It's alright Big Guy. I got it covered. I agree, fantastic post!
The Abolishment of the Negative Gearing Debate
- Thread starter Rixter
- Start date
It's alright Big Guy. I got it covered. I agree, fantastic post!
Aww, I feel a warm glow, which is good as we are expected to get snow where I live tomorrow.
Thanks guys. Peter
I would disagree.
Investors buy at the best prices they can, and are, on the whole, much more analytical that owner occupiers. - this is true for most members of this forum.
but, I believe, untrue for the average investor who owns one, maybe two IPs. They buy based on the same emotion as a PPOR.
seven grand is nothing. the average couple could save that in a few months and the average single six months. better savers, or higher income earners could save that in the blink of an eye.
$7,000 at 95% lend leverages to $140k (assuming the servicibility is there also).
If it's such an insignificant amount and contribution to buyers then there should be no problems with it's removal.
Yes, and it was mean to phase out and the market found level. And it doe snot apply on second sale of homes.
Another example of how Gov interference distorts the market.
Peter
Rixter said:
....is dead.
move along, already!
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Totally agree. People on this forum tend to be more well-informed than most casual property investors (casual investors being the majority of property investors) I've come across. I've known people who have bought investment properties with zero idea of market value, comparable sales, expected yields, vacancy rates, growth prospects, etc.. They'll gush over their IP purchase as if it's a PPOR, but if you ask them a vaguely practical question, they kind of twitch and declare "property is a solid investment", quite proud of making this quaint little discovery.
People here are more well-informed because they have more than likely taken action and then stumbled across this site, lurked, gone off and read some books and then start learning more by contributing.
How many times do you hear from most people about their intentions, but that's all it comes to.
To start PI you need to start somewhere. Even if it's getting all emo in a purchase because it looks good, or whatever.
That's exactly how I started and then I moved on from there.
I don't expect someone to start off with all the PI savvy of a multi-mogul like Donald Trump.
100% Right.
When I am (rarely because we don't tell people we have IPs) asked for IP advice, ....the secret, ....the get rich quick, I reply: www.somersoft.com.au
Free website with warts and all property knowledge, unlike the API which rarely have bad news outcomes. Most who ask don't even look as it is too hard or boring but I have had some successes....
An ex client, now best friend, is a lurker. I introduced him here in 2001 ish when he had one small unit PPOR worth say $220k and 60% paid off. He read and read and then bought his first IP off the plan, with his heart, a unit in Sydney and watched it sit flat on CG.
But he learned from that lesson, didn't give up and got savvy. Middle this year he bought his 8th IP. The PPOR is now a home in Sydney worth $800k and still around 60% paid off. He buy +CF deals now and finds them like "a great white sniffing blood" shifting the web listing for hours for the good deal. Oh, the Sydney one has come good with time..
He did this all on one salary. Did two post grad courses to advance in employment. Lives frugal but not tight, never owns a car worth more than $5k but subscribes to Wheels for the Ferrari's. One day....
And he still asks my advice to which I reply, stuff me
, I want YOUR advice.True Story. You can do it, it just takes 12 years not 1 deal.
Personally, we (wife and I) worked hard and paid off our PPOR and built up IP portfolio then did the tree change and kicked back a few years ago.
So I am about to leave our office and saddle up the daughter's pony for a walk (no, not frugal but we have land) and then I will cook the family dinner and a bottle of Red with wife. It takes 2 minutes to walk home in our Country Town.
But tomorrow I will be hanging blinds at an IP being refurbished and mowing the lawns because, hey, I ain't paying some dude $300 to mow all day when I can! Most investors I know do the same.
And the best of all, my daughter is learning the craft. It is part of her life so tomorrow in exchange for 50c chore money, she will come to the IP and work just as hard cleaning and helping mow, etc..
Of course one day, it will all be hers (as only child) and I am pleased she does not have to worry about what mum and dad lives on and if she wants to: study what ever Uni course or run a shop or heaven forbid, ....be an artist....we will be able to support her.
That is why we invest: control of our future via security and peach of mind.
Good night all, Peter 14.7
Peach of mind - awesome!!!
A typo, I know, but so appropriate, still!Peter, I have to spread it around.
In a perfect world hobo-jo, what you have written is probably correct.
Unfortunately, in the real world, things aren't so clear cut.
The latest stats I saw had FHB pegged at about 18% of the total market, everyone else being 82% obviously.
I don't reckon our political masters are that stupid that they are willing to let a market that constitutes the vast bulk of the private citizens of the country's wealth slip back like you have described so that prices drop just to allow FHBs to buy into a market.
It ain't gonna happen.
The stats that I've seen suggest that historically FHBs make up around 40% of the market. If their numbers are down, does that mean they're being outbid by investors, who are typically richer, have access to equity, and tax advantages? If so, then Hobo Jo's argument could be sustained by the facts.
If it's that easy to prevent a housing market slump, then how come the US and Ireland are still suffering from crashes, whilst much of Europe is in a protracted slump?
There's a lot of talk about supply and demand, but the latter means willing buyers who can afford to pay. If property prices move out of reach of would-be owners then demand will fall, and I would expect the market to follow.
And it's all about what a FHB will settle for as to what they can really afford....their expectations and whether they are truly in a dreamworld or not.
If they want, they can buy a very nice 3x2xDLUG brand new home:
http://www.metricon.com.au/melbourn...rb=PAKENHAM&StartPrice=150000&EndPrice=350000
Is it near the CBD? No.
Stiff cheese; all generations before this current crop of sooks had to live out in the goombies to afford anything decent, and commute to work - that place you go to where they give you money which you save towards another better joint, or; if they don't give you enough you take on a second job. And so on.
Or, this; if they simply have to live near the CBD and the action:
http://www.realestate.com.au/buy/be...d&activeSort=price-asc&source=location-search
We recently sold a 2x1 unit in Frankston for $213k. What can I say? We need the dough, and the market is cr@p. Our buyer is likely to be a future "lucky" dude who "got in at the right time", just like we were when we bought it.
Now; that's not yer ideal First property, but it's liveable, near everything and no-one ever buys their ideal property first up from my experience.
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Believe it or not; there are not really that many investors out there, and not that many who are cashed up to buy anything all the time. There are, however; loads of people who are "gunna" invest and never do...just lots of talk.
Also; having equity doesn't mean you have serviceability. A lot are in that boat too.
Once you (your mindset) enter the world of investing, you will run across lots more people who are into it, because your eyes are focused on that thing - a lot like when you think of buying a VW, and suddenly you see them everywhere - everyone has got one! Not really, of course.
It can also mean they are not qualifying for loans, which; with how thew banks are behaving currently, would cut out a lot of potential borrowers at all levels of zero's on the end.
See above. I think you'll find the same mindset is prevalent in their banks as well, plus in the USA many folk are upside down financially, and even at such low rates can't borrow. The investors with a good credit rating will be though.
True; and always will be G; and you can watch it happen right now around the Country...the volume of sales is down, down, down (except maybe W.A?).
Generally; less buyers (sentiment), less qualified buyers (Banks), and less nervous Vendors (sentiment) who don't want to give their house away just now.
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