We will defy history if the bubble doesn't burst

[JIT]

Whatever, I'm happy for you and like mindeds to build a portfolio from today, of 2.5% yielders. The rest of us can only benefit from such.

WW,

I don't understand why you would say this when you yourself are investing at gross yields of 3.15% pa today, and admittedly, despite your experience, not that well timed by your own accord?

http://www.somersoft.com/forums/showpost.php?p=676481&postcount=44

How would this look on your spreadsheet?

Thanks.

 

[WinstonWolfe]

WW,

I don't understand why you would say this when you yourself are investing at gross yields of 3.15% pa today, and admittedly, despite your experience, not that well timed by your own accord?

http://www.somersoft.com/forums/showpost.php?p=676481&postcount=44

How would this look on your spreadsheet?

Thanks.

This investment isn't representative of the market JIT. Aust. Property Monitors place it as metro Brisbane's hottest performing suburb, a statistical outlier.

I am confused about your viewpoint JIT. Above you are an extreme permabull full of bravado that there's always a way to outplay downside risk, but here it's "little to no CG, rising holding costs, another correction in 6-12mths time, negative sentiment."

EDIT:

What advice would you give Biggles here JIT?

 

[Sunfish]

Sunfish do you think we are following americas footsteps?

Not directly.

I was asking if you (collectively) even knew where America was going. I did and I knew that the borrowing frenzy would collapse. I didn't realise that Britain and Europe were as vulnerable as they were though and I certainly did not escape unscathed.

I don't intend to be damaged as much next time.

 

[JIT]

This investment isn't representative of the market JIT. Aust. Property Monitors place it as metro Brisbane's hottest performing suburb, a statistical outlier.

I am confused about your viewpoint JIT. Above you are an extreme permabull full of bravado that there's always a way to outplay downside risk, but here it's "little to no CG, rising holding costs, another correction in 6-12mths time, negative sentiment."

EDIT:

What advice would you give Biggles here JIT?

You never "buy the market"!

My point in that post was pertaining to those trying to time the market cycle.

But if you don't have any property/small amount of property, and are just starting out I think it is more important to just get in the market... for most people.

An exception to this would be if you were on a high income and your savings capacity exceeded the anticipated CG in the short-term.

I still wonder how your recent purchase would stack up on your spreadsheet assumptions......

 

[Sunfish]

You never "buy the market"!

......

On AVERAGE that's what you do. That's what you advocate here when you are a property bull singing the praises of the investment.

You can always find a market somewhere that is booming. This might be OK for a share trader because they can move in and out of sectors easily. It is devilishly difficult for me to sell here and buy interstate everytime the wind changes.

 

[bene313]

But if you don't have any property/small amount of property, and are just starting out I think it is more important to just get in the market... for most people.

I don't disbelieve that a bust may come for property. But as I cannot see the future, I continue my belief that a balanced asset portfolio (which includes property) is important.

Is there anyone here so sure of this 'property bust' that they have disposed of all their RE holdings?

 

[WinstonWolfe]

You never "buy the market"!

My point in that post was pertaining to those trying to time the market cycle.

But if you don't have any property/small amount of property, and are just starting out I think it is more important to just get in the market... for most people.

So your advice to Biggles would be that at this point, a 2.5% yielder is a sound investment, as long as he can cover the shortfall?

An exception to this would be if you were on a high income and your savings capacity exceeded the anticipated CG in the short-term.

I still wonder how your recent purchase would stack up on your speeadsheet assumptions......

Our recent purchase obviously needs growth and tax credits to offset the lower yield. I've given enough hints about that growth. If the growth weakens, we will most likely proceed with a small or large value add, or we may flick it. If you're sweet on 2.5% yields JIT, I'll send you a PM before we put it on the market

 

[Sunfish]

I don't disbelieve that a bust may come for property. But as I cannot see the future, I continue my belief that a balanced asset portfolio (which includes property) is important.

Is there anyone here so sure of this 'property bust' that they have disposed of all their RE holdings?

One of my IPs is for sale now, the first opportunity I've had, and another will come out of lease in a few months and I've arranged to meet an RE there on Wed. I'm not selling my house, of course. (Unless someone makes an offer I can't refuse. LOL)

 

[devo76]

One of my IPs is for sale now, the first opportunity I've had, and another will come out of lease in a few months and I've arranged to meet an RE there on Wed. I'm not selling my house, of course. (Unless someone makes an offer I can't refuse. LOL)

Do you believe they will be worth less in the year 2020 ?

 

[Sunfish]

Do you believe they will be worth less in the year 2020 ?

Do you really think that is impossible? It sounds as if you do.

But to the question: There is almost no chance of a rise, in Townsville (no point telling me about Melbourne), probable scenario is 5 to 10% drop with a real possibility of more than 20. So I answered bene313's question.

I'll ask again: Did you foresee the GFC and did you recognise the US property bubble for what it was? If not why do you think you are better able to point to the future now?

 

[devo76]

Do you really think that is impossible? It sounds as if you do.

But to the question: There is almost no chance of a rise, in Townsville (no point telling me about Melbourne), probable scenario is 5 to 10% drop with a real possibility of more than 20. So I answered bene313's question.

I'll ask again: Did you foresee the GFC and did you recognise the US property bubble for what it was? If not why do you think you are better able to point to the future now?

Calm down. Im not getting into the "who predicted what first" thing. I dont care actually. Throw enough stones and someone will hit the bullseye eventually.
And i dont think anything is impossible. Im simply saying do you think the values will be above or below. What about % of each happening.

Most would say we have a 100% chance of values being higher but lets gloom ourselves up a bit and go 50/50 chance of values being lower.

Now lets say you bought well and your neg or neutral property is now neutral or positive in 2020 balancing out costs over that time.

So in year 10 and your values are down....Well hold on a bit longer the turn around will be getting close.No loss realised yet.It will probably be making you money by now.

But if values are above ......Happy days.....Do what you want.

So you have a 50/50 chance doing well or you wait a little longer and do well.

Not the greatest outcome either way but still not a bad risk/return.

yes there is the risk of 20,30,40 year slump or you can factor in the oppertunity costs of having the money tied up but to the majority of mum and dad investors. The numbers still stack up over time.

 

[granev]

Do you believe rents will be the same or less in 2020 ?

 

[Sunfish]

Most would say we have a 100% chance of values being higher but lets gloom ourselves up a bit and go 50/50 chance of values being lower.

Devo I am on record here saying that there would be a crash late in the decade as early as '04. If you didn't see it coming, why do you feel qualified to give me financial advice?

Two questions have been asked and I answered them. I do not recall asking for advice.

So in year 10 and your values are down....

Rule one before you give financial/retirement advice is find out the age of the person you are talking to. I'll most likely be dead in the timeframe you are discussing.

 

[Sunfish]

Do you believe rents will be the same or less in 2020 ?

This is 2010 for god's sake.

 

[JIT]

Our recent purchase obviously needs growth and tax credits to offset the lower yield. I've given enough hints about that growth. If the growth weakens, we will most likely proceed with a small or large value add, or we may flick it. If you're sweet on 2.5% yields JIT, I'll send you a PM before we put it on the market

Not sure about Biggles, but I personally wouldn't buy at 2.5% yields, and wouldn't even buy at 3.15% yields either.

My comments were directed at the uselessness of your spreadsheeting.

How long till your 3.15% yielder breaks even after tax on this?

Aren't your posts and your actions/where you put your money... somewhat incongruent?

Aren't you ''gambling'' in the same way as you suggest others are?

 

[devo76]

For the record i think values will be higher in 2020.
yes i know this is 2010. I am concerned about values in 10 years time. not today. If you dont have the luxury of time as you suggest then sure, i understand that all decisions must be looked at more closely.

I am not trying to give advice. I just asked a question that you didnt have to answer. Where do you believe values will be in 10 years? Your answer to this gives people some idea as to why you believe what you believe.
What i am trying to get at is if prices recover and move higher in the future. A short term drop in values may not be good enough reason to sell.

No offence intended sunfish

 

[BV]

. I'll most likely be dead in the timeframe you are discussing.

What if you are not?
People live longer and longer these days

 

[urbanprospector]

for the record i dont think they will be higher by 2020 we may even have a new currency by then ..

i posted on many threads here now and said what was going to happen how am i doing so far ..

this might sound like blowing my trumpet . you think but before anyone comments please follow where i have posted and check it out ..

gold now $1500 aussie an ounce

stocks down since i posted first about trend

lending freezing up as i said

housing is going south .

spending plummeting

the piigs would have an effect here more than people thought

p.s want a real giggle read professor neferous thread

i have come to this site to gauge public perception and perhaps pass some of what i have discovered is happening and perhaps save some people from big mistakes ..

i dont have anything to do with making money out of property like many posting here who make a living from it .

i have made money on property in the past and large sums (details in other posts)

i still own but country land .

so i have nothing to gain by being here enjoying the discussions going on and having my say also .. i have respected others since i have been here yet been called many things .

we are at a very interesting time in our development as a country and a big **** taking place on a world scale its been fasinating watching it play out so far . my humble opinion is we headed for times not many here have ever experienced .

 

[Sunfish]

What if you are not?
People live longer and longer these days

Are you suggesting I live in poverty for a decade paying half my pension into a neg geared prop on the grounds that "Someday I'll be rich!!!!!"?

You guys are like Jehova's Witnesses. You try to tell people twice your age what to believe.

 

[WinstonWolfe]

You guys are like Jehova's Witnesses. You try to tell people twice your age what to believe.

nah nah Sunfish.....they really will be worth more......why gee, even by this Christmas, they'll be up 10%......... right across Awhhstrahlia..... you just wait and see..... wait and see I say........The REIA told me so, the HIA told me so...Jehweh told me so......you can take that to the bank....now let me leave you with this beautiful 4 color pamphlet on why only 144,000 of the chosen few will succeed in their property investing......better make that 7.....cos I forgot 143,993 good PIers have already made it there. Only room for 6 more, including me. You don't want to miss out now do ya.

whoops......just woke up from a bad dream........now, back to the risk mgt spreadsheets with the pretty charts....the ones that help me decide how to time the market.......and back to the latest threat to global credit flows Australian mortgages are so dependent on..........oh and my Gold and Palladium positions......

WHAT!!!!...what's this.....my monthly profit target achieved in the first week!!!! God must want me to take that trip to Aix en Provence and Chamonix.