Why are so many on this forum against property?

[Dan_p]

Aside from the odd troll bopping (yes a deliberate reference ) in and out, most people here post with good intentions and are willing to offer advice, guidance and generally happy to chat about property and/or other type of investment strategies with you, giving of their time freely and without prejudice.

Take from this (information) what you will, and what doesn't suit, leave behind. Trust me, no one will take it personally if you don't heed their wisdom.

Thats great. I put a question on here a few months ago about my situation and am now putting into action the advice I received from here. I was too stubborn to listen to family members.

 

[atsim]

Hi Bluestorm and Rumpledelf.

My comments are not directed at people like yourselves. Your sorts of views are helpful and informative. What I see is a different take on things which is good. I was aiming more at people who I found very annoying to read but I couldn't help myself but to read the whole thread, sort of addictive really. One was beepop.

I agree fully with watching from the sidelines sometimes. I have to at the moment due to being heavily committed now. Since I have started in property I have become very enthusiastic about it and I wish I had of started 10 years earlier. It is better to be in property then not as well.

Most people are really good and there is a wealth of knowledge here. Maybe it takes time to work out who is not worth listening to.

dan , go back in time , say 1997 and you would have said the same thing (i wish i had started 10 years earlier) and again in 2006. now in 2011 you are in the position where in 2 to 3 years or so you will be able to say ( im glad i invested 10 years ago) not to say you will double your money. but you will be much better off , than if you didnt buy 10 years earlier. cheers

 

[BayView]

Actually there was one more type I have noticed. It is the pre first home buyer saying houses are un-affordable. Do you think when they buy their first home they will not want its value to go up?

They won't buy, and they will want all of us to feel terrible along with them.

Some say they are trying to warn us. Thanks for the warning, but I'm ok.

Read the under-lying statement - "property is unaffordable".

They are beaten in their own mind before they start; it's like someone who says "I can't do it" before they attempt something scary for the first time and then don't do it.

The pre-first home buyer of 25 years ago or more (me) didn't have the luxury of forums, stats charts, and the like in which to vent their frustration at expensive real estate.

We/they simply went out and found something with a roof on that seemed ok and bought the bloody thing. A place of our own. I had never heard of a Depreciation Schedule until my 4th PPoR. Amazingly, they all keep going up in value. I wish I had had the resources to retain all 4 of them until now.

Nowadays, we have all these hi-tech analytical tossers whining about it, because they have the ability to better analyse the risk/reward/loss/value whatever aspect of property. And does it help them? No. Property will still go up despite all their bleatings. Maybe not today, or tomorrow, but definitely in the next 5-10 years. So, will you be on the train?

Look, is now the best time to buy? Maybe not, because in terms of cap growth many areas are dead and will be for another year or so - and I am pro-property always.

But, my argument is always the same; they ain't making anymore land, and us stupid humans keep over-populating the planet at a rate of knots, and we all want to live in the best spots, so based on this, properties are always going to grow in price at some stage.

If you buy now, you may see a coupla years of little growth. But so what? I have experienced that exact thing, and have still done ok in the time I've been stuffing up property investing.

What are you buying for? A PPoR, or an IP?

If it's a PPoR, then all the stats/returns and so on really don't matter. Of course; all of us here are more sophisticated than that; we are on an investing forum, which the majority of penguins don't do, and will never do. But the stats do matter to us; we are the enlightened ones, we are investors with stats charts..

But if you didn't have them, you would be ignorant and still buy an unaffordable property anyway and still do well in 10 years from doing so, just like millions of people who want a roof over their head that's theirs..

So, just ignore these pre-FHB techno-babble IT spoonheads and listen to the people here who have done a coupla deals or so, and you will learn plenty.

 

[Rockstar]

I think this post by Ian Somers pretty well covers it. I'm not sure how many of you out there have read Jan's books. If not, do yourself a favour and have a look. Plenty of realistic avice with examples based on decades of experience.

When we are talking about property, are these economic times all that different to the various economic crises that the world has experienced over the past 100 years or so?

Is it so easy to lose the big picture in the day to day media hype?

Doesn't "shelter" still remain one of our basic needs?

Has property in any of Australia's capitals ever dropped in value over any 10 year period in our history?

Doesn't a hypothetical doubling of the unemployment rate from 4% to 8% still mean that 92% of workers are still employed?

Does someone know something that I don't? Have there really been too many properties built to house Australia's current and projected population?

I don't know what others feel about property as an investment, but I have found that long-term investment in residential rental property has served and continues to serve me well. I do not expect or need capital growth of 10+% or more every year. I do not expect or need to have 0% vacancy rate or 5+% rental yields every year.

I do know that I have more control over my investment assets than if they were shares in a company run by people I do not know and vulnerable to a world economy that everyone says is in turmoil. I do know that my investments help people by providing them a decent shelter in a place and time that serves their needs. I also know that keeping all my assets in the form of cash would be a sure way to see my wealth dwindle over the long term.

For me, I decided a long time ago that long-term investment in residential rental property was my best option as it lets me sleep well at night. I do not expect everyone to share my view on the investment world and these days, I have no real interest in preaching the property investment bible. But I do feel sorry for those people with such a gloomy outlook on life or are so tied up in looking for the next get-rich-quick scheme in changing times that they apparently have no time to smell the roses.

Maybe I am getting a bit old and cynical but I also wonder why it is that people who have no apparent interest in sharing their knowledge about property investment, are so motivated to even visit this site, let alone publish such negative alarmist posts. Having said that, I do maintain my belief that you cannot read too many books or talk to too many people so negativity is not a justification for censorship.

I just hope that potential investors are not so paralysed by all of the negative stuff that they use it as a convenient excuse to do nothing. Long term, doing nothing is the worst thing you can do if your aim is some form of financial independence in your mature years.

 

[wobbycarly]

Why, thank you. I'm delighted you noticed! I tried frenetically to find somewhere for a semicolon, but was otherwise engaged in clarifying my argument to the exclusion of Poetics. (Notably the title of the companion work to Aristotle's Aesthetics, burned from history's memory by the Church for its ridiculing of 'the unquestionable').

(Happy always to debate the comparative cultural validity of the old-world past-tense periphrastic auxillary verb form in contrast to new-world mutations absentia punctuation, any time you've got the time of course, WC. )

Did you actually have anything enlightening to say on topic, by the way? Or is this just a tired sideways dig at form in place of function? Do help me here, because I tire so easily of enervating the lame.

Sorry, I must have missed the new rules that say that every post must be on topic. I do apologise for offending your sensibilities. I see the error of my ways and will refrain from anything other than the deadly serious - as you do.

FWIW, I was actually 'admiring' your comprehensive formatting, hence the gold star and "" - maybe some kudos would have helped you see the light-hearted side of my comments? No "tired sideways dig" intended.

My serious comment on the topic has already been voiced, but for your erudition, I shall repeat. I believe it's important that opposing views are shared, particularly those that I don't initially agree with. It helps me think critically and challenge my own views. Better?

 

[Dan_p]

They are beaten in their own mind before they start; it's like someone who says "I can't do it" before they attempt something scary for the first time and then don't do it.

We/they simply went out and found something with a roof on that seemed ok and bought the bloody thing. A place of our own. I had never heard of a Depreciation Schedule until my 4th PPoR. Amazingly, they all keep going up in value. I wish I had had the resources to retain all 4 of them until now.

Nowadays, we have all these hi-tech analytical tossers whining about it, because they have the ability to better analyse the risk/reward/loss/value whatever aspect of property. And does it help them? No. Property will still go up despite all their bleatings. Maybe not today, or tomorrow, but definitely in the next 5-10 years. So, will you be on the train?

Look, is now the best time to buy? Maybe not, because in terms of cap growth many areas are dead and will be for another year or so - and I am pro-property always.

But, my argument is always the same; they ain't making anymore land, and us stupid humans keep over-populating the planet at a rate of knots, and we all want to live in the best spots, so based on this, properties are always going to grow in price at some stage.

If you buy now, you may see a coupla years of little growth. But so what? I have experienced that exact thing, and have still done ok in the time I've been stuffing up property investing.

What are you buying for? A PPoR, or an IP?

If it's a PPoR, then all the stats/returns and so on really don't matter. Of course; all of us here are more sophisticated than that; we are on an investing forum, which the majority of penguins don't do, and will never do. But the stats do matter to us; we are the enlightened ones, we are investors with stats charts..

But if you didn't have them, you would be ignorant and still buy an unaffordable property anyway and still do well in 10 years from doing so, just like millions of people who want a roof over their head that's theirs..

So, just ignore these pre-FHB techno-babble IT spoonheads and listen to the people here who have done a coupla deals or so, and you will learn plenty.

Thanks Bayview for your detailed response.

I was trying for 6 years to get my first house (10 years ago from now). I didn't know about brokers then, just went to the one bank manager and he said he couldn't do it to me. It was a $145k cottage in cairns. It took me a fair while to wake up. Then I tried a couple more times when we moved from Cairns to Perth 5 years ago and failed a couple more times there until finally we got our first one in Sydney while living in Perth. Since the first one 4 years ago I have bought something each year, 2 units, 1 land, then built on the land. Maybe I have been trying to make up for lost time. This attitude can be dangerous I guess if you leverage too high.

I will never forget that bank manager telling me that. I had about 5% deposit at the time and was earning about $70kpa in a secure job so I really would have been able to make the purchase if I explored a bit. Now those houses are around the 400k mark. Its hard not to regret and think what might have been if I got that first property, but you learn from those as well.

I got knocked back so many times but kept trying. Whats the alternative, to rent forever. The first one is the hardest by a long shot. I think people need to be positive to try and reach their goals. (I dont mean only pro-property, which I am). When I see people now who have access to the likes of these forums it annoys me when they get so much good advice on how you can do things and still find excuses why they cannot.

Another way I look at property as an investment, I might be on my own here. You have your capital growth, your rent is going up all of the time as well. So if you want to say your capital growth only went up with cpi say, then can't you also add your rent to say your investment went up that year by cpi plus the $16k you received in rent. So you could have 3% cg and 4% rent so you are actually getting a 7% return. Or am I way off the mark here. (minus expenses)

 

[Dan_p]

I think this post by Ian Somers pretty well covers it. I'm not sure how many of you out there have read Jan's books. If not, do yourself a favour and have a look. Plenty of realistic avice with examples based on decades of experience.

I have read her books and got them signed.

I think the last paragraph is excellent:
I just hope that potential investors are not so paralysed by all of the negative stuff that they use it as a convenient excuse to do nothing. Long term, doing nothing is the worst thing you can do if your aim is some form of financial independence in your mature years.

 

[Rockstar]

I have read her books and got them signed.

No wonder you're a fan. Good luck with your future investments

 

[Belbo]

Sorry, I must have missed the new rules that say that every post must be on topic. I do apologise for offending your sensibilities. I see the error of my ways and will refrain from anything other than the deadly serious - as you do.

FWIW, I was actually 'admiring' your comprehensive formatting, hence the gold star and "" - maybe some kudos would have helped you see the light-hearted side of my comments? No "tired sideways dig" intended.

My serious comment on the topic has already been voiced, but for your erudition, I shall repeat. I believe it's important that opposing views are shared, particularly those that I don't initially agree with. It helps me think critically and challenge my own views. Better?

Ah! Then I owe you an apology. I mistook your comment for sarcasm, as I was being quite serious in this thread. I'd be grateful if you'd forgive my blunder, Wobbycarly.

 

[Sim]

In general, if you are "against" property, then you probably have no place posting on this forum - doing so is most likely only to cause a reaction or to bait those who are not "against" property (ie trolling).

Note that being "short-term negative", or "cautious", or even a property "bear" is different to being "against" property and is no problem in itself - provided that you recognise that your opinion is just that - an opinion, and that other people are quite entitled to their opinion as well - even if it disagrees with your own.

Anyone who spends their entire time on this site trying to prove someone else wrong is likely to find themselves banned.

Anyone who can express their point of view without resorting to name calling and flaming, and is prepared to accept that other people might disagree with that point of view and post to that effect ... is welcome here.

We've had a few trolls on the forums of late (my fault for the most part - I've only recently been able to spare the time to look back through the entire post history of some of these users to understand their point of view and observe their behaviour on the forums) ... which can lead to the impression that a lot of people are against property. In general, I don't think that's the case with most of our members.

 

[wobbycarly]

Ah! Then I owe you an apology. I mistook your comment for sarcasm, as I was being quite serious in this thread. I'd be grateful if you'd forgive my blunder, Wobbycarly.

Forgiven. Friends? *high five*

Enough sidetracking.

 

[Andrew_A]

Just think of what could be achieved if all the energy that was expended trying to prove a view point as being correct to other posters was actually used to work towards one's goals!

 

[lizzie]

we really appreciate the hard, and often thankless, task you mods do.

luv ya sim!

 

[Dan_p]

In general, if you are "against" property, then you probably have no place posting on this forum - doing so is most likely only to cause a reaction or to bait those who are not "against" property (ie trolling).

Note that being "short-term negative", or "cautious", or even a property "bear" is different to being "against" property and is no problem in itself - provided that you recognise that your opinion is just that - an opinion, and that other people are quite entitled to their opinion as well - even if it disagrees with your own.

Anyone who spends their entire time on this site trying to prove someone else wrong is likely to find themselves banned.

Anyone who can express their point of view without resorting to name calling and flaming, and is prepared to accept that other people might disagree with that point of view and post to that effect ... is welcome here.

We've had a few trolls on the forums of late (my fault for the most part - I've only recently been able to spare the time to look back through the entire post history of some of these users to understand their point of view and observe their behaviour on the forums) ... which can lead to the impression that a lot of people are against property. In general, I don't think that's the case with most of our members.

It is a terrific forum, as a newish member I noticed a couple of what appeared to be trolls, just wanted to confirm so I knew to disregard these types.

 

[evand]

Some people are capable of both.

Just think of what could be achieved if all the energy that was expended trying to prove a view point as being correct to other posters was actually used to work towards one's goals!

 

[andrew_de_a]

you love using that smilie evan

 

[BayView]

Another way I look at property as an investment, I might be on my own here. You have your capital growth, your rent is going up all of the time as well. So if you want to say your capital growth only went up with cpi say, then can't you also add your rent to say your investment went up that year by cpi plus the $16k you received in rent. So you could have 3% cg and 4% rent so you are actually getting a 7% return. Or am I way off the mark here. (minus expenses)

You are correct.

You can also add your tax deductions and/or depreciation on the building/fixtures to that.

If you use the 10% cash deposit example, by the time you look at what the house is worth after say; 10 years, and factor in all the deductions and rents, then look at what your total holding costs are out of your own pocket combined with any cash deposit after all this, the ROI of that intial cash deposit is usually very good.

A number of people talk about CD's, and gold, and art etc as investments - and they can all be very good, but it's more difficult to rent them out and get tax deductions to wipe out any out of pocket holding costs along the way.

This is why - for the average earner - if they get their foot into a cheap property in a good location, maximise all the factors such as amenities, depreciation and so on (so DD is important) to improve rent returns and reduce holding costs, it would be hard to see them do a lot better than property.

You can argue that shares will deliver the same returns, but considering the leveraging, rents, tax deductions and depreciation not available to shares for the most part, I wonder...

For high income earners, the choice of investment is rather immaterial as they can throw a decent chunk of after tax income at almost any investment and not hurt their lifestyle.

The average Joe doesn't have that luxury of plenty of expendable dollars to throw into an investment that only has a cap gain, or has limited monetary returns other than cap gain, hence the combined factors as described above provide a better leverage to more wealth for Joe.

 

[Indifference]

Why are so many on this forum against property?

As Sim said, some people, like myself, are cautious at present, BUT I am a true believer that Property IS the end game. Just because some of us are currently cautious, does not mean we are against property.

I really want to buy more property, but my personal outlook and circumstances have me in a new acquisition "holding pattern".... Am I still looking at potential deals? Heck yeah! But, my purchasing requirements have changed markedly in the past 3-4 years, as I have now incorporated a potential period of sustained CG stagnation into my thinking. This means I am now more cashflow focussed and less CG focussed in the short to midterm, and I have walked away from many a potential deal in the last 6 months because of it....

Does this mean I am doing nothing? No, I am pursuing other asset class opportunities in the meantime with any spare capital. So, some of us are "property bears" at present. We can't ALL be raging bulls ALL of the time...

 

[tobybarton]

Hi Belbo, thanks for the response,

This is exactly what I am talking about. Its a bit disappointing. I like to take most people's opinions with good faith but some are trying to bring people down.

I am only fairly new on this site and it is terrific. Personally I get told enough through family, friends and certain colleagues about what cannot be done. I really like the I can do attitude on here.

It can be difficult early on who's advice is good and who's to ignore. I can see most are excellent.

Dan and Nan,

I was slightly comforted to see that I was not the only one feeling like these forums have the tendency to become a negative sounding board, and some people have some very insightful reasons as to why this is.

And yes these forums can prove to have some really great information, but finding the gold nuggets is time consuming and quite demotivating too - with some topics more than others.

Thank you to those who are successful in their property careers and have dedicated the time to sharing their wealth of information.

The negative few, I can only deduce, are less successful and therefore have more time and energy to plague the forums with uncooperative "advice"; or advertise themselves and their businesses. It is a shame.

Toby

 

[Sunfish]

The negative few, I can only deduce, are less successful and therefore have more time and energy to plague the forums with uncooperative "advice";

Not very friendly.

What did your post contribute? Just looks like another newcomer wanting to decide who is welcome and who is not. This is a democratic forum and you must take it as it is, or not.