Low Interest Rates + Flat market + Healthy Returns = Buy Big.
Thoughts. . .
Thoughts. . .
Buy Big
- Thread starter Somersault
- Start date
Agree totally. A few years down the track, some folks will be celebrating their good fortune based on what they do NOW.
Go hard or go home!
Go hard or go home!
Rob's and Allan's suggestions have merit but I'll say buy only what you can
support with at least 8% interest rates because when interest rates go up again you could end up losing it all.
What are you thinking of buying?
If you are buying expensive property this could be a good time to buy because prices have come down considerably or if you are seeing prices coming down further you could wait a bit longer.
If you are buying entry level property you are competing with first home buyers so you are paying the asking price plus more. This is not a good thing IMO
How is your finance?
Finance approvals are now very slow.
What's your plan?
To create a property portfolio or to make money?
Property is already expensive and IMO it's unlikely that you will make a lot of money by going hard so I'd take a step back and invest wisely.
support with at least 8% interest rates because when interest rates go up again you could end up losing it all.
What are you thinking of buying?
If you are buying expensive property this could be a good time to buy because prices have come down considerably or if you are seeing prices coming down further you could wait a bit longer.
If you are buying entry level property you are competing with first home buyers so you are paying the asking price plus more. This is not a good thing IMO
How is your finance?
Finance approvals are now very slow.
What's your plan?
To create a property portfolio or to make money?
Property is already expensive and IMO it's unlikely that you will make a lot of money by going hard so I'd take a step back and invest wisely.
What's big?
For me, one IP worth $400k is big. And I want it CFPAT as well with that. No neg gearing here thanks.
For someone earning that per year as a wage; it's a doddle.
Buy as big as you can go - with absolutely safety.
The number of noughts on the end don't matter eventually, but the + or - on the bottom line makes a big difference.
It's no good buying a $1 mill IP if the rent return is around the interest rate right now. This is a neg geared property after you factor in holding costs and interest, and the rates won't stay low forever.
Four $200k IP's or three $300k IP's are better for cashflow in most cases, less risk from vacancy and so on.
If you are going big, you need to have very very good cashflows, a very good income which is also safe from recession.
Keep LVR's as low as you can.
For me, one IP worth $400k is big. And I want it CFPAT as well with that. No neg gearing here thanks.
For someone earning that per year as a wage; it's a doddle.
Buy as big as you can go - with absolutely safety.
The number of noughts on the end don't matter eventually, but the + or - on the bottom line makes a big difference.
It's no good buying a $1 mill IP if the rent return is around the interest rate right now. This is a neg geared property after you factor in holding costs and interest, and the rates won't stay low forever.
Four $200k IP's or three $300k IP's are better for cashflow in most cases, less risk from vacancy and so on.
If you are going big, you need to have very very good cashflows, a very good income which is also safe from recession.
Keep LVR's as low as you can.
As long as you can service loans, which probably means having a secure job...go for it, but don't forget what BV said above.
Regards
Marty
Has the market really flattened out yet?
FHOG disappearing, possible interest rates on the rise, and rising unemployment will be negative factors.
I am cashed and ready to buy, but not buying yet, just circling.
If my theory is wrong, then I miss out, no big deal. But I don't think so. I've been playing this game a long time.
Well said!
Rob's and Allan's suggestions have merit but I'll say buy only what you can
support with at least 8% interest rates because when interest rates go up again you could end up losing it all.
What are you thinking of buying?
If you are buying expensive property this could be a good time to buy because prices have come down considerably or if you are seeing prices coming down further you could wait a bit longer.
If you are buying entry level property you are competing with first home buyers so you are paying the asking price plus more. This is not a good thing IMO
How is your finance?
Finance approvals are now very slow.
What's your plan?
To create a property portfolio or to make money?
Property is already expensive and IMO it's unlikely that you will make a lot of money by going hard so I'd take a step back and invest wisely.
I know there's bigger, but I have been partial to this one. Of course 12 tenancies would be a handful....
More of a handful than 12 x separate resi houses & tenants Buzz ?
I noticed this one last week
http://www.realcommercial.com.au/cg...der=&cc=&c=17523378&s=wa&snf=as&tm=1240908431
A bit smaller again, but pretty sure a lot bigger than the banks would lend me atm
I noticed this one last week
http://www.realcommercial.com.au/cg...der=&cc=&c=17523378&s=wa&snf=as&tm=1240908431
A bit smaller again, but pretty sure a lot bigger than the banks would lend me atm
jaycee there are a couple of very good reasons why that isn't selling. It's been up there for donkeys and nobody will touch it.
Even though it looks like a newsagency and shop, it's really just a trumped up house.
The rent they are proposing to pay (they dictate Lease terms cos they are selling) is already covered in the outrageous over the top purchase price.
You must of done the same thing I did 4 months ago, type in 11% yield, say sort and one property in Australia pops up - that one.
Even though it looks like a newsagency and shop, it's really just a trumped up house.
The rent they are proposing to pay (they dictate Lease terms cos they are selling) is already covered in the outrageous over the top purchase price.
You must of done the same thing I did 4 months ago, type in 11% yield, say sort and one property in Australia pops up - that one.
I reckon some of you blokes are a bit ahead of yourselves. At the start of a recession and high unemployment, it's time to be conservative. You buy up big towards the end of the recession.
I'd think buying up big at the start of the last two recessions would have been a very bad thing to do, as in, 1981, and 1990. But buying up a few years later would have been very smart.
Anyway, good luck. I'm keeping my powder dry for the while.
See ya's.
I'd think buying up big at the start of the last two recessions would have been a very bad thing to do, as in, 1981, and 1990. But buying up a few years later would have been very smart.
Anyway, good luck. I'm keeping my powder dry for the while.
See ya's.
Agree with TC. I've become a bit more bearish on (Melbourne inner 5-15km median priced) property in my area in the 1 - 2 year timeframe recently as:
- I've looked into prices more closely, and in the last 6-12 months rather than staying flat prices have actually gone up a lot
- Had IP's appraised. Thought I'd have taken a hit, but they have gone up quite a bit. Im shocked actually.
- Yields based on valuations are terrible, and you can tell prices have been pushed up by low interest rates, FHBG, and still low unemployment outside the fin services / commercial property (ie. traditional leading) areas
I'd see no harm in taking ones time to buy in c. 12 - 18 months time. When unemployment rises first, then interest rates second (once unemployment falls again) there will be two "lids" on growth. Then the next wave of growth. No rush!
Other states / areas / types of property may of course be wildly different.
- I've looked into prices more closely, and in the last 6-12 months rather than staying flat prices have actually gone up a lot
- Had IP's appraised. Thought I'd have taken a hit, but they have gone up quite a bit. Im shocked actually.
- Yields based on valuations are terrible, and you can tell prices have been pushed up by low interest rates, FHBG, and still low unemployment outside the fin services / commercial property (ie. traditional leading) areas
I'd see no harm in taking ones time to buy in c. 12 - 18 months time. When unemployment rises first, then interest rates second (once unemployment falls again) there will be two "lids" on growth. Then the next wave of growth. No rush!
Other states / areas / types of property may of course be wildly different.
Good to see you offering your 2c worth of predictions for the future when you openly admit you got it wrong in the last 6 - 12 months
Good to see you offering your 2c worth of predictions for the future when you openly admit you got it wrong in the last 6 - 12 months
Yeah because the massive FHBG, the GFC, and record low interest rates were predicted by all!!
They were serious left field events, but barring more left field events, my view stands!!
The problem with predictions in the short term is all these left field events. Govts. all meddle in the market. No-one (except Prof. Keen ) saw the GFC coming at the speed it hit. Other seasoned investors locked in IRs at 8 & 9% because it looked like they were heading North big time.
It is safer to take a 10 year view because of the asset we are dealing with and time itself seems to smooth the effect of all these left field events and trends are adhered to.
I'll go out on a limb and say that in the next 7 - 12 years RE on average will double in price. (some areas won't move much, some will triple but on average I think I'll be right)
