For the past nine months most of my Saturdays have been spent pulling the curtain back on what it’s like to buy an investment property.
And to be honest I wish I’d left the damn curtain shut.
After squirreling away enough money to tether myself to a bank for 40 years (yippee!), I thought the hard part was over.
But oh, how wrong I was.
For a start, any dreams of this being a swift process were thrown out the window around the time I was poking my way through the belongings of the 100th stranger. There really is only so many times you can open up the built-in wardrobes of someone you’ve never met and be greeted by their dirty laundry before you start thinking, ‘there’s got to be more to life than this.’
Having said that, at least you’re never looking at their soiled knickers for long thanks to the universal desire of every real estate agent in the country to open their properties for inspection between 10 and 11am, despite there being another 23 full hours available in the day.
In fact, the times an agent has scheduled a viewing for 1:15pm I’ve almost felt compelled to ask if I could take them upstairs and spoon them for awhile because I’m just so damn grateful. See, the problem is, you’ve usually got a list of about 13 properties to get through, encompassing an area the size of a nuclear blast zone, and they’re all occurring at pretty much the same time.
Ye olde market strikes again.
So your options are either to ring up the blokes who cloned Dolly the sheep back in ‘96 and see if one wants to come out of retirement and the other wants to come back from the dead.
Or, you can take the more realistic approach, which involves dedicating approximately two and a half minutes to racing through each of the properties that could potentially become the single biggest purchase of your life.
It really is sobering to think you’d spend more time deliberating over a new pair of underpants and you’re not expecting anyone to rent those out.
Unfortunately (or fortunately) the difference between an investment property and my underpants doesn’t stop there.
For starters, with a pair of underpants the price on the label is the price you pay, which certainly can’t be said for an investment property.
Every apartment I’ve been interested in has gone for at least $70,000 more than it was listed at, which has made me wonder whether in my swift two and a half minute glance I’d missed the door to the basement where the gold bullion was stored.
It really does feel at times like the housing equivalent of ordering the dish that’s on the menu at ‘Market Price’. You just know you’re getting screwed, but at least at dinner there’s a glass of wine to numb the pain.
So the next step is to only attend auctions where you have a little financial room to move. However, just when you’re patting yourself on the back for coming to that realisation, ye olde market strikes again.
Let me set you a scene: You’ve rocked up to an auction fairly confident because you’ve factored in what you think is a hefty buffer. You look around at the other bidders, thinking that you don’t want to get ahead of yourself, but this could be your day. Proceedings kick off and the auctioneer calls out, “Can I have an opening bid?”
Then some douche bag from up the back shouts out a number that not only surpasses the advertised price but also every last skerrick of your buffer AND the entirety of your loan amount plus an extra $25,000 thrown in for good measure.
So now you are left standing there like a dickhead with a bidder’s number that is not only never going to get the chance to be raised, but is also good for nothing expect spitting your gum into… or hiding the bird you’ve just flipped the opening bidder.
See that? It’s not a dream. It’s a nightmare.
The only thing that makes a situation like this even worse is when the winning bidder isn’t even present.
S/he’s just there on the phone, silently bidding from afar like s/he’s ordering something from a Woolworths deli.
These remote bidders also have a knack for suspense that would make Alfred Hitchcock jealous.
If you’ve got a phone bidder at your next auction, be prepared for the repetitive process of the auctioneer asking, “is that his last and final?”, the person on the phone saying “yes”, the auctioneer yelling “going once, twice…” and the twat on the end of the phone saying “oooh, maybe an extra $1000″, until you’ve spent another 30 minutes incrementally adding what ends ups being an additional $20,000 to the purchase price.
Just offer the damn $20,000 in one hit and let the rest of us go home and cry over realestate.com.au, as we realise we are back at the drawing board yet again!
When this happens you feel like grabbing the phone and yelling down the line, “Listen buddy! If you’re going to rip my dreams out from under me you may as well have the decency to do it in person, so I can have a face to visualise when I’m back home with the voodoo doll!”
If only someone had detailed in the ‘How to be a Responsible Adult’ brochure that sometimes the ‘Australian Dream’ can actually be a bloody nightmare.
See you at auction! I’ll be the one in the foetal position.
You mention both "Investment Property" and "The Great Australian Dream". As far as I am concerned those 2 things are very different.
If you already have your own house, who are you to complain that the numbers won't stack up for you in regards to your IP purchase when the guy bidding on the phone may be actually bidding to put a roof over his head?
You have mentioned on other posts that you haven't had to work for 30 years. This doesn't vibe with not having enough to buy an IP bro... please explain?
Ok, Sorry misunderstanding, I am always looking for investments. The point of the post is to show the futility of looking to invest in a market with to much competition "a hot market". Like going to a brothel when the American fleet is in town, you have to pay more and everything is fucked. I always look to markets where the fools are running away. Invariably that market was the one they all flocked into just a short time ago. Again i say the smart money does not go into housing. Who in there right mind would put their money into a house for someone else to live in?? Ever wondered why the government so heavily supports the housing industry. If it was that good why does it need so much support, this position is defeated on logic alone. But because low intelligent undereducated ignorant people get some resources to, they need to put them somewhere. Housing is that place for them. Just think about it, it may take a while for you to understand what i am saying but if you have the ability you may see the world in a different way. To own a house that you live in is good, i think, to invest into houses is ok, if you can not find something better. I have bought 4 properties that had houses on them, i got the houses for free. two of them are 2 story houses one has wonderful ocean views. An uneducated unenlightened person may see an apple, Sir Isaac Newton saw much more. Good luck and keep up the fight. Peter :pop: You seem keen.
Ok, Sorry misunderstanding, I am always looking for investments. The point of the post is to show the futility of looking to invest in a market with to much competition "a hot market". Like going to a brothel when the American fleet is in town, you have to pay more and everything is fucked. I always look to markets where the fools are running away. Invariably that market was the one they all flocked into just a short time ago. Again i say the smart money does not go into housing. Who in there right mind would put their money into a house for someone else to live in?? Ever wondered why the government so heavily supports the housing industry. If it was that good why does it need so much support, this position is defeated on logic alone. But because low intelligent undereducated ignorant people get some resources to, they need to put them somewhere. Housing is that place for them. Just think about it, it may take a while for you to understand what i am saying but if you have the ability you may see the world in a different way. To own a house that you live in is good, i think, to invest into houses is ok, if you can not find something better. I have bought 4 properties that had houses on them, i got the houses for free. two of them are 2 story houses one has wonderful ocean views. An uneducated unenlightened person may see an apple, Sir Isaac Newton saw much more. Good luck and keep up the fight. Peter :pop: You seem keen.
Yes, it was a misunderstanding, on my part, I accidentally assumed you were the author of that piece (silly me) and I did retract my post, but nonetheless, the point still stands as you endorsed the post.
You are basically insulting 50 + % of this forum with your "only people that can't think of something better to invest in, invest in property".
What have you done that has ensured you haven't had to work for the past 30 years then?
Why are you on a property forum if you've written it off as a "poor investment"?
Yes, it was a misunderstanding, on my part, I accidentally assumed you were the author of that piece (silly me) and I did retract my post, but nonetheless, the point still stands as you endorsed the post.
You are basically insulting 50 + % of this forum with your "only people that can't think of something better to invest in, invest in property".
What have you done that has ensured you haven't had to work for the past 30 years then?
Why are you on a property forum if you've written it off as a "poor investment"?
No sorry misunderstanding. 90% of my assets are in property. 20% of that property is residential. 15% rural. 65% comercial. I live in that 20%. Numbers are not 100% i know but hey it's not a jailable offence. (Yet)
Why would i ever put my money into property for some one else to live in Thats just plain crazy.
You can download a book called the "Richest Man in Babylon".
It's free on the net.
Follow the advise in the book and it will set you free.
No sorry misunderstanding. 90% of my assets are in property. 20% of that property is residential. 15% rural. 65% comercial. I live in that 20%. Numbers are not 100% i know but hey it's not a jailable offence. (Yet)
Why would i ever put my money into property for some one else to live in Thats just plain crazy.
You can download a book called the "Richest Man in Babylon".
It's free on the net.
Follow the advise in the book and it will set you free.
Good luck and keep up the fight. Peter :pop:
Why would you put your money into property for someone else to do business in?
My guess is... to make money?
Actually, my logic is the opposite of yours. Mine is more along the lines of "Why would I put my money into a property for myself to live in?". I put the bare minimum into my PPOR. I figure it is better to live in 10% of your borrowing capacity and rent out the other 90% to let someone else pay your retirement off for you, but that's just me...
Why would you put your money into property for someone else to do business in?
My guess is... to make money?
Actually, my logic is the opposite of yours. Mine is more along the lines of "Why would I put my money into a property for myself to live in?". I put the bare minimum into my PPOR. I figure it is better to live in 10% of your borrowing capacity and rent out the other 90% to let someone else pay your retirement off for you, but that's just me...
We thank god have a queen. And i truly am thankful for having her as our head of state. She lives in a palace. A great deal of resources are invested into her residence. Resources that are well invested. Are you saying she should have less invested in her palace, perhaps a smaller palace or a little flat????? If you agree with me and say that the queen is right to live in her palace, would it not be a good idea for you and i to live in the best house we can afford ?? After all we have but 1 life. Peter :pop:
We thank god have a queen. And i truly am thankful for having her as our head of state. She lives in a palace. A great deal of resources are invested into her residence. Resources that are well invested. Are you saying she should have less invested in her palace, perhaps a smaller palace or a little flat????? If you agree with me and say that the queen is right to live in her palace, would it not be a good idea for you and i to live in the best house we can afford ?? After all we have but 1 life. Peter :pop:
1. She may have a great deal of resources invested in her residence but how much of her overall resources are invested in it? My guess is that it is a small %.
2. You are not the Queen, and neither am I. Why are you making comparisons to the super wealthy that have the luxury of being able to allocate their capital wherever they see fit?
You can do what you like with your resources, and I do the same with mine. I accept that everyone is different, and I accept that what I am happy to live in, others may not be happy with (I see this as being positive for me as I have to spend less to receive the same outcome in personal satisfaction).
I just didn't like the way you spoke as if you had all the answers or something and blatantly called all property investors idiots. You then changed it to all residential property investors (even though you invest in the much riskier "commercial" sector).
There are many reasons one may choose residential over commercial:
- you can leverage residential better and generally don't need as much cash upfront to get in. - lower vacancy rates and thus less risk attached. - lower interest rates. - generally easier to sell. - the returns really aren't much better than residential in most cases anyway (if you look in the right places for residential).
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