Considering where we are in the current property cycle,When is the best time to buy?
- Thread starter Aceyducey
- Start date
MJK touched on it...if something fitted the buying criteria, MJK would buy.....simple.
So my buys, fit my buying criteria.
All look to be as astro described above....unusual...exceptional...extremely profitable.
Why limit yourself to "long term" investing when you can make a better than decent return in the short term?
Why limit yourself ....fullstop?
Its appears I am the one that needs enlightening....
PS...I'm pretty serious about my investing....it needs to show a profit from day one...and it usually does.....
So my buys, fit my buying criteria.
All look to be as astro described above....unusual...exceptional...extremely profitable.
Why limit yourself to "long term" investing when you can make a better than decent return in the short term?
Why limit yourself ....fullstop?
Its appears I am the one that needs enlightening....
PS...I'm pretty serious about my investing....it needs to show a profit from day one...and it usually does.....
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I look at it another way .
There are always going to be good deals around , if you're prepared to look hard enough and for long enough.
Personally I'm lazy.
I know there are times in the market when it's easy to make money without having to work hard and after a while I find looking at houses boring. There are other things I want to do with my time than look for a new deal.
When we were buying in logan anything made money . Sure some made more money than others, but is the extra effort worth it ? Our worst deal in logan went from 65 to 145 in two years. If we'd sold at the top we might have got 160-165 but there was probably only about a two month window one year earlier when that was possible.
Having done a bit of share trading in the past I'm finalising a "mechanical" share trading system. It involves a fair bit of time to set it up and test it , but once it's set up it will take minimal effort to run and I'd have a guess it will give me a better return over the next few years than property, though time will tell.
I note than John Edwards from residex in last weeks SMH was predicting low growth in sydney's middle and lower markets for the next five years. Given the strength in the market over the last ten years, I wonder if that's optomistic.
By all means everybody , keep buying at the moment, That means that you won't be competition for the like of me or Likewow ( I agree with what he's said in this post , but .... sssssh ... pleeeease don't tell him I do ) when the real bargains appear. Part of the reasons the market will be tougher is that the banks will tighten up their lending policies, so people who are currently buying while maxing out on their servicability will not get a look in when rates are higher. 1 high profile member of the forum has just had something along these lines happen. On the sale of IP , they were informed that there wern't going to get any money for the sale as the Bank wanted to decrease their DSR on other loans, needless to say when I talked to her she was already lining up alternatives , and a certain bank , Which Bank?? was about to loose about 1 mill in loans which had been conducted impecabily.
I wonder if this and other debates more reflect the different stages investors are go through in their education process from newbie to peebee to infromed investor to Expert investor.
It also has a bit to do with Peter Spanns concept of getting good at something and then repeating it.
We're on our secord Subdivion in Sydneys north shore . The first one we stubled into but it worked out well. The second one had finally had the dual occ and now the Subdividion approved. This is one thing we know feel comfortable . We can look at a site and have a pretty good idea of what you can do and can;t do . Sometimes the experts need a bit ot prodding in order to consider other options. With our current house we were advised that it would be cheaper to demolish the current house and build two new ones. I pointed out a couple of simple things and they then said yes you could do it that way and it will be cheaper still .
At some stage in the future we will look for another similar block , one condition being that you don't have to demolish the exixting house.
In this cycle we've done well with buying high yield properties at the right time , just as they were about to take off in price.
In the next Cycle I will be doing this again , though instead of picking two areas, I will be trying to stagger this over several different areas. I've said before you don't know how long a market goes down for , but even once it's obvious ( to people who trak that local market closely ) that the market is moving, there is plenty of time to get good buys.
Mt Druitt / fairfield / liverpool will be easy to pick . Just whatch what's happening in the centre of SYdney, watch a couple of middle ring suburbs, and once the amount of stock in Mt Druitt starts dropping , look to buy. Avoid the grotty streets and gerenally to close to the shops , pubs and workers clubs etc.
Then it's time for a trip to Melb and I'd even be looking a the Docklands area to see if there are distressed sales arounnd there . I'd be picking Rubies and Goannas brains for ideas while shouting them for dinner in the evening.
Next stop will be central areas in Brisbane and hobart, and then it will be on the the outer rings, and up the q'land coast to the regionals and ROCKY......and Townsville.
With a conservative approach I think you can easily increase you wealth by a minimum of a factor of ten , and if you 're more agressive you can go a lot further.
I will be adding a seperate strategy to our two used so far, and this will be buying in certain areas where I think the demographics are going to change significantly for what ever reasons. There sorts of things are probably harder to pick unless you have a familiarity with an area and what factors determine where people live in that area.
Bit of a ramble there .
See Change
There are always going to be good deals around , if you're prepared to look hard enough and for long enough.
Personally I'm lazy.
I know there are times in the market when it's easy to make money without having to work hard and after a while I find looking at houses boring. There are other things I want to do with my time than look for a new deal.
When we were buying in logan anything made money . Sure some made more money than others, but is the extra effort worth it ? Our worst deal in logan went from 65 to 145 in two years. If we'd sold at the top we might have got 160-165 but there was probably only about a two month window one year earlier when that was possible.
Having done a bit of share trading in the past I'm finalising a "mechanical" share trading system. It involves a fair bit of time to set it up and test it , but once it's set up it will take minimal effort to run and I'd have a guess it will give me a better return over the next few years than property, though time will tell.
I note than John Edwards from residex in last weeks SMH was predicting low growth in sydney's middle and lower markets for the next five years. Given the strength in the market over the last ten years, I wonder if that's optomistic.
By all means everybody , keep buying at the moment, That means that you won't be competition for the like of me or Likewow ( I agree with what he's said in this post , but .... sssssh ... pleeeease don't tell him I do
) when the real bargains appear. Part of the reasons the market will be tougher is that the banks will tighten up their lending policies, so people who are currently buying while maxing out on their servicability will not get a look in when rates are higher. 1 high profile member of the forum has just had something along these lines happen. On the sale of IP , they were informed that there wern't going to get any money for the sale as the Bank wanted to decrease their DSR on other loans, needless to say when I talked to her she was already lining up alternatives , and a certain bank , Which Bank?? was about to loose about 1 mill in loans which had been conducted impecabily.I wonder if this and other debates more reflect the different stages investors are go through in their education process from newbie to peebee to infromed investor to Expert investor.
It also has a bit to do with Peter Spanns concept of getting good at something and then repeating it.
We're on our secord Subdivion in Sydneys north shore . The first one we stubled into but it worked out well. The second one had finally had the dual occ and now the Subdividion approved. This is one thing we know feel comfortable . We can look at a site and have a pretty good idea of what you can do and can;t do . Sometimes the experts need a bit ot prodding in order to consider other options. With our current house we were advised that it would be cheaper to demolish the current house and build two new ones. I pointed out a couple of simple things and they then said yes you could do it that way and it will be cheaper still .
At some stage in the future we will look for another similar block , one condition being that you don't have to demolish the exixting house.
In this cycle we've done well with buying high yield properties at the right time , just as they were about to take off in price.
In the next Cycle I will be doing this again , though instead of picking two areas, I will be trying to stagger this over several different areas. I've said before you don't know how long a market goes down for , but even once it's obvious ( to people who trak that local market closely ) that the market is moving, there is plenty of time to get good buys.
Mt Druitt / fairfield / liverpool will be easy to pick . Just whatch what's happening in the centre of SYdney, watch a couple of middle ring suburbs, and once the amount of stock in Mt Druitt starts dropping , look to buy. Avoid the grotty streets and gerenally to close to the shops , pubs and workers clubs etc.
Then it's time for a trip to Melb and I'd even be looking a the Docklands area to see if there are distressed sales arounnd there . I'd be picking Rubies and Goannas brains for ideas while shouting them for dinner in the evening.
Next stop will be central areas in Brisbane and hobart, and then it will be on the the outer rings, and up the q'land coast to the regionals and ROCKY......and Townsville.
With a conservative approach I think you can easily increase you wealth by a minimum of a factor of ten , and if you 're more agressive you can go a lot further.
I will be adding a seperate strategy to our two used so far, and this will be buying in certain areas where I think the demographics are going to change significantly for what ever reasons. There sorts of things are probably harder to pick unless you have a familiarity with an area and what factors determine where people live in that area.
Bit of a ramble there .
See Change
Ok SC,
Seeyou in a few years then, bye.
Good luck with your 'mechanical trading' system, hell, you can write a book if it works.
If you think yourself and likewow wont be competeing with me when you 'come back to property' you are kidding yourself.
I think I have the edge on you re: subdivisions, but why would you worry ? Get good at your mechanical trading system and *stick to it*.
Hasta la vista See_Change.
astroboy
Seeyou in a few years then, bye.
Good luck with your 'mechanical trading' system, hell, you can write a book if it works.
If you think yourself and likewow wont be competeing with me when you 'come back to property' you are kidding yourself.
I think I have the edge on you re: subdivisions, but why would you worry ? Get good at your mechanical trading system and *stick to it*.
Hasta la vista See_Change.
astroboy
astroboy said:
AB , don't fret . I'll still be around to remind you of past posts. Bought 92k , Sold 145k in just over one year in Rocky. At 57 % gross , that's not a bad short term return for somewhere that wasn't going to go anywhere.
Depending on how well our dual occ goes we may even have some money spare to buy in a central location in Sydney.
BTW if it works I won't be writing a book about it , though I might have some time to have a serious crack at the song writing business.
See Change
see_change said:
Now theres a true thinking investors post. I have (like lots of others) have also done amazingly well in the most recent boom. (Increase of about 110% in almost 3 years, was 130% + at the beginning of this year when i sold one to fund some business expansion)
In the recent boom, pretty much all you had to do was look at the yield, if it was above 8% gross, just buy it and stick a tenant in and wait for the wave to catch you.
Astro, I agree, you would need exceptional circumstances to do well in this market and they would be like hens teeth. Just dont use up your valuable equity/serviceabilty for when we have some interest rate rises. I cant wait for 2006-7
astroboy said:You could have done better, I did
astro
AB, congratulations. There's always going to be somewhere , something or someone that performs better.
I'm not competing with you. I have my own timetable and it's running on time.
See Change
SC pretty much summed it up ...
I too am a lazy investor......I'm not looking all the time...its bloody boring !!
There is absolutely more to life than spending all your spart time ( and I have more than most) trying to maximise your wealth by chasing property....or even shares for that matter, so I don't do it.....
Instead I "Live It" ......life that is.
But if and when I spot what appears to to be a workable deal....I go through with it.
And if my servicibility, DSR,...blah blah blah, is affected....what do I do.....SELL!!
Reduce debt...take a profit...cash up.....
You're entitled to at least one PPOR which is CGT free after 12 months ...so....sell a PPOR a year...
And what is all this fixation with 2006-2007 ???
Whats going to happen......I must be missing something.........
KP
I too am a lazy investor......I'm not looking all the time...its bloody boring !!
There is absolutely more to life than spending all your spart time ( and I have more than most) trying to maximise your wealth by chasing property....or even shares for that matter, so I don't do it.....
Instead I "Live It" ......life that is.
But if and when I spot what appears to to be a workable deal....I go through with it.
And if my servicibility, DSR,...blah blah blah, is affected....what do I do.....SELL!!
Reduce debt...take a profit...cash up.....
You're entitled to at least one PPOR which is CGT free after 12 months ...so....sell a PPOR a year...
And what is all this fixation with 2006-2007 ???
Whats going to happen......I must be missing something.........
KP
See_Change,
It was a solid result for what I thought (wrongly) would be a fairly ordinary market. Ok I still wouldn't buy there, but your result and your research set a great example for those here now and in the future, on how to go about their due diligence in selecting high performance property.
*TOUCHDOWN*
astroboy.
It was a solid result for what I thought (wrongly) would be a fairly ordinary market. Ok I still wouldn't buy there, but your result and your research set a great example for those here now and in the future, on how to go about their due diligence in selecting high performance property.
*TOUCHDOWN*
astroboy.
See_Change,
Is this a possibility you're allowing for or are at all concerned about?
I'm somewhat wary right now about pouring funds into the stock market with it at such high levels. I wouldn't be impressed (to put it politely) if only a few months after doing so we got one of those days where prices dropped something like 30%-40% with little chance of selling.
GP
With a lot of talk of the possibly big correction-we'll-have-to-have coming any time soon, do you think your trading system will get you out in time - especially if it's more of a crash (ie. sudden) than a correction?see_change said:
Is this a possibility you're allowing for or are at all concerned about?
I'm somewhat wary right now about pouring funds into the stock market with it at such high levels. I wouldn't be impressed (to put it politely
) if only a few months after doing so we got one of those days where prices dropped something like 30%-40% with little chance of selling.GP
GreatPig said:
It is a possibility I'm concerned about , but it's something that I've looked at fairly carefully and I think the downsides are more than compensated by the upside.
No , my system won't get me " out in time " , but short of not investing , I'm not aware of a " system " that will.
Most long term ( conservative ) systems seem to have about a 10 % drawdown during " normal " conditions , but can take up to about a 30 % hit on equity on open positions with a bigger correction. The two that I can back test on are the " tech wreck " and 911 . My system takes about a 30 % hit on both of these.
I'm not aware of any of the people who I talk to who have been able to work around it. It's just a matter of being aware that it's going to happen. ( not if , just when ).
If I look at any six month period , I can find periods where it isn't profitable, but I havn't found a two year period where the profit is significantly below the average. Jan 00 - jan 02 ( which includes the tech wreck and 911 ) gives over a 40 % return.
When you track the equity curve, some of the strongest periods of growth are in the periods starting shortly after these.
See Change
Glebe,
Personally I'm more concerned about trying to ensure I could survive a correction with minimal damage than wondering if or why there might be one.
I don't follow market fundamentals enough to answer that question, but there are certainly a number of people in the industry predicting one.
GP
Glebe said:
Personally I'm more concerned about trying to ensure I could survive a correction with minimal damage than wondering if or why there might be one.
I don't follow market fundamentals enough to answer that question, but there are certainly a number of people in the industry predicting one.
GP
I think the "correction" is already taking place - and i'm not sure that it is going to be as dramatic as some people might think. A recent revalue on a property of mine in Sydney's south west shows a drop of almost 15% in the last 12 months - I wouldn't expect it to fall too much further...
I do however think that those who paid premium prices in the last 12 months may have cause for concern if rates jump a few % (can't really see it, but who knows ??) - especially those who are finding it tough meeting their current repayments...
The next 12mths - 2 years will be interesting though - I've decided to concentrate on saving dollars and hopefully be in a position to buy well in 2006/7...
I do however think that those who paid premium prices in the last 12 months may have cause for concern if rates jump a few % (can't really see it, but who knows ??) - especially those who are finding it tough meeting their current repayments...
The next 12mths - 2 years will be interesting though - I've decided to concentrate on saving dollars and hopefully be in a position to buy well in 2006/7...
Fatboy
The correction we're talkingabout in the last few posts is in the share market.
( I think .... )
See Change
The correction we're talkingabout in the last few posts is in the share market.
( I think ....
) See Change
I personally can't identify with the posters on this forum who voted the "now" option. Theres plenty of wonderful investment opportunities out there at the moment. The stockmarket looks good in the medium term, Oil prices look like their going to continue their upward trends, Uranium (I hope I spelled it right) should do well over the next few years due to lots of new demand from China and Thommo is very bullish on silver, I haven't checked it out, but Thommo seems to know what his talking about. Now look at Property, its generally overvalued (look at rental reality) and has poor growth prospects over the next few years. Limiting yourself to one asset class sounds rather limiting to me.............
see_change said:
I've also been running a long term mechanical share system for some time now and it brings home some lessons to me for my property investing. When backtesting the mechanical system I trade, adding market filters (ie don't buy during downturns) reduced the returns and I found it was best to wear the drawdowns for the larger return.
I feel the same about property investing. If a property passes my buy criteria and I can afford it I will buy.
Sure I might get caught without equity when there are absolute bargains around but who can predict the future? While there are some dire warnings -- we could equally be at the bottom. I have read somewhere that in Sydney and Melbourne that the oversupply of apartments can be absorbed in 18 months and the Bond market certainly isn't factoring in any real interest rate rises over the next 10 years.
There can be any number of future scenarios at the moment and my plan is to keep inevesting in both property and shares.
Michael
