Noel Whittaker ...Again!

He's changed his tune.

I remember back in the early nineties his advice was to sell investment units on the Gold Coast as people would NEVER make any money out of them. We had two units and thankfully ignored that advice. (As well as being cash flow positive from day 1 we experienced annual capital growth of around 7% (as worked out by a forumite) until we sold them last year.)

To be fair, this was in the early days of two-tier marketing when the units were sold interstate for very inflated prices.
Marg
 
The thing that has always annoyed me about him, is that he made his early living (and I suspect built his initial wealth) running a real estate office, but used to rarely recommend buying of real estate once he went into financial planning. He lives in one the prime spots in Brisbane as well.
 
Wylie

I didn't realize that NW was an REA - I thought his background was in banking.

I remember those days well. We bought property in 1995 (our current PPOR) when all about us was doom and gloom. We looked at this house in the early stages of our search, but decided not to buy it, as it was too small for our requirements. Six weeks later when the price had dropped from $249K to $198K, we thought we'd be silly not to buy it. The growth in the first couple of years was either non-existent or negative, but happily the upswing kicked in eventually, and now it is valued at almost 4 times what we paid 13 years ago. Can't complain about that!!!

Cycles come and go - always have and always will - so if you want to do well in the long run, don't get off the merry-go-round too early!

Cheers
LynnH
 
Sorry about that, try this...
Seems like a good article. I like Noel as well and his book 'Getting it Together' was my introduction to the concept of investing and not spending everything I earnt, shame I only got that in my 20's and not from my parents or at school.

Sometimes you can look back and notice wonderful turning points in the market based on our favourite contrarian indicators. Greenspan is so bad that he's close to fadeable on pretty much everything important, Suze Orman telling people to buy gold (Sunfish might have profitably sold out upon hearing that clinker), Abby Joseph Cohen getting demoted.... Most of the time it's just noise though.

If Noel starts telling people to go out and buy property instead of share funds then ... be afraid :)
 
I went to a joint investing day seminar that was run by Noel and Margaret Lomas. He knows his stuff and you will find his newspaper columns great. I started out with buying property based on Margaret strategies and then was able to diversify using Noels advice I gained by reading his books.
I have to thank both for the jump start 7 years ago.:D
 
I remember a negative 60 minutes story about Noel Whitiker years ago. It involved a couple from Moranbah and something to do with negative gearing.

Before that I like him and when I hear him on the radio, he does make sense and I enjoy listening BUT I always have that in the back of my mind.

Wish I could remember exactly what it was.
 
The thing that has always annoyed me about him, is that he made his early living (and I suspect built his initial wealth) running a real estate office, but used to rarely recommend buying of real estate once he went into financial planning.
He does recommend it sometimes though
SMH said:
Q: A friend told me negative gearing to buy investment properties is the best way to accumulate wealth. But if you invest in managed funds or the sharemarket, you would be unlikely to borrow such a large sum for investment. The return will then be less because of the smaller principal. Is this true? I am 55 and contribute a third of my before-tax income to super.

A: It is true that you can usually borrow more against property than you can against shares but it's also true that over the long term shares tend to give better returns. Remember, too, that borrowing magnifies the outcome, so if you lose money because of badly chosen investments, the losses will be greater if you borrow heavily. Your best course of action may be to buy a property to start with and focus your energies on reducing the debt to a level where it is no more than 50 per cent of the value. You could then borrow against the equity in that property for shares and increase your borrowings as your equity in both asset classes grows.

http://www.smh.com.au/news/planning...1210444336134.html?page=fullpage#contentSwap1
 
Nice!

And I very much tend to agree with his conclusions in that article. We are not headed for armageddon, we're just going through the usual bear market downturn in the economic cycle which, as always, represents a great buying opportunity if you're cashed up to do so.

I said much the same thing on another thread which asked us to post our thoughts so we could check back in 5 years time or so. I reckon you'll look back in 5 years and lament not investing now. And by now I mean any time over the next 12 months. BHP is already back higher than it was pre-crash so some opportunities are already rapidly diminishing in their upside potential.

Property will follow a similar path, but I can't comment on the timeframe. But often investors wait until the trend has clearly established and by then have missed out on a large chunk of the growth that will occur from the base. Today we are at the base or maybe a touch away from it. But there are definately a lot of spooked homeowners (investors and OOs) out there who are selling at fire sale prices. It only takes one bargain for you to buy well. You don't need the median to crash, just the property you're negotiating on...

Cheers,
Michael.
 
I just saw a new development here of three units in a trendy area finally start to sell. They kicked off at close to $700K which was always high then sat for a while at $590K with nothing happening. The best of the three just sold at $510K. I would have paid that and I wish I had thought of lowballing like that.

IS a good comparable to the one I am looking at today where they are asking $599K down from $640K a few weeks ago. I am thinking of offering $540K with no negotiation. The agent was kind enough to tell me they had no offers, had already comitted to buy elsewhere and were getting desperate. Tried to talk me into offering $580K as the owners would take it he said.

Proves my belief that the second a listing is secured the agent works for noone but himself ....
 
The agent was kind enough to tell me they had no offers, had already comitted to buy elsewhere and were getting desperate. Tried to talk me into offering $580K as the owners would take it he said.

I assume you would NEVER sell through that agent. Talk about loose lips.
 
Simon,

If the best unit sold for $510K then make the same offer. Tell the agent you will sign contracts immediately on acceptance of offer, no cooling off period and subject to pest and building. This puts the heat on the vendor. Offer is open for one week. Mention that the nice unit you liked went for $510K. The agent has to submit the offer to the vendor in NSW. Who knows these are interesting times. Make the bid. And don't go anywhere near $580K. Lots more coming onto the market anyway and the main stream media just keep printing more and more negative news.
 
I assume you would NEVER sell through that agent. Talk about loose lips.
I don't blame the agent completely, I blame the vendor to some degree too. They should never have told their REA that they had committed to buy elsewhere and were getting desperate. As a vendor, its all about your posturing in managing your REA. We all know they're just interested in making the sale at any price, so you need to posture strongly to get the best price.

REAs are experts in determining your degree of desperation. It also helps not to sign a sole agent agreement. A bit of competition between agents to get the sale never hurts. Put your price floor firmly and play a few off against each other to get the minimum required price. Make them work for the sale.

Still, a good example of what you can do in the current environment. Get out there and bargain hard, there's opportunities in abundance!

Cheers,
Michael.
 
Simon,

If the best unit sold for $510K then make the same offer. Tell the agent you will sign contracts immediately on acceptance of offer, no cooling off period and subject to pest and building. This puts the heat on the vendor. Offer is open for one week. Mention that the nice unit you liked went for $510K. The agent has to submit the offer to the vendor in NSW. Who knows these are interesting times. Make the bid. And don't go anywhere near $580K. Lots more coming onto the market anyway and the main stream media just keep printing more and more negative news.

My poor post - is a different development. I was just going to use the recent sale to justify my low offer I am considering.

But I appreciate your advice and will take it on board.

I am even thinking it might be worth holding off a bit longer still. I don't think anything will improve before spring in my local area...
 
I would NEVER leave my offer on the table for a week. That gives the agent and vendor way too much time to drum up a better offer especially if yours is low ball. Harsh but true :D
 
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