Property Values

Discussion in 'Property Market Economics' started by MTR, 3rd Feb, 2019.

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  1. JamesP

    JamesP Well-Known Member

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    Hopefully they didn't buy an OTP apartment and can add some value. Or agist a horse in the backyard. Otherwise all I can suggest is rent the place out room by room.
     
  2. Bill Williamson

    Bill Williamson Well-Known Member

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    So if you're negatively geared when does the money kick in and you get something back?
     
  3. MTR

    MTR Well-Known Member

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    Sadly......it wont until either rents increase and if it covers the mortgage?

    Not a great position to be in, but probably going to happen to many investors.
     
  4. Perthguy

    Perthguy Well-Known Member

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    It does depend on the cashflow though. I have a couple of properties in Perth that could possibly be in negative equity but the cashflow is so good that I'm not worried if they are or they are not. Besides, how would I really value tjem unless I sold them? A valuer could guess the value but the number assigned by a valuer is meaningless unless the properties were sold and the number validated. As I have no interest in selling, the current value of the properties does not affect me.
     
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  5. wylie

    wylie Moderator Staff Member

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    For those (like us) who bought when they could, and waited for property values to increase whilst the rent increased and put us from negative into positive territory, this is a valid way to provide for your future.

    Once negative turns positive, we bought again. But we also sold when we wanted to upgrade our own house. It has never just been about accumulating money or houses for us.

    Our properties have fit in with our lifestyle and allowed hubby to retire at 50.

    We've probably only twice in 40 years had to take a rent cut. One was a big drop when hundreds of new apartments were available nearby, but once before I recall dropping the rent by $5 or maybe $10 to get a tenant (back when rents were maybe $250 per week?).

    Not everyone wants to "trade" or develop or time the market. We've stuck with one or two suburbs that we know well and that has worked for us. Different strategies work for different people. We've done well out of being very passive and just holding and allowing time to work its magic.
     
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  6. MTR

    MTR Well-Known Member

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    Thats good, its not a competition

    This thread is about property values, nothing to do with trading versus holding

    Your strategy has worked well and it will work for others, but success will also be dependent on what, when and where you buy
     
    Last edited: 6th Feb, 2019
  7. hammer

    hammer Well-Known Member

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    I have learned this by buying in the current ground zero for Aussie property crashes (Darwin).

    We would have to be down a little maybe 30k or so? Maybe more? But as it is our home and is still cheaper than renting....we're quite happy and not at all worried.

    I was looking over the stats today and that scenario seems to be playing out across town.
    People are comfortably staying in their PPORs.

    However for the interstate investors it's a whole other ballgame....one in three sales here are now foreclosures. People who bought in the boom and rents haven't kept up....
     
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  8. wylie

    wylie Moderator Staff Member

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    I think it has a lot to do with trading versus holding, especially when many (including you) talk about timing the market. My comment was in response to the first post in the thread where you said "no need to panic in falling/flat markets if you don't have to sell". I'm agreeing with you.

    But many on the forum believe buy and long term hold is not a way to make money. I'm simply saying it can be a very good way to make money, especially for a lazy investor, like me.
     
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  9. berten

    berten Well-Known Member

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    Damn, you sound like a good brother.
     
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  10. MTR

    MTR Well-Known Member

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    Similar to Perth, rents hammered, oversupply 25% fall. Thiugh I think its starting to stabilise
     
  11. MTR

    MTR Well-Known Member

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    Ok,

    I think its all about creating income streams. To achieve this investors must hold assets. I hold 25 properties, I dont sell everything

    I just mix it with other strategies
     
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  12. wylie

    wylie Moderator Staff Member

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    Ok.

    You said “it’s not a competition”. :rolleyes:

    We are aiming to develop and sell some property. Land tax is the biggest driver in our change of direction as the regular increase in land values means the tax is taking a huge chunk of our income.

    The threshold doesn't seem to move. Just judging on how much we are being gouged, I cannot imagine how much the states are raking in via land tax, that supposedly was going to be removed when GST came in. Pfffftttt!!!

    I’m guessing many of your prooerties are in the US or at least spread over different states within Australia or land tax would be really hurting.
     
    Last edited: 6th Feb, 2019
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  13. willair

    willair Well-Known Member Premium Member

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    Just the way it is,my first job after my Father walked out on my Mother when I was 8 years old was selling news papers outside the Inala Hotel after school the money I made each day paid for the milk and bread for the next day..
    The strange part was looking back ,where I would buy the bread and milk and each afternoon from was the mother of the present Labor Leader of Queensland who run a bakery outlet,and every Friday that kind Lady would give me a free apple strudel as no one looked down on anyone back then.
    .
    Always put your family first even if you only have 20 left cent in your back pocket.
     
    Last edited: 6th Feb, 2019
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  14. kierank

    kierank Well-Known Member

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    When one gets to retirement, having a large property portfolio becomes a real pain in the ass.

    Say one has 25 IPs. That could be one rent review a week, then there is maintenance requests, then there is seeking new tenants on vacancies, then loan payments, then bookwork, ...

    I know a number of people with considerable property holdings and, as they near retirement, they are realising they have placed a noose around their neck.

    In retirement, one wants simplicity. It is about “show me the money so I can spend/enjoy it”.

    Having a property investment job overseeing a large property portfolio takes time away from the good things to do in retirement.

    We are thinking of handing over all our IPs to our kids. When we finally “fall off the perch”, they will get them anyway.

    No stamp duty, no CGT, ... - just a change of directors for each of our trustee companies.

    And no more property oversight tasks for us :D.

    The kids can have that too ;).
     
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  15. MTR

    MTR Well-Known Member

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    Heads up.... property is a passive investment, last time I looked. My property manager gets paid to manage my properties
     
    Last edited: 6th Feb, 2019
  16. Ross 355

    Ross 355 Well-Known Member

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    You have some very lucky kids.
     
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  17. kierank

    kierank Well-Known Member

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    ... and they have two very lucky parents.
     
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  18. kitdoctor

    kitdoctor Well-Known Member

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    With you on this one awylie We pay $5000/annum each on two properties in Brissie. This is all part of the hunt for taxes by government to pay for ballooning expenditure.
     
  19. kierank

    kierank Well-Known Member

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    So you don’t approve tenant applications, you don’t approve rent reviews, you don’t approve rent increases, you don’t approve rent decreases, you don’t review and pay land tax invoices, you don’t review and pay building insurance, landlord insurance, you don’t pay rates, you don’t attend BC meetings, you don’t do any bookwork, ...:eek:.

    I like to keep on top of my investments ;).

    If I want a passive investment, especially in retirement, I must prefer shares. Basically no work except “spend the money”.

    Heaps up. That is the sort of work I like :D.
     
  20. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Hi Kierank,

    You make a really good point here. That multiple properties creates complexity: 25 properties = 25 ovens that can break down, 25 renovations, more tax return administration etc.

    I hate to tie it back, but it is actually one of the advantages of buying fewer properties in markets like Sydney or Melbourne. Slower accumulation of fewer properties can provide just as much growth, but reduce a lot of the unnecessary complication from an unwieldy property portfolio.
     
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