Did she ask if she should sell? She hasn't very much time left. If she's not out by Christmas I wouldn't hold much hope.
They got into IP's in 2012 with their most recent buy being a new build in Baldivis last year.
They have capital growth on the first but the Baldivis property is proving to be a bit of a mistake. They paid too much for the land and they commissioned a build when the building trade was in a boom. No tenant yet.
They can liquidate and walk away with a small profit based on current market values and they can hold if both rentals are fully occupied.
Their main worry is what happens if either loses their job. She is pretty safe as she is a highly qualified financial controller working three days a week for us. She could go back to full time with another company and earn a bit more.
He is on sticky ground because he is a QC for one of the big third party quality control companies (think Lloyds register or Moodys maybe). But his workload has been cut drastically and he is paid by the contract so they have taken a big income hit.
They could cut their cost of living quite a bit because they tend to live big. They eat out three or four times a week (not at Maccas) and they drive very nice cars. Kids are in private school and they go to Bali at least once a fortnight (seems like it anyway!!).
I have no idea what their debtload is, but she does seem worried enough about their situation to talk about it at work. Like I said earlier, this kind of stuff wasn't even contemplated in Perth a year ago.
She is talking about selling their PPOR and moving into the Baldivis property but to my mind, the PPOR is worth hanging onto as it has a decent bit of land (big enough to subdivide when things improve). I would flog the new build and take the loss.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
They got into IP's in 2012 with their most recent buy being a new build in Baldivis last year.
They have capital growth on the first but the Baldivis property is proving to be a bit of a mistake. They paid too much for the land and they commissioned a build when the building trade was in a boom. No tenant yet.
They can liquidate and walk away with a small profit based on current market values and they can hold if both rentals are fully occupied.
Their main worry is what happens if either loses their job. She is pretty safe as she is a highly qualified financial controller working three days a week for us. She could go back to full time with another company and earn a bit more.
He is on sticky ground because he is a QC for one of the big third party quality control companies (think Lloyds register or Moodys maybe). But his workload has been cut drastically and he is paid by the contract so they have taken a big income hit.
They could cut their cost of living quite a bit because they tend to live big. They eat out three or four times a week (not at Maccas) and they drive very nice cars. Kids are in private school and they go to Bali at least once a fortnight (seems like it anyway!!).
I have no idea what their debtload is, but she does seem worried enough about their situation to talk about it at work. Like I said earlier, this kind of stuff wasn't even contemplated in Perth a year ago.
She is talking about selling their PPOR and moving into the Baldivis property but to my mind, the PPOR is worth hanging onto as it has a decent bit of land (big enough to subdivide when things improve). I would flog the new build and take the loss.
They always do new builds. Never understood why. Emotionally involved.
I should take Matthew off ignore. Some of his posts are comedy gold. Loved the iron ore one.
They always do new builds. Never understood why. Emotionally involved.
I know a few "investors" who have built new. The feeling I get, is that they want to be also known as "property developers" when they talk about their empire at barbeques.
You know, the type that have given work to builders and created something from nothing with their bare hands rather than just buying a place and renting it out. Contributing something real to the Aussie dream. Ala Skamy.
Makes them feel all warm and fuzzy and entrepreneurial at the same time.
Good on um.
newjez
16 Oct 2015, 05:54 AM
I should take Matthew off ignore. Some All of his posts are comedy gold. Loved the iron ore one.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
My point was that most people don't buy on the way down, if they did the market would correct as you correctly point out.
In my experience better bargains are to be had before the market bottom than after it because when vendors see worsening conditions ahead they will take almost any offer, but when they see the market improving they dig their toes in. Have any Perth bears here tested the market recently, or are they just watching the index which is 3 months old data.
That is a potential tactic but one that most investors will avoid. The phrase don't try to catch a falling knife is a popular one for a reason. Trying to pick the bottom usually means you just end up with stinky fingers. etc etc etc.
The logic you stated is not very sound. ie. vendors see worsening conditions will take almost any offer (at THAT time = Time A), yet when they see the market improving they dig their toes in (could be 6 to 12 months later = time B). The price at Time B could be much much lower than anyone expected at Time A. This is a relative falsehood of hindsight even in this hypothetical situation.
For this to work you have to use market psychology mixed with a view of the fundamentals and looking at the changing rate of decline (quite difficult in a market with low transaction numbers of non-homogeneous items like the property market).
That is a potential tactic but one that most investors will avoid. The phrase don't try to catch a falling knife is a popular one for a reason. Trying to pick the bottom usually means you just end up with stinky fingers. etc etc etc.
The logic you stated is not very sound. ie. vendors see worsening conditions will take almost any offer (at THAT time = Time A), yet when they see the market improving they dig their toes in (could be 6 to 12 months later = time B). The price at Time B could be much much lower than anyone expected at Time A. This is a relative falsehood of hindsight even in this hypothetical situation.
For this to work you have to use market psychology mixed with a view of the fundamentals and looking at the changing rate of decline (quite difficult in a market with low transaction numbers of non-homogeneous items like the property market).
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
So according to your genius chart that looks like it was drawn in ms paint by the "count to potato" girl, the world has always been in a never ending recession.
They always do new builds. Never understood why. Emotionally involved.
Greater depreciation allowance I would hazard a guess at.
Some share buyers have a similar view only with fully franked dividend paying shares to claim imputation credits
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
Still too expensive for a unit in a giant shithole.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Still too expensive for a unit in a giant shithole.
Suspect real price will revert to Building cost minus severe depreciation. In a space as big as WA land in real terms (apart from where they actualy diggging mining holes is worth nothing.
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