You wouldnt happen to have those figures handy for reference would you?
Or is this just another hypothesis?
I see that you missed the Perfect opportunity to buy property late 90s early 00s
So please be sure to let me know when its a good time to enter property.
.
In 10 years your IP should be (hopefully) worth twice what you paid for it originally (excluding expenses). Wow a 100% gain in 10 years, fantastic. But then had you invested in Fortescue or Paladin 10 years ago you would have outperformed the market by 61,429 per cent and 12,475 per cent respectively. Still prefer property, I don't.
i know personally many builder/developers who have gone bankrupt, also my lecturer at uni (who runs a large investment/valuation firm) used to give examples often.
How silly of me not to be buying property between the ages of 7 and 12... what a noob am I
Both actually but did not hold them for 10 years. But then I am not a buy and hold investor. You generally make more on equities if you go short and long but there are definitely exceptions to this.This is an excellent arguement.
Did you invest in either?
No need to put down anywhere near $200k to outperform your property portfolio. Property in general is for the conservative long term investor who believes that it will deliver over time while counting on history to repeat itself (at least in the Australian market.)So I agree with you if you can find a Fortesque and put say $200K on it as a trade and hold it for the whole rise!!! Reality is ---that this is just as unlikely as anyone doing extremely well in property---the 3%
Yeah, the future for all of us would be secure if we only embraced commercial property development as an occupation.OH And let me know when the next Fortesque/Poisiden is ready for purchase. Great in theory---just doesnt happen in practice---for the larger majority of us.
Ride the gravy train while it lasts tech
An excellent point Junior that's been generally glossed over or ignored by the IP bulls here in the past. They tend to ignore the fact that most property spruikers advise their gullible audience to gear to the max and buy their next IP as soon as the next bank porfolio valuation permits it. This is the wealth creation formula the masses have bought into. The fact that Australia is characterised by one of the highest levels of household debt in the world seems of little or no interest to the IP bulls here.The baby boomers I know who hold multiple investment properties generally have a relatively high level of gearing as well.... in many cases, it seems that as soon as they have enough equity available, and the bank approves, they will rush out and add another property to the portfolio asap. I worry about how/when they plan on reducing this debt - higher interest rates will hurt someone in this scenario.
Due deligence is all about analysing current and potential risk factors that will impact on the investment. In the case of property that would include consideration of many stats including household debt, affordability, prospects for future capital growth etc. Few of the property bulls here seem to think such information is worthy of consideration since the primary focus is always that property has gone up in the last 50 years (in Australia only) and hence should go up over the next 50 so jump in and a secure your future by buying IP.
In 10 years your IP should be (hopefully) worth twice what you paid for it originally (excluding expenses). Wow a 100% gain in 10 years, fantastic. But then had you invested in Fortescue or Paladin 10 years ago you would have outperformed the market by 61,429 per cent and 12,475 per cent respectively. Still prefer property, I don't.
Sure GenX with their 95% LVRs and massive debt burdens can pay for now, let's just see what happens when interest rates continue to rise and Chinese buyers stop proping up the market.
Here we go again, housing affordability means nothing. Melbourne and Sydney deserve to be amongst the most unaffordable places to live in the developed world because it's a paradise - botty says so.Let me see ........ when I was 21 years old and working as a mechanic my wage was $25,000 per annum. Houses were costing between $110,000 to $150,000 depending on location. Therefore housing affordability was between 4.4 to 6 times my wage.
You're not checking hard enough, banks are bending over backwards to keep the bubble inflated and loan origination turning over by now effectively allowing up to 97% LVRs.Last time I checked THE FINANCIER has a very large duty of care to make sure YOU CAN AFFORD to buy the aforementioned property. Debt Servicability Ratios, Loan to Valuation Ratios, Uncommitted Income Ratios, Lenders Mortgage Insurance etc et al ad infinitum.
You and tech seem to find it necessary to roll out capital gains figures from sales to justify just how profitable it can be to speculate in property (like you flipping a land purchase in 6 months for a $40k, before tax and expenses, profit.)How many FMG and PDN's are there available to the average punter? Who holds them for 10 years? Can't quite relate to the analogy you are putting out there. I have had residential property (vacant land) that I purchased for $53,000 and within 6 months sold for $93,000. Have purchased commercial property (vacant land with DA's in place) for a similar rate of return within the same timeframe. DUE DILLIGENCE. I also have property that I acquired 11 years ago that has trebled in price comfortably. Sound familiar to the share market? You can buy and sell within certain timeframes in both mediums and make coin.
Trading options and FX I have made 50% to over 100% on my account in a month in some months but I am not going to publish my trades here or declare how much coin I'm making so as to suggest everyone here should do what I do. Your profit figures don't impress me at all as a speculator.
Statistics show that around 3% will ever "make it" (Self funding retiries).
So if my ramblings influence only 3% of the ASF audience then thats great.
The others can and do influence the 97%!!!
Personally I prefer being a minority!
the myth of property doubling every 10 years.. at current rates of wage growth, the median wage to buy the median house in Sydney will require the owner to shell out 90% of gross wage in debt servicing roughly for that to be true 10 years from now.
So what? Doesn't mean YOU have to be over leveraged, or at 97% LVR or face bankrupty from a major economic event. The reality is that EVERY investment vehicle will suffer from similar issues. Supply, demand, economics, leverage, etc.
The key is to devise a plan to minimise your risk in the event that things go against you. Instead of attacking every damn post that goes against your own fearful nature, stick a sock in it and listen to the people that have "been there, done that" and learn from them.
In which case I must be a fool for not having invested in property, except as we have already run the numbers in this thread (thanks Tysonboss) it turns out that remaining in rental has been marginally more profitable over the last 10 year period with increased citizen mobility to boot!
That you are.
10 yrs ago property was at the levels you WISH they were NOW.
Many friends thought I too was a fool.
Fancy leveraging 90% on $4 mill of property!!!
Now 14 yrs later with $2.6 mill Freehold-----I'm a very happy fool.
Frankly I dont care much for this arguement I call back every 3 mths or so--and it is still the same.
Agrue your selves to oblivion while a few of us get on with it.
Fear---a terrible cross to bare.
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