Property direction

[XSorXpire]

Originally Posted by Deej

Discalimer: I know nufn about nufn. Apart from boats. I know boats. But this isnt about boats, its about property, and I dont know nufn about property, or anythin.

Turtles, you know about turtles too.

[Jonchilds]

Sitting down and doing some more sums, it seems like the biggest hinderance to me buying a property is my HECS debt, which sees between $60 and $100/wk taken out of my pay, which could be helping to sustain higher mortgage repayments.

The other thing is that 3% returns on $200k + 4-5% growth is in the long run better than 7.5% on $20k (would need to verify, but would seem correct). Negative gearing would also provide the opportunity for lump sum repayments to the mortgage, meaning it could be nicely paid off in ~8-10 years if rental went straight into the mortgage ontop of regular payments...

Oh, and what's the opinon on some people saying the median price will be closer to $1mil in 10 years or so? I'm thinking we'll see a bit less than that given the current trend may continue for another 1-2 years...

[D'Artagnan]

Originally Posted by Deej

But at least in property if everything goes pear shaped with your investment decision.... you have still got a place you can sleep

Ahh yes, but I meant as an additional income to support several investment properties thereby freeing up income (or lack of) for other things.

BTW: it's a catch 22. The more investors, the more upward pressure on home prices etc so...

D'Art

[DaveR6]

just to add to what deej said about long term investments....the same can be said about a well diversified share portfolio. in the long term its going to do well. have some idea what u want to invest in and have the money ready. wait for a bit of a downturn in the market and its time to enter

[shmoo]

Originally Posted by Jedi

Ok so Deej, we all know you aren't an expert and nothing you say can be construed as advice, but here's a question: what do you see the next generation of what would have been home buyers, like 23-33 years old, doing as far as having a place to live if they want to stay in Perth? Renting for the rest of their lives? Getting a great whopping mortgage when they are very young and paying it off over the next 50 years? And for arguments sake lets say the person in question is a student engineer who would be on an average of about 100k per year, maybe a bit more, over the course of their lifetime (but is a long way from that right now )

The simple answer is that out of necessity, people in Perth will have to finally come to terms with NOT living in a 4 x 2 with double car port and a pool and a back yard. People will also have to accept that not everyone is going to be able to own the place they live in.

There will be more and more people permanently renting. That is not necessarily a bad thing, its just that it is so ingrained in our minds that we must buy property. Owning property is not the be all and end all that many people believe it is. The reality is that times are/have changed significantly and people are just going to have to get over it and accept reality.

I dont subscribe to the "doom and gloom" view that many people bleat on about. Our culture will/is changing and people are accepting that living in apartments is the way to go. We need more people living in apartments and sharing one car between a couple or family. Peoples expectations need to change.

Groups of apartments that have always been really shit, are now full of young professionals, so the areas are changing for the better as the derros move out.

Stick to the fundamentals of property - location, location, location. Then remember property is a long term investment, do not buy property if you want to get in and out within a few years and make a buck. Buy a unit or duplex or townhouse in the inner suburbs. I mean we hear non stop about battling couples struggling to buy/pay for a 4 x 2 out in bloody Landsdale or somewhere hideous like that when the reality is that they could buy a villa in Yokine or somewhere like that for 350k and be 10 minutes from the CBD.

[dr00]

i dont see that there is that much of a "crisis" for first home buyers, you can still get a 2 bedroom apartment in wembley with two secure parking bays, communal pool, bbq and tennis court for 300k. thats 10 mins drive to the city and beach and affordable on a decent single persons wage, piece of piss on two incomes. thats assuming a deposit of $50k which you can save in 3 years at $320 a week without even counting interest. of course things are a lot more expensive than they used to be but thats the way the cookie crumbles.

i also think it is almost a duty for parents to provide at least the deposit for their child to buy a house/apartment. think of it like giving your kid a bit of their inheritance before you die instead of after, you'll actually be able to see them enjoy it. buying property young is the foundation for a life without financial worries and thats something that i think all parents should factor into the cost of a child.

its not a 'right' to own property, its something you have to earn. people have this sense of entitlement that shits me.

[Deej]

Yeh equities (in property companies) is a good option. But unfort u cant gear it like u can property so you dont get to leverage your equity as well.

[Deej]

[dr00]

so youre saying the effects of the property downturn will be felt less and less the further out you are?

[Scoundrel]

I think if you want to get into your first home, you've got to be smart and you've got to be prepared to make a few sacrifices. Study the market for what it is doing and what happens to prices. A downturn like right now is a good time to buy, regardless of what the interest rates are doing, because speculators and people who are over committed have flooded the market with properties which has given a buyer more choice and henceforth more buying power. There is something like 18,000 listings on the market at the moment, compared to around 4,500 when the boom peaked in 2006.

And consider what you don't need in life right now - $100 a month gym membership? Buy your lunch every day? Own 2 cars or 2 bikes? It all adds up.

Short term pain for long term gain is what I say. It's going to be tough for me for the next 12 months to re-consolidate my savings but I can make do without a nice car and expensive gym membership, and a few other things. I have a plan in my head and know where I want to go with it and how long it will take. But setting yourself up in the beginning is crucial.

I used to be one of those types that used to complain about how hard done by I was with the so-called 'boom' and that I would never be able to buy a house, but I took a step back and assessed my financials and what I truly didnt NEED, and started studying the market to see where it was going to go. Then I just got my money organised and waited for the downturn which eventually came.

If you can't beat 'em, join 'em as the saying goes.

[Brougham]

Originally Posted by Deej

The only way I personally see my own children having their own home in 20 years is if their parents buy it for them.

dood, are you saying that your kids.... aren't yours???

[Brougham]

Originally Posted by dr00

i also think it is almost a duty for parents to provide at least the deposit for their child to buy a house/apartment. think of it like giving your kid a bit of their inheritance before you die instead of after, you'll actually be able to see them enjoy it. buying property young is the foundation for a life without financial worries and thats something that i think all parents should factor into the cost of a child.

my first child is due in 3 mths. we've already agreed to deposit the entire $5000 baby bonus into a long-term savings acct, and going to be making a planned $10 p/wk savings into that acct.

so, (based on 7% interest) by the time the kid is 20yrs old, there'll be over $50k there. that's a good house deposit/wedding payment/etc.

we're going to do that for every child we have.

[Fastgirl]

Yup......us to. We have their education sorted...and they day they were born we put away $15 per week...Nic has $7020, Sarah has $4680, and Chloe has $3120....plus the interest as well on top of that....but we take that out and put that into their education portfolio. We dont notice the direct debit each week....and it will be the only way the kids can afford a house. We also will have a property each for them when they are older. Sometimes I wonder if we are making it too easey for them....but we wont be handing it all over for nothing...we want to see them work hard for it....and will want them to stilll have saved a huge amount for another property they will have to buy themselves....a investment....so they still learn the value of hardwork and investing.

Its a fine lines sometimes....

[leeham]

Originally Posted by Jonchilds

Sitting down and doing some more sums, it seems like the biggest hinderance to me buying a property is my HECS debt, which sees between $60 and $100/wk taken out of my pay, which could be helping to sustain higher mortgage repayments.

...

not sure on how they calculate HEX payments (eg on taxable or some sort of pre deduction amount) but if you NEG gear and reduce your taxable income you may lower your hecs payments as well....?

[leeham]

while on the property subject

anyone know a good "accounting" software program that can handle multi properties?

i am talking 20+ investments, as i am doing some work (accounting) for someone and they are "paper based" and we were thinking of going electronic but need to be user frendily as they are not the "bookkeeper type"

needs to handle:
income (rent)
interest calcs
expenses
depreciation
revalualtions
give a balance sheet for each prop then portfolio of
cashflow satements for each and all
etc
etc
maybe also include new building projects (management?)

not sure if MYOB etc can handle these issues well enough?

[Jamathi]

Perth and WA plus Australia as a whole is growing in population.
Hence, DEMAND.
DEMAND will be the greatest where da MULLA$$$$ are.
With the infra structure going on up North, it was a safe bet.
Now with Kevin 09 and beyond plus his greenarse wipe toilet paper policy, a wee little think might be in order.
Some senior senators were yesterday in Karratha getting the low down, plus it was beautiful weather.
Banana republic?? ohh no these things, nana's, give out a ripening gas, so must be banned and or taxed to death!

[Lolly]

If European cities is a trend, people there have long given up the aspiration of owning their own home/apartment. That said, its still feasible to pick up a 2 bed apartment in Maylands down near the river, million dollar homes, golf course, parks, 4-5 klms to city etc for $220-240K.

I think the expectations of the first home has to be adjusted. My folks first home was a 2 bed fibro home and then over time they bought and sold, upgrading a little each time to something more comfortable.

[Scoundrel]

Originally Posted by Lolly

I think the expectations of the first home has to be adjusted. My folks first home was a 2 bed fibro home and then over time they bought and sold, upgrading a little each time to something more comfortable.

Exactly. The concept of which seems to be lost on many in this day and age.

[shmoo]

Originally Posted by Lolly

I think the expectations of the first home has to be adjusted. My folks first home was a 2 bed fibro home and then over time they bought and sold, upgrading a little each time to something more comfortable.

Yep spot on.

Its a cliché that gets used over and over but its appropriate - first home buyers need to get over the "plasma" obsession. People claim to be struggling, but they still buy the 3-4 thousand dollar TV to go with the brand new everything they have. Obviously TV's are not the answer to all society's problems, but its an indicator of seriously screwed up priorities when people are struggling but still buying these sorts of products.

[Jonchilds]

Originally Posted by leeham

not sure on how they calculate HEX payments (eg on taxable or some sort of pre deduction amount) but if you NEG gear and reduce your taxable income you may lower your hecs payments as well....?

Yes, it would lower the repayments though it would come back as a lump sum with my tax return rather than increased disbursements to my account.