I was "taken in" by this forum

[Lukey13]

yep - that's me. I'm geared to the hilt with a 70% LVR against my PPOR which i chose for it's location and future capital growth and have now adapted it for the start of a 10yr CGA plan

Hi Blue Card

Just wondering whether you've strategically chosen to put a lot of funds into your PPOR rather than channel that money into more investment properties?

I'm only asking because I am weighing up whether to purchase more IPs or instead put money into a more expensive PPOR (LVR of say 65-70% up from current one of around 50-55%)

Back on topic, though, as a relative newbie to property investing (only 2 years in with a PPOR and one IP), I'm still very keen to continue investing and am confident of the values of property in Townsville increasing. I would probably prefer for growth to slow down a little in the short term (as long as yields continue to grow strongly) to enable me to purchase maybe a few more IPs (and/or upgrade the PPOR) before the next upsurge.

Imagine this... prices dropping due to "doom and gloom" and lack of interest from investors, rents skyrocketing due to supply/demand... if this persisted for several years, the opportunity would be there to purchase several IPs that are neutrally geared or thereabouts... fast forward a few years when the rates (probably) come down or other factors affect the market = the next boom... who's laughing now?!

My only concern is that perhaps we won't see a long enough period of slow-down to enable the purchase of several more properties in time to catch the next wave. But that's not a real concern as the upside to that is my current properties will increase in value anyway. Either way, we (investors) win!

No doom and gloom from my point of view. With our current supply/demand issues I can't see there being too much of a downswing.

 

[yieldmatters]

Incidentally, BHP is yielding 1.4% in dividend. At least properties are still yielding 4-5%!

WPL I think is overvalued. Oil prices are high due to the high level of speculator money. With US in a recession, and Chinese economy taking a breather after the Olympics, and Russia pumping ever more oil, I don't think WPL and all other energy companies stocks can hold the highs for long.

Dividend yield is the wrong comparison. It should be earnings yield. Unless you are reinvesting 80% of your rent back into the house then it wouldn't be a fair comparison to use dividend yield.

BTW - I think WPL is overvalued as well. Agree with you there.

 

[sash]

I have been lurking in the shadows also!

I sold one property in Jan 2008...but I am actively watching the market.

My gearing is low....so just need properties at the right prices.

 

[seank]

I think its sad that people join up to this forum only to preach "doom and gloom" even sader they actually find the time too! I simply couldn't be bothered to join a stockmarket forum and post negative comments.
Maybe they have other motives ?or simply can't stand seeing people make money?
Anyway as a fellow young property investor, I'm still positive yet cautious, and like everyone else waiting on the sidelines for some bargains.

 

[always_learning]

I dont know about doom and gloom, but as far as I can see prices are bumping along at the top of the serviciblity ceiling, rents are getting there, there is not much natural increases left in the general market. This means we all need to be very particular about what we buy and where we buy it.

My misadventure in development after 5 years is still remains negative territory even if I forget the 5 years of interest servicing.

The key thing I know is that markets "flip" quickly, the supply and demand equation changes suddenly and it is hard to predict. Prices for centrally located apartments and residental land in Tokyo have dropped 20% this year (after increase by around 50% in the last 5).

 

[Harris]

Good to see you back AL after a long while.

I would have thought that the growth in the last couple of years in Melbourne would have well and truly turned your sour development experience into a relatively positive territory..?

Harris

I dont know about doom and gloom, but as far as I can see prices are bumping along at the top of the serviciblity ceiling, rents are getting there, there is not much natural increases left in the general market. This means we all need to be very particular about what we buy and where we buy it.

My misadventure in development after 5 years is still remains negative territory even if I forget the 5 years of interest servicing.

The key thing I know is that markets "flip" quickly, the supply and demand equation changes suddenly and it is hard to predict. Prices for centrally located apartments and residental land in Tokyo have dropped 20% this year (after increase by around 50% in the last 5).

 

[GIDDO]

Heartening to see so many Somersofters who are prepared to wait and watch and plan for their financial rewards.

I was beginning to think I was one of the very few, but i was wrong (again).

As Michael Whyte stated, it is a bit boring when you are going through a quiet watchful patch, and maybe that is why some of the patient majority are not posting much.
Seems they are reading though.

Although i do get a bit tired of some of the doom and gloom stuff, it is like a car crash, in that I can't look away!

Silly to be uninformed anyway.

A good time to have a nice fat LOC I reckon. In case of trouble, but also in case of bargains.

 

[jingo]

Although i do get a bit tired of some of the doom and gloom stuff, it is like a car crash, in that I can't look away!

Concentrate on the long term outlook Giddo. Stay focused on building your wealth. The doom and gloom is here to stay for a while but it will pass - eventually!

Regards Jason.

 

[pawprints]

It is hard for newbies as well!! I am so motivated and excited about trying to enter the IP market but sometimes on here you read things and it makes me doubt myself. I have a lump sum of $90K heading my way in 2 weeks and I want to use it wisely.

But it is a little frightening to read about negative things. It just makes it more confusing as to what to do. I rent at the moment and would like to get two IP's but now I'm swaying to buy one PPOR and 1 IP?!?!

 

[wylie]

Why not do the two IPs and if you like, you can move into one of them if circumstances change.

 

[ArJay]

Haven't posted a whole lot recently but have been lurking...some interesting reading. So much D&G compared to even 18 months ago.

Market wise I'm more of a contrarian. Just wish I had the cash/servicability to buy in the next 12 months. There will be some bargains to be had...

R

 

[marg4000]

I think that everyone realises that a forum expresses many different styles of investing, and also that many people are at different stages of their lives and investment journey, and therefore their goals and actions differ.

I am within 2-3 years of retirement and my investing decisions involve consolidation and selecting assets to take into retirement. At this stage I will not borrow more, even though others in my position might. Our son is 28 and, as he earns a very high income, we are encouraging him to acquire more IPs at the same time as we are looking at reducing our holdings. Different ages and stages....

The strength of a forum lies in the many different ideas expressed, some of which a member will agree with, others they will not. But it is always healthy to consider an opposite point of view.
Marg

 

[alexlee]

It is hard for newbies as well!! I am so motivated and excited about trying to enter the IP market but sometimes on here you read things and it makes me doubt myself. I have a lump sum of $90K heading my way in 2 weeks and I want to use it wisely.

But it is a little frightening to read about negative things. It just makes it more confusing as to what to do. I rent at the moment and would like to get two IP's but now I'm swaying to buy one PPOR and 1 IP?!?!

Though to be honest, the doom and gloom was there around 2000 too. It's when the market is all roses and butterflies that you have to be more careful.
Alex

 

[kaf]

Though to be honest, the doom and gloom was there around 2000 too. It's when the market is all roses and butterflies that you have to be more careful.
Alex

I'm with Alex on this. Warren Buffet put it nicely: "Be fearful when others are greedy and greedy when others are fearful" - and I think Warren's done alright .

kaf

 

[alexlee]

I'm with Alex on this. Warren Buffet put it nicely: "Be fearful when others are greedy and greedy when others are fearful" - and I think Warren's done alright .

I mean, be careful of your cashflow, but you should do that in ANY environment. It's very hard to see the doom and gloom and still invest. But that's where the best returns are. If you only invested when the market is saying 'you can't lose in this market!' you're more likely to be buying at or near the top.

Buy below your means, keep saving, repeat.
Alex

 

[aaarghhh]

Buy below your means, keep saving, repeat.
Alex

that pretty much says it all.