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the property investment thread

property is beginning to look more attractive.

Each has it's pros and cons, however I think property is more suited to the "typical aussie".

Another thing.

Let's say you have $100k in the bank.

You can leverage property at 80% without paying LMI. Your $100k will get you $500k worth of property. Property doubles on AVERAGE every 10 years, so your $500k property is now worth $1m; you've turned your $100k into $600k.

Leverage with shares varies between nothing and 50%. At 50% leverage, you would need to generate an average annual compounded return of 13.35% to turn $100k into $600k. At no leverage, you'd need to generate 19.62%. Possible? Of course. However, if you look at the historical returns of most of the professional managers, very few achieve it.

With shares and leverage, you also need to have cash reserves or be prepared to sell at a loss if margin called.

No such thing with property.
 
Each has it's pros and cons, however I think property is more suited to the "typical aussie".

Another thing.

Let's say you have $100k in the bank.

You can leverage property at 80% without paying LMI. Your $100k will get you $500k worth of property. Property doubles on AVERAGE every 10 years, so your $500k property is now worth $1m; you've turned your $100k into $600k.

Leverage with shares varies between nothing and 50%. At 50% leverage, you would need to generate an average annual compounded return of 13.35% to turn $100k into $600k. At no leverage, you'd need to generate 19.62%. Possible? Of course. However, if you look at the historical returns of most of the professional managers, very few achieve it.

With shares and leverage, you also need to have cash reserves or be prepared to sell at a loss if margin called.

No such thing with property.

i'm thinking about leveraging my property equity into the sharemarket with a line of credit held against one of the investments. the aim being to take away the option of a margin call and I can give myself the same principle of time in the market.
 
i did a bachelor of science with majors in pure and applied maths.

i am now studying actuarial sciences through the institute of actuaries (so basically teaching myself). i'm half way through part 1, still got about 3-4 years to go, although I should be able to nab a job in the industry in 2012

Same here - I have a BSc majoring in applied maths. Upon graduation I found work for an actuarial consultancy so they pay for my studies. Mostly finished Part I and going to start Part II next year (would've started Part II this year had baby not come along!)

Hubby and I have ambitions to get out of the rat race by age 35 yo. I'm 25, so we have 10 more years to keep buying investment properties with a view towards living off the rental income. We're in it for the long term - no quick flips for us. We have a spreadsheet detailing our plan, and even with conservative assumptions (rents increase by 2% pa, capital growth of 3% pa, interest rates 10% pa), for us, property is the way to go. You can leverage into property but with considerably less risk of losing all your capital (eg. shares and margin calls). Of course there are certain risks associated with investing in property - eg. property downturns and negative capital growth - but you have to do your research and mitigate your risks.

I highly recommend the SS forums if you are interested in property - I post a lot there and don't know where I'd be without the inspiration that I get from there!

Good luck :)
 
My $50 says that if you buy in a reasonable location, over my investment timeframe (MINIMUM 10 years, preferably don't sell at all) you'll do well.

It's time IN the market, not timing the market that counts.

Yep ill agree with that

i just think the current market is way overheated
 
Same here - I have a BSc majoring in applied maths. Upon graduation I found work for an actuarial consultancy so they pay for my studies. Mostly finished Part I and going to start Part II next year (would've started Part II this year had baby not come along!)

Hubby and I have ambitions to get out of the rat race by age 35 yo. I'm 25, so we have 10 more years to keep buying investment properties with a view towards living off the rental income. We're in it for the long term - no quick flips for us. We have a spreadsheet detailing our plan, and even with conservative assumptions (rents increase by 2% pa, capital growth of 3% pa, interest rates 10% pa), for us, property is the way to go. You can leverage into property but with considerably less risk of losing all your capital (eg. shares and margin calls). Of course there are certain risks associated with investing in property - eg. property downturns and negative capital growth - but you have to do your research and mitigate your risks.

I highly recommend the SS forums if you are interested in property - I post a lot there and don't know where I'd be without the inspiration that I get from there!

Good luck :)

wow katie, would never have guessed. very few people know even know what an actuary is, let alone studying to become one!

im thinking i should probably be looking for work early 2012, after i finish part 1 of my studies, although i might ask around at places like PWC to see if they hire people studying actuarial sciences, but not yet qualified. where do you work if you don't mind me asking? feel free to PM me :)

sounds like a good plan, i have something similar in mind. got to get my foot in the door first tho... i think i should set a goal to have at least one property by the end of the year. i've signed up to the SS forums, i'll do an intro post shortly, should be easy to recognise me :)
 
im sure i heard off one of my friends who is an actuary? that both PWC and earnest & young hire people still in uni, or not yet finished the degree..

Not sure if that help at all
 
im sure i heard off one of my friends who is an actuary? that both PWC and earnest & young hire people still in uni, or not yet finished the degree..

Not sure if that help at all

Yeah its called the graduate rotation program. Where they put u in different roles of the buisness for 3months at a time.
 
Yep ill agree with that

i just think the current market is way overheated

In some areas it might be mate - look what happened to Perth over the incline and decline of the resources boom.

If I see properties jumping by 40% a year that would tell me to stay away lol
 
Has anyone looked at shared appreciation loans? Would they be worth it for the first property until a decent income stream has been achieved then on subsequent properties more traditional loan products? I looked into on and it stated I could save $491 a month which is a fair amount of cash...
 
Whats the rental market doing in South Australia? I have 2x rooms to rent for $80 per room which includes utilities and I havent got anyone asking yet! I looked on a few sites and i am the cheapest around. Whats the deal? Any advice? Is the market dead? Is this the wrong time of year to advertise?
 
Im in the post code 5163 there are hardly any share houses in that post code and im undercutting them all.
 
got my Jan Somers book this week, will start on it after i finish "How to Make Your Money Last as Long as You Do" by Margaret Lomas. My mum bought this for me years ago and i never bothered reading it, it seems to cover the basics pretty well for me.
 
Im in the post code 5163 there are hardly any share houses in that post code and im undercutting them all.

Before u bought the property or tried to rent it out.

Did u ring some of the real estate agents in the area to have a look at their rental books? They should tell u the vacancy rate for the area. U perfereably want a lower vacancy rate.
All my properties have 1% vacancy rate for the last 10 years so im NEVER without a tenant.


I had a quick look at the suburb u mentioned

http://www.domain.com.au/Public/suburbprofile.aspx?mode=research&searchTerm=Hackham

Look for this section

Nature of Occupancy - Top 35163AdelaidePurchasing42%28% Rented29%27% Fully Owned25%39%

Ok the rule when buying to for renting here is
Fully owned should be above 40% IF it is a densly house populated area.
U want families to move into your house and they are attracted by areas with other families/Couples in them.

Also i do not know the state of your property kindred but families/couples look for 2 things when they walk into a house.

1. The kitchen. The WIFE/FEMALE will always head towards the kitchen first. If its been renovated or looked after then your set. After ALL the wives do the majority of the household decisions :D. I spend 4-5k on the kitchen at all my houses when renting it out. U get alot of it back in tax slowly anywayz so its not money gone down the drain.

2. The bathroom is next
 
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Good advice. Im just looking for a room mate not renting the entire property out. So probably looking for different types of people. I think my problem was where i was advertising. I started advertising in some other places and have had 3x hits already.

I WILL keep what you have said about the kitchen and bathroom in mind for the future ;)

Thanks again for the advice.
 
Maybe you are asking to cheap? They might think its a sex trap or something.

Ask for more and someone will bargain you down
 
Guys and Gals,

For a bit of clarity, who's game to post their SS username here?

I'm going by 'Television' over on Somersoft.

Can't thank you guys highly enough for making the recommendation to join that forum, I owe you all a beer/burger/protein bar whatever when/if we meet.
 
Mines ceffo on the Ss forums (original I know) LOL
I havent posted there for awhile now but still lurk there 10-15 min a day to catch some up and coming news.


Well I'm off to Melbourne next month to buy house number 5. Hopefully the vendors ain't hardball and I can get a deal from the auctions.
 
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