Regretting buying property?!

In the last Sydney boom I made over a mill sitting on my hands. And lots of people made a lot more than that. People doubling their money in the last two years has been prevalent. Its all about research research research and a little bit of luck.

 

Buy and hold. Boring.

That's fair enough. I really strongly believe that you should not do something if it makes you that uncomfortable. I'm the same when it comes to shares. I would feel very uncomfortable setting up a margin loan and investing the money on the stock market, so I don't do it.

On the other hand I love borrowing to invest in property (but I don't have a simple buy and hold strategy). I didn't invest a single cent of my own money in my last 2 IP purchases. Both were over 100% borrow including purchase cost, stamp duty, borrowing costs. The only confusing thing is calculating return on investment when you didn't invest any of your own money

 

Five years? Try 8 years. There are places in Perth that have not increased in price since the peak of 2008, effectively 8 years with no growth. Some properties have even gone backwards in that time. Property is not a sure thing, but a house, wait 10 years, it will double in value.

You are right that timing is important. I bought into an area of Perth in 2011 that was about to boom. I could see it was undervalued and by 2014 the value of the property had almost doubled. Timing.

 

How about then Return on Interest paid...?

 

@Perthguy what are those places in Perth that have not moved since 2008. if you don't mind sharing please

 

That could work. Alternately, mine were negatively geared, so I could take the loss from each year, add it up and hope it is less than the profit

How about for cashflow positive though? I have put nothing in, rent is more than interest and costs, the property makes me money every year, sell for a profit. Return on investment?

 

Thats, Return on a Job Bloody Well Done!

 

I did a big analysis of negative growth or neutral growth suburbs vs boom suburbs a while back. From memory, it was places like Cottesloe, Nedlands and Dalkeith that were negative or neutral over the timeframe. Mind you, this is based on median house price, so it is a very rough indicator of market trends but has limited applicability to any individual property. Examples:

Suburb - 2008 median - 2015 median - % drop
Cottesloe - $1.9M - $1.8M - 5%
Nedlands - $1.6M - $1.5M - 6%
Dalkeith - $2.76M - $2.28M - 17%
Peppermint Grove - $3.59M - $2.91M - 19%

You can see from this that using medians is wildly inaccurate and does not even close to tell the full story. Example is Peppy Grove:

Peppermint Grove Investment Property Market Data

At the same time, it would hard to argue these suburbs have "boomed" since 2008. In real terms, they have experienced flat or negative growth. As always, individual properties may have outperformed the market and I am sure there are many examples of these.

 

LOL holy crap thanks for such a detailed response

 

There not really PI suburbs though, except maybe Cott. The investor suburbs like Belmont, Cloverdale, Kewdale and Rivervale really boomed over the same time. But now they are overpriced and very difficult to find a good deal. I am posting a link to Cloverdale. Go to the Median price in Cloverdale graph and set it to buy, All houses, 10 years. Completely different story. (I bought in 2011 )

Cloverdale Investment Property Market Data

 

It's perfectly normal to stress a little when something is new. sounds like you are just adjusting to how things are as a landlord. If you purchased well hopefully you won't have maintenance left and right moving forward. For some reason it can tend to Happen a bit with a new purchase once it settles.

 

Thanks @Perthguy the area has dropped 50k the last 12months. Yep you got in at the right time I would like to look at Perth later in the year when I can get finance together. I've started to write suburbs down but didn't have Cloverdale or Kewdale on my list

 

@Tranquilo don't forget to share your list when your done..share the love

 

Lol @Leo2413 you don't want to follow my list.

 

Cloverdale has dropped 50k in the last 12 months but I still can't find any good deals

I am also watching Beckenham and Thornlie.

 

I've got Eden hill down on my list. Not sure where I got it from. Do you know much about that area? @Perthguy

 

We should move this discussion to the Perth Market thread: Perth Market

 

You will always slap forehead at times, and out of four or five, at least one will take you to the cleaners, the others will try and take the rest !

 

Regret buying property? Well you could have sunk it all into ASX shares. How do you reckon that would be going for you?

Ride it out, problems will pass. It will get easier. Capital growth will kick in. And you will ask yourself why you didn't buy more property.

 

I'm terrible at shares. I though Dick Smith looked like a great buy. 'nuff said really.

That's where I am at now. Post not buying regret.