6 for "Bears complaining incessantly about the injustice of it all"
Looks like we have a winner
Actually it looks like anyone in Australia with the ability to sign their name has bought an investment property and expects to retire on the proceeds. If it was just 5 or 10% I would give them a good chance, but when everyone does it. No Chance.
stinkbug
23 Sep 2013, 08:21 PM
And what was the average yield on high-flying IT stocks?
Ha. That has nothing to do with it, that is just your "justification" for borrowing a million dollars and buying an asset class that everyone else is buying. How much yield do you live off? Or does it all go to service the properties?
Ha. That has nothing to do with it, that is just your "justification" for borrowing a million dollars and buying an asset class that everyone else is buying. How much yield do you live off? Or does it all go to service the properties?
I reinvest all spare yield in paying off my PPOR. At the moment the portfolio generates a couple of thousand a month above costs, but in 10-15 years it will generate perahps $15k per month above costs, if rents rise in line with CPI at about 2.5% p.a. Once my PPOR is paid off I'll smash down the IP loans with the yield over a 5-10 year period.
I reinvest all spare yield in paying off my PPOR. At the moment the portfolio generates a couple of thousand a month above costs, but in 10-15 years it will generate perahps $15k per month above costs, if rents rise in line with CPI at about 2.5% p.a. Once my PPOR is paid off I'll smash down the IP loans with the yield over a 5-10 year period.
And in the mean time anyone who threatens that blueprint is seen as an extremist!!
And in the mean time anyone who threatens that blueprint is seen as an extremist!!
Not by me.
I bought my IP portfolio between 2004 and 2010, and focussed on properties with high rental demand in good areas, bought for a good price.
I've never had a problem finding tenants or increasing rents over time.
Provided I can continue to increase rents by a couple of percent per year, I don't really care what happens. In 15 years or so I'll own the lot outright anyway, and have a couple of hundred thousand a year coming in from rents, and all of it paid for by my tenants.
It's not real exciting or fast, but so far it has worked very well, and I've no reason to expect anything to change.
I bought my IP portfolio between 2004 and 2010, and focussed on properties with high rental demand in good areas, bought for a good price.
I've never had a problem finding tenants or increasing rents over time.
Provided I can continue to increase rents by a couple of percent per year, I don't really care what happens. In 15 years or so I'll own the lot outright anyway, and have a couple of hundred thousand a year coming in from rents, and all of it paid for by my tenants.
It's not real exciting or fast, but so far it has worked very well, and I've no reason to expect anything to change.
I see, you plan to be rich by investing in nonproductive works. I guess you can not see the problem in that. Oh dear....
I reinvest all spare yield in paying off my PPOR. At the moment the portfolio generates a couple of thousand a month above costs, but in 10-15 years it will generate perahps $15k per month above costs, if rents rise in line with CPI at about 2.5% p.a. Once my PPOR is paid off I'll smash down the IP loans with the yield over a 5-10 year period.
A good plan. probably similar to the plans the millions of other property investors have. But you have to get there first, and so do the millions of others. Btw, have you ever asked yourself how the nation can support all of those passive income earners in the years ahead?
Here is what happened as I see it. For decades and decades Australians went to work and had little debt because they had learned a painfull lesson from the great depression. That lesson was that debt is toxic in a downturn. Many bought houses and a few bought investment properties, but it was a very small percentage. As the decades passed wages declined relative to houses etc so mothers were forced to enter the workforce so a family could maintain its standard of living and afford a home. Then people were sold superannuation, which was never going to work but it helped the government talk their way out of the pension dilemma and provided hundreds of billions for the financial industry to play with.
When it became obvious that the super was not going to ever live up to it's million dollar promises, because interest rates fell and fell, people gambled on the stock market, and more went into investment property. When the stock market collapsed in 2000 more people sought retirement security in property, and the government and banks encouraged this, because the nation was basically living on borrowed money by this stage and we needed to borrow a lot just to keep the wheels turning. As you well know, buying property generates a lot of debt, much of which can be spent through the economy.
Property began to rise faster than general inflation because the demand was expanding with all the new interest in property investment. Up and Up it went, and money was made more and more accessable with IO loans, low doc, etc. After the gfc people really got scared and bid houses up even more as they took advantage of equity loans to buy IP's to secure their retirement. The prices went up in many cities even while prices were collapsing across much of the rest of the industrialized world.
Now we have millions of people across Australia, husbands and wives and singles, all dependent on property prices and yields for their retirement security. All expecting to retire and have the rest of Australia pay for it out of their diminishing future incomes. So many things can go wrong with this plan they are not worth listing.
Good luck.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
I bought my IP portfolio between 2004 and 2010, and focussed on properties with high rental demand in good areas, bought for a good price.
I've never had a problem finding tenants or increasing rents over time.
Provided I can continue to increase rents by a couple of percent per year, I don't really care what happens. In 15 years or so I'll own the lot outright anyway, and have a couple of hundred thousand a year coming in from rents, and all of it paid for by my tenants.
It's not real exciting or fast, but so far it has worked very well, and I've no reason to expect anything to change.
A good plan. probably similar to the plans the millions of other property investors have. But you have to get there first, and so do the millions of others. Btw, have you ever asked yourself how the nation can support all of those passive income earners in the years ahead?
The thing is, though, that 70% of property investors own one property, and 28% own two properties. One or two properties is not enough to support a retirement, at least, not my kind of retirement.
Hardly anyone actually has multiple properties, and holds them for multiple decades.
The fact that so few people actually carry the plan through means there's literally heaps of rent money to be shared by the few who do.
A good plan. probably similar to the plans the millions of other property investors have. But you have to get there first, and so do the millions of others. Btw, have you ever asked yourself how the nation can support all of those passive income earners in the years ahead?
As long as people want to rent places to live, rental property will deliver an income. I don't expect people will stop renting anytime soon. The price of rental properties will trend such that expected risk adjusted returns will be competitive with other places you can deploy capital in the (eventual) production of goods and services. In the short term the market is a voting machine, but in the long term it is a weighing machine and it abhors arbitrage.
Not sure what you mean by passive income. As far as I can tell passive or non-passive has absolutely zip to do with sustainability but would be interested to hear your defence of that.
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