When discussing property, you'll always hear some statements that SOUND reasonable but are, in fact, total BS. Spruikers and property seminars use a lot of these (your home is an asset, property always goes up, etc). There are a lot of negative ones too, such as debt is bad, no one will lend you money, you'll go bankrupt from all the debt, only the big guys win in investing, etc.
Then, there are those ones that are SO weird that it's worth noting.
I was emailing a friend about investing, and he suddenly asks (quoting exactly):
"u need to consider what to do with these aged properties...since u know the capital growth for units are decreasing..... and they usually have a life of about 6-7 yrs....have u thought of the depreciation effect? are u going to do something about it?"
Rigggghhhhhhttttt. My properties are not going to appreciate after 6 or 7 years. Tell THAT to people who buy 20 year-old unrenovated units all over the country. I'll happily pay the price of a unit on the lower north shore from 13 years ago, since it hasn't go up since then! I could pick up a unit in Artarmon, Wollstonecraft, Waverton for <$200k!!! Sold!
The point is, it MIGHT sound SORT of reasonable to a newbie. I can imagine developers, if not spruikers, selling new properties using this. Well, yes, units depreciate because the building depreciates, so growth might stop when the unit becomes worthless...... Yikes! Don't touch the old units!!! They're never going to appreciate!!!! (Ooh look! A pig flying outside my window!)
Kind of shook my head and laughed. This is a guy who asked me whether I might be interested in partnering with him to increase the power of our capital. If this is the sort of investment wisdom he will be contributing......
This is the sort of insanity you hear from people. It's hard enough for us to concentrate on investment with all the naysayers and doubters. We also have to contend with people who THINK they know what they're doing. Mind you if my friend invests based on his theories, I'll be able to buy HIS properties cheap when he stuffs it up.
Just a warning to newbies: if you hear anything that doesn't sound right (whether too positive or too negative) about property, ask someone who actually invests in property. Better yet, post it here and ask people to comment on it.
Does anyone want to contribute the 'twilight zone' investment theories they've heard over the years?
Alex
Then, there are those ones that are SO weird that it's worth noting.
I was emailing a friend about investing, and he suddenly asks (quoting exactly):
"u need to consider what to do with these aged properties...since u know the capital growth for units are decreasing..... and they usually have a life of about 6-7 yrs....have u thought of the depreciation effect? are u going to do something about it?"
Rigggghhhhhhttttt. My properties are not going to appreciate after 6 or 7 years. Tell THAT to people who buy 20 year-old unrenovated units all over the country. I'll happily pay the price of a unit on the lower north shore from 13 years ago, since it hasn't go up since then! I could pick up a unit in Artarmon, Wollstonecraft, Waverton for <$200k!!! Sold!
The point is, it MIGHT sound SORT of reasonable to a newbie. I can imagine developers, if not spruikers, selling new properties using this. Well, yes, units depreciate because the building depreciates, so growth might stop when the unit becomes worthless...... Yikes! Don't touch the old units!!! They're never going to appreciate!!!! (Ooh look! A pig flying outside my window!)
Kind of shook my head and laughed. This is a guy who asked me whether I might be interested in partnering with him to increase the power of our capital. If this is the sort of investment wisdom he will be contributing......
This is the sort of insanity you hear from people. It's hard enough for us to concentrate on investment with all the naysayers and doubters. We also have to contend with people who THINK they know what they're doing. Mind you if my friend invests based on his theories, I'll be able to buy HIS properties cheap when he stuffs it up.
Just a warning to newbies: if you hear anything that doesn't sound right (whether too positive or too negative) about property, ask someone who actually invests in property. Better yet, post it here and ask people to comment on it.
Does anyone want to contribute the 'twilight zone' investment theories they've heard over the years?
Alex
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