My Story

[sash]

Good for you...and good luck!

Please note the comments below do not apply to your directly, rather a general observation.

Remember, I am not one of the original bears on this site. I am just a pragmatist.

Forecasting....is done by everyone including business....but like everything you need to be flexible and change as circumstances change.

One trick ponys do not last long. I must admit that I have learnt from some of the posters that I was most critical of.

I never said that Australia was doomed....all I said is that I believe the affect of will be greater than original envisaged. As for me I will be looking at the economic numbers, as this is what affects the market as people become fearful and stop spending when people lose jobs.

To coin a phrase I have used many times......."time will tell"....this is ultimate proof of whether one's investment decisions are sound.

Cheers
Sash

I believe that we should all tread carefully, especially at this time in the market, but I don't believe for an instant that Australia is doomed just because the other parts of the world are in crisis. Just before you shoot me down, I'll just add that I'm not saying that we won't have a crisis either. I don't have a crystal ball, so I'm not going to jump up & down to predict which way we are headed, only time will tell.

 

[sash]

That is not a good sign......in the last major downturn in 1990 the same thing happened. It is sign of lack of confidence in the general economy...vendors do not think they will get the price they want so they not sell unless they need to. Also, people don't upgrade and move.....I think the key will be the Jan. 2009 employment numbers....if there is not a 5 in front....we should be okay.

This also means that there are less listing which also translates to less income for agents....this has a flow on affect to employment and spending by agencies. The media has a huge influence as the average punter has not knowledge of economics.....and people like Professor Keen will have a detrimental affect on the spending.

For example, I was talking to an associate in Radio Sales and they have said that sales for them in Sydney are really down. They promote to small businesses like car yards, lawyers, restaurants, etc. I have also noticed the number of businesses that have closed in places like Balmain.....that is a bit of a worry.

Also, my believe is that rents will now ease thus where I was getting $20 every 6 months in increases in Sydney I have revised my figures down to $10 per 6 months.

I have also heard that other banks are following the 0.25% cut ANZ.....NAB and Aussie followed this morning. So it is not all bad news.

I believe this is a cycle that happens every couple of years.

Please note, I am not trying to be negative....I am just taking a unemotive view of how things are playing out now. I am arch conservative financially...so this has a bearing on my thinking.

Cheers
Sash

Agree,

Skater has no interest in my affairs, only she knows my main area i invest in quiet well.

Western sydney is bread and butter, and represents good value with strong demand. I know agents in the area on a friend basis, and i know that they are struggling getting listings at present.

 

[Nathan]

That is not a good sign......in the last major downturn in 1990 the same thing happened. It is sign of lack of confidence in the general economy...vendors do not think they will get the price they want so they not sell unless they need to. Also, people don't upgrade and move.....I think the key will be the Jan. 2009 employment numbers....if there is not a 5 in front....we should be okay.

This also means that there are less listing which also translates to less income for agents....this has a flow on affect to employment and spending by agencies. The media has a huge influence as the average punter has not knowledge of economics.....and people like Professor Keen will have a detrimental affect on the spending.

For example, I was talking to an associate in Radio Sales and they have said that sales for them in Sydney are really down. They promote to small businesses like car yards, lawyers, restaurants, etc. I have also noticed the number of businesses that have closed in places like Balmain.....that is a bit of a worry.

Also, my believe is that rents will now ease thus where I was getting $20 every 6 months in increases in Sydney I have revised my figures down to $10 per 6 months.

I have also heard that other banks are following the 0.25% cut ANZ.....NAB and Aussie followed this morning. So it is not all bad news.

I believe this is a cycle that happens every couple of years.

Please note, I am not trying to be negative....I am just taking a unemotive view of how things are playing out now. I am arch conservative financially...so this has a bearing on my thinking.

Cheers
Sash

Yeh i agree, this is a time of survival @ present, thos who are cashed up are in good position, those in positions like myself, hang on and ride thru the storm...

all i know is in 10 a year timeframe from now, we will be in a better position then we are now...

as i read the other day by someone,

Survive and thrive...

 

[sash]

Agree on the survive and thrive and the 10 year time frame.

Have you considered maybe reducing your portfolio by one or two places. I did it by selling one which reduced my debt level substantially? In your case you might be even close to neutrally geared.

There is still time as the FHOG is still new and the news is dire but not as dire as when unemployment shoots up.

Cheers
Sash

Yeh i agree, this is a time of survival @ present, thos who are cashed up are in good position, those in positions like myself, hang on and ride thru the storm...

all i know is in 10 a year timeframe from now, we will be in a better position then we are now...

as i read the other day by someone,

Survive and thrive...

 

[Nathan]

Agree on the survive and thrive and the 10 year time frame.

Have you considered maybe reducing your portfolio by one or two places. I did it by selling one which reduced my debt level substantially? In your case you might be even close to neutrally geared.

There is still time as the FHOG is still new and the news is dire but not as dire as when unemployment shoots up.

Cheers
Sash

Nah nbot looking at reducing portfolio, no way of bringing it down...

I have stuff that has yet to settle, aswell

Im optimistic of the future, just next couple of years is slightly blurred.

I would rather carry thru, knowing rents are on rise, rates are coming down, and loans may be harder to get in the future...

hence why i been buying up more of recent..

 

[evand]

I wouldnt be surprised to see rents coming down a bit with the new government initiatives.

In fact i'm pretty sure they will as a lot of pressure will come off the rental market.

I would rather carry thru, knowing rents are on rise, .

 

[skater]

I wouldnt be surprised to see rents coming down a bit with the new government initiatives.

In fact i'm pretty sure they will as a lot of pressure will come off the rental market.

See, now that is where I dissagree. You have people like Professor Keen scaring people. For instance, just the other day I overheard 2 Mum's discussing the state of the ecconomy. No offence to either of them, they are both nice people & friends of mine, but neither of them have any investments, nor much financial intelligence. They were both concerned that the sky is falling and Australia is about to sink into the depths of depression. One was thinking of selling her house & renting for no foreseable reason, just because she believes all the doom & gloom of the moment.

I don't seen any pressure coming off rents for a little while yet.

 

[evand]

With all due respect you are talking about one lovely little old lady in Mt Druitt. She does not make a market.

And how did you turn this around to Steve Keen? The people that actually take action based on the words of an academic without having a clue themselves probably deserve to make bad decisions.

Why is this forum full of so called experienced property investors putting all the blame on one man from the western suburbs for all the ills that are coming. Bizarre! Does anyone take responsibility themselves these days?

If he was saying that property will rise in price by 40% he would be crowned as a king by the forum and a knowledgeable property guru etc.

Wow...you cant have it both ways.

See, now that is where I dissagree. You have people like Professor Keen scaring people. For instance, just the other day I overheard 2 Mum's discussing the state of the ecconomy. No offence to either of them, they are both nice people & friends of mine, but neither of them have any investments, nor much financial intelligence. They were both concerned that the sky is falling and Australia is about to sink into the depths of depression. One was thinking of selling her house & renting for no foreseable reason, just because she believes all the doom & gloom of the moment.

I don't seen any pressure coming off rents for a little while yet.

 

[sash]

Evand

Can't see them coming down for a while yet as the supply constrainsts will not get fixed overnight.

However, I am seeing that I will have to slow my 20% rent increases to something like 5-10% per annum. Unfortunately, party here is also over.

My properties are slightly under market. I just rented out a house in Adelaide for 12 months which I increased the rent from $220pw to $230pw with another $10 in six months. I thought I could get $250 pw rent....but was not to be. I believe interest rates in the next 12 months will drive some buyers to buy particularly if it is low end where renting and buying are almost the same cost...if you buy in the correct suburbs.

Cheers
Sash

I wouldnt be surprised to see rents coming down a bit with the new government initiatives.

In fact i'm pretty sure they will as a lot of pressure will come off the rental market.

 

[evand]

Yes, that's true. Well at least they will stop growing. You cant have a price boom caused by the government initiatives AND rising rents.

Evand

Can't see them coming down for a while yet as the supply constrainsts will not get fixed overnight.

 

[skater]

With all due respect you are talking about one lovely little old lady in Mt Druitt. She does not make a market.

With all due respect, why do you assume that my friends are located in Mt Druitt. This lady is not a little old lady & she is not from Mt Druitt. The point I am trying to make is that this lady is an average person on the street. Some pay no attention to the headlines, Some listen but form their own opinions and others BELIEVE EVERYTHING THEY HEAR, especially if what they are hearing comes from a so-called expert I assure you, she won't be the only one who is scared $hitless from what the current affairs shows are saying. Just look around at the doom & gloomers on here.

The people that actually take action based on the words of an academic without having a clue themselves probably deserve to make bad decisions.

That may be the case, but it doesn't mean that we stick our heads in the sand & pretend that there aren't people who do this, because there most certainly are.

Why is this forum full of so called experienced property investors putting all the blame on one man from the western suburbs for all the ills that are coming. Bizarre! Does anyone take responsibility themselves these days?

I'm not blaming him for anything. I don't believe him, that doesn't mean that I blame him.

If he was saying that property will rise in price by 40% he would be crowned as a king by the forum and a knowledgeable property guru etc.

Wow...you cant have it both ways.

If he turned around & said that I still wouldn't believe him. Sheesh! I form my own opinions and I am sure that most of the more experienced forum members would be the same.

 

[evand]

Well if you believe enough people will take notice of him and sell their property to rent, enough to hold up (or increase) rental prices.

Then logically, it will be enough people selling to make property prices fall. Right?

You cant have it both ways.

I have seen so many times on the forum people quoting media reports of property increases that are believed and lauded and given credibility. At the same time negative media releases are discredited and not believed. Its happens here all the time. This is just another case of it.

With all due respect, why do you assume that my friends are located in Mt Druitt. This lady is not a little old lady & she is not from Mt Druitt. The point I am trying to make is that this lady is an average person on the street. Some pay no attention to the headlines, Some listen but form their own opinions and others BELIEVE EVERYTHING THEY HEAR, especially if what they are hearing comes from a so-called expert I assure you, she won't be the only one who is scared $hitless from what the current affairs shows are saying. Just look around at the doom & gloomers on here.
That may be the case, but it doesn't mean that we stick our heads in the sand & pretend that there aren't people who do this, because there most certainly are.


I'm not blaming him for anything. I don't believe him, that doesn't mean that I blame him.

If he turned around & said that I still wouldn't believe him. Sheesh! I form my own opinions and I am sure that most of the more experienced forum members would be the same.

 

[Nathan]

the good thing with property is, people go buy and rents suffer i get capital gains... they dont buy, and keep renting my rents will go up, or hold....

either way it looks positive, its not like house prices are falling and rents are going down the gurgle aswell...

 

[skater]

Well if you believe enough people will take notice of him and sell their property to rent, enough to hold up (or increase) rental prices.

Then logically, it will be enough people selling to make property prices fall. Right?

You cant have it both ways.

Sure I can.

Property falls = I buy more property = I'm happy.

Rents go up = I buy more property = I'm happy.

In case you don't know it, rental prices work on supply & demand. If there is a larger demand for property than there is supply, rental prices go up. Rents are not going to go down until we are having another boom and we end up with a glut of rental properties on the market. If people are getting squeezed out of their properties (for whatever reason, real or imagined) AND we are still bringing immigrants into the country, then this equals MORE RENTERS, this in turn means rents will continue to rise. They might not rise as quickly as they have previously, or they may continue to rise quickly, I don't know. As I have already said, I don't have a crystal ball.

I have seen so many times on the forum people quoting media reports of property increases that are believed and lauded and given credibility. At the same time negative media releases are discredited and not believed. Its happens here all the time. This is just another case of it.

Poppycock! Where have I EVER given credit to the media.

 

[urchin]

the good thing with property is, people go buy and rents suffer i get capital gains... they dont buy, and keep renting my rents will go up, or hold....

either way it looks positive, its not like house prices are falling and rents are going down the gurgle aswell...

they are in canberra.

 

[steveadl]

I assure you, she won't be the only one who is scared $hitless from what the current affairs shows are saying.

By sheer definition, she's not the only one being scared by the shows. Those programs will put on what ever gives them the most ratings at the time and since there are so many D&G stories on them at the moment (so people say, I don't watch them), the stories obviously rate extremely well.

 

[urchin]

just out of curiousity, what is your backup plan if you lose your job? it sounds like you are cutting it pretty fine already.... do you have a cash buffer on hand to ride out short to medium term turmoil?

 

[sash]

This is what sorts the "wheat from the chaffe"......will be interesting how the SSers go over the next year once the Credit Crisis impact on Australia's economy is fully known!

Remind to do a poll this time next year!

In the meantime...I will ensure I get kevlar for my behind!

Cheers
Sash

just out of curiousity, what is your backup plan if you lose your job? it sounds like you are cutting it pretty fine already.... do you have a cash buffer on hand to ride out short to medium term turmoil?

 

[Witzl]

Going back to the topic at hand..... well done on your accumulation thus far Nathan.
Im sure you have enough buffer, and a solid plan already worked out to ride out whatever financial crisis hits our shores.

Im getting to know the west pretty well now as well, and i agree that its a good area to hold onto at the moment, as holding costs are relatively low, and buying a 20% under val bargain is definitely possible.
Who really cares if the prices go down a little from today.... as long as you can afford to keep them - what does it really matter in the long term?

Keep going champ. I might see you at the next Syd meetup.

 

[want2bewealthy]

Hi again Nathan,
With such a large number of properties under your belt and at such a young age, would you also be willing to share their combined worth with us?

Im asking because Id like to know if these properties were all cheapies, medium priced, or a bit of both?

Thanks.