That may be the case everywhere else, but in Perth, I believe it will have a big impact. A lot of mining related high wage earners have dived into investment property due to the "free money" they get from the government via NG. It has been spruiked to hell and back over here and I have lost count of the number of fuckwits that have told me to buy an investment property to reduce my tax bill.
That is my whole reason for being bearish on Perth property. It is full of amateur (dumb) money. You only have to look at the number of suckers who bought Jims franchises to see that WA is full of fools and their money.
This explains a lot.
Some one has a chip on there shoulder.
So now people who go into business for themselves are suckers.
Care to post some data or links which show people with mining jobs on high wages are buying all the investment properties, plus a link to how they are fuckwits.
My personnel view point is some people on high incomes do this, some buy shares, some buy a business, some buy lots of toys and blow it on expensive holidays and hookers. So what.
You are quick to tell us all how everyone else is so stupid, fuckwits but bring no data or information to support your claims. If it is your opinion, that is fine but that does not carry a lot of weight.
They can change the rules if they like, but it will be difficult to get it right. NG is not, in itself, a rule or law. A lot of the bears forget that.
Lots of the '1 or 2' investors will drop out, because too many accountants still carry on as thought it's the 1990s and focus on tax reduction, but anyone with serious intentions will jump in and pick up some bargains. Prices will drop off, but then pick back up again.
Deductions will get carried forward into future tax years as nominal yield increases and investors will get their money back. Rents are more likely to increase as '1 or 2' investor demand for canned, off-the-plan stock drops and thus overall stock levels reduce.
You've then got to deal with issues of people hiding behind company and trust structures.
I don't think they'll do it. This idea gets trotted out every few years, but unless our tax system is completely changed I don't think it's viable. Personally I don't care either way - I'm positively geared.
They can change the rules if they like, but it will be difficult to get it right. NG is not, in itself, a rule or law. A lot of the bears forget that.
Lots of the '1 or 2' investors will drop out, because too many accountants still carry on as thought it's the 1990s and focus on tax reduction, but anyone with serious intentions will jump in and pick up some bargains. Prices will drop off, but then pick back up again.
Deductions will get carried forward into future tax years as nominal yield increases and investors will get their money back. Rents are more likely to increase as '1 or 2' investor demand for canned, off-the-plan stock drops and thus overall stock levels reduce.
You've then got to deal with issues of people hiding behind company and trust structures.
I don't think they'll do it. This idea gets trotted out every few years, but unless our tax system is completely changed I don't think it's viable. Personally I don't care either way - I'm positively geared.
Agree - People who call constantly for a change to NG don't understand the tax rules, and that includes some high profile economists who we would expect to know better or at least take some advice from a tax accountant.
I love my loss forwards. I have been holding onto an old company for 14 years because it has a large loss forward. I can buy an unencumbered property in that company name and via different distribution methods choose whether I use up that tax loss against revenue or later capital gains.
The simplistic argument made by the anti-NG crowd never takes into account the real effect of tax deductions, and those deductions are universal - the same the world over, so why would Australia bring in a unique set of tax laws?
Yeah. I can understand you might be a little bitter when those dumb fuckwits did well by doing what you didn't.
I had a lot of money tied up in my home (the one I lived in). Seven figures, all equity. There is no way on this earth that I am going to invest more in exactly the same asset class. That just flies in the face of all common sense.
That seems to be the strategy in WA though. Buy a house in the same suburb you live in. Buy another house or two just down the road. Complete and utter madness.
I have a mixed bag of investments and over the last four years, I have seen returns that have outperformed Perth property by a country mile. The Dow has gone up 50% in four years ffs. I am not crying because I didn't buy an investment property in 2010.
I am not anti the idea of property investment, I just don't see it as viable in WA in the current climate. If I was going to chuck money at property, I would not buy in the same market as my primary asset (my own home).
I follow a simple investing rule.
Don't put all your eggs in one basket.
Mike
15 Aug 2014, 02:17 AM
This explains a lot.
Some one has a chip on there (their) shoulder.
So now people who go into business for themselves are suckers.
Care to post some data or links which show people with mining jobs on high wages are buying all the investment properties, plus a link to how they are fuckwits.
My personnel view point is some people on high incomes do this, some buy shares, some buy a business, some buy lots of toys and blow it on expensive holidays and hookers. So what.
You are quick to tell us all how everyone else is so stupid, fuckwits but bring no data or information to support your claims. If it is your opinion, that is fine but that does not carry a lot of weight.
I have not said that everyone who has bought an investment property is a fuckwit.
What I am saying, is that an awful lot of fuckwits I speak to have bought investment properties. They tell you that "you really need to buy an investment property, you can't lose".
It reminds me of silver four or five years ago. When every other person you meet is telling you that silver is going to the moon and you really need to buy some, you don't buy.
I have talked to property investors on site and many seem to have little idea of how the economy works. They just know that property always goes up. That is a very dangerous assumption to make in any market. I wouldn't borrow $500k to buy shares in the most reliable blue chip company on the planet. But people will do just that when it comes to Perth property?
Investment buying frenzies in any asset class are generally caused by non savvy buyers trying to jump on the bandwagon. This pushes up the asset price and creates buyers allowing the smart money to get out.
I have sold most of my shares in the last month (for very good returns) because I have made enough and I see greater downside risk in the markets than upside potential. I had more to lose than I stood to gain. Markets may go up another 10% in the next year, but I am not prepared to risk everything on that.
Buying stuff is easy. Any fool can buy any asset. The trick is knowing when to sell.
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.
So now people who go into business for themselves are suckers.
Care to post some data or links which show people with mining jobs on high wages are buying all the investment properties, plus a link to how they are fuckwits.
My personnel view point is some people on high incomes do this, some buy shares, some buy a business, some buy lots of toys and blow it on expensive holidays and hookers. So what.
You are quick to tell us all how everyone else is so stupid, fuckwits but bring no data or information to support your claims. If it is your opinion, that is fine but that does not carry a lot of weight.
Going into business for themselves.
Conjures up all sorts of connotations that I don't associate with halfwit high viz types who just "cannot lose" on property mate.
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
As far as rental assistance goes, those receiving it are on welfare and not really in a position to buy a home.
I think you are mistaken there. We get Family Tax A and would be eligible for Rental Assistance if we were renting. But we managed to buy our own home (as well as a few investment properties).
You've then got to deal with issues of people hiding behind company and trust structures.
Discretionary family trusts are already very popular with property investors. Remove negative gearing and watch more property move into trusts.
Jimbo
15 Aug 2014, 11:04 AM
I follow a simple investing rule.
Don't put all your eggs in one basket.
So when you buy shares, do you only invest the ones which you think are going up? Or do you spread your capital among the ones which are bleeding red ink as well (just to spread the eggs around)?
I think comment was about people buying into Jim's Mowing franchises or similar.
I agree, I think that's what Mike was getting at.
There is nothing wrong with starting your own business, but franchises are not really your own business. You don't have complete control and so you are not really your own boss.
If I was going to start a lawn mowing business, I'd buy a mower and a ute and knock on doors myself.
Trojan
15 Aug 2014, 12:42 PM
So when you buy shares, do you only invest the ones which you think are going up? Or do you spread your capital among the ones which are bleeding red ink as well (just to spread the eggs around)?
No, I wouldn't put all of my money into the share market like some people have all of their money in the Perth property market.
My largest single asset is my property (although I am between houses at the moment).
The rest is split between shares (also out at the moment), commodities and a local business venture.
I would never have everything in one asset class because that is the quickest way to get wiped out.
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.
If I was going to start a lawn mowing business, I'd buy a mower and a ute and knock on doors myself.
I reckon a mower, whipper snipper and a trailer is all you'd need. Maybe a jerry can a rake and a broom to go with it.
I'm surprised more people don't do it. $2000 would set you up nicely, and there'd be no cost of buying into a franchise. Ads in the local paper, knock on some doors and maybe a cheap website. Paint your mobile number on the side of the trailer.
I reckon a mower, whipper snipper and a trailer is all you'd need. Maybe a jerry can a rake and a broom to go with it.
I'm surprised more people don't do it. $2000 would set you up nicely, and there'd be no cost of buying into a franchise. Ads in the local paper, knock on some doors and maybe a cheap website. Paint your mobile number on the side of the trailer.
It's one of those things you can start part time as well.
The risk with providing domestic services that can be carried out by the householder, is that they are the first things to be cut back on when people tighten their belts. Also, the easier it is to start a business, the easier it is for competition to start up as well.
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.
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