Negativity regarding property investment

Has anyone experienced this particularly in Reddit or from the general mainstream finance audience? Seems like people are portraying property to be risky, that it is about to crash. They love emphasising the cost and maintenance of owning a property, issues with having a tenant, ongoing expenses and risks, etc.
I have so far owned an IP for about 2 years and have not had any of those issues. Negatively geared slightly but as rents go up it wont be for long. Also have a lot in my offset.
Property has gone up by about $100K or so.
Am I lucky? I swear everyone who has purchased close to the CBD has been successful. So why are people so negative?
Thoughts?

 

Yes its common with share investors (and tenants).

 

You should search for posts from 2018, and 2020, and 2022.

Some interesting debates, especially in hindsight.

 

There are a lot of negative people out there regarding property investment. Don’t let it bother you for a moment. Only take notice of other investors who are out there walking their talk. The whole world is full of fools!

 

After a while, you remember all the times people were negative about property…. And they were wrong and it kept rising. So you learn to ignore it.

 

Long before I found this Forum. I brought a property in 2008 in Perth so I would always have a back up place to live. I am a long term renter.

Without a doubt I would be ahead if I had bought shares and topped up super.

Friday the 13th in 2020 I bought NAB shares they have doubled in value and always paid good dividends.

A lot of people make money with property and many lose money.

Learn about Cognitive Dissonance. Which is what your doing with this post.

You don't have to agree but lots to learn from here. If you search hard enough he started with houses then moved to ETFs. A good explanation behind what he does
Aussie Firebug | Financial Independence Retire Early

 

I look at the long term; this smooths out the GFC fall and pandemic rise. Good property will do well. I have no idea why people are negative. The only negative I have is electrons. I do renos with positrons.

A maxim of media reporting is that bad news sells, so there tends to be more bad news than good news. There were a lot of news items about how the pandemic affected shares and property, but not much about the slow steady recovery. The All ords is over 8000, highest on record, and my rental income has gone up quite a bit, as have property values. The negative here is that LLs are getting too much income, ripping off tenants.

Some fools use scare tactics to sell books. I cannot recall the name of the bloke that has a series of books scaring people into this or that, with most of his predictions later found to be wrong. He was given uncritical media coverage by people that have no idea about investing and did not ask about his failure rate. Paul Erdman wrote a series of fiction panic crash share books.

Many years ago I was PANICKING when rental income, dividends and share prices went down. These days a correction is a buying opportunity. It was not helped at all by negative news and negative people. These days I am with Cousinit, albeit not quite as hairy.

Disregard the naysayers, get good advice and act on it. Sometimes you will be like me and will do the wrong thing. Oops, learn from this, move on and recover.

 

Everything carries a certain element of risk, the longer you own a rental the higher the chances of something bad happening are.

 

But the longer you own the more likely you have experienced appreciation so the lvr is lower.

 

Risk is part of life. Taking steps to minimise the chance of an adverse event and the degree of such an event is good. My investing and other actions are based around the long term results. I've had significant property costs, not much fun at the time. However, in the long term the costs have added to the value.

I also subscribe to the 80-20 breakdown of investing. It's easier with shares. Buy 10 lots of shares for $1000 each, $10,000.
2 fail, worth nothing
6 are up 2.5 times, $15,000
2 are up 10 times, $20,000
Total $35,000.
That is, despite failing in 20 per cent of the shares, the other shares have performed quite well, offsetting the loss. The preceding is more or less what I did for some time, with dividends and cashflow used to buy more shares. Now I'm just saving, although I may be tempted with a bargain.

I have never thought of risk being a function of time. Diversification, attempting to select good investments at a good time, adding the right amount of value, good interest cover, good cash reserve and more allows me to manage the risks. the pandemic was seven standard deviations from the norm with a triple black swan with bells. I was ready for the worst that could happen, and the pandemic was worse than that. Now I'm secure. No debt, good cash, a cupboard full of toilet paper ... happy.

 

No thoughts. I totally ignore all the noise and keep on my journey.

Why would I listen to folks who are likely all far less successful than myself.

 

You can't control the behaviour of tenants and your right to protect your own assets is diminished by the day with changes in rental reforms, e.g. not having a choice to reject tenants with pets for one.

 

And then you have stuff like this that will most likely spread to other states.

 

Then the owners who aren't feeling victimised, and keep their rentals, will see rents go up even faster. Those who sell can buy index funds.

 

I have literally lost friends when they found out I was investing in property.

I had one (now ex) partner who flipped her lid when I bought my first IP.

Other friends couldn't believe that I was contributing to Australia's housing crisis.

Other people gave me sage advice when I was buying property 3 to buy a tiny 2br unit with a shared laundry as opposed to a 2 br inner city townhouse with a back yard, carport, and yes, a laundry.

So. Much. Noise. @Sackie is right.

I move into my townhouse in a few weeks.....

 

I agree with the commentator, this is knee jerk. Rents are going up, the yields are better than Sydney. And the rate of growth happening in Brisbane and Perth, Melbourne yields aren't that much far behind now.

Having just bought in Melbourne maybe I'm bias though lol.

 

There's been several reports saying that LLs are leaving Victoria. I have been unable to find any hard evidence with a satisfactory breakdown of figures. Does anyone know of a disinterested report showing long-term Australian selling trends? Too short a time does not convey much. Each of the sharp drop and rise during and after the pandemic does not give a good picture.

This Where landlords are selling up - and why - realestate.com.au has some information, but not enough for me. Note that the percentages increase for all states and territories. This could be related to less people selling non-investment properties or less sales. For Victoria:
July 2019, 15% of sales are for IPs
July 2023, 28% of sales are for IPs
It may be:
July 2019 total sales 100 properties, IPs 15, others 78.
July 2023, total sales 50 properties, IPs 14, others 36
Also, who is buying? One LL may be selling to another LL, or the buyer may be intending to live at the property. I don't know.

This can work. Buy one or more IPs with rent as the main goal now, and the longer term option of moving in. A friend did this with seven cross-collateralised properties, using the increased equity to buy another, IO, very high LVR ... too risky for me. It worked. My recollection is that she paid down the mortgages to a more reasonable LVR, then paid what would be her PPOR mortgage down to zero, then moved in.

 

You only have to go as far as the rental advocacy groups and see all the complaints about rentals being sold under tenant's feet. Usually, the data on places like CoreLogic is delayed.

Sorry, I can't post the full article due to site regulations and it's behind a paywall but maybe contact Suburbtrends and ask them.

Thousands of landlords have listed rental properties for sale in Victoria in the first two months of this year in a further blow to already struggling tenants.

Research by Suburbtrends has revealed the hotspots where the most investors are selling up and where renters might soon be facing eviction – if they haven’t already been ordered out. Search your suburb in out interactive map below

Data crunched by the real estate analytics company shows 8738 ex-rental homes were listed for sale in Victoria across January and February.
This equated to 21.63 per cent of all residences on the market in areas with a minimum five sales.

In comparison, during 2023’s first two months, 5811 former rentals made up 17.52 per cent of homes for sale.

The 4.11 per cent difference between the two years was Australia’s largest aside from the ACT’s 5.8 per cent increase.

 

If you look up the table here
Rental Report - Quarterly: Data Tables - Victorian Government Data Directory

It shows the total number of active bonds held has fallen in Vic over the last 9 months.
Look at the figure 4 source data.

Of course with an increasing population it should be increasing but a net decrease is actually a significant shortfall in rental accomodation required.

 

I think there's a lot of complaining landlords and a lot of landlords threatening to leave but not actually leaving but it is affecting potentially new landlords coming in so for example pk's group there's starting to be a few posts saying 'hey what about Melbourne?' however the general vibe in there is that Melbourne is not a good place to invest as it is anti landlord. And the vast majority are all still about Queensland and western Australia.
Pk's group is a good sort of sentiment gauge because it has a mixture of investors including less sophisticated investors and it's Facebook so you get a sense of the kind of general mood.