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