Why not buy now



From: Jack Moro

G,day all

Just read the posts from some respected investors (In or out the market)

You may need to slap me in the face with the obvious but, I cant see the problem with buying now, I say this because

1. Cheap rates 6 - 7% up to 10 years N.A.B.
2. I've done it before in November 1989 (Young and dumb) bought a cheapie which has more than doubled in value (On par with Jans expeerience)
3. Post 1989 (the recession 1990 1991) the property I bought in 1989 I dont believe went down in value, to be honest I am not sure what happened with its value as I am a buy and hold P.I. what did happen was people still needed a home to RENT and they rented it, my sums at purchase, showed a property _ quite -ve but wouldnt you know it by 1994-1995 the bull was hitting its straps the property soon became +ve and in hindsight Iam glad I bought it them,It was my first venture.

(Now we have cheap money sums should work out O.K.)

This may only suit buy and holders, I also remember reading in Jans book where she seems to have bought in so called bad times (High interest rates) and she mentions only paying $80 pw for her I.P "I am sure we can do better than that at the moment!!!"

(Iam in Melb and buy out East)I can and I am a relative newbie so come on and slap me with the obvious other wise I am going to buy an over priced house which is only slightly -ve and fits in with my servicability, and I believe will continue to rise in value in coming years even if we have a couple of bad years.

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Reply: 1
From: Emil Ajepoor

Hi Jack,

Remember 2 things:

* Depends on the deal you obtained
* Also depends when the property will be settled.

Emil Ajepoor
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Reply: 1.1
From: Kristine .

G'day Jack

I'm with you! I bought my first business in 1989 with a Better Business Loan from the ANZ, and paid 24.25% interest!!

Home loans climbed to 17.5% shortly afterwards, and everybody was preaching doom and gloom.

I sold the then very well established business in 1994, and with some of the proceeds put the fairly large deposit of $40K on a 1974 mission brown brick & tile on 900msq for $105,000 which was then renting out for $150 pw.

A little later I spent $10K (extended the mortgage) and installed ducted heating, new fencing, new curtains & light fittings, dyed the carpet, general painting and clean up, rented out for $170. Recently vacant for the first time since then, put in another $1,500 (new stove, paint, cleaning) and its now rented for $215 pw (and yes, I allow pets).

Interest now is about 6.75%, with approx market value of $205,000. Dear me, perhaps I should have waited?

Fools rush in where Angels fear to tread, but then again, fortune favours the brave.

Guess it depends on which fortune cookie you're eating at the time. I just like to keep life simple, and if I had the serviceability right now, I'd be buying - there's some amazing deals out there RIGHT NOW!

Go for it!

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Reply: 2
From: The Wife

HI Jack,

I guess it depends on what your investing style is. If you are a buy and hold person, I think ANY time is a good time to buy, just do it!

For myself, I am still buying my blue chips, ( I buy them with cash), and I am still buying a lot of other property, but what I consider my 'trading stock' , basic residential, I am not buying at the moment.

I have said before, this doesnt mean there arent any good buys out there, it just means that I am not interested in spending the extreme amount of time( because i am busy buying elsewhere as well) involved in finding the rare, ( if you are just starting out, this would be a very benificial thing for you to be doing, the pure exercise of finding the good rare bargain, will be priceless to you).

The only people I have met so far who are still proclaiming that there are bargains as far as the eye can see, are real estate agents, or people who are somehow 'selling' the bargains.

MY trading stock is the lower to medium end of the market, and I have the FHOG, and the wrappers, to thank for driving the prices way out of my comfort and profit zones. Nevermind, I believe in the cycles, and I believe the market will come back to negotiable again, when? not sure.

I know a great many people whose style is buy and hold, I dont know of many who have failed with this strategy, in fact, a good number of freestylers are buy and hold people, and they are doing very well for themselves, they are true to their strategy and playing it well, that makes it very hard to fail.

PART of my strategy is based around buy and hold, but then part of it is based on cycles, and also, quite a few in the freestyler groups are 'cycle riders' and they are all selling at the moment, they are doing really great as well, but they are playing the cycle just as carefully as the buy and hold people are playing their game.

I think you need to decide what style of investing you are comfortable with, get familiar with it, and maybe even cross styles as you feel confident, I think there is still a lot of money to be made out there.

I think a big problem right now is, prices are up, people are getting their homes revalued and they have a lot of equity burning a hole in their pockets, and are eager to jump into the market. I just hope people jump with caution.

Make an educated jump/guess, discover who you are, what your style right now is, what your safety boundaries are, what you would be prepared to do, or not do, Look at how much you would be prepared to lose should the market go to mud, and then by all means, jump in, property investing is a wonderful thing, It can make you free!

~Life is a daring adventure, or nothing at all~
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Reply: 2.1
From: Dave :)

Hi Jack,

I was about to post a reply until I read The Wife's post. Perfectly said,

Good luck Jack. If you want to buy now, go for it...just do your homework.


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Reply: 2.1.1
From: Rolf Latham

Hi Dave

Old saying from the little German town I come from.

"Good things come to those who wait, but not to those that procrastinate"

The wait bit does not wait for an opening in the market but relates to the concept of delayed gratification.

I suppose translated this means save some dough, do your sums, do your ressearch and stride forth purposefully, and see Dave for an OTP opportunity :eek:)


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