More bubble debates in the media

[Beebop]

interest payments will only go down, while rent goes up.

Sure, it is crap for the first few years, you have to share a house and pay 350-400 for your room, but you also get equity and capital gains and if you don't like your housemates you can just kick them out because you own the place.

Like any debt, it is fine, so long as you anticipate paying it off and your salary increases..

I predict my salary will increase, so a VALUE FOR MONEY PROPERTY is always a good financial investment, even if it is not technically classed as one you will be a lot better off financially by owning one, so long as you do not over spend on something which is value for money.

Which is why I'm not buying a crappy 2 unit on my bad wage.

When I am on 90k I'll put 700 a week into the mortgage plus the 300 a week for renting out to rooms,

 

[wylie]

interest payments will only go down, while rent goes up.

Interest payments might go up, but you factor that in before you buy.

Sure, it is crap for the first few years, you have to share a house and pay 350-400 for your room, but you also get equity and capital gains and if you don't like your housemates you can just kick them out because you own the place.

Correct. But you don't pay anywhere near $340 to $400 for your room unless you are buying Buck Palace.

I feel quite sure you are being sarcastic still, but even so, what you are saying is right.

 

[BayView]

even if it is not technically classed as one you will be a lot better off financially by owning one, so long as you do not over spend on something which is value for money.

When I was in high school a million years ago, studying economics, we learnt about "opportunity cost".

It's the most ridiculous subject I ever studied - other than logarithms.

"The opportunity cost of a sausage roll is a pie witout sauce". Who farken cares? I want the sausage roll, and I can buy it today for 5cents less at the corner milkbar than I can at the other corner milkbar. Next year they will cost me 20cents more than today.

The reality is quite clear in your case; you are analysing to death the what-if's of property. The opportunity costs are endless, but do you know everything about every other possible investment vehicle out there to make the best choice? I don't, and don't try to. It's too bloody hard and life is short.

Not even Warren Buffet is that smart, an doesn't try to be. He sticks to what he knows, and buys.

The people who have done well out of it just go out and buy a good deal at that time if they can find one, hold it for a bit and buy another one, or buy a few.

Not many people I know who have done well have been traders or flippers - the timing of the market is too critical, and you need to have bought "under market" as they say during a boom...good luck with that. BS in my opinion, sprouted by wangers and others who love to tell ya how well they bought when everyone esle got creamed... yeah.

Seriously, we will be sitting here in 5 years from now hearing how you are gunna buy a "value" property soon and you won't have bought anything...

Meanwhile, the average 3x2 house will have gone up by at least another $100k

 

[VYBerlinaV8]

Not many people I know who have done well have been traders or flippers - the timing of the market is too critical, and you need to have bought "under market" as they say during a boom...good luck with that. BS in my opinion, sprouted by wangers and others who love to tell ya how well they bought when everyone esle got creamed... yeah.

I don't know anyone who has genuinely done well from trading or flipping. Frankly I have no idea why it is some people think all investors are like that.

Good deals at the time, with a strategy going forward. It's all you need.

 

[Beebop]

When I was in high school a million years ago, studying economics, we learnt about "opportunity cost".

It's the most ridiculous subject I ever studied - other than logarithms.

"The opportunity cost of a sausage roll is a pie witout sauce". Who farken cares? I want the sausage roll, and I can buy it today for 5cents less at the corner milkbar than I can at the other corner milkbar. Next year they will cost me 20cents more than today.

The reality is quite clear in your case; you are analysing to death the what-if's of property. The opportunity costs are endless, but do you know everything about every other possible investment vehicle out there to make the best choice? I don't, and don't try to. It's too bloody hard and life is short.

Not even Warren Buffet is that smart, an doesn't try to be. He sticks to what he knows, and buys.

The people who have done well out of it just go out and buy a good deal at that time if they can find one, hold it for a bit and buy another one, or buy a few.

Not many people I know who have done well have been traders or flippers - the timing of the market is too critical, and you need to have bought "under market" as they say during a boom...good luck with that. BS in my opinion, sprouted by wangers and others who love to tell ya how well they bought when everyone esle got creamed... yeah.

Seriously, we will be sitting here in 5 years from now hearing how you are gunna buy a "value" property soon and you won't have bought anything...

Meanwhile, the average 3x2 house will have gone up by at least another $100k

I want to own land. A home without land is meh.

 

[Beebop]

If you can't see how rent money could be treated as an offset then we're not going to agree of anything.

If it costs $400 to rent, and $800 to buy, then the cost of buying over renting is $400, the cost to me of owning my home would be $400, as the other $400 would have been paid anyway.

You rent out the other 2 rooms for 150 a week each, and you end up paying $500 a week for a room in a sharehouse which you own, but that is okay, because you take home $1200 a week.

That is the only way I can see myself being able to afford to buy and $800 is probably on the 400k side of town rather than the 320-350 where I'll eventually be aiming... eventually.. but you need cash flow to make anything work..

 

[HiEquity]

Or just pay the 400pw rent to live somewhere and buy something else for the 800pw you mention and rent it out for 400pw. At least then the loss ur making becomes tax deductible and you still own the same amount of real estate, you don't have to share and are now immune to rent rises overall.

Or if you feel like sharing, just pay $150pw to share in someone else's house and put the money you save into IP#2 and IP#3. All interest is tax deductible again.

Or if you actually want to make some money buy a bunch of IPs that each cost you $350pw and rent for $400pw, all while paying $150pw for a room in a share house. With five or six (or more!) properties under your belt, you definitely won't be complaining about rent increases! The cashflow would help accelerate your savings for that dream house in a nice suburb just in time to start a family if that becomes your goal at any time...

 

[Aaron Sice]

I want to own land. A home without land is meh.

Oh.
My.
God.

Are you starting to make sense?!