With all the doom and gloom - is anyone buying?

[always_learning]

Dear AL,

"we can switch to electric cars simply," is wonderful in theory but are you aware of how many gas-guzzlers we would need to put off the road in the next 5yrs to make a 10% reduction in transportation industry's consumption? I don't know either so maybe you could Goggle it (sorry!)

You then need to multiply that number by the number of barrels of oil needed to make each vehicle. This oil use (direct and indirect) is most definately not insignificant. So "not insignificant" is it that I recall reading that there is as much energy used to make a vehicle as it will burn via petrol during it's lifetime. The acuracy of that figure is something-nothing WRT the general argument, which is that we no longer have enough cheap oil to produce the efficient cars in enough quantity to save enough oil to justify the ...... Geez I need another beer.

Acey and I aren't radicals, we just read beyond Saturday's realestate lift-out.

Question, does it take much more oil to make an electric car v.s. a petrol driven one? Sorry, I dont think so, I guess about the same or even less (depending on battery technology used).

Thus electric cars will go on sale along side the petrol ones, you will be able to buy the Electric Honda Civic, the Hybrid Civic or the Petrol Civic from your local Honda dealer...it will be your choice! Currently the petrol one wins hands down due to the price/performance. Hybrid is available in Japan but due to extra cost not many buy it, and Honda doesnt offer an electric one, not because of any engineering issues, simply because nobody would buy it given the higher price and it's limitations!

P.S.

I did a goggle seach

And the energy needed to make a car is equal to 1.5 tonnes of oil, about a years worth of driving! Of course this energy could be from alternative sources (coal, gas, nuclear)
http://www.newint.org/issue279/curiosities.html

 

[buzzlightyear]

Similar issue with the SFLPG (single fuel LPG) Ford which has been offered as an option on the local model. The payback requires you to travel approximately 19 000kms+ per annum. Demand has been quite poor due to a perceived lack of performance (only marginally less than the petrol model though)

 

[Sunfish]

Similar issue with the SFLPG (single fuel LPG) Ford which has been offered as an option on the local model. The payback requires you to travel approximately 19 000kms+ per annum. Demand has been quite poor due to a perceived lack of performance (only marginally less than the petrol model though)

Are you saying economy doesn't come cheaP?

That is the point I was trying to make.

 

[Ronulas]

see change ,

Here are the figures you wanted to see. If you read carefully you will see all costs are factored in.

As I am managing this property there will be no agent fees.
Maintenance I've estemated at $500 a year. This could be more or less of course.
Vacancy I've set to nil for now as my friend is renting the place for the first 12 months.
I have not included any depreciation at this stage. After talking to Depreciator he is certain I will be able to claim a fair bit on fittings ect.
House has dishwasher, alarm system, two aircon and two ceiling fans.

As you can see the house is showing a negative cashflow of about 6$ -$11 a week. After depreciation however this house is positive. Because of the attachment file size limitation I had to cut the next 5 years off but over time the property actually becomes cashflow positive.

 

[Ronulas]

I Always use I/O.

Costs to hold property... mmm

Agents fees , Rates , Insurance , maintainence, pest treatments etc are the main ones that spring to mind.

At around 120k I'd guess this isn't a new property. Usually means a moderate amount of maintainence.

If I'm looking at cash flow style properties I'll be looking at over 10 % myself , and preferably higher.

I'll be happy to buy negative geared properties, but I think it'll be at least a couple of years off.

See Change

Ahhhh I thought thats what you men't. Yep all those costs are factored in.
As for maintenance, I own an IP in Victoria well over 40years old and in the last 6 years has only cost me maybe $2000. and that is with a new hot water system.

This house cost me $32500 and rents for $135 p/w. I only owe about $19 000 on it.Work out the cashflow on that I once worked it out at about 38% returns. It is now worth over $120 000 and is currently paying for itself and a large part of my PPOR.

 

[Fester]

I reckon we could see a fair big drop quickly and then it will plateau for a few years. Maybe its a good time to buy a PPOR (for those renting) and plough money into it over the next few years. Kind of like enforced savings...

Investment properties - income levels still to low for me to jump...

Interestingly 'the age' on the weekend quoted some economist who has picked all the recent booms (and busts) as stating that the share market is about to boom 3 fold/300 pct over the next 5 years. Dont wanna miss out on that so will have some money always to take advantgage should this happen.

Economists!! Been there done that, boom 3 fold, I'll believe it when I see it!

 

[see_change]

Ronumlus, if you think it's a good deal congratulations.

We don't self manage and I would have included some vacancy. Also I assume I'm financing the lot, rather than putting a deposit in.

Not familiar with SA , but your other figures seem ok so I assume the rates are accurate as well. $650 is cheaper than in Queensland.

I wouldn't buy it , but that probably more of a difference in style. I know I've bought better deals in the past at a time when the market wasn't that bad. I'm confident that I will be able to get better deals in the future so I'm happy to not fully commit myself in the market at this stage.

I know there are people who are getting what I would consider good deals out there , but they're a minority , and ( I assume ) they're having to spend a reasonable amount of time to find them.

See Change

 

[always_learning]

Ronumlus, if you think it's a good deal congratulations.

I wouldn't buy it , but that probably more of a difference in style. I know I've bought better deals in the past at a time when the market wasn't that bad. I'm confident that I will be able to get better deals in the future so I'm happy to not fully commit myself in the market at this stage.

I know there are people who are getting what I would consider good deals out there , but they're a minority , and ( I assume ) they're having to spend a reasonable amount of time to find them.

See Change

Ronumlus, I think it is more than "good enough", I dont know how many IP's you own but I think this one clearly falls into the "Jan Somers" IP plan. You are buying for less than replacement cost a standard home which will command a rental that most people can pay and you have a tenant for than 12 months.

See Change, since this is a thread about "is anyone buying", I am interested in some info about the good deals you consider others are buying?

 

[see_change]

See Change, since this is a thread about "is anyone buying", I am interested in some info about the good deals you consider others are buying?

AL , not in a position to post on deals that other people are doing . Sorry.

See Change

 

[Ronulas]

Ronumlus, I think it is more than "good enough", I dont know how many IP's you own but I think this one clearly falls into the "Jan Somers" IP plan. You are buying for less than replacement cost a standard home which will command a rental that most people can pay and you have a tenant for than 12 months.

See Change, since this is a thread about "is anyone buying", I am interested in some info about the good deals you consider others are buying?

Thanks for the positive comment always_learning I guess time will tell if I'm right or not. It helps that I live in the area(just around the corner) and know what sort of market I'm aiming for.

All the best

 

[always_learning]

AL , not in a position to post on deals that other people are doing . Sorry.

See Change

I mean "generally" what is a good deal in your opinion today's market that is being achieved! You dont have to say in Bundy,Rocky,WoyWoy, Whocares where!

 

[see_change]

I mean "generally" what is a good deal in your opinion today's market that is being achieved! You dont have to say in Bundy,Rocky,WoyWoy, Whocares where!

I was told details of three specific deals in private conversations . The people who told me these deals are members of the forum and I don't think that it's my job to report specifics of what other people told me in private conversations even if the location of the deals is changed.

My observations ? Don't know what is out there because I'm not looking because I'm not planing on buying in the near future. I do know roughly what is happening in areas where I hold properties, but I wouldn't be buying there .

See Change

 

[Peter Parker]

At the moment, with the benefit of more free time, I'm in the '(re) reading, travelling and thinking' stage.

The idea is to improve my ability to see opportunity, enhance knowledge of various areas and compare risks and returns from different types of investments.

I am in no hurry to act.

Various possibilities (none particularly creative) have included:

a. Commercial property (very steep learning curve here, risks and returns that may not justify the capital invested)

b. Purchasing in a cheap area (making multiple low offers until someone bites), small cosmetic renovation and resale. (if held it would still be negatively geared, if sold there are CGT implications and profit margin could be small (or even negative))

c. As above, but in certain areas there may be a possibility of water views if a second level is added. Houses already with this view 500m away in a better suburb sell for $100k more. (risk of overcapitalising, big costs and potential risks that may not be outweighed by returns)

d. Small cosmetic improvements to existing IP that has already had good growth. It's in a good area and the building is fine. But the front is cosmetically challenged, and outside living facilities are limited.

Adding a front picket fence, path and gate, a new letterbox, tree removal, minor painting and concreting a sandy patch beside the building are possible improvements and would vastly enhance street appeal. I'd guess value could increase by up to 10k, which would outstrip the cost of the improvements. Also, as the work can be done while the property is tenanted, there is no interruption to rent.

The four possibilities vary radically in their size, risk and likely returns.

(d) is a very small project and the chance of success is high. Return on capital could be 100%+, which is far better than where the funds required are now. The improved equity could make future projects (possibly including a, b or c) easier. Even if the value did not rise as anticipated, the losses would be small and the cosequences of failure negligible. The rental value could well be $5 - 10pw higher as well.

Therefore there is almost nothing to lose by going ahead with (d).

The portfolio might not get any bigger, but it will be better and it will most likely be worth a little more

So to answer the question posed, I'm not buying, but that doesn't mean that I'm not working on my portfolio (and self) in other ways.

I suspect that many others are in a similar boat, thinking how they can improve what they have rather than buying more.

But if too many do just that then demand and prices will fall, and it might be time to resume buying

Regards, Peter

 

[Lplate]

Dear AL,

"we can switch to electric cars simply," is wonderful in theory but are you aware of how many gas-guzzlers we would need to put off the road in the next 5yrs to make a 10% reduction in transportation industry's consumption? [snip]

Thommo

There is a lot of *bleep* about what is a fuel guzzler.

Gas guzzler depends on the number in the vehicle and its use. An urban commuter with small vehicle is guzzling gas. A two stroke motorbike is, relatively speaking, a bad polluter and if it has a high capacity it is probably a gas guzzler to boot.

Many families require larger vehicles. I have a diesel Landcruiser because my three teens were cramped on trips in the back of a Falcon. Painful to sit for even 20kms with legs akimbo because of a tailshaft hump. My vehicle is only used weekends and we commute by public transport through the week.

Regardless of the number in it, my turbo diesel Landcruiser is more economical than many medium cars and some small capacity cars. It pollutes far less than the petrol vehicles and because it is well constructed, does not end up at the dump as early.

Not having a shot at you just taking the opportunity to set the record straight for the politically correct.

Lplate

Added: what I am saying is that a lot of savings could come from improving public transport and encouraging car pooling.

 

[Sunfish]

Not having a shot at you

Nor I you.

In the context of AL's post that I was replying to, I was calling all our petroleum fueled cars GG's.

May I refer you to a post I made earlir today @ http://www.somersoft.com/forums/showthread.php?t=19999

After reading that post you will understand why I am surprised you responded as you did.

Thommo

 

[duncan_m]

because of a tailshaft hump.

I tried the Tailshaft Hump once and got slapped

 

[Lplate]

Thommo
None intended or taken and I always enjoy your posts.

I was taking the opportunity afforded by your post to make another point (my add on). I should have started another thread rather than piggy-back.

Have a good one.
Lplate

 

[diake ya]

i just buyed my first investment house. Will see how it go then maybe buy second house. Good price

Furosha diake ya

 

[Lplate]

I tried the Tailshaft Hump once and got slapped

duncan_m
Should have a decent hump in a Bedford truck. Depends on the size of your tailshaft I suppose.
Lplate

 

[Lplate]

I've heard of tailshaft vibration and that could result in problems with your (universal) joints or damage your rear end.

But tailshaft slap would be uncommon. What's the diff?