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Thread: Buying a Home?

  1. #21
    Member boeman's Avatar
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    Quote Originally Posted by chew View Post
    More than ever you are better off finding something you are happy to live in.
    This is true.

    After 6 years we think we have maybe 2 left where we are before we give in to the upgrade.

    Our incomes have grown and our preferences have changed. A kid is on the card in a few years and where we are isn't somewhere we want to stroll the streets with a kid in a pram.
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    Quote Originally Posted by chew View Post
    Well I may be hypothesising but I generally do not take what others say twist it, then exaggerate.

    It was not that long ago that the theory was house prices double every ten years. Ten years ago the median house price was $480k, now it is $516k. Not quite double.

    In the current climate I cannot see the sense in speculating. More than ever you are better off finding something you are happy to live in.
    Yeah for sure and it gets worse if you look at specific examples of the average family home.

    For example, a random 4x2x2 from Clarkson on Springthorpe Tce sold 08/2018 for $390,000. Previous sale 02/2008 $399,000. A bit up the same road another 4x2x2 sold 11/2016: $$480,000. Previous sale 11/2008, $479.000.

    I'm pretty sure that 10 year pattern will be repeated right throughout the W.A. middle class mortgage belt. Property spruikers really sell this 'investment' con well.
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    Member chew's Avatar
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    Quote Originally Posted by datsikk View Post
    Re you blaming increasing house prices on the senate inquiry? I think one of the causes for the reckless lending was Kevin Rudds guarantee that no major bank would go bankrupt.
    This guarantee has actually been in place since the 1940's and was part of the reason our banks did not fall over in 2008. The manic lending from the banks was already in full swing and had been for some time.

    Quote Originally Posted by datsikk View Post
    Another rason for the increase in prices (as others alluded to in other posts) was diy super which allowed investors to buy homes.
    I would love to see figures on this and if you did invest in housing through an SMSF I cannot imagine the annual auditors report patting you on the back.
    They hung a sign up in our town "If you live it up, you won't live it down"-Tom Waits
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    Supplementary question.

    Build? Buy a "Renovator's delight"? Or an established home that's serviceable and doesn't need major renos?

  5. #25
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    Quote Originally Posted by AZAZL View Post
    Yeah for sure and it gets worse if you look at specific examples of the average family home.

    For example, a random 4x2x2 from Clarkson on Springthorpe Tce sold 08/2018 for $390,000. Previous sale 02/2008 $399,000. A bit up the same road another 4x2x2 sold 11/2016: $$480,000. Previous sale 11/2008, $479.000.

    I'm pretty sure that 10 year pattern will be repeated right throughout the W.A. middle class mortgage belt. Property spruikers really sell this 'investment' con well.
    The positive about that is the people who bought in 08 didn't spend $800k only to now have a $600k home like in some suburbs... Given inflation, they lost a bit, but not enough to ruin lives...

    One advantage of being humble when choosing a home is you wont lose as much as someone who over-extended.

    But that's also the downfall... you won't benefit as much in a boom... If there's ever a boom again.

    As for the supplementary question... buy something that shouldn't need major repairs for 5-10 years since they'll be selling it then.

    Another question you might want to ask is who's name is on the title? Will the son and GF both give up their FHOG / stamp duty concession?
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    Quote Originally Posted by peter600 View Post
    Or an established home that's serviceable and doesn't need major renos?
    This one.

    Building is pretty competitive at the moment, can get a good deal. Its the price of land that is still stupid. Try find me a plot of land where the build cost + land cost = end value. 90% of them will be overcapitalising.

    As for renovations, I have a small renovating company and renovations (done properly) are expensive. Mostly the same deal, if you buy at todays prices and do a large renovation your total outlay likely wont match the end value. Most of the clients we renovate for have held the property for 10+ years, its their dream location, and they just want their house to be nice and have the equity to do it.
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    Quote Originally Posted by boeman View Post
    This one.

    Building is pretty competitive at the moment, can get a good deal. Its the price of land that is still stupid. Try find me a plot of land where the build cost + land cost = end value. 90% of them will be overcapitalising.

    As for renovations, I have a small renovating company and renovations (done properly) are expensive. Mostly the same deal, if you buy at todays prices and do a large renovation your total outlay likely wont match the end value. Most of the clients we renovate for have held the property for 10+ years, its their dream location, and they just want their house to be nice and have the equity to do it.
    Renovating can work out, but they need be committed to the process and have the skills to carry out as much work as possible themselves, and engage the trades directly rather than just farming the whole job out...

    Essentially building equity in the home with their own blood, sweat, and tears...
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    Almost like modifying a motorcycle... Bike ($X) + Parts ($$$$X) =/= Result
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    Quote Originally Posted by INTJ View Post
    Another question you might want to ask is who's name is on the title? Will the son and GF both give up their FHOG / stamp duty concession?
    If both their names are on the title (as you'd think if they're both paying the mortgage) then they'll both lose their right to the FHOG


    Quote Originally Posted by boeman View Post
    This one.

    Building is pretty competitive at the moment, can get a good deal. Its the price of land that is still stupid. Try find me a plot of land where the build cost + land cost = end value. 90% of them will be overcapitalising.

    +1 It's not so much the cost of the actual dwelling that has jacked up the cost for someone getting into the housing market it's the land that has gone to ridiculous levels

    As for renovations, I have a small renovating company and renovations (done properly) are expensive. Mostly the same deal, if you buy at todays prices and do a large renovation your total outlay likely wont match the end value. Most of the clients we renovate for have held the property for 10+ years, its their dream location, and they just want their house to be nice and have the equity to do it.
    Yep we've been in our house for 20 years and no reason to move and may look at another storey at some time down the track rather than moving
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    Quote Originally Posted by Phildo View Post
    Noted. We'll check back on that one in three years
    Quote Originally Posted by filbert View Post
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    Quote Originally Posted by chew View Post

    I would love to see figures on this and if you did invest in housing through an SMSF I cannot imagine the annual auditors report patting you on the back.
    To not derail this thread...PM sent

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    Quote Originally Posted by TurboR1 View Post
    Almost like modifying a motorcycle... Bike ($X) + Parts ($$$$X) =/= Result
    Like those Ford 250 6 cylinder guys who spent $5,000 on their XYs and claimed their car sounded just as good and went as just hard as my HQ V8 ... yeah nah.

    [I've been infected with the Lil Boner virus]
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    I'm a reasonably seasoned investor with a sizable portfolio. There are a couple of rules that I'm looking for when I buy a property (this is for $ not love)
    1) look for add value. Look for a property that you can take to a higher and better use, eg renovation / subdivision / add a bedroom or bathroom
    2) buy problems. The bigger the problem the bigger the profit (If you know what you are doing)
    3) I'm looking for as much of the purchase price as possible being the value of the land. Buildings go down in value and land goes up
    4) look for motivated vendors / sales agents. This is a science that has taken me a long time to work out. But I can now tell if a vendor is motivated to sell within 5 minutes of being inside a home

    When you have all four you are onto a winner. To do well, you will be looking at less than 1 in 1000 listings. You have 6 months to buy, after that the market is going to turn. The rental market has turned with a vengeance. This and a strong recovery in the mining jobs market is going to see a recovery in Perth house prices. If lending standards are relaxed, it will put even more fire into the market.
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  13. #33
    Member GsxInShed's Avatar
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    ^^^ How confident are you in your abilities? ^^^

    Do you freelance....or is it all for you.?
    " Imagination is the seed of life..."

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    Quote Originally Posted by wiggles View Post
    I'm a reasonably seasoned investor with a sizable portfolio. There are a couple of rules that I'm looking for when I buy a property (this is for $ not love)
    1) look for add value. Look for a property that you can take to a higher and better use, eg renovation / subdivision / add a bedroom or bathroom
    2) buy problems. The bigger the problem the bigger the profit (If you know what you are doing)
    3) I'm looking for as much of the purchase price as possible being the value of the land. Buildings go down in value and land goes up
    4) look for motivated vendors / sales agents. This is a science that has taken me a long time to work out. But I can now tell if a vendor is motivated to sell within 5 minutes of being inside a home

    When you have all four you are onto a winner. To do well, you will be looking at less than 1 in 1000 listings. You have 6 months to buy, after that the market is going to turn. The rental market has turned with a vengeance. This and a strong recovery in the mining jobs market is going to see a recovery in Perth house prices. If lending standards are relaxed, it will put even more fire into the market.
    Some good points here. You really have to know what you’re doing with point 2) . If you fuck up there and don’t have the coin to back it, you’ll be in a world of financial shit.
    Look beyond WA for investment. There’s some affordable investment properties on the eastern seaboard. Tas gov for example is using the private rental market to fill public housing shortfall. And if you look outside Hobart, there’s plenty of bargains to be had.


    Sent from my iPad using Tapatalk

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    Member boeman's Avatar
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    Quote Originally Posted by wiggles View Post
    This and a strong recovery in the mining jobs market is going to see a recovery in Perth house prices. If lending standards are relaxed, it will put even more fire into the market.
    I agree with everything you said except this one, but opinions are arseholes and so on.

    Our population is going backwards so our supply is still exceeding our demand. That said, we haven't built houses for 4 or 5 years now so if and when the population starts increasing again it will be interesting. I don't think the mining industry is going that gangbusters construction wise. Don't remember the exact figures but it was something like $40b being spent by the big boys this time versus $130b last time?
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    Quote Originally Posted by Gim View Post
    Look beyond WA for investment. There’s some affordable investment properties on the eastern seaboard. Tas gov for example is using the private rental market to fill public housing shortfall. And if you look outside Hobart, there’s plenty of bargains to be had.
    +1 We're glad we built our investment place on the Central NSW Coast ~4 years ago Land and build costs were nearly 2/3 of the Perth prices at the time, the value has gone up ~100k and were getting 100pw more than we were when we built and that is with keeping it down a bit because we really like the tenants and don't want to give them a reason to move

    Conversely friends of ours built a similar sized house in Eglinton (albeit on a smaller block with no backyard) and have had no real increase in value, seen their rental $ drop ~$100 below what it was originally just to get it rented which has been very haphazard at best

    Another mate and his missus are looking to semi retire in Tassie at the moment but need to sell their huge house/land in Gnangara for at least 1.25m then they can buy something similar for 1/2 the price in the northeast of Tassie and live comfortably doing a bit of part time bobcat/digger/truck work
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    Quote Originally Posted by Phildo View Post
    Noted. We'll check back on that one in three years
    Quote Originally Posted by filbert View Post
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