interesting mentality/conversation i heard today

Discussion in 'Investor Psychology' started by TMNT, 14th May, 2015.

  1. TMNT

    TMNT Member

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    Well in hindsight is probably not that interesting

    But today i was working (totally real estate unrelated)
    Doing my work minding my own business and i heard a colleague that i barely know start a conversation about real estate investment

    One was a Asian lady in her 50s been here 20 years and the other a guy about 40

    Any way i was quietly listening in and the conversation went something like this

    Oh I'm looking to invest in real estate
    you should look at buying otp in my areas. They are "insert suburbs north of Melbourne "
    What's so good about them
    well if you buy oto. You can save on stamp duty which is like 5% and you are buying at today's Prices so you will get growth.
    Plus these areas have already gone up 14% in the last year! !


    I got pulled away at that moment. But im not judging or saying he is wrong but it's an interesting mentality coming from a person i have to assume isn't a big investor

    I might have joined in the conversation but i would have probably advised against it
     
  2. jerrybee

    jerrybee Member

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    I don't get people who are incentivized by these small amounts. Save on stamp. First home buyers grant. Rental guarantees. They are nice icing on the cake, but why would you make big decisions (like spending a million bucks) on such minuscule bonuses. Need to look at the big picture. My cousin was almost going to buy a townhouse instead of the house he actually wanted because it meant it would be under the FHB threshold...I talked him out of it.
     
  3. Rixter

    Rixter $uper Investor (Retired)

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    Its typical herd mentality..its the catalyst underlying a boom cycle in RE.
     
  4. EN710

    EN710 Member

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    Because when you are just starting, the upfront costs are the hardest to come by - the rest come from bank loan which somewhat hurt less (I'm not saying it doesn't matter, it's a matter of perception).
     
  5. TMNT

    TMNT Member

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    iactually looked into otp a lifetime ago In a bluechip area of melb. And i mean blue chip

    It was something like 320k for a 1bdr apartment. And admittedly the stamp duty saving was something like 15k so that was one of the reasons it appealed to me. As 15k back then for me was big biccies

    Not too sure what thise places are worth ten years later
     
  6. jerrybee

    jerrybee Member

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    No I get that. It makes a world of difference for some people. But a lot don't need it. I was talking to a friend with a monster deposit and he was still harping on about the benefits. It still attracts a lot of people who really shouldn't need to factor it into their decision making process.
     
  7. TMNT

    TMNT Member

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  8. hugh72

    hugh72 Member

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    I would be more concerned that they already went up 14% last year, should be looking forward not back IMO
     
  9. Deltaberry

    Deltaberry Member

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    Buy at today's prices so you gain later? Try telling that to Greeks or Spanish.
     
  10. datto

    datto Member

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    I normally try to listen in to conversations that are of a far more personal nature. Sometimes with a glass to the wall ..ha.

    This crazy talk about OTP benefits should be set straight. The cons should be brought to light as well.

    Maybe at the water bubbler the converstion could go ...."buying OTP could mean buying at a premium with slow cap gains, and Yes your hubby should see a doc to get that wart removed (duck to avoid face slap)"