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**************************************************Bill.L said:Hi all,
Kennethkohsg,
I don't understand what you are trying to say here....
" While I do enjoy your "sparrings" and exchange of views with the various forum members to a certain extent, nonetheless, I feel that I need to say this: Say what you like, a cogent and well argument does not create (material) wealth for any one of us... A well presented/argued viewpoint does not neccessarily means that the outcome will turn out exactly what we think or will want to think it out to be. Remember the saying, " the only thing that we can be certain about this world is change (or/and its uncertainities)".
Don't get me wrong, I'm not anti-property, nor am I necessarily anti this property of Georges, but I am against this property at this price.
I like to look at the economics of any investment, and that includes the assumptions most make about an investment.
We owned a similar type of property in Melbourne in the 80's and sold at the peak of the boom in 1990 (that was more good luck than management, though when we sold it did not make sense to keep it). We used the money for other purposes.
We have, and are holding IPs that have had good cap growth and are cashflow positive. I don't expect them to go up in value given the current inflation levels/market conditions, but because they still give a 5% gross yield (on current valuations) they probably will not drop in value by enough(given current inflation and interest rates) to justify selling now and repurchasing later.
I also wish Georges the best, but he must make up his own investment strategy that suits himself (and the new wife). If he has a chain around his neck from a poor decision from the past, then the clearly defined strategy will be harder to work out.
Kenneth, Do you think this property is a proposition to hold and hope that there are changes in market conditions that will turn it around?? What would you expect the time frame to be?? Why??
Would you continue to hold this property or cut your losses and look for further opportunity??
bye
GeorgesA said:Hi All,
In the peak of the boom in 2003 i bought a unrenovated 2br fibro house (12.12 X 45m) in the western area of sydney for 346k(borrowed 350k). Several months later interest rates rose twice.
Hi GeorgesA
Do you know who the local arsonist is???????????????????????????
*************************************************Bill.L said:Hi all,
Kenneth, Do you think this property is a proposition to hold and hope that there are changes in market conditions that will turn it around?? What would you expect the time frame to be?? Why??
Would you continue to hold this property or cut your losses and look for further opportunity??
bye
GeorgesA said:MY attitude was light hearted but thats because during the boom a monkey could make money on a property.. You didnt really need to be an expert back then!! if you bought in 2002 and sold in 2005 you would have made money.. Unfortunatly for me it happened too late.. I now believe that in this market that knowledge is very neccesary and i am taking steps in order to ammend my prior attitudes towards this. I dont thik im taking a light hearted attitude though... I am reading all your posts like scripture and absorbing as much as i can...
Aceyducey said:Georges,
.Find me a monkey who made money on the property market during the period you specify and I'll allow you the point
Hi Aceyducey
Well this monkey made money in the period so specified.
Purchased Dec2003 and sold April 2005 for a 50% gross profit.
Cheers
Lancelot Link
P.S. I thought mortgage gearing was the lever
*************************************************markp said:I thought that one of the biggest advantages of residential property investment was that it did not require specialised knowledge or expertise but merely common sense.
This form of investment is simply an exersise of capital appreciation through mortgage gearing. And if one can earn enough income to cover all the contingencies a landlord has to put up with then it can be a worthwhile investment.
Booms come and go but one has to sit quietly and let inflation do its work.
Bill.L said:Hi all,
Kenneth, if I have upset you in some way I am very sorry, that has not been my intention.
All I have been trying to do in this thread is answer the queries that Georges made at the very beginning......
"I would love some advice on where to go from here.. it has been on the market for 1 year now.
'''should i do some more renovations ( eg.. drievway and landscaping) and try to resell
''''should i sell it even if i am left with a 10-15k mortgage?? and buy something else...
should i hold onto it????
Any insight would be great... Thanks" and tried to give my reasons.
bye
8. One thing that I am certain now is that GeorgeSA is no longer thinking the same way he has initially thought when he first invested in his property. He has learnt something from our discussion here.
Bill.L said:1 Buy a house (IP using all borrowed funds IO) for $44,000. Rent for $70 pw
2 Current income $14,000
3 10 years go by with inflation at 7.2% pa.
4 At end of 10 years house value $88,000, house rents for $140 pw and current income is $28,000
5 Everything is still relative.
6 But wait there's more!!!
7 You still only owe $44000 on the loan!!!!
8 Inflation has given you half of the house for nothing.