year cycle. Indeed, look at all property investment as a 10 year cycle.

The media and money market use expressions such as boom and bust. In reality they rarely exist and then only if you look short term. The last time we had a property downturn (bust) was in the early 90's and that was a flattening of the market (slight fall) and not a bust.

If you are ready to invest now and I think you are, then do the sums, get the professional advice and then work out where to invest. Many people invest in their own suburb or very near by. Don't do that unless there are compelling reasons to do so.

Typically there will be a strong rise in the market in one city, say Sydney, for several years which is followed by lesser rise or flattening for maybe 4 years. This has happened. Rents are now way behind property prices and must even up.

Now, following the top of the strong rise in Sydney will be upward pressure in the next area, currently Brisbane. This appears to want to hold for the next 2 to 3 years.

What then, I don't know, but some of the long time experts in the field seem to think it may be Perth starting in 2004 or 2005. Let's see.

Be prepared to look at these areas at the time at the bottom of their curves. They do not all run simultaneously.

Go for it. Look to be financially secure by the time you are 60 years.

Regards

Ross
 
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