Greedy Investors
- Thread starter Alex P Keaton
- Start date
I never thought that. I don't think anyone else on here does either. Someone has to work. Someone else. Just because you preach to everyone to own IPs doesn't mean that you think if everyone did it it would still work.
Most people who start this path never even make it. I'm only about 1/2 way there. I've worked and paid a tonne in taxes and I've still got at least another 10 years of working left. And by investing in properties I am providing accommodation to those who can't afford or do not wish to buy it much more efficiently than the government ever could.
I do believe in the abundance of the universe and think there is enough of everything to go around for everyone.
Nowhere near 10% of the world would ever want to own 10 investment properties. I'm not sure on the exact figures but I'd say less than 5% of Australian alone (a wealthy country) own more than 3.
That's why you can preach to everyone to own IPs and they get rich because only 5% of the people you preach to will ever even do anything.
If everyone was doing it it might not work and we'd have to do something else.
If you simplistically split housing into owner-occupied and private rented only and assume an owner-occupancy rate of 80% then using the above of 80 households, 8 own another 80 IPs. The problem is that there are only 20 households to become tenants. Not good news! Residential property as an investment only works if most people don't join in.
I agree. Hence the is very little abundance in the world of investing. You gotta make sure that no too many people do what you do, and be grateful to all the tenants out there who help pay your mortgages.
If you do not understand these concepts, you should not be in the game. Microsoft make billions from taking out the small guys. The same happens in all industries and professions.
I doubt a lot of the old rich Italian and Greeks around the place with more property than most will ever dream of would understand what you're on about there. Perhaps you'd like to go around and tell them they shouldn't be in the game?
From middle class Australia, it is very easy to assume that the world is abundant, but it is not.
What if 10% of the population each buy 10 investment properties? Is the world abundant enough to allow 11% of the population to each have 10 properties?
Do you really think that's going to be a problem? SS has about what - 2000 regualr contributors? Why not focus on reality (ie. majority of population plodding along as usual in day to day jobs without investing) rather than the theory about why it could not work if this was that and that was this?
I remember hearing from one property 'guru' that the solution to very few people having enough super was for everyone to go out and buy lots of property. Perhaps that one should be thought over a few times.
I'm not saying there is anything wrong with property investment (or else my position would be highly hypocritical), I just think it's naive to assume that the whole world can be rich, and live off passive income.
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The median which is far more important is still only around 40k or something.
Median household income in Vic 05-06 is $56,576. So even allowing for 2009 figures and that a 'household' might be 1.3 earners it probably is around 40k or so.
I don't get it. What's stopping you from being a successful investor? People come to this country with barely any English and $10 in their pocket and they can make it happen.
There is enough abundance / opportunity in Australia that almost anyone who puts their minds to it can achieve a reasonable level of success.
You don't have to make sure not too many others will do it, they're already 'not doing it' themselves. For every 50 people I help with property investing only 1 or 2 actually do anything.
As Steve said even considering that 10% of the population could go out and buy 3 properties is such an unrealistic scenario it's not even worth thinking about.
Yes, I'm grateful for everything I receive in life. I'm grateful for my tenants who pay on time (mostly) an amount which covers around 75% of the cost of the roof over their heads I provide for them.
I do think it is slightly harder for a FHB on a low to average wage to get in the market now days, but hasn't it always been difficult? A bit of hard work and sacrifice can go a long way. I scream when people say I'm lucky - luck hasn't got a great deal to do with it.
For instance, take my own family:
Grandparents: Lived for the first 8 years of their married life with my grandmothers sister and family. Grandfather built the very modest family home (which they both lived in till their deaths) on weekends for about 2 years I think. They had just had their 2nd child when they moved in.
My parents: First house was an ugly 1 bedder on the outskirts of town that needed the bathroom lined and tiled. Their 2nd house was a 3 beder with 1 bath, 1 garage and 1 living area about 2k from the first home. There are 3 kids in my family, 2 of us shared a bedroom.
I spent 13 years in the defence force, 8 of them living on base in a room about the size of a average bedroom, sometimes smaller, sharing a bathroom with up to 20 other people. I did that to get ahead.
My first PPOR (bought mid 1999) was a run down weatherboard federation era 2 beder with a kitchen made of left overs, packing crates (was a shocker). Lounge room was about 3m x 3.5 m, had an old bathroom that I put my foot through the floor and an outside dunny and laundry. I ripped up the carpet cause it stank of dog pee and couldn't get the smell out. The plasterboard needed replacing everywhere, the front verandah needed new decking and the traditional federation timber fretwork and hand railing on the verandah was long gone. No -one wanted this ugly duckling. I lived with the house as it was for 4.5 years, was bl***dy freezing in winter. All my furniture bar the bed was 2nd hand. The microwave, taster, electric frying pan, kettle were 2nd hand. The TV was old and I drove a 12 year old rice bubble on wheels. Everyone laughed at my car. I bought that house for 80K. after 4.5 years, when I had paid off about half of the mortgage, I renovated it for about 30K. Sold in 2006
for $235 (wished to god I kept it) had a couple of people fighting over it as it was beautiful. Just saw it on the market for 300K (think they are being a little too abitious).
Anyway, I, my parents, and my grandparents made sacrifices and did without to get our first house. I know people who have done the same jobs as me, had no dependants who are still no better off than I was 10 years ago. And they used to laugh at me. Luck had nothing to do with it.
But, I am an average earner living in a regional area where the prices can be about 2/3 the price of the capital cities. I still reckon, if I had to start again I could do it.
For instance, take my own family:
Grandparents: Lived for the first 8 years of their married life with my grandmothers sister and family. Grandfather built the very modest family home (which they both lived in till their deaths) on weekends for about 2 years I think. They had just had their 2nd child when they moved in.
My parents: First house was an ugly 1 bedder on the outskirts of town that needed the bathroom lined and tiled. Their 2nd house was a 3 beder with 1 bath, 1 garage and 1 living area about 2k from the first home. There are 3 kids in my family, 2 of us shared a bedroom.
I spent 13 years in the defence force, 8 of them living on base in a room about the size of a average bedroom, sometimes smaller, sharing a bathroom with up to 20 other people. I did that to get ahead.
My first PPOR (bought mid 1999) was a run down weatherboard federation era 2 beder with a kitchen made of left overs, packing crates (was a shocker). Lounge room was about 3m x 3.5 m, had an old bathroom that I put my foot through the floor and an outside dunny and laundry. I ripped up the carpet cause it stank of dog pee and couldn't get the smell out. The plasterboard needed replacing everywhere, the front verandah needed new decking and the traditional federation timber fretwork and hand railing on the verandah was long gone. No -one wanted this ugly duckling. I lived with the house as it was for 4.5 years, was bl***dy freezing in winter. All my furniture bar the bed was 2nd hand. The microwave, taster, electric frying pan, kettle were 2nd hand. The TV was old and I drove a 12 year old rice bubble on wheels. Everyone laughed at my car. I bought that house for 80K. after 4.5 years, when I had paid off about half of the mortgage, I renovated it for about 30K. Sold in 2006
for $235 (wished to god I kept it) had a couple of people fighting over it as it was beautiful. Just saw it on the market for 300K (think they are being a little too abitious).Anyway, I, my parents, and my grandparents made sacrifices and did without to get our first house. I know people who have done the same jobs as me, had no dependants who are still no better off than I was 10 years ago. And they used to laugh at me. Luck had nothing to do with it.
But, I am an average earner living in a regional area where the prices can be about 2/3 the price of the capital cities. I still reckon, if I had to start again I could do it.
i want that as my sig.
if you can't afford it. don't whinge about those that can.
the people that can afford it now, put the effort in regardless of market conditions to get ahead. now they can buy what they want.
there's always a reason NOT to invest.
the people that can afford it now, put the effort in regardless of market conditions to get ahead. now they can buy what they want.
there's always a reason NOT to invest.
same here. of the tens of folk i help out each year with individual and personalised advice, maybe 5 MAX go on to better things or actually make something of it.
think of all the rellies and friends that have asked for advice, and it's given freely and openly, and they still haven't done anything....
Damn, I paid handsomely for your advice last year and still did nothing !!
I'm definitely in the "others - did nothing" camp.
Can we talk about this objectively for a minute? Are greedy investors affecting house prices?
First of all, what's the alternative? Correct me if I'm wrong but negative gearing was introduced to encourage private property investment to create rental properties.
So, if private investors weren't providing rental housing, the govt would have to do it, or there would be a severe shortage of rental housing, driving rents through the roof.
So, if the govt is building rental housing and replacing the current private investors in the market, what happens?
I suppose first of all we all pay higher taxes to fund building and management expenses. But how are house prices affected? I don't really know, but all of these rental properties are essentially off the market right?
So the number of available homes for home owners is significantly reduced, is this going to put upward pressure on prices. Think of all the investors that aren't spending their dough on IPs, how does their buying power affect prices in high demand areas where there is a shortage of housing?
Thinking out loud here, would love hear poeples thoughts.
First of all, what's the alternative? Correct me if I'm wrong but negative gearing was introduced to encourage private property investment to create rental properties.
So, if private investors weren't providing rental housing, the govt would have to do it, or there would be a severe shortage of rental housing, driving rents through the roof.
So, if the govt is building rental housing and replacing the current private investors in the market, what happens?
I suppose first of all we all pay higher taxes to fund building and management expenses. But how are house prices affected? I don't really know, but all of these rental properties are essentially off the market right?
So the number of available homes for home owners is significantly reduced, is this going to put upward pressure on prices. Think of all the investors that aren't spending their dough on IPs, how does their buying power affect prices in high demand areas where there is a shortage of housing?
Thinking out loud here, would love hear poeples thoughts.
If there are approximately 8 million households in Australia, (approximation only)
And if approximately 25% of these a rental properties, (again, approximation only)
Well thank goodness we have investors to actually buy these 2 million houses, because without them, these 2 million houses would be empty.
Or would they?
And if approximately 25% of these a rental properties, (again, approximation only)
Well thank goodness we have investors to actually buy these 2 million houses, because without them, these 2 million houses would be empty.
Or would they?
Mmh this whole idea of greed and taking from other people who don't invest is an interesting one. I guess you could / should make the same argument about salaries. How come a nurse is paid so much less than a lawyer, even though nursing also requires tertiary education, has huge responsibilities in life & death situations etc.?
Intrinsically we all agree that not everyone can be on a high salary, that different occupations pay different wages, almost regardless of working hours, importance to society, level of responsibility etc. and that some people are better off in their jobs than others, by choice, luck, talent or education. Do we call higher income earners greedy, taking money away from the more lowly paid? No, we usually don't (unless they are useless CEOs who are overpaid and underperforming). So why is this different with investors?
kaf
Intrinsically we all agree that not everyone can be on a high salary, that different occupations pay different wages, almost regardless of working hours, importance to society, level of responsibility etc. and that some people are better off in their jobs than others, by choice, luck, talent or education. Do we call higher income earners greedy, taking money away from the more lowly paid? No, we usually don't (unless they are useless CEOs who are overpaid and underperforming). So why is this different with investors?
kaf
Without investors:
Those houses would not exist to start with (I'm an investor and I've build property that wouldn't have existed otherwise). We'd be piling in 4, 5 to a house and the existing houses would cost so much more due to supply / demand.
OR
They'd exist and be government owned and managed rental accommodation. i.e. Commission housing. Hands up who wants to live in those? We'd also pay more taxes for this too.
Greedy investors?
I've paid enough in CGT, stamp duty and GST associated with rental properties (in the last year) to keep someone in centrelink payments for a year. Yeh, I know SD is a state thing.
Reminds me of a friend (who both herself and hubbie earnt incomes in the highest tax bracket) because they paid so much tax, and as some of that tax was keeping some welfare recipients, she said she should be alocated a family that could wear "sponsored by the Jones Family" t shirts (or whatever you name is).
Very very un PC I know, but amusing.
I've paid enough in CGT, stamp duty and GST associated with rental properties (in the last year) to keep someone in centrelink payments for a year. Yeh, I know SD is a state thing.
Reminds me of a friend (who both herself and hubbie earnt incomes in the highest tax bracket) because they paid so much tax, and as some of that tax was keeping some welfare recipients, she said she should be alocated a family that could wear "sponsored by the Jones Family" t shirts (or whatever you name is).
Very very un PC I know, but amusing.
Sometimes... I think it is..."The quick brown fox jumps over the lazy dog."
