What if the market tanks??

.... you hit the nail on the head "opportunity cost". also the holding costs on top of this, negatively geared 7 years ouch

The buy and hold forever strategy is flawed because the focus is accumulating at any cost. I think growing asset base is important but ignoring market conditions is like shooting yourself in the foot.

I suppose least some investors can sleep at night knowing in 10-15 years all the ups and downs will make it worth while. Too bad its bleeding you dry today, maintenance, taxes, insurance, negatively geared/low yields, interest rate hikes, servicing loans. All this to contend to, while you have the lemons going backwards.
Unfortunately you don't get a "free jail card", all associated costs need to be met while you are waiting to ride the next boom cycle.

OP mentioned "buy and hold forever" is low risk, another myth, I see it as high risk. If you have a huge portfolio and you can service today, does not mean it's a given moving forward, life happens, people seem to forget this.

If you had the opportunity to retire in 5 years rather than 10 years less risk which would you pick?

MTR

 

The biggest fallacy is believing this "safe as houses" stuff. Property can go up, down or sideways. If you believe in one side you are buying into an illusion. (I say this with love)

Its not scare mongering to be real about life and what can/can't go wrong. if you look at other countries, property markets have dropped sometimes as much as 50% in big cities, especially during the GFC.

 

That post was facetious in its entirety and more!

I may not be old, but I have been around a bit! I know your camp pretty well.

pinkboy

 

Kate you are correct, this is a fallacy but its a nice selling pitch and makes property spuiker's job very easy, many investors get suckered into this one because it takes the fear out of the equation.

Its professional BS, here's the thread.
Professional BS Detector

 

Go and look at Moranbah, Dysart, Middlemount, Collinsville, Emerald, Blackwater, Hedland, Newman, Karratha, Gladstone... even Mackay (180,000 person city) .... and then please argue your point?

Suburbs in the gold coast, sunshine coast, Harvey Bay etc have struggled to recover since the GFC in 2008. I know plenty of people that bought in these areas and can't sell to cover the mortgage.

People that believe in property always goes up fallacy risk becoming lazy when they purchase. Its dangerous.

 

And its good for the banks too grrrrr...... I know someone who bought a unit in a capital city on the water front, since 2008 its dropped in value about $300-$400k.

 

I think it may be prudent for you to Google the word 'facetious'.

And perhaps view where I live.

pinkboy

 

Shame.
I guess we all need to do our own DD,
I know this from experience, BA recommending the wrong product at the wrong time.... but most investors will accept their advice/information with no evidence to support the recommendation.

 

Stuff goes wrong from time to time. If you expect to make money all the time your better off to do noting. You make mistakes, learn and move on. Its life.

 

MERRY CHRISTMAS

 

I wonder if they had a good understanding of the market they were buying into, the demographic, the underlying growth drivers, demand and supply etc. All this makes a massive difference. Of course property goes up, down and sidewards which is normal. The major difference to how it turns out is who is doing the buying. Just my opinion.

 

There is 'stuff going wrong', and then there is just plain poor investment decisions which is the responsibility of the individual. We gotta keep it real.

 

I take that reply that you understand that I was quoting I fully understand that property prices go up, down and sideways - and my original post was in jest as THE largest trap people fall into.

Mackay is lovely today thanks.


pinkboy

 

Yes. Sometimes its hard to get people tone and jest when its in writing.

PS - Are we a bunch of sad sacks for being on a forum on xmas ???

 

Of course, but sometimes stuff does go wrong that is outside of our hands. I have seen some experienced people get caught up in a very bad way. You'd be surprised the amount of people that declare they are successful, and if you look behind the scenes, they have done some terrible deals.

Sometimes you just got to realise "it happens", even to the best of us. Donald Trump has an entourage and all they do is focus on the problems that could pop up before they arise, and how they will resolve them.

No one is immune to challenges no matter "how right" they try to get it.

 

Not really. My wife, daughter and I are all sitting on the lounge, all using devices.

And back on topic, I've taken full advantage of Mackay 'tanking'. I just purchased a (unconditional Wednesday, settle mid January ) commercial property to run my business from.

There is still a lot of work here for those who know how to make, create and execute opportunities.

pinkboy

 

I am in Perth I got up at 5.00 am its 7.00 am and my children still sleeping, that's my excuse
Hubby just got my first coffee.
Happy Xmas all

 

Good for you. There is always opportunity for those that want to have a go.

 

haha... I'm home alone and meant to be finishing my book ....this forum is my research tool to see what people know/ don't know

 

Entertaining reading

Back to the topic

Im not sure if a crash would affect us or not. As some have correctly pointed out QLD, prices have not moved since 2008 and SA and TAS have done nothing for a similar period
We bought a place for 398k in townsville this year that sold for 480 in 2007!
We bought a place in birkdale qld in 2013 for 370k so equivalent to 2006 prices...

So id like to think we cant lose anything as they have already been down for a decade!

Ill be looking closely at perth in the next year hopefully, not too worried about timing just a good long term deal
Still areas of melbourne that have done bugger all as well
I like TAS but am confused as to what would be the best investment - lifestyle property with a decent 5% yield or one in Hobart with 7% which in reality is just a big country town with little in the way of good job prospects but an up and coming tourism economy (cairns?)