agree. if someone is looking longterm, like 20 years, then yes u will find some good opportunities now but u will find even better ones in a few years i feel and save yourself a few 100k's
Save a few 100K in a few yrs on genuinely decent investment properties currently valued at how much?
Hmmm - 'N if ya a genuine ('n 'youngish') investor (rather than a speculator) why wouldn't you be looking long term?
Any expenses incurred go towards your income. So say you earn 120k a year (tax bracket of 37%) and your investment is costing you 20k a year, then you can use that 20k to lower your income which will reduce it to 100k. So now your only taxed on 100k and not 120k. So 37% of 20k is around 7.5k. That leaves another 12.5k that will come out of your pocket and you wont get back. Now add 2 or more houses to that and its looking pretty bleak. So investments are good for lowering your tax but unless you can lower it to 18k (tax free) then your always going to lose money unless your working on capital gains.
Now add to that the property value going down and your now losing the amount plus property value.
Now please enlighten me on how its good to invest when market is dead.
Yeh nah, that's not how I look at it. I want to make my money on the purchase. I would be looking for a 20% discount, so I want a $500K property for $400K so I've made $100K on purchase. if I have to go without any rental for 6 months which would be extreme if I bought in a desirable area, and if I had to take $400 per week instead of $500 per week than that's a shortfall in income of $13K in the first 6 months and possibly $15,600 for the year.
It's not a big loss and tax partly covers it, even at your chosen tax rate of 37 cents I would get about $6K back
Using a 20% deposit would probably give me a modestly negatively geared investment (on paper) that would probably become positively geared after a few years of rental gains.
Our philosophical difference is probably in my belief that prices in the long term will rise whilst you believe the a crash will continue in Perth. It really wouldn't worry me if the median price fell further, I rely on picking the right property and paying the right price. If I don't get it perfectly right it's not a big issue.
For you to win, house price changes would have to go against a trend in housing that has been in place since 1945 - that's over 70 years.
Take risks - if you win you will become wealthy, if you lose you will become wise
What we have invented to keep big banks afloat for a while longer is ultra low interest rates, NIRP, ZIRP etc. They create the illusion of not only growth, but also of wealth. They make people think a home they couldn’t have dreamt of buying not long ago now fits in their ‘budget’. That is how we get them to sign up for ever bigger mortgages. And those in turn keep our banks from falling over.
Record low interest rates have become the only way that private banks can create new money, and stay alive (because at higher rates hardly anybody can afford a mortgage). It’s of course not just the banks that are kept alive, it’s the entire economy. Without the ZIRP rates, the mortgages they lure people into, and the housing bubbles this creates, the amount of money circulating in our economies would shrink so much and so fast the whole shebang would fall to bits.
That’s right: the survival of our economies today depends one on one on the existence of housing bubbles. No bubble means no money creation means no functioning economy.
What we should do in the short term is lower private debt levels (drastically, jubilee style), and temporarily raise public debt to encourage economic activity, aim for more and better jobs. But we’re doing the exact opposite: austerity measures are geared towards lowering public debt, while they cut the consumer spending power that makes up 60-70% of our economies. Meanwhile, housing bubbles raise private debt through the -grossly overpriced- roof.
This is today’s general economic dynamic. It’s exclusively controlled by the price of debt. However, as low interest rates make the price of debt look very low, the real price (there always is one, it’s just like thermodynamics) is paid beyond interest rates, beyond the financial markets even, it’s paid on Main Street, in the real economy. Where the quality of jobs, if not the quantity, has fallen dramatically, and people can only survive by descending ever deeper into ever more debt.
Yeh nah, that's not how I look at it. I want to make my money on the purchase. I would be looking for a 20% discount, so I want a $500K property for $400K so I've made $100K on purchase.
How did you work that one 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.
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