So Why do You Invest in Property ?

[kathryn d]

I have taken property investing in a new direction.
Unsuccessful in getting our "kids" to be proactive in the property game, I took control.

Son # 1 (age 22) has applied for a mortgage last week and should know the results in a couple of days. He has the deposit and legal fees saved, but is risk adversive. So...I had to ask for his help. I asked if he was willing to hold the mortgage and provide the downpayment/closing costs, we would be willing to do the rest. We would be willing to split the profit with him 50/50 when we conclude a Rent to Own on the property. After he got his head around the fact, he is not risking any money, we are willing to do everything, he relaxed and said ok. The plan is to take the $7 k outlay of funds to come away with a profit of $30-40 k in a 2-5 year span.
Hoping with property # 2, he will see how easy it is, and be willing for us to just do it for a set fee...and he keep 100% of the profit.

Son # 2 (age 21) is hoping to buy a property using a personal loan, since he hasn't saved any downpayment. This property would be paid off in 5 years, and CF+ from Day 1. He is more receptive to the idea of property, but doesn't want to deal with it personally. For 10% of the rent ($65) month, we will do it all.

Daughter (age 27) has just finished recouperating from being hit by a car, and goes back to work this week.She needs to wait a few weeks and then hopefully she will qualify for a loan.

Son # 3 (age 19) is just starting to listen to us, and is also now considering saving a bit of money, so we can get him a property too.

There is hope yet !!!

 

[locko24]

S0 Belbo the size of the portfolio doesnt mean much, it can just mean a tighter noose around your kneck. You probably owe$2.5 m on it. with a recourse loan and paying 7.2% interest. If you borrow $2 M to buy shares you could get $10M worth of shares and because it is less risk you can get non recourse loans and lower interest rates, was 3%, a few months ago but probably about 5% now. That is 3 x as many assets at halve the cost.or less as there is no rates or maintaince costs. It is very likely you could get about $1M return in 1st 12 months. If the $2M doesnt double in 3 years,with dividends it probably will in 4, then you still have CG. I think Supperanuation is only good if you manage it yourself or have an exceptionally good manager, most performances are a disgrace. and there are restricions on what you can do in them. you dont have to be Warren Buffet but it is very simple to buy shares in his company ,and leverage shares in his company, you can do this in a supperanuation fund, it is far better than an ordinary industry fund. And you can get far more leverage than you can get buying house.

Care to elaborate Buster?
Who offers this sort of finance? If this is true, it's certainly worth looking into!!

P.S. Zed Kid and Learnings, i'll be happy to join you in the parking lot in an Aston Martin DBS - not as fast, but sooo pretty! (is there a need for DA for extensions on one of these?)

 

[Belbo]

Sorry, Buster, but I've reached a $3.6M portfolio now and counting , which isn't that much I know, but it's better than the $180K of savings I started out with 7 or so yrs ago. Before that I tried Oz stocks for 7 years to be sure, and you know what? They friggin' suck. Our stock market's too small and too corrupt for anyone to employ Buffetology successfully here (and did I try, studiously and fervently!). Sadly, key financial reporting standards are incredibly weak and quite simply unpoliced in this country, and the leverage offered against property investing is simply outstanding by comparison. But I do love the sound of the planet you live on!

 

[buster]

Sorry, Buster, but I've reached a $3.6M portfolio now and counting , which isn't that much I know, but it's better than the $180K of savings I started out with 7 or so yrs ago. Before that I tried Oz stocks for 7 years to be sure, and you know what? They friggin' suck. Our stock market's too small and too corrupt for anyone to employ Buffetology successfully here (and did I try, studiously and fervently!). Sadly, key financial reporting standards are incredibly weak and quite simply unpoliced in this country, and the leverage offered against property investing is simply outstanding by comparison. But I do love the sound of the planet you live on!

Who said anything about investing in in Our stockmarket .

 

[buster]

Care to elaborate Buster?
Who offers this sort of finance? If this is true, it's certainly worth looking into!!

P.S. Zed Kid and Learnings, i'll be happy to join you in the parking lot in an Aston Martin DBS - not as fast, but sooo pretty! (is there a need for DA for extensions on one of these?)

Royal Bank of Scotland, interest rate was 3.75% plus 1.5% hedging fee. You can also use some of the Swiss banks for a similiar rate.

 

[luce.rocks]

Mostly, because I find it easier to understand the minutiae of property than other types of investing.

But I also just like houses. I moved around a lot growing up, and it was always fun when we found a new house to rent and had to decide who got what room and how decorate it in a way that made it feel like a home. Made me predisposed to imagining what you could do with a house. Also gave me house-envy. I started reading the RE section of the weekend papers when I was about 13 and started buying Vogue Living around 15. I was always obsessed with houses.

All other things being equal (return, growth, etc.), if you asked me if I would rather own 100 kg of gold, or a big house in a prime suburb, or 3.5 million worth of shares or just have 3.5 million in the bank, I would always choose the house

 

[Ridin-High]

Some main reasons

*Ability of SAFE leverage (90% LVR and it's highly unlikely the lender will force the sale of the asset if the price drops)

* Burrow against increased value cheaply/safely (Low interest rates)

*Gives me lifestyle options (I can move into one of the places if i wish)

*Steady flow of income

 

[Belbo]

Some main reasons

** Burrow

You dirty rat!

 

[Tin Tin]

As I catch up on this weeks property investment news from industry commentators and leading property institutes on the latest figures around the country I do from time to time ponder what got me interested in property investment in the first place.

In my latest blog I suggest what you can do to invest more wiesely and being a more confident property investor. Enjoy !

i paid $990 to see dolf de roos 15 yrs ago and he suggested that a good % of wealthy people either made or held their wealth thru property. that was good enough for me, after that i was hooked.

 

[locko24]

I was actually wondering why i like property so much the other day...

The conclusion i came to, was that it was due to playing the board game Monopoly as a kid!

Buy properties, get money for rent! Easy

The winner was the person with the most properties

 

[kathryn d]

I was actually wondering why i like property so much the other day...

The conclusion i came to, was that it was due to playing the board game Monopoly as a kid!

Buy properties, get money for rent! Easy

The winner was the person with the most properties

I used to love to play monopoly too.
I think it goes a bit farther..in how did you play.
Some people I played with were only interested in having sets, and if someone else had a property, they wouldn't buy it, if they couldn't own them all.

I bought everything. Didn't matter if I needed to mortgage everything to get it.
It seems to be the way we bought in the beginning of real life investments too.

 

[BayView]

I was actually wondering why i like property so much the other day...

The conclusion i came to, was that it was due to playing the board game Monopoly as a kid!

Buy properties, get money for rent! Easy

The winner was the person with the most properties

The difference on the Monopoly board was the rent return from day one, and little ongoing expenses unless you were unlucky in the chance cards.

 

[locko24]

I used to love to play monopoly too.
I think it goes a bit farther..in how did you play.
Some people I played with were only interested in having sets, and if someone else had a property, they wouldn't buy it, if they couldn't own them all.

It seems to be the way we bought in the beginning of real life investments too.

I'd buy absolutely everything - getting into massive debt along the way! (close to real life there )
Except those stupid electric/water company ones

The difference on the Monopoly board was the rent return from day one, and little ongoing expenses unless you were unlucky in the chance cards.

Same (very) basic principal though.

 

[murph14]

Man, we should have a huge Somersoft meetup game of monopoly.

 

[Dazz]

Except those stupid electric/water company ones

....and yet, in real life, those stupid electric and water companies on the Monopoly board, which in the game are a pittance compared with the flasho Mayfair with a hotel on it....are actually the best by far and trounce anything in Bond St or beyond.


Unlike the Monopoly board, they can be developed and improved, and the fling off massive mobs of cash. Oh, and they cost about 100 x Mayfairs in real life.


If only they'd let me buy the jail, I'd win every game.

 

[locko24]

....and yet, in real life, those stupid electric and water companies on the Monopoly board, which in the game are a pittance compared with the flasho Mayfair with a hotel on it....are actually the best by far and trounce anything in Bond St or beyond.


Unlike the Monopoly board, they can be developed and improved, and the fling off massive mobs of cash. Oh, and they cost about 100 x Mayfairs in real life.


If only they'd let me buy the jail, I'd win every game.

Nah, the real money is in being the bank!