..How Will New Investors Approach The Real Estate Market..

Discussion in 'Investor Psychology & Mindset' started by willair, 25th May, 2017.

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  1. chylld

    chylld Well-Known Member

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    Getting started is important, but reckless action is not a guarantee that the market will play into your hands. Different vehicles will have different optimum entry windows, and prior performance is not a reliable indicator of future performance.

    As MTR says, with a long-enough investment timeframe the fluctuations mean less, but that is no excuse to not do one's research and pick the appropriate action for each market; even if that means inaction.
     
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  2. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    The majority of investors only ever acquire 1 or 2 IPs so best to just get started and worry about number 3 and 4 later.

    Its always good to find a site you can "value add" to manufacture some equity in a flat market and a double wammy in a rising market.
     
  3. Perthguy

    Perthguy Well-Known Member

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    This is the right attitude. People get on here, read a lot and then pressure themselves to find the best performing investment property in Australia. To be successful, you don't have to find the best performing investment property in Australia. My first IP only made about $40,000 over 6 years. So what? It was enough to get me started and I haven't looked back. It was important for me to buy something I could afford when I was starting out. It was not important for me to buy the best performing property ever.
     
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  4. jins13

    jins13 Well-Known Member

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    In this day and age, everyone wants it now! But I do concur with you that even with one or two IPs is a massive achievement.
     
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  5. jins13

    jins13 Well-Known Member

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    Keeping up with the Jones!
     
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  6. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    I agree that it is a massive achievement to pull off for the average person.

    If you hang around here long enough and absorb and apply you will no longer be average :)
     
  7. chylld

    chylld Well-Known Member

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    Doing this would be a great achievement as it is well-advised and takes into considerations the opportunities that the market will likely offer in the future.

    Blind action relies on hope, and hope is not a strategy (™ Rolf)
     
  8. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    @Rolf Latham when is the "Quotes by Rolf" book being published? ;)
     
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  9. Perthguy

    Perthguy Well-Known Member

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    I don't talk to them ;)
     
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  10. Big Will

    Big Will Well-Known Member

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    My first house has gone from 510k to ~1M in 6 years and I am very happy with.

    Would I be happy if I bought in Sydney and it was now worth 1.3M, of course it is a better result and yes it would be nicer.

    Would I happy if I bought in Brisbane for 450k (approx. median house Brisbane 2011) and now worth 550k in 6 years, I would be happy not as happy as I currently am but it would be a good opportunity to learn why.

    My research would probably be if I could buy a house in Melb for 500k or a house in Brisbane for 450k it seems Brisbane was likely overpriced or Melb is under-priced.

    Would I be happy if I bought in Perth (sorry WA) and it had gone backwards, well no not really but again is a chance to learn more and again Perth wasn't and still isn't a market I would consider buying in but with their current prices I might need to haha, thought I would probably rather just buy shares.

    There are too many markets to be across everything so for newbies it isn't about understanding all markets but rather understanding a couple of markets well. For me I know Brisbane and Melbourne and one day likely Sydney but after that I will not likely be understanding any more markets because if I cannot find an opportunity in three major areas then it would be far to hot.

    Do I have more knowledge than I had 6 years ago, yes (I think so) but will I have the same level of knowledge now in another 6 years, no as it would likely improve even further.

    Finally investing should be seen as a marathon, if you think of it that way you will lower your expectations and have nice surprises along the way. If you target it as a sprint you will either burn out or burn up along with the surprises not being as pleasant.
     
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  11. Gypsyblood

    Gypsyblood Well-Known Member

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    Absolutely agree! In some ways, it's these regulations safe guarding those with no strategy from making mistake! Unfortunate for those who know what they are doing though.
     
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  12. albanga

    albanga Well-Known Member

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    Buying a property does not make you a property investor. I 100% agree with the sentiments of other posters, the vast majority of Australian "property investors" are in fact property speculators.
     
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  13. Rocky

    Rocky Active Member

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    Buying an investment property does make you a property investor, due to time and finances put into the purchase and holding/maintenance costs etc. But does this make you a professional or semi professional property investor? No.

    It's similar to buying shares, if you're a buy and hold, and not trading, this would not make you a professional share investor, however you are still investing in shares.

    Myself being someone that is far from being a professional property investor, have made good capital gains previously without professional advice, in fact, my account told me that whatever I do, don't buy in SE Qld (back in late 90, early 2000's) I ended up buying a few due to how cheap I thought they were, and positively geared. (unfortunately that all disappeared due to silly decisions outside of property), but back into it now.

    I'm glad I found this forum, I've been learning big time!
     
  14. Archaon

    Archaon Well-Known Member

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    Being that I bought my first investment with no clue what I was doing and thinking that negative gearing was the endgame 8+ years ago, I've found it was better to take action than sit on the sidelines as I've had positive growth and also manufactured equity through development, though I bought with development in mind, back then I did nowhere near the Due Diligence I should have.

    This forum has been an excellent vehicle for schooling in investment, and has so far enlightened me to the risks of property spruikers and allowed me to question my accountant on an estimated tax bill of $25k to actually equal $0, major saving in and of itself right there.

    New investors should potentially look to value add on existing properties I think. OTP and/or H/L releases in brand new estates are full of unknown risks to the inexperienced, and if you buy near existing shops and public transport and infrastructure, at least you can be certain that those services are a reality, and not a pipedream as has been shown in some new estates.
     
    Last edited: 26th May, 2017
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  15. jim1964

    jim1964 1941

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    And perhaps some "seasoned" investors should take note.I can only speak of Adelaide,but properties with the potential of value add are a plenty,you name it,its out there,Hammerheads,corner block cut off,duplex,s on one title ready to be split,development blocks you can keep as a sleeper,if you understand how to intemperate councils development plan,and can visually look outside the box,its a great way to make money whilst you sleep.
     
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  16. Archaon

    Archaon Well-Known Member

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    Corner block Subdivision is what I accomplished under the minimum lot size with approved plans, though it was due to luck, and the thought that it had potential (I didn't do thorough DD) that saw me over the line, as well as 3+ years of learning through the whole process!
     
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  17. jim1964

    jim1964 1941

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    Rinse,repeat.Imagine if you did a thorough DD,or even pay someone to find the development block, money well spent.
     
  18. Archaon

    Archaon Well-Known Member

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    If I had found PC/SS 8 years ago, it wouldn't have taken me 3+ years to get it across the line, I can guarantee that.
     
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  19. Invest_noob

    Invest_noob Well-Known Member

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    In my noob opinion, the whole argument of who's an investor and who's a speculator is not as important as the end results achieved, unless you're paying speculator for advice. Anyone who is buying a property purely for CG is speculating, so that's a lot of people that you would refer to as investors. If they end up successful, you can learn something from what they did right. If they failed, you can learn from their mistake. Of course you need to do your research and understand why you're buying an asset, but how many people actually knew each and everything about property investing before they bought their first property?

    Mum & Dad speculators who bought in Perth won't lose too much because they would have bought with an intention of holding for a long time as they are not investors looking to buy 10 properties. I don't know much about Perth(or property investing) but is it a little town with a dwindling population that may disappear off the map or is there a chance it could rise again in the next 10 years?
    I think it is the ''property investors'' who thought they knew what they were doing, and bought in mining towns who would have lost money.

    People who already have property/equity that is nicely ticking along and making them money can afford to be more picky with when they invest and when to hold back. Noobs like me need to at least make a start after doing some good research.
     
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  20. NHG

    NHG Well-Known Member

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    As above, most won't know any different.

    New investors will just require more research and likely start regional, do reno flips, or develop more advanced skills such as options from sheer necessity. Many will just borrow more from mum and dad.

    I'm seeing it happen now. Friends just starting out doing subdivisions in Tasmania, HMO's, and small renos in regional centers.
     
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