Surviving the soft depression
- Thread starter nonrecourse
- Start date
Your plan to ignore all fundamentals to the contrary with your blinkers on will ensure that you retire looking for the taxpayer to support you in old age.confused:
Last edited by a moderator:
I took Blue Cards positon to be in jest. He/she is clearly too much a thinker to act rashly.
And why not buy more?
If your strategy is to flip in 2 years then that is big call.
If you are thinking I can buy CF+ in 6 months. Lock at say 6% for 10 years AND I have the security of tenant and cashflow to carry the IP, Why not?
Unless you think in 10 years property is going to be lower than now and rents are going to fall why not? But ot think that is a even bigger call than the 2 year flip IMHO.
It really is simple fundamentals some of the time. There are many secure jobs, recession proof jobs such as Police, Nurses, Doctors, Teachers, etc. that have next to nil risk of cashflow interuption.
Buy and Hold. Simple stuff.
regards, Peter 14.7
That sounds like a plan for thriving in the soft depression!
yep - and if your situation might be shakey, even better if you lock in.
So then fix the interest rate. If you can still be cash flow or nearly cash flow positive after fixing the rate for a minimum of 5yrs and preferably 10yrs then whats the risk (assuming security of the income flow)?
This title should be corrected... "surviving A soft depression".
Hi, it really is simple.
In May 08, [folks, only 6 months ago], there was all the dire warnings about rates & decimated yields. I privately thought that the reverse would also be true. If things got bad, rates would go down.
My 'dud' investments, for my old age, [stupid but ...] are student accom. units. Bought on 9.25% yield 4 yr guarantee. Fixed for 2+2 then interest rates exploded or imploded., whatever.
In the 4 years, the principal pay down was so quick that the term reduced from 25 year to 9 year. I also took out some money when I needed it.
Oh, I had a 25% deposit so not for no money down strategies.
Interesting happened after they got into trouble. 1 project was uncoupled from the uni. I've 2 units that potentially would spell big cashflow drain. New managers leased 1 immediately. Rent $240 pw on $95000 purchase price.
I immediately fixed my loan at 6.69%
Sky didn't fall after all.
KY
In May 08, [folks, only 6 months ago], there was all the dire warnings about rates & decimated yields. I privately thought that the reverse would also be true. If things got bad, rates would go down.
My 'dud' investments, for my old age, [stupid but ...] are student accom. units. Bought on 9.25% yield 4 yr guarantee. Fixed for 2+2 then interest rates exploded or imploded., whatever.
In the 4 years, the principal pay down was so quick that the term reduced from 25 year to 9 year. I also took out some money when I needed it.
Oh, I had a 25% deposit so not for no money down strategies.
Interesting happened after they got into trouble. 1 project was uncoupled from the uni. I've 2 units that potentially would spell big cashflow drain. New managers leased 1 immediately. Rent $240 pw on $95000 purchase price.
I immediately fixed my loan at 6.69%
Sky didn't fall after all.
KY
Thats great Kum. Up to a 12.5% gross yld (but without knowing your specifics, many student based accommodation have killer body corporate fees).
But you point highlights, instead of bleating the sky is falling the sky is falling, quick sell sell no matter what, a property investment strategy for 2008 is mainly dictated by one's investment decisions prior to 2008.
But you point highlights, instead of bleating the sky is falling the sky is falling, quick sell sell no matter what, a property investment strategy for 2008 is mainly dictated by one's investment decisions prior to 2008.
Hi Chilliaa, yes you're right that's why I haven't been able to buy any property since May 06. Have sold 4 between Sept 07 to May 08 precisely cos I thought holding costs were over running the yields.
I'm looking to the stock market instead because everywhere I look, the value stocks jump back at me.
For starters, I'm going to buy QBE [$23.94] IPL [$2.27] NVT [$2.27] TNE [$0.75] AND BOL [$0.60]
Would be very interested in your comments,
KY
I'm looking to the stock market instead because everywhere I look, the value stocks jump back at me.
For starters, I'm going to buy QBE [$23.94] IPL [$2.27] NVT [$2.27] TNE [$0.75] AND BOL [$0.60]
Would be very interested in your comments,
KY
Out of the stocks you mentioned, i only hold QBE.
QBE is Australia's best run insurance company. Management is astute, focuses on EPS growth and has very good risk management strategies (did you know they hedged the majority of their share portfolio mid last year).
Current buy in point is good but not great (very hard to get great buy in points for exceptional businesses, and sometimes it better to pay a fair price for a great company than a great price for a fair company)
I dont hold positions in any of the other companies mentioned.
QBE is Australia's best run insurance company. Management is astute, focuses on EPS growth and has very good risk management strategies (did you know they hedged the majority of their share portfolio mid last year).
Current buy in point is good but not great (very hard to get great buy in points for exceptional businesses, and sometimes it better to pay a fair price for a great company than a great price for a fair company)
I dont hold positions in any of the other companies mentioned.
Hi Chilliaa, thanks for your comments, they're in line with the analyst's report that I've read, those are the reasons why I'm buying QBE 1st. The other stocks are a mix of what I myself have picked. Mainly smaller cap stocks for growth. Also lower priced.
Navitas is an interesting one - pricewise, it's very steady, don't hope for it to plummet.
Round 2 will be the bank stocks. I'm hopeful of buying CBA around the $20 mark. Wesfarmers maybe, Argo [SA homegrown] & possibly BSA.
At 1st, I was very keen on BHP.
Sorry to talk stocks on a property forum. Just throwing out lures in the hope some people will respond.
KY
Navitas is an interesting one - pricewise, it's very steady, don't hope for it to plummet.
Round 2 will be the bank stocks. I'm hopeful of buying CBA around the $20 mark. Wesfarmers maybe, Argo [SA homegrown] & possibly BSA.
At 1st, I was very keen on BHP.
Sorry to talk stocks on a property forum. Just throwing out lures in the hope some people will respond.
KY
I've got a better question. How much equity do you need to hold onto your existing investment properties over the next two years of the credit crunch?
We are about one third of the way through the subprime debacle and here are some sobering facts from the epicentre;
http://www.housingwire.com/2008/12/15/nearly-2-trillion-in-home-values-lost-this-year/
Ive got a better idea, how about stop using examples of the US, last time i checked we are living in Australia.
Mate you are sounding increasingly desperate and frustrated, my gut feeling is its because you are invested in commercial property in Australia, the fundamentals of which are completely different to residential property in THIS CYCLE.
To be fair to nonrecourse, the fact that the US is not yet half way through their particular nightmare is highly relevant to us.
It's the largest consumer economy in the world and, as I have been trying to point out to the "China Will Save Us" crowd for some time, it is entirely relevant to a commodities exporting nation when the major source of international demand maxes out its credit card.
Because there is not 100% correlation between the investment performance in the US and Australia.
Token Funder, at least you present a moderate negative view, you back your views up with statements, and most importantly you do play the game of 'the sky is falling in' quick get you debt down not matter what (even if it means selling assets at a distressed price).
When some members of this forum argue that they already have risk mitigation strategies in place, NR derides them as being naive and will be decimated in the recession to be.
