It's in the papers

From: Simon and Julie M


Hi all
You know that old saying "when you read it in the papers it's often too late to take advantage of the opportunity"

Page 49 Aust Financial Review (Fri 11)
"Canberra's cheap in comparison"

Just over 12 months ago our friends thought we were mad buying property in Weston Creek in a depressed market.
If you were to buy in Canberra now you might find yourself following in the herd unless

1 you plan to hold it for some time.

2 you purchase a property with high land value.+40%

3 cashflow is enough to sustain the investment over the longer term.

I believe having said this that there is a bargain born every minute. The real buzz comes when we find them.
This is only opinion not advice.

What do you real Gurus think?

Simon(apprentice Guru)
 
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Reply: 1
From: Glenn Mott


3 Years ago when I purchased 2 small rental units in a quiet street close to the CBD, a few of my mates thought I was mad as they were busy selling property to buy shares. Also, another mate advised me to sell a rental in a poor cap growth area a year or so again. I had bought it for 88k in 1994 and the units were selling for 85k 12 months ago. I thought it was not the time to be selling property but to hold. Yesterday, I accepted an offer for 99k.

When people without property start giving advice, my small amount of experience tells me to qualify their advice with their experience and do what the gurus suggest on this forum - if the deal stacks up, don't worry about the market.

Creative visualisation can make you money. The first 1 bedder I bought was only 48sqm internally but had a 52sqm high fenced backyard with a dirty big tree in it. After buying the property, I sent a letter to the strata managers explaining that I thought the tree was very tall (20m) and if it fell over in a storm, would cause a lot of damage to our units and the neighbouring properties. The tree was removed after which my dad and I took out the stump, brick paved the entire area, put in a shed and waterproof pergola and hey presto - 90sqm of living area and no peeping eyes through the back door or bedroom window.

At the time, the Perth property market was flat and the unit was neutrally geared with no deposit, or returning $10/wk with 20% deposit after taking into account rates, strata fees and water consumption.

I have now learned that during these times when the market is flat, it becomes easier to identify these types of properties and that if you can pick up a few of them, you can flick them a few years later after they have cost you nothing but the time to look and negotiate the sale.

Regards

Glenn
 
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