Buy Or not to buy?

[DanielN]

I realise this question has been asked alot and there a number of different opinions, for investors starting out now(2007/2008) particulary the young and keen/nsure what to do with all the interest rate rise predictions what advise can you give young investors trying to make it, do we wait or do we ride out the market along with the resource boom/or hope Labour can manage the ecnomy to continue to grow..?

CASH for now? or start getting into the property world.


Any advice/opinion would be greatly appreciated..

 

[alexlee]

What's your long term plan? If you only plan to buy ONE property in your lifetime, you'd better time it well. If you have a long term plan where you plan to buy multiple properties over a number of years, then the experience of holding a property is the most important at the start.

If I were you (and I'm not saying this is advice, just what I would do): check what your borrowing limit is, then buy something 'standard' (ordinary unit or house that can be easily rented out) for LESS than that.
Alex

 

[DanielN]

What's your long term plan? If you only plan to buy ONE property in your lifetime, you'd better time it well. If you have a long term plan where you plan to buy multiple properties over a number of years, then the experience of holding a property is the most important at the start.

If I were you (and I'm not saying this is advice, just what I would do): check what your borrowing limit is, then buy something 'standard' (ordinary unit or house that can be easily rented out) for LESS than that.
Alex

Yeah id definatley like to have more than one house next to my name, build alot of equity over 4 - 5 years.. thats my goal.. try be finanicially secure in 5 years..
I hope i dont sound nieve..
cheers for the reply & suggestion alex

 

[alexlee]

Well, you can certainly aim for 5 years, and reassess after a few years. But the point here is, if you don't start, you'll never get there.
Alex

 

[DanielN]

very true Alex, you gotta start somewhere even if there was a bit of correction, just have to hold it out.

 

[alexlee]

The other thing to remember is, good buying opportunities only look good in retrospect. I started buying in 2000, when (in retrospect) it was a great opportunity. But I could have posted the same questions back then as you did: Asia is still mired in a currency crisis, the US internet bubble just popped, the AUD is trading at 50 US cents suggesting a lack of confidence in our market, memories of double digit rates were still fresh, and there is a real risk of recession. Should I buy? Or wait?

However, remember that there IS a risk of a significant downturn, but then there always is. If I was a newbie, I would buy below my borrowing capacity (e.g. if the bank is willing to lend you $300k, say, you buy a property for around 200-250k), and build up my reserves by saving more money.
Alex