Buy Now Or Wait For The Bust?? Consider This Scenario Please

[trendsta]

I agree with the general strategy watermelon.

Wait for an asset to be fair value before buying. How do you know an asset is fair value? Use fundamentals.

Keithj has an excellent post on how he achieved this with property in 01 and in shares in 03-04.

 

[trendsta]

In terms of economy, there are many posts about china boom continuing for many years and thus helping Aussie resource and agri driven economy. Which in turn will help unemployment rate stay low, property proces etc..

But, what if China becomes a net EXPORTER of minerals and agri-products in few years? How will this impact the economy and property in various cities/regions?

This is not completely inconcievable. 10 years ago, ppl drooled at the prospects of manufacturing in Australia/US and exporting to China.. few years later the opposite happened. China is consolidating its minerals/resources sector closing inefficient small mines and starting to globally acquire large feasible assets. If this coincides with slowdown in US consumer spending we could be in for some fun...

I dont think its very likely, but still makes me wonder...

 

[steveadl]

Say I buy an IP today for $200,000 in a rising market.

In 3 years say it's worth $250,000.

Then the market starts falling & declines in value over the next 4 years to be worth now $200,000.

So after 7 years from initial purchase the IP is worth the same money.

You have described almost exactly what has happened to me the last couple years (except it did'nt quite get to $250k) - and in my case, due to the rise in this first property, I bought another 2 properties using the equity from this first purchase, within your 3yr time frame.

So yes assuming my first IP does fall back to $200k (which is a big IF), and I could have bought it for that price again now - I would'nt have the other 2 IP's.

Which is why I still think, you don't necessarily need to find the perfect time, or the bargain of the decade, just buy average, and wait for equity to do it's job. There are too many risks in sitting around and waiting for the perfect time to buy.

Cheers
Steve

 

[sailor]

If you try and hold off to pick at buying in good market, you could miss out on getting a good reno opportunity, which not only increases CF but LVR as well.

 

[BV]

And ofcourse, in a rising market there is a lot more competition from other buyers
so you could end up paying more than you have to.
cheers