Property does so well because of leverage which magnifies returns. In the long term prices always rise.
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Property does so well because of leverage which magnifies returns. In the long term prices always rise.
I suppose he lived in a rental all his life.:D:DmacdunkQuote:
quote:Originally posted by Mr_Market
Have you not heard of Warren Buffett. Second richest person in the world (after Bill Gates). Made his fortune in in stocks, averaged over 20% return pa for over 40 years.Quote:
quote:Originally posted by JoeKing
Let me let you into a little secret... EVERY! super successful entreprenuer throughout history has made their fortunes via Real Estate
Ah JK
The richestman in Babylon by G Clason. Have given this book (besides recommending it to a lot of friends and this forum-doubt anyone here would have bothered) to each of my children - incidently they are mortgage free apart from my daughter(who would have been also until she bought into a high country station in the south island).
Cheers
Nope, I do believe that he owns his own houseQuote:
quote:Originally posted by duncan macgregor
[brI suppose he lived in a rental all his life.:D:Dmacdunk
Quote:
quote:Originally posted by Steve
Nope, I do believe that he owns his own houseQuote:
quote:Originally posted by duncan macgregor
[brI suppose he lived in a rental all his life.:D:Dmacdunk
Which no doubt he bought when undervalued. :)
joeking.... I never said one time that I have a future in the sharemarket.... I said that I've got 2 or 3 more years there.... enough to build up a deposit of 50%.... already on track....
a sideways market for 2 years at minimum, a falling market even better is all it may take....
"ok jK, I will have a look at the richest man in babylon.... do you have a spare copy?"
JK, so whats your advice about that Aranui squallor....? where has that cantab gone.....?
Cantab....the agent that carrys a weapon to open home reviews for his clients protection
[8D]
.^sc
at the moment Im only earning about $300 after tax.... am I wrong to assume that I can't get a house now?... on such little income.... although I do have 40k liquid assets......
my view is that I've got to wait until I graduate at year end....
The thing is no matter what decision I make, that I have a strong group of people that I can get advice from....
you can't sqeeze someone into a catagory from internet posts buddy... It dont matter what catagory I fit into in your views.... It has been interesting in trying to take a view against property... just to see what response I would get...
give me two years, and then talk....
[8D]
.^sc
The BNZ are doing their best to keep the property market ticking over
BNZ in pre-emptive strike on loans
The mortgage war is back on as Bank of New Zealand yesterday produced a special offer two-year fixed rate of 7.85%, 0.5 percentage points below the other big banks.
[quote]Originally posted by Shrewd Crude
".... enough to build up a deposit of 50%.... already on track...."
Shrewdie, good luck. Don't lose site of the fact that most people caught in the rental rut are desperately trying to save for that illusive initial deposit. If you chase a rainbow it will keep moving, turn around and walk away it will follow you.
"ok jK, I will have a look at the richest man in babylon.... do you have a spare copy?"
I bought my copy 50c at a weekend market 25 years ago. It is getting a bit tattered but I would not part with it. You can get a copy here
http://www.goodreturns.co.nz/books/product_info.php?products_id=333
"JK, so whats your advice about that Aranui squallor....?"
I guess every town has its better suburbs, arn't we lucky to be able to choose? My guess is people who live there are probably quite happy
FOODEE
Good to see there is at least one other on this thread who sees wisdom can come in little packages.
I have given all my kids a copy of Og Mandino's "The greatest salesman in the world" too, and they regularly come to borrow from my extensive library. "Affirmations" by Stuart Wilde I would also highly recommend.
Cheers
JK
Well actually yes. -- lives in a house he bought for $31,500, He's worth $36 billion ... give or take a few mil.Quote:
quote:Originally posted by Mr_Market
Have you not heard of Warren Buffett. Second richest person in the world (after Bill Gates). Made his fortune in in stocks, averaged over 20% return pa for over 40 years.
And made his money buying and selling WHOLE COMPANIES.
I don't think Shrewdy is that far advanced.... yet.
Cheers
JK
Do you think he bought whole companies when he was starting out? Don't be ridiculous. He spent years building up to that level by investing in small portions of companies (i.e buying stocks). You are very selective with the truth JoeKing.Quote:
quote:Originally posted by JoeKing
Well actually yes. -- lives in a house he bought for $31,500, He's worth $36 billion ... give or take a few mil.Quote:
quote:Originally posted by Mr_Market
Have you not heard of Warren Buffett. Second richest person in the world (after Bill Gates). Made his fortune in in stocks, averaged over 20% return pa for over 40 years.
And made his money buying and selling WHOLE COMPANIES.
If you were to buy a $300K family home with the banks aid you will end up paying $800K for the privilage.
Seems to me like banks are the real winners.
The average return on housing (which incidentatly despite ALL the hype is what is currently being returned in most parts of NZ) is 4.4% after inflation.
With this current train of thought that considers the total repayments over the term of the 25 year mortgage, we should not forget that historically generations of kiwis have been happy to sign up to the 25 year mortgage as part of the kiwi dream...
<center>NZ HOUSING AMONG MOST EXPENSIVE</center>
article on teletext.......
The third annual demographia International Housing Affordability survey makes grim readings for Kiwi's.....
IT found Auckland is one of the most expensive housing markets in the world once incomes are taken into account... Its ranks 21st on the list, ahead of melbourne and equal with outer London. Los Angeles is the least affordable.
Christchurch ranks 31st while Wellington comes in at 47th....
[8D]
.^sc
Are we splitting hairs MM? I didn't say he started out buying whole Companies, I said thats where he made his money. That is the truth.Quote:
quote:Originally posted by Mr_Market
Do you think he bought whole companies when he was starting out? Don't be ridiculous. He spent years building up to that level by investing in small portions of companies (i.e buying stocks). You are very selective with the truth JoeKing.
Warren Buffet made his first property investment at 14 when he bought 40 acres for $1,200 and leased it to a tenant farmer.
Cheers
JK
Fact:Quote:
quote:Originally posted by Steve
With this current train of thought that considers the total repayments over the term of the 25 year mortgage, we should not forget that historically generations of kiwis have been happy to sign up to the 25 year mortgage as part of the kiwi dream...
Thae average length of a mortgage in NZ is only seven (7) years. Usually within that time Mr./Mrs. average mortgage owner will move house, at which time the mortgage is settled.
True, but most likely they require a new mortgage on the new house meaning that they are still making repayments.Quote:
quote:Originally posted by JoeKing
Fact:Quote:
quote:Originally posted by Steve
With this current train of thought that considers the total repayments over the term of the 25 year mortgage, we should not forget that historically generations of kiwis have been happy to sign up to the 25 year mortgage as part of the kiwi dream...
Thae average length of a mortgage in NZ is only seven (7) years. Usually within that time Mr./Mrs. average mortgage owner will move house, at which time the mortgage is settled.
Then again, they may switch banks 4 times during the 25 years they are mortgaged, resulting in a 7 year average mortgage!
FACTS CAN BE DECPTIVE!;)
Quote:
quote:Originally posted by JoeKing
Are we splitting hairs MM? I didn't say he started out buying whole Companies, I said thats where he made his money. That is the truth.Quote:
quote:Originally posted by Mr_Market
Do you think he bought whole companies when he was starting out? Don't be ridiculous. He spent years building up to that level by investing in small portions of companies (i.e buying stocks). You are very selective with the truth JoeKing.
Warren Buffet made his first property investment at 14 when he bought 40 acres for $1,200 and leased it to a tenant farmer.
Cheers
JK
No, not splitting hairs. I'm simply refuting your assertion that "EVERY! super successful entreprenuer throughout history has made their fortunes via Real Estate".
You seem to be trying to turn Shrewd Crude off stocks with blanket statements like that. From my point of view there is plenty of scope for profiting from stocks at the present time.
At the beginging of the loan sentence (sorry to make it sound like a prison term)... You find that in the first 5-8 years the principal component (the amount coming off the loan balance is low...Quote:
quote:The average length of a mortgage in NZ is only seven (7) years. Usually within that time Mr./Mrs. average mortgage owner will move house, at which time the mortgage is settled.
its not until you get to the 10th year and beyond, when the loan size decreases at a faster and faster rate..
as time passes incremental payments off the house mean that more of the weekly interest is coming off the house and less in pure interest... (a negative sloping enponential curve).... I guess 7 years is when the bank is only to happy to regig the loan schedule...
to suite the bank...(so that the interest component can be as high as possible)
[8D]
.^sc
Shrewdy, it seems to me you are hell bent on finding all the reasons why you cannot buy a house. Try finding just one reason why you can ... and it will work!
When beginning this thread you said:
The housing success stories are all to common for people who are 5plus years older than me and beyond... when you get that that stage maybe (hopefully) you will see that the probable reason is in most cases, a few years more wisdom and "smart."
Rather than use hypothetical scenarios I don't mind using my own experiences as an example. I bought my first property in 1986. After saving for some 15 years I had $7k deposit, the best interest rate we could get was 24%. While my peers were crying in their shandies I figured if I could afford to make the repayments then, it would be easier when interest rates dropped. In 1989 interest rates dropped to around 9% property prices went up 50%, my peers were still crying in their shandies and by 1992 my modest 2 bedroom unit was paid for. We still have it, plus the other 4 in the same block that it helped pay for.
In 1999 I bought the section (2 acres) where I now live. Paid $158k cash, borrowed $280k to build and landscape. A registered valuation 2003 valued this property at $380k. (As there had been no properties sold in this new developement, the valuer had difficulties finding something to compare). About 8 months ago a property 3 away from ours sold $2.2mil. (yes it was pretty nice), around 2 months ago my neighbors' put their property on the market for $1.4, I believe there are 2 contracts on it. I would expect our property to be worth about the same...
My friends from 1986 are still crying in there shandies cause "first home buyers are getting screwed" and rents have just gone up... again sob! sob!
Shrewdy in 20 yers time I sincerely hope you are not like them. But the longer you stay in the rental rut the deeper it gets.
MM. This thread is entitled: "NZ 1st homebuyers are ScReWeD..." I am merely trying to point out that they are not being "screwed" as much as becoming SNIOPed. (Susceptable to the Negative Input of Other People) You will never know how many people I have helped make the first move toward first home ownership, or satisfaction and pleasure I have enjoyed from doing so.
As a home owner I consider myself very fortunate. Not because I own my own home, but because I finally realised I COULD own my own home.... could've/should've done it 20 years earlier!
Cheers
JK
well said Joe, i've had a very similar property path, yep paid 24% on the first house i bought, still own it and the three more that i leveraged into off the first. Built and live in the big house out in the country ..... all this only happened because i wanted it to happen and took the plunge
Can you please tell us in dollars how much money buying this section has put in your pocket.Quote:
quote:Originally posted by JoeKing
In 1999 I bought the section (2 acres) where I now live. Paid $158k cash, borrowed $280k to build and landscape. A registered valuation 2003 valued this property at $380k.
This is a forum for investors not farmers counting there chickens before they hatch.
Converting useless money into securities such as property will always be a great scheme but the points are that property is not the only vehicle for investing nor is taking out a mortgage the only method of purchasing a house.
A a great question would be how much money has you buying this section put in the banks pocket.
Whats wrong with you guys dont you understand the crude one is young and stupid, the same as us at his age. Jeeze was i ever the dumb one at his age, its lucky i fluked my way into the house market.:D:D
I remember i was so smart that i thought POISIDEN mining shares in Australia were over priced at $15, and watched them go up to $230-00.
The crude one thinks the share market is the way to go, up to the first slump, then perhaps hopefully he fluked buying a house before that happens. When you understand the property market and how easy it is to make money then sharemarket is only for a bit of fun.
macdunk
You could always find somewhere cheaper to rent to help build up your deposit? CLASSIC!
Pigs may fly before people live in this converted sty again
A pig farmer converted a sty into four residential flats that she then rented out for $150 a week to Aucklanders desperate for accommodation.
In one of the most unusual tales to come from Auckland's super-heated housing market, a building where up to 150 piglets a week were born was turned into flats that were soon snapped up by eager tenants.
But, when the local council got wind of the unusual redevelopment, it was underwhelmed and took the owner to court.
There a literally millions of people who would dearly love to own their own home. Most don't, simply because they have been told, and believe they can't.Quote:
quote:Originally posted by Bel
Can you please tell us in dollars how much money buying this section has put in your pocket.
Bel sorry cannot put an exact figure, but somewhere else (maybe another thread?) I briefly outlined how I used $20,000 equity in our home and turned it into more than $1 mill in less than 3 years, and used not one penny of my own! At one stage I owned 37 houses. At a guess I would say probably 2mil+ (without selling our home) Could have been a lot more but I gave up property investing a couple of years ago.
This is a forum for investors not farmers counting there chickens before they hatch.
Ahem... this thread is entitled NZ 1st homebuyers are ScReWeD...
Converting useless money into securities such as property will always be a great scheme but the points are that property is not the only vehicle for investing nor is taking out a mortgage the only method of purchasing a house.
I don't think anyone is disputing this, tho I have never actually had any "useless money"
A a great question would be how much money has you buying this section put in the banks pocket.
Perhaps a more relevant question might be "how much money has the bank put in my pocket"? If the bank has done ok as well thats fine by me.
I have a very nice orchard, people say virtually everyday when they come to pick fruit "look the birds are murdering your plums - peaches - nectarines - grapes whatever," my reply is "as long as I get what I want, they are welcome to what is left, the same as you are"
When I bought my first property as above I was 43 and had been adjudged bankrupt 6 months. I approached the Official Assignee and asked "is it illegal to have a mortgage" he said NO! "so long as you disclose your position to a lender, but the chances of a bank lending to you are pretty slim." True! I tried every lending institution I could find and got knocked back. Then the newly founded United Building Society opened an office in Rotorua and I found a sympathetic ear and became the first(and possibly only) undischarged bankrupt in NZ to have a mortgage. A little later I became the first (and again possibly ony) undischarged bankrupt to be registered for GST.
It is true... If you believe you can, you are right. If you believe you can't, you will also be right.
A wise word from me for all you doubters:
Unlike a marriage, a mortgage is just as easy to get out of, as into. If you decide it is not for you, you can always just sell the problem, with a chance of coming out better off.
Cheers
JK
Joeking what did you pay for your first property back in 1986? have any ideas what it may be worth now?
[8D]
.^sc
Hi Shrewdy, It was/is a 2 b/r concrete block unit strata titled in a block of 5, close to city centre.Quote:
quote:Originally posted by Shrewd Crude
Joeking what did you pay for your first property back in 1986? have any ideas what it may be worth now?
[8D]
.^sc
We paid $39k (GV was $43k) for first unit (lived in it 5 years) and purchased the rest over 12 years as they became available. Latest RV (rateable value) around $118k each, but as we own the total block and zoning has recently been changed to allow for hotel construction, although the units are not all that flash..I do all the maintenence and enjoy pottering with a hammer and paintbrush to keep them in good repair. (under rented but still returning 20%+) the total section is very valuable. I had thought of demolishing existing units and constructing 8 multi level nice apartments then flicking them at around $360k each,(about the going rate) but have instead decided to wait till someone else wants to do something similar and comes a knockin with a hand full of dollars, or alternatively sell them one at a time for say $125k each.
MMM not a bad return for $39k outlay, oops-(plus interest of course I'm sure someone will figure how much over 5 years). All the subsequent unit purchases and maintenece have been paid for by their own incomes/rents, and we have been able to claim all GST and tax incentives to boot.
Cheers
JK
JK awesome....
Using historical performance and comparing it with present/future performance is a waste of time... your return is approximately 300%
using your historical return and putting it into present time you get
Say I bought a house for 280k
280k * 3= 840k
in dollar terms your $ increased 118-39=79k
in dollar terms mine has to increase = 560k
for us to be equal
mine has to increase 700% in dollar terms more than yours....!
"Whats wrong with you guys dont you understand the crude one is young and stupid" ... I maybe young but certainly not stupid... I am certainly not wrong to way up all the costs rather than ONLY look at the benefits...Quote:
quote:duncan macgregor Posted - 23/01/2007 : 08:52:28 AM
Whats wrong with you guys dont you understand the crude one is young and stupid,
The crude one thinks the share market is the way to go.
then perhaps hopefully he fluked buying a house before that happens.
When you understand the property market and how easy it is to make money then sharemarket is only for a bit of fun.
macdunk
in present tense, there are costs.... namely a falling market amongst MaNy...
but you guys don't seem to want to talk about the costs....
the way to get around this is to talk past performance.....
"The crude one thinks the share market is the way to go"
....I don't think the share market is the way to go.... I have said (more than once) that I only have a 2-3 years left in shares... I believe the last 3-5 years performance can be put down to Baby boomers that have kept markets liquid.... they will pull out.... and I will be out of this game.... (or maybe I might go short!)
" then perhaps hopefully he fluked buying a house before that happens"
.... IF I buy a house it will be no fluke....
"When you understand the property market and how easy it is to make money then sharemarket is only for a bit of fun"
this is not a house vs sharemarket thread.... you cannot compare leverage vs non leverage... with sharemarket leverage my AED would kick house butt... not comparable buddy...
you cannot compare past to future.... as you cannot compare 79k to 560k....
[8D]
.^sc
hey joe... how do you claim gst on residential property ?
This would set you up shrewd:
http://www.trademe.co.nz/Trade-Me-Pr...htm?key=298346
A falling market? ROFL... since when?Quote:
quote:
"Whats wrong with you guys dont you understand the crude one is young and stupid" ... I maybe young but certainly not stupid... I am certainly not wrong to way up all the costs rather than ONLY look at the benefits...
in present tense, there are costs.... namely a falling market amongst MaNy...
but you guys don't seem to want to talk about the costs....
the way to get around this is to talk past performance.....
"The crude one thinks the share market is the way to go"
....I don't think the share market is the way to go.... I have said (more than once) that I only have a 2-3 years left in shares... I believe the last 3-5 years performance can be put down to Baby boomers that have kept markets liquid.... they will pull out.... and I will be out of this game.... (or maybe I might go short!)
Haha, thats a good one... We can't talk about leveraged gains? In a property investing forum? that's brilliantQuote:
quote:
"When you understand the property market and how easy it is to make money then sharemarket is only for a bit of fun"
this is not a house vs sharemarket thread.... you cannot compare leverage vs non leverage... with sharemarket leverage my AED would kick house butt... not comparable buddy...
1.... we are due for a falling market....... thats all im saying... have alook at this graph, I have shown it before... in particular look at the years 91-92, 98-99, 00-01Quote:
quote:
trackers Posted - 23/01/2007 : 3:11:37 PM
quote:
1....A falling market? ROFL... since when?
2....Haha, thats a good one... We can't talk about leveraged gains? In a property investing forum? that's brilliant
www.rbnz.govt.nz/keygraphs/fig4.html ..... as mac dunk said, its all about cycles... whata ya no... the next downward cycle is due....
2....you can talk about anything you want....all i'm trying to say is that...
My position has nothing to do with houses vs shares...
for me there is no argument about comparing one to the other...
all I said was if my shares had leverage then I wood eat housing alive... (dollar for dollar)
at the moment I don't stand for housing....I have shares... that Don't mean that shares>housing....
Mack dunk... im not in the rental rut either... I live at home rent free, I exchange free rent for financial advice with me old man....
[8D]
.^sc
Clips,Quote:
quote:Originally posted by clips
hey joe... how do you claim gst on residential property ?
firstly congrats on your success story.
Re gst. I just asked my bookeeper (wifey) and she says I was wrong. You can't claim GST on residential properties, only depreciation and tax deductions on repairs and maintenence.... my apologies. I fix leaky taps she pays the bills and counts the money... the way it should be.
I got confused with trading entity that handles WRAP's and properties that have intentially been bought to onsell, and is GST registered.
Shrewdy
"you cannot compare past to future.... as you cannot compare 79k to 560k...."
But you can always compare the past with the past. My Dad bought his first house 1954
Hull road Mt Maunganui in amongst the gorse and lupins. Cost 900 pound. I was brought up there as a boy, but cannot even find the section now, it is all industrial/commercial. I have often wondered how many millions it would be worth today? Don't be frightened by the zeros!Do you think we would ever be able to imagine our little 2 bedroom concrete block flat would EVER be worth over a HUNDRED GRAND!!
Historically you can safely bet on property appreciating around 8-10% per. an. on average.
Just take any average property and trace its sales history via QVNZ. I think you will be surprised.
Trackers
Re ChCh house. Great find! A few years ago I would have bought it over the phone, then called a management agency.
Cheers
JK
In that case I think you will find that more people will be convinced by your agruments if they are based upon FACT.Quote:
quote:Originally posted by JoeKing
MM. This thread is entitled: "NZ 1st homebuyers are ScReWeD..." I am merely trying to point out that they are not being "screwed" as much as becoming SNIOPed. (Susceptable to the Negative Input of Other People)
Congratulations, you deserve a medal. I'm sure everyone is familiar by now with your great charity - you haven't missed an opportunity to tell us so.Quote:
quote:
You will never know how many people I have helped make the first move toward first home ownership, or satisfaction and pleasure I have enjoyed from doing so.
[quote]Originally posted by Mr_Market
... I think you will find that more people will be convinced by your agruments if they are based upon FACT.
Thats why I prefer to use my own experiences, they ARE fact, if you want to question anything I say please just do so.
Congratulations, you deserve a medal. I'm sure everyone is familiar by now with your great charity - you haven't missed an opportunity to tell us so.
OOOh! do I detect some sarcasm? Don't want a medal, and can't be bothered argueing! This thread was started for discussion, would you rather I go away? sorta leaves a hole in the discussion tho don't you think?
Cheers
JK
Better if you stayed IMO...Quote:
quote:Originally posted by JoeKing
[brThis thread was started for discussion, would you rather I go away? sorta leaves a hole in the discussion tho don't you think?
Cheers
JK
[quote]quote:Originally posted by Shrewd Crude
Quote:
My position has nothing to do with houses vs shares...
for me there is no argument about comparing one to the other...
all I said was if my shares had leverage then I wood eat housing alive... (dollar for dollar)
at the moment I don't stand for housing....I have shares...
.^sc
I entirely agree with your position and outlook. However, I don't understand with you are not leveraging shares. If you don't like the rates charged for margin lending, you can always use a revolving credit facility against your home and buy relatively low volatility shares like KIP and achieve a significantly higher return than if the funds were invested directly into commercial property (and you don't have to deal with tenants, and you have high liquidity as well).
[quote]quote:Originally posted by patsy
LOL, Patsy he hasn't got a home, however interesting that you mention borrowing against his home at a lower interest rate. ;)Quote:
quote:Originally posted by Shrewd Crude
Quote:
My position has nothing to do with houses vs shares...
for me there is no argument about comparing one to the other...
all I said was if my shares had leverage then I wood eat housing alive... (dollar for dollar)
at the moment I don't stand for housing....I have shares...
.^sc
I entirely agree with your position and outlook. However, I don't understand with you are not leveraging shares. If you don't like the rates charged for margin lending, you can always use a revolving credit facility against your home and buy relatively low volatility shares like KIP and achieve a significantly higher return than if the funds were invested directly into commercial property (and you don't have to deal with tenants, and you have high liquidity as well).
Are you absolutely certain that your statement
"...like KIP and achieve a significantly higher return than if the funds were invested directly into commercial property"
is correct? Please supply the numbers if you have them.
Shrewd, your shares can't get leverage, the bank isn't interested, what does that tell you?Quote:
quote:Originally posted by Shrewd Crude
My position has nothing to do with houses vs shares...
for me there is no argument about comparing one to the other...
all I said was if my shares had leverage then I wood eat housing alive... (dollar for dollar)
.^sc
Found another great first home, even room for a sandpit for the kids and the missus will do some great fryups in the kitchen:
http://www.harcourts.co.nz/listing/d...lton&id=347911
Pack a few photos to show the local lasses in China. ;)
Haha... That first bit of the link, "harcourts.co.nz" told me all I needed to know ;)Quote:
quote:Originally posted by cantab
Shrewd, your shares can't get leverage, the bank isn't interested, what does that tell you?Quote:
quote:Originally posted by Shrewd Crude
My position has nothing to do with houses vs shares...
for me there is no argument about comparing one to the other...
all I said was if my shares had leverage then I wood eat housing alive... (dollar for dollar)
.^sc
Found another great first home, even room for a sandpit for the kids and the missus will do some great fryups in the kitchen:
http://www.harcourts.co.nz/listing/d...lton&id=347911
Pack a few photos to show the local lasses in China. ;)
I'v been following this thread - didn't plan on commenting until I saw the above remarkQuote:
quote:Originally posted by cantab
[
Shrewd, your shares can't get leverage, the bank isn't interested, what does that tell you?
The fact is that you can borrow against shares - it's called margin lending
You can borrow between 40 and 80% against many of the shares listed on the NZX and ASX.
eg, You can borrow 70% against GPG. GPG has an average return of 18% pa while you can borrow the money to buy them at 10% pa - what's wrong with that.
You can't borrow 90% of the value of the asset as with housing but, depending on the shares you buy, you could easily borrow 50% of the value of your portfolio.
I'v made great use of leverage in the sharemarket.
.
MICK, With property you can borrow more at cheaper rates so why would anyone wish to borrow for shares?. I would mortgage the homestead if i were into that, but would much rather buy more property with the money. It might be different for our young friend SHREWD CRUDE to risk the lot at the start of his investing career.
Property leveraged to the hilt gives a capital gain of 10 pc in my experience on a fixed mortgage of 8pc. Add the rent deduct the expences get all your own money back in three years start again double your size.
Why would anyone think that a 2pc gain is good when you can do that?.
I would rather have hundreds of thousands in mortgages on properties, than borrow five bob to buy shares. Buying shares involves greater risk than property. macdunk
Nothing wrong with that Mick, if you're comfortable with it and know what you are doing, I do know about margin lending, wouldn't do it myself, however my point to Shrewdie was related to his particular shares "your shares" - he has told us what shares he owns, perhaps Shrewdie can refresh us all with his portfolio and you can tell us how much the bank will lend to him, from memory there are a couple of oilers and a couple of uranium stocks. Come in Shrewdie :)Quote:
quote:Originally posted by Mick100
eg, You can borrow 70% against GPG. GPG has an average return of 18% pa while you can borrow the money to buy them at 10% pa - what's wrong with that.
I can understand some people being prepared to leverage against defensive, high dividend paying, Aussie blue chips such as banks however I wouldn't use margin lending to do it.
Buying shares on margin is a very risky practice for those people who don't know what they are doing in the markets. Let me put it another way - if I were you macdunk, I sure as hell would not use margin either.Quote:
quote:Originally posted by duncan macgregor
I would rather have hundreds of thousands in mortgages on properties, than borrow five bob to buy shares. Buying shares involves greater risk than property. macdunk
As for myself, I consistantly (last 5 yrs) make well in excess of 10% pa in the markets so I'm quite comfortable borrowing at 10% pa.
,
Good point cantabQuote:
quote:Originally posted by cantab
however my point to Shrewdie was related to his particular shares "your shares" .Quote:
quote:Originally posted by Mick100
eg, You can borrow 70% against GPG. GPG has an average return of 18% pa while you can borrow the money to buy them at 10% pa - what's wrong with that.
One of the things, that those of us who use margin, would consider when buying shares, is whether those shares are on the lending list.
Successful investing doesn't depend entirely on picking the right shares - money managment is also quite important in my opinion.
.
thanks patsy...Quote:
quote:patsy Posted - 24/01/2007 : 07:41:54 AM
I entirely agree with your position and outlook. However, I don't understand with you are not leveraging shares. If you don't like the rates charged for margin lending, you can always use a revolving credit facility against your home and buy relatively low volatility shares like KIP and achieve a significantly higher return than if the funds were invested directly into commercial property (and you don't have to deal with tenants, and you have high liquidity as well).
I don't have a house though....
It is not my goal to invest in low volatility shares... im chasing
high risk shares (with research)... and prepared to put it on the line.... now that I'm up 10k plus, I can afford more downside....
sold my NZOOD 1 day ago... its down 10% today... bought NWE with big announcement coming up....
Mack dunk.... at least we agree on one thing!... I have too sent every dollar I own and put into australia assets/dollars.... a future exchange rate fall guaranteed... wanna get back into NZOOD some time though
thats not amusing at all... I hope you are around in two years so we can debate what will happen after a falling market...Quote:
quote:cantab Posted - 24/01/2007 : 11:25:46 AM
LOL, Patsy he hasn't got a home,
cantab- squallor to 2.4 million dollar... which one is it?...
Mick100.... how many dollars leveraged could I borrow against AED? how can I use leverage in the share market? I have an email...
[8D]
.^sc
If that person didn't like the outlook on property... and if that person thought they could return way more on shares compared to the associated lending rateQuote:
quote:duncan macgregor Posted - 24/01/2007 : 6:33:20 PM
--------------------------------------------------------------------------------
MICK, With property you can borrow more at cheaper rates so why would anyone wish to borrow for shares?.
[8D]
.^sc
shrewd, AED is not on the lending list at my broker - NZO is, so I'm a bit surprised that AED isn't - I don't know the criteria that is used in determining which companies go on the list.
I have been expecting AED to get added to the list for a while now. ARQ and TAP are both on at 60%, NZO at 50%, PSA at 40%, STO at 70%.
May see AED get added in the next 6 months hopefully.
,
Mick100...
thanx...in 6 months the horse would have bolted... AED will be 10... It will be a 6bagger for me...feeling most confident about this stock over all others...
cantab... I have regigged my portfolio of late to include NWE (to increase my exposure to the PUFFin announcement coming up)..... other stocks are AED, URA, 30k of UOGO...Quote:
quote:
cantab
Posted - 24/01/2007 : 7:14:11 PM
quote:
Originally posted by Mick100
my point to Shrewdie was related to his particular shares "your shares" - he has told us what shares he owns, perhaps Shrewdie can refresh us all with his portfolio and you can tell us how much the bank will lend to him, from memory there are a couple of oilers and a couple of uranium stocks. Come in Shrewdie
tried to push out all my NZOOD at 13.3 ... pushed out 70% or so at 13.3... and now only hold 20 something k NZOOD.... thats all.....
I can answer that question now on how much the bank will lend me.... zero leverage....
It doesnot deter me on my path to cut that 30year loan to 10years...
and two years sideways / falling market shall be enough...
I hope that the one's going against my thoughts will be around in two years!
the risks of holding out two years vs 30year loan is defintely worth it...
[8D]
.^sc
Shrewdie, you read that wrong buddy, I wasn't laughing at you, I was making a joke with Patsy who somehow couldn't work out after 12 or so pages on this topic that you don't yet own a home. I sincerely hope you get a home however I'm already on record as saying I don't believe it is necessary to ever own one's own home. I've currently got a tenant who owns a number of houses in Christchurch. That thinking changes everything - areas that you wouldn't live in suddenly become attractive, for example Hornby which happens to be a great letting location - close to ever increasing industry and warehousing - therefore growing employment - close to major shopping centres - not that far away from Westfield Riccarton Mall - attracts good stable family tenants - old man hops on the bike and cycles down to the same factory for 20 years - rents for life.Quote:
quote:Originally posted by Shrewd Crude
thanks patsy...
I don't have a house though....
thats not amusing at all... I hope you are around in two years so we can debate what will happen after a falling market...Quote:
quote:cantab Posted - 24/01/2007 : 11:25:46 AM
LOL, Patsy he hasn't got a home,
cantab- squallor to 2.4 million dollar... which one is it?...
[8D]
.^sc
You wrote off linwood - walking distance to Cathedral Square! Take a look at the people walking around - it's changing - increasing numbers of Asian students, etc
Shrewdie, you've certainly started something interesting. :)
Aranui or Fendalton - your call
Shrewdie, you've done fantastically well and I can understand your thinking as far as the timing is concerned, especially if you can continue to do well in the sharemarket. You may have seen a few weeks ago in the Press, a comment by the president of the NZ Property Investors Federation (a Cantabrian), that smart investors are sitting on piles of cash and waiting for the right time to buy which will be when the yields rise to a point where it makes sense to invest. He expected a rise in rents over time but no major fall in property prices.Quote:
quote:Originally posted by Shrewd Crude
cantab... I have regigged my portfolio of late to include NWE (to increase my exposure to the PUFFin announcement coming up)..... other stocks are AED, URA, 30k of UOGO...
tried to push out all my NZOOD at 13.3 ... pushed out 70% or so at 13.3... and now only hold 20 something k NZOOD.... thats all.....
I can answer that question now on how much the bank will lend me.... zero leverage....
It doesnot deter me on my path to cut that 30year loan to 10years...
and two years sideways / falling market shall be enough...
I hope that the one's going against my thoughts will be around in two years!
the risks of holding out two years vs 30year loan is defintely worth it...
[8D]
.^sc
For what it's worth this is what I would do, firstly I'd find a good wife - this is the number 1 rule - someone who thinks the same way as you - investment, spending, travel, kids, etc, divorce is expensive, it helps a lot if she has a good income - bank mangers love this. BTW I like your taste in Chinese girls - some pretty hot numbers walking around town [:p]
Second I wouldn't buy a house to live in, when the time is right you can own a lot more property = more leverage, using that equity built up in the sharemarket, if you buy rentals.
IMHO, the property market leaves the sharemarket for dead as a safe and sure way to create wealth and therefore income using leverage - the banks' money.
Mick, would be interested to know your thoughts on money management.Quote:
quote:Originally posted by Mick100
Successful investing doesn't depend entirely on picking the right shares - money managment is also quite important in my opinion.
.
Thanks
cantab I have picked out the nice chunky bits....Quote:
quote:cantab Posted - 24/01/2007 : 10:38:36 PM
quote:
1....Shrewdie, you read that wrong buddy,
2....I sincerely hope you get a home
3.....You wrote off linwood - walking distance to Cathedral Square!
4......Shrewdie, you've certainly started something interesting.
5......Aranui or Fendalton - your call
1.... my apologies...
2...... I hope I get a house aswell, I have been thinking about housing since I was 15...
I have only been in the position to be able to do something about it in the last one year...
( i have never had a full time job for more than a few months other than for 6 months when I first left High school...)
I am not stupid enough to turn an opportunity away when It comes in my favour... Its not in my favour, and I will wait
3.....The beauty of Chch is that most areas are walking distance from town... If im out and about hittin it hard on a sat night... I usually walk home to Avonhead... takes me 1.5hrs... its that or taxi at 20 something bucks... clean chch fresh air.... why not...
when I was young there was 300k people in chch... now there is 400k.... it makes sense that these extra people have increased demand on the chch housing market...
4.....[8D] <sc
5..... something in the middle I reckon.... how about a new area called fendanui....
(cheaper houses with expensive land prices)
no.... Money management is not quite important....... but rather it is the most important thing...baggers mean nothing if you spend profits up... I have only ever aloud myself to put into shares what I can afford... and have never taken out....Quote:
quote:
Mick100 Posted - 24/01/2007 : 7:33:41 PM
Successful investing doesn't depend entirely on picking the right shares - money managment is also quite important in my opinion.
I have far to many stories to tell but... In my generation the number of kids with flash cars which represent like 80% of their assets makes me cringe..if you want a depreciating asset (thats fine) but get a million first, (I actually call them depreciating liabilities)... in 5 years theres always the next gadget....
I have buddys that have been working full time for 5 years and still live from week to week...
Mick100, the way I sum it up is.... you could either buy a flash XYZ now.... or forgo short term pleasure and some time in the future get two XYZ's.... If that XYZ means that much to you, then im sure you will put the hard yards in to get there...
[8D]
.^sc-hard yards now... short term pain equals long term gain.... Its hardly short term pain when you get such a buzz from studying shares as I do...
cantab...
sorry didnt mean to leap the gun, but I had already written up what I had to say before I saw that you had asked that question....
Micks statement stood out for me aswell.... so I addressed it....
I would also be interested in Micks thoughts....
[8D]
.^sc
He is IRISH you know dousnt think much.:D:D:DmacdunkQuote:
quote:Originally posted by Shrewd Crude
cantab...
sorry didnt mean to leap the gun, but I had already written up what I had to say before I saw that you had asked that question....
Micks statement stood out for me aswell.... so I addressed it....
I would also be interested in Micks thoughts....
[8D]
.^sc
Aspex, agree that there are some unique advantages with shares, clearly you have found a niche and are good at what you do, however as a safe and sure way to generate a passive income in retirement, property is the way to go for the average Joe.
There is no such thing as "safe and sure". The nearest proxy is "I don't fully understand the risks I am taking but am unaware so everything is OK".
From 1980 to 2005 the Capital Stock Value of residential real estate rose 9.7% per annum. This can be adjusted by:
-1% due to increased housing numbers (Although in 2005 this would be -2% due to higher value new dwellingsand a building boom).
Inflation accounted for -5.3%
Maintenance (my estimate) probably needs to be around -1.5 to -2% to sustain a dwelling, perhaps just -1% to wallpaper over bad maintenance budgeting.
Operating expenses like rates, insurance maybe another -0.4% or -0.5%
Rents "saved" by owner occupying vary according to region but in our most populated area of Auckland might now gross around +6% but historically may have been +7 or +8%.
Floating interest rates for the period averaged -12.4%
If we do the math the Average Joes "made" all of their money by enforced saving of mortgage principal (which over 25 years on a 25% deposit would average 3%pa although in practice be a little more balloon shaped).
The benefit of inflation adjusted mortgages is eroded as the mortgage is paid down. And other forms of saving like equities still benefit from Inflation adjusted wage rises which is the real "benefit" of the inflation adjusted mortgage (i.e. there would be no benefit if wages didn't rise by at least the rate of inflation).
I can do a lot better than 3% by saving my rent differential. Most people choose not to. Attributing their wealth to "anti saving" via an expensive mortgage is proof only of financial literacy levels, not property outperformance.
HalebopQuote:
quote:Originally posted by Halebop
There is no such thing as "safe and sure". The nearest proxy is "I don't fully understand the risks I am taking but am unaware so everything is OK".
BOLLOCKS! Pull your head out before you get lost in the dark.
Cheers
JK
I have been reading this thread from the start, and it has been an excellent read :).
I decided to sign up to give my view on the matter.
I am in Shrewds position, looking for a way into the property market, but thinking its not the right time. With my little knowledge I have looked at several area's and crunched the numbers, but things still dont look so good. My main goal right now is to gain as much saving/capital within the next 3-5years, then maybe.. I will think about buying a house.
My ideas are also like Shrewds. I am holding off buying items which will not increase in value over time (car/electronics) and saving that money to be spent in assets which will earn me money.
Maybe if I find a partner in crime who share's the same ideas of saving and investment, then I will be more keen on property but with a single income, shares are looking more attractive.
p.s. Its inspiring to hear storys of experience's in the property market, namly JoeKing
Thanks,
Hi Vivens
THANKS! for the compliment. There are more inspirational people than me. I did not wake up till I was 43, and broke.
remember this post by Canatab a few pages back?
" The Star 29/09/06
Steve Brooks is not old enough to go to the casino, but the 19 - year - old has been playing the property market since he was 14. Last week he signed up his biggest deal yet: a 3800m2 block of land on Buchanans Rd and now owns nine houses in Christchurch. He has recently set up his own business and is getting a book published, A Young Punter's Guide to Property Investing."
Now there is a young man to be inspired by... why not give him a call? Successful people love to share, its an attitude thing.
I would say Cantab, if not already there will one day be very wealthy too, his/her positive attitude is obvious. I'm sure even ole McDunk (successfuly retired choosing his own lifestyle), ditto Foodee, and others would be only too pleased to offer a wealth of experience if asked.
Unfortunately threads like this can become inhabited by frustrated wannabees while the real go getters are out there "go-getting" but those with positve, success orientated attitudes are here to... ya just have to draft them out.
Read on... there is some good stuff here.
Cheers
JK
Well I think you are on the right track already.Quote:
quote:
posted by vivivns
..I am holding off buying items which will not increase .....
My own observation is that a lot of 1st home buyers have never been in the share market. Doesn't matter as long as you're working your money and your money is working for you.
cheers
vivins.....you are welcome here....
1..... This man has every incentive to give a biased view.... Its like asking your real estate agent if he thinks prices will fall, and if you should buy that house now.... is the salesman pushing for a sale or not!...Quote:
quote:
cantab
Advanced Member
2224 Posts
Posted - 24/01/2007 : 11:27:09 PM
quote:
1...... You may have seen a few weeks ago in the Press, a comment by the president of the NZ Property Investors Federation (a Cantabrian), that smart investors are sitting on piles of cash and waiting for the right time to buy which will be when the yields rise to a point where it makes sense to invest. He expected a rise in rents over time but no major fall in property prices.
2......For what it's worth this is what I would do, firstly I'd find a good wife - this is the number 1 rule - someone who thinks the same way as you - investment, spending, travel, kids,
2...... Im only 22, im not looking for a wife just yet... boy, its hard enough finding the right girl, let alone finding one that is financially astute...
its now becoming a monster tick list....The way I look at it, a woman with the financials is just a bonus... a quick lesson on money management will sort things out...
[8D]
.^sc
JEEZE crude one have you got a lot to learn. :D:D:DmacdunkQuote:
quote:Originally posted by Shrewd Crude
vivins.....you are welcome here....
its now becoming a monster tick list....The way I look at it, a woman with the financials is just a bonus... a quick lesson on money management will sort things out...
[8D]
.^sc
<center>[u]OCR STAYS PUT AT 7.25%</center></u>
The reserve band has left the official cash rate unchanged at 7.25%...
But it is warning of a possible increase when it next reviews the rate in March, at the release of its quarterly monetary policy statement...
Govenor Alan Bollard says domestic demand is rebounding, putting further pressure on inflation in the medium term...
quoted off teletext
High five vivins... good news for us...Its amazing oil prices had fallen from $62 and was under $50 for a short while... in that time petrol prices at the pump only fell 4 cents a litre... Oil prices are now back over $55... go the OCR and inflation go you good thing...
Mackdunk, you have always taken what I have said and thrown it back at me with negativeness... my last statement was abit of a joke, but true in many ways...and yet You are the ones talking about dual incomes and how important it is... you have never agreed with me on anything... surely there are things you do agree with me on, but I would never expect you to admit it...
Mick, thanks for the margin info and all... I do want to get into margins and CFD's but still feel like im not quite there...shares and call options now... next step will be margins
[8D]
.^sc
SHREWD CRUDE, I might agree with you more times than you think. I have been into property ,share trading etc etc all that means is that i have made a lot more mistakes than you up to this point. We all learn from each other, the wise ones learn from other peoples mistakes. You are on the right path, dont allow macdunks reverse humour to put you off. Even mad mick 100 might get something right sooner or later. Pay attention, do it your way i will try and keep my funnies to myself. macdunkQuote:
quote:Originally posted by Shrewd Crude
Mackdunk, you have always taken what I have said and thrown it back at me with negativeness... my last statement was abit of a joke, but true in many ways...and yet You are the ones talking about dual incomes and how important it is... you have never agreed with me on anything... surely there are things you do agree with me on, but I would never expect you to admit it...
I'll say this much - shrewd is a hell of alot wiser that I was at 22 yrs old. What I like about the sharemarket is that you learn something every day. With regards to finance/investing I'v learn't more the the past 5 yrs than I had learn't in half a lifetime. I think property investing would be dull and boring - for me anyway. (I do like dull and boring share though)Quote:
quote:Originally posted by duncan macgregor
[ Even mad mick 100 might get something right sooner or later. Pay attention, do it your way i will try and keep my funnies to myself. macdunk
.
Macdunk, I get things right far more often than I get it wrong in the sharemarket. As i'v told you before - I put alot of effort into it including some formal study in recent yrs.
I want to be still involved in this sharemarket business in 20-30 yrs time - I enjoy it. I don't plan on doing anything that's going to wipe me out and put me out of the game.
.
I now consider my darkness illuminated. Blessings to the well reasoned and rational. [:X]Quote:
quote:Originally posted by JoeKing
Halebop
BOLLOCKS! Pull your head out before you get lost in the dark.
Cheers
JK
Is Duncan finally getting his throw away lines correct?Quote:
quote:Originally posted by duncan macgregor
MICK, With property you can borrow more at cheaper rates so why would anyone wish to borrow for shares?. I would mortgage the homestead if i were into that, but would much rather buy more property with the money. It might be different for our young friend SHREWD CRUDE to risk the lot at the start of his investing career.
Property leveraged to the hilt gives a capital gain of 10 pc in my experience on a fixed mortgage of 8pc. Add the rent deduct the expences get all your own money back in three years start again double your size.
Why would anyone think that a 2pc gain is good when you can do that?.
I would rather have hundreds of thousands in mortgages on properties, than borrow five bob to buy shares. Buying shares involves greater risk than property. macdunk
"First it was property has gone up 10% per year from 1066".
Next it was
"property doubles every 7 years and will in the future":
And now its
"Property leveraged to the hilt gives a capital gain of 10 pc."
Finally Duncan has a throw away line that is close to reality.
But even that is only correct if property prices keep going up.
They will fall as NZ's Population falls (from 2050) if not well before that.
I think he's missed his mark by several quarters as well. Any Petrol pump savings will just flow into the consumer economy anyhow so I suspect this just shows a flaw in their consumer basket calculations rather than a break on inflation.Quote:
quote:Originally posted by aspex
Bollard is woolly woofter.
The Bank of England showed the way by slugging another quarter percent over there.
What we really needed here was an extra half percent mid 2006 to send the message.
By now we would have a realistic exchange rate down by 15% to the level needed to grab some extra exports.
Bollard is likely to be overtaken by relative tightening elsewhere and this country will stagger on well into 2009 with the ever present danger of melt-down which no one needs or wants.
Rising interest rates would hurt equities more quickly than property but it's pretty obvious we are a bit out of wack and something needs to be done (or something will give all on its own). Problem is with our rising mortgage interest payments to overseas creditors and Aussie banks, it would probably hurt our balance of payments before it helped it. I really think there needs to be a different weapon in the reserve bank's ****nal because lowering interest rates could conceivably have a beneficial impact too if foreign investors were turned off and the $NZ dropped. So a better tool might not directly revolve around the OCR / interest rates.
You've got it Shrewd.Quote:
quote:Originally posted by Shrewd Crude
vivins.....you are welcome here....
1..... This man has every incentive to give a biased view.... Its like asking your real estate agent if he thinks prices will fall, and if you should buy that house now.... is the salesman pushing for a sale or not!...Quote:
quote:
cantab
Advanced Member
2224 Posts
Posted - 24/01/2007 : 11:27:09 PM
quote:
1...... You may have seen a few weeks ago in the Press, a comment by the president of the NZ Property Investors Federation (a Cantabrian), that smart investors are sitting on piles of cash and waiting for the right time to buy which will be when the yields rise to a point where it makes sense to invest. He expected a rise in rents over time but no major fall in property prices.
2......For what it's worth this is what I would do, firstly I'd find a good wife - this is the number 1 rule - someone who thinks the same way as you - investment, spending, travel, kids,
2...... Im only 22, im not looking for a wife just yet... boy, its hard enough finding the right girl, let alone finding one that is financially astute...
its now becoming a monster tick list....The way I look at it, a woman with the financials is just a bonus... a quick lesson on money management will sort things out...
[8D]
.^sc
Marring a woman who is only interested in spending your money is the biggest mistke you'll ever make. It'll virtually guarantee that you'll work until your 65 and retire with nothing more than your own house.
The next biggest mistake you'll make is having too many kids. Over 18 years raising a kid costs the same as buying a house.
Quote:
quote:Originally posted by rmbbrave
Is Duncan finally getting his throw away lines correct?
"First it was property has gone up 10% per year from 1066".
I don't know about 1066, wasn't that when magnacata was signed? but certainly over the past 100 or so years in NZ wouldn't be far off on average
Next it was
"property doubles every 7 years and will in the future":
Historically using "rule of 72" would give 7.2 years... not far off. No one really knows the future but is there a valid reason why trend should not continue? AND exponentially which makes it faster..?
And now its
"Property leveraged to the hilt gives a capital gain of 10 pc."
same as above, but don't need "to the hilt". I'll sure vouch for that! 10% profit on banks money can't all be bad?
Finally Duncan has a throw away line that is close to reality.
But even that is only correct if property prices keep going up.
They will fall as NZ's Population falls (from 2050) if not well before that.
RMB, property prices have climbed steadily since Adam bit the apple, I note in Genises that his "shares" went down dramatically about the same time ;-(( (ahem, that was a figureative joke for you over serious buggers)
Do you forsee NZ population falling from:
1. Global warming
2. dissapearing coastline
3. GE meddling causing potato crop failure... cause the greenies were too slow.
4.I.R. radiation because fart tax was not implemented.
5. Shrewdie owns all the rental properties and high rents are causing mass starvation.
6.rock snot has clogged the waterways and dams and citizens die from lack of electric heating in winter and frustration cause they can't wash any of their 5 cars in summer.
7.NZO flood the world markets with cheap oil causing a world economic crash and major depression.
ok getting a bit frivolous but 2050 really is a long ways off.
Cheers JK
"we all learn from each other"Quote:
quote:
duncan macgregor Posted - 25/01/2007 : 5:18:57 PM
quote:
SHREWD CRUDE, I might agree with you more times than you think. I have been into property ,share trading etc etc all that means is that i have made a lot more mistakes than you up to this point. WE ALL LEARN FROM EACH OTHER, the wise ones learn from other peoples mistakes. You are on the right path, dont allow macdunks reverse humour to put you off. Even mad mick 100 might get something right sooner or later. Pay attention, do it your way i will try and keep my funnies to myself. macdunk
learn from this one buddy... NWE a 1 month pick....
mack dunk....I can be cheeky aswell... [:p]
[8D]
.^sc
Joe King,
Read the first post of this thread.
http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=23675
Thanks JK, theirs been a lot of good information in this thread, yours just stuck out :)Quote:
quote:Originally posted by JoeKing
Hi Vivens
THANKS! for the compliment. There are more inspirational people than me. I did not wake up till I was 43, and broke.
remember this post by Canatab a few pages back?
" The Star 29/09/06
Steve Brooks is not old enough to go to the casino, but the 19 - year - old has been playing the property market since he was 14. Last week he signed up his biggest deal yet: a 3800m2 block of land on Buchanans Rd and now owns nine houses in Christchurch. He has recently set up his own business and is getting a book published, A Young Punter's Guide to Property Investing."
Now there is a young man to be inspired by... why not give him a call? Successful people love to share, its an attitude thing.
I would say Cantab, if not already there will one day be very wealthy too, his/her positive attitude is obvious. I'm sure even ole McDunk (successfuly retired choosing his own lifestyle), ditto Foodee, and others would be only too pleased to offer a wealth of experience if asked.
Unfortunately threads like this can become inhabited by frustrated wannabees while the real go getters are out there "go-getting" but those with positve, success orientated attitudes are here to... ya just have to draft them out.
Read on... there is some good stuff here.
Cheers
JK
In terms of population falling by 2050, I find that hard to believe. All the people over sea’s have told me "your so lucky to be living in such a beautiful place, I wish I can live/retire there one day" and I agree with them, I have not traveled much of the world, but I would be happy to retire here, when I’m much older.
RMB
Thanks, I read the post and you probably already know my reaction. I'm on McDunks side.
It is a fact that no matter where you live you have to pay to use the roof over your head, and someone has to own it. Either:
1. You, in which case you have had to pay someone to buy the exclusive use of that roof and have ability to set outgongs and maintain some control, or,
2. a Landlord, in which case you have to pay increasingly for the temporary right to use the roof but have no control.
Both have their advantages. It really is a matter of choosing what is best for you! aren't we lucky!
In the first case if you decide you no longer want that roof you can sell the exclusive use to someone else and recover some, all, or even more than the original cost.
In the second case you recover nothing that you have paid and have to find another roof to rent, with probability of increased rents.
With this in mind, I fully agree with the idea of long mortgage terms. I know it works because when I did my WRAP deals that is exactly what I did. I sat with my buyer and worked out how much they could COMFORTABLY afford each week, then worked the numbers to suit. So long as the payments covered my mortgages and included a reasonable weekly cash surplus for me after rates and ins. In more than one case we made the term 35 years.We did not expect them to take 35 years to pay. I promised all my WRAP buyers that if they fulfilled their part of the bargain they would qualify for a bank loan within 3 - 5 years. Thats how confident I am in a 8-10% p.an. increase in values for the forseeable future.
Here is a real life example. He was 64, she was 56. and desperate to own their own home. Both worked, had good incomes but not enough savings history to satisfy the banks. I bought a modest 3 br house for $95k Rotorua,(used 100% bank finance (will explain how if anyone interested) fixed 3 yrs 6.8%) sold it to them $135 on a WRAP on $9k deposit (plus $12k gst refund) 9.5% int. 35yr term.
Their repayments $274 pw (the same house is rented today for $300pw) my outgoings $152 (P&I), cash surplus $122 pw. They completely refurbished the house, and resold 2 years later $195k. Added an inheritance to profit bought a couple of rentals as prices were rising Rotorua, used equity to buy nice home, rental incomes from 4 properties to pay for it, and send me a nice Xmas card and bottle single malt each year. Can't all be bad. Remember I had not paid one penny for this property gross profit $52,000 plus satisfaction of helping someone achieve their dream (priceless!) everybody wins.
As for your comment "This guy is dreaming if he thinks his 35 houses and flats (which would be worth about 35x300,000 = $10 million now) will be worth over $100 million when he dies in 40 years time." I think this is a typical case of "zero-phobia", afraid of zeros. I have already given examples of inflation effects on property... why do you think our coinage recently changed and there are no more 1c 2c 5c pieces?.
Hell the changes in my own life time are scary.
Petrol for my first car cost 1/3d (about 12c) a GALLON! about 3c a litre? My wages were 6 quid a week! about the cost of a packet of fags today... The farm I dreamed of owning when a 28 year old station manager, was less than the cost of 1 bedroom in our new apartment.
Viven
I have travelled a lot and believe me we are fortunate to be living in such a beautiful place. Unfortunately it has been discovered and the very things that make NZ special are being compromised so fast.
Every piece of NZ is owned by some one. You can be one of those owners if you so chose. You have a right to own a bit of this Paradise if you want to, don't be put off! Winners are winners, it dosn't matter if you are talking property, shares, business, relationships or whatever. Winners, even in this thread, are obvious.. Coge, Clips, YOTT, Tim, Cantab, Foodee, McD. If you find a winner that have succeeded because they have something that you don't - don't be frightened to ask them what it might be and where/h
JK, I think when you deal in property, either as a landlord or doing these wrap deals as you have done, you need to have certain qualties that not everyone has - ie, you have to enjoy dealing with people. From my experience, as a renter, I would say that 2 out of 3 long term renters are total losers - certainly not the kind of people that I would want to do business with. I'v seen enough of long term renters to put me off ever wanting to have any involvment in residential property in any way whatsoever. The only property that I would consider investing in would be industrial - which means your tenants are business people, which for me, would be people that I could deal with.
,
Whatever side of the fence you sit on the facts are these.
1, Landlords make money and seem to buy more properties.
2, Some landlords have low paid jobs, lack the skills of higher employment, yet end up filthy rich from humble beginnings.
3,It is false economy to rent anything that is in continual use, other than for tax reasons, or for short periods of time.
4, Most rich people own properties most poor people dont.:D
5, Most rich people think property is a good investment.
6, most poor people find reasons to say its not.
Those are the facts as i see them but i am only a simple lad that owns properties, and plays the sharemarket for a bit of excitement.
MACDUNK
I'm not 100% sure, but you could use a site like http://www.filefactory.com/ to upload a file, then post a link to the download? I would be very interested in having a look at that calculator :)Quote:
quote:Originally posted by JoeKing
PS
If somebody can explain how to post a XL spreadsheet program I will put up my WRAP calculator free. (or you can buy a similar, but not as good) one from KPI for around $400).
Thanks,
Quote:
quote:Originally posted by duncan macgregor
Whatever side of the fence you sit on the facts are these.
1, Landlords make money and seem to buy more properties.
some people make money in the sharemarket and buy more shares
2, Some landlords have low paid jobs, lack the skills of higher employment, yet end up filthy rich from humble beginnings.
Most successful share investors start from humble beginnings also and develop the required skills to make investing profitable
3,It is false economy to rent anything that is in continual use, other than for tax reasons, or for short periods of time.
Is it? What if you could make well above average returns in the sharemarket does it make sense to sink $300,000 into a house which has zero returns
4, Most rich people own properties most poor people dont.:D
I agree - most poor people don't own much of anything
5, Most rich people think property is a good investment.
Most rich people who own property think property is a good investment
6, most poor people find reasons to say its not.
From my experience, I would say that most poor people would love to own property, but they're poor - so they don't
Those are the facts as i see them but i am only a simple lad that owns properties,
How many properties do yopu own macdunk - apart from the house you live in that is
and plays the sharemarket for a bit of excitement.
I'v been watching your antics in the sharemarket for close on 4 yrs now and it's obvious to me that you don't make much money at it, if any - so, yes, I agree, you must be playing in the markets just for a bit of fun
MACDUNK
Hi MickQuote:
quote:Originally posted by Mick100
JK, I think when you deal in property, either as a landlord or doing these wrap deals as you have done, you need to have certain qualties that not everyone has - ie, you have to enjoy dealing with people. From my experience, as a renter, I would say that 2 out of 3 long term renters are total losers - certainly not the kind of people that I would want to do business with. I'v seen enough of long term renters to put me off ever wanting to have any involvment in residential property in any way whatsoever. The only property that I would consider investing in would be industrial - which means your tenants are business people, which for me, would be people that I could deal with.
,
Totally agree Landlording is not for everyone. One of the reasons I got into WRAPs was I got sick of being a Landlord. I had a real problem asking tenants to mow the lawn cause the neighbors were sending me nasty letters, asking how they were going to pay the 3 weeks rent in arrears, requesting they tell their kids to stop swinging on the (broken) clothes line I replaced just last week etc.
I even had a tenant phone me 10.30 at night to replace the bathroom light that just blew as her kids were in the bath, and drove 1/2 an hour across town to replace it :-((
My first WRAP was a "problem" tenant. I discovered that a lot of renters look upon their landlord with disdain and even go out of their way to be difficult. Often they are envious, jealous, and even hate their landlords who they consider "priveledged" and "leeches" getting fat on their tenants rents. In rare cases this may be true but in most cases not. Most landlords are responsible and provide a good service and shelter for their tenants. Any way, when I offered our problem tenant the opportunity to own their home the whole familiy's attitude changed immediately. Within 2 weeks the property went from being one of the worst houses in the street to by far the best. Instead of being greeted with "mumble mumble Oh shi-t its the landlord" I got a hug and a handshake and "Hey come see the new vinyl in OUR! bathroom, or the new wallpaper in OUR! bedroom." or something similar. The transformation in that family was unbelievable! Soon they shamed the neighbors into being tidier. I was able to buy and WRAP another 2 houses in the same street. Eventually the whole cul-de-sac of about 18 homes improved. Landlords and home owners did up adjoining properties and got better quality tenants who were prepared to pay higher rent to live in a "nice" street, again every one wins... Every Xmas we give 2 bottles of wine (red/white) to the tenants in all our rental units. Every year we GET (usually a bottle of something) and a card from each of our WRAP Purchasers, most of whom are X tenants, and an invite for coffee and "to see OUR! new kitchen or...." . All our rentals are now handled by good professional managers and we have very few problems. I would recommend anyone comtemplating getting into rentals to do the same... can save a lot of headaches.
After the total success of my $$ goal at the time I turned my attention to an industrial investment... it was a total absolute disaster, but that story can keep for another time.
Just a thought for you Entreprenuers out there after reading over a few of my past posts on this thread. Perhaps someone might like to put all this information into a book form and publish it. Seriously!
The sun is now out, bite time is in 1 hour so... I'm going fishing
Cheers all
JK
I'v got a couple sets of neighbours at the moment who speak quite openly to me about what they think of the landlords and your above remarks are right on the money JK. These people just despise their landlords for no apparent reason. The rent is reasonable, the properies are well maintained and the landlords are genuinely good people in my opinion.Quote:
quote:Originally posted by JoeKing
[
,
I discovered that a lot of renters look upon their landlord with disdain and even go out of their way to be difficult. Often they are envious, jealous, and even hate their landlords who they consider "priveledged" and "leeches" getting fat on their tenants rents.
The fact is that most long term tenents seem to resent the fact that they have to pay rent but they are not prepared to do anything about except ***** and winge about the landlord.
./
What a pathetic little person you are MICK. You cant even put forward a reasonable arguement on the subject without reverting to personal attacks. When have you ever said i will buy this or sell that as i do:D:D. I have doubled my money Invested on the sharemarket in the last four years and given out my buys and sells in advance. I never defend my position but will say this you are not big enough to do the same. My last statement was sold TPW ,CEN bought MCR at $2-15 on 3rd of jan after a two year hold :D:D.Quote:
quote:Originally posted by Mick100
I'v been watching your antics in the sharemarket for close on 4 yrs now and it's obvious to me that you don't make much money at it, if any - so, yes, I agree, you must be playing in the markets just for a bit of fun
MACDUNK
You are pathetic try again sometime. MACDUNK
For being a landlord, I disagree with your statement - that's what property managers are for. They deal with the tenants so you as the landlord don't need to. I've had two rental properties since late 2003, and I've only met the tenants once, back in 2005 when I saw the properties for the first time. The properties are 600km from where we live and we incorporated an inspection into part of a holiday we had. As much as anything I was curious to see what the houses looked like on the inside. Both our tenants were nice people and were renting the houses before we purchased them.Quote:
quote:Originally posted by Mick100
JK, I think when you deal in property, either as a landlord or doing these wrap deals as you have done, you need to have certain qualties that not everyone has - ie, you have to enjoy dealing with people.
Putting vendor finance deals together is different though and a lot more involved. You're dealing with people, selling, qualifying, seeing if there's a way to make the deal work.
If you're a money partner on vendor finance deals (which is what I did), then all you have to do is arrange finance for your purchase of the house, sign some papers and watch the money come in each month.
I could host the file on my webserver if it was emailed to me :)Quote:
quote:Originally posted by vivins
I'm not 100% sure, but you could use a site like http://www.filefactory.com/ to upload a file, then post a link to the download? I would be very interested in having a look at that calculator :)Quote:
quote:Originally posted by JoeKing
PS
If somebody can explain how to post a XL spreadsheet program I will put up my WRAP calculator free. (or you can buy a similar, but not as good) one from KPI for around $400).
Thanks,
[quote]quote:Originally posted by duncan macgregor
Doubling your money in 4 years is worth bragging about but remember that there is a degree of hitching your boat to rising tide rather than personal brilliance in this sort of result. Since it's forumlation on 3 March 2003 (About 3.9 years ago), the NZX50 Gross index has risen 119%.Quote:
[i]...I have doubled my money Invested on the sharemarket in the last four years...
[/quote] What a pathetic little person you are MICK. You cant even put forward a reasonable arguement on the subject without reverting to personal attacks. When have you ever said i will buy this or sell that as i do
[/quote]
Seems I'v hit a raw nerve macdunk. I sometimes read your posts and I get the feeling that something doesn't add up. Years ago you wrote (on numerous ocassions) about buying a property from housing corp and selling it to your daughter at a profit. If you were doing such deals reguarly I'm sure we would have heard about it. Your trying to give readers the impression that you have a property portfloio. Thats why I asked the question - how many properties do you own other than the house your living in.
I often declare my hand on the ASX forum as regular readers will know
The reason why I don't often post on any changes in my NZX portfolio is becaause I very rarely make changes to that portfoio. Last yr I bought PGW which you and other followers of that thread know. I sold CDL and bought ABA the year before which I also announced on that thread - go and have a look at the thread. I havn't made a secret of the fact that I hold NZO, while GPG and CEN have been in my portfolio since the 1990s - thats it Macdunk - no secrets there.
You constantly claim that your the only person who declares his hand - if you read more carefully you will find that plenty of people declare what they are holding.
It's a bit like when you claim that your the only person on this forum who uses his real name - I could name 4 others, off the top of my head, who use their real names.
,
A very mediocre performance on the stockmarket given the likes of the ASX200 has generated more over the same period in capital gains alone.Quote:
quote:Originally posted by duncan macgregor
I have doubled my money Invested on the sharemarket in the last four years
Some of the better investors that post on Sharetrader have probably doubled their money EVERY year in the past four years.
That's so different to my experience as a landlord!Quote:
quote:Originally posted by JoeKing
One of the reasons I got into WRAPs was I got sick of being a Landlord. I had a real problem asking tenants to mow the lawn cause the neighbors were sending me nasty letters, asking how they were going to pay the 3 weeks rent in arrears, requesting they tell their kids to stop swinging on the (broken) clothes line I replaced just last week etc.
I even had a tenant phone me 10.30 at night to replace the bathroom light that just blew as her kids were in the bath, and drove 1/2 an hour across town to replace it :-((
My tenants have no idea where I live or how to contact me, let alone my tenants' neighbours!
Actually one of my investment properties is surrounded by a shopping centre carpark so they have no neighbours other than cars and shopping trolleys. :)
I get maybe four calls per year from my property manager to discuss a maintenance issue, that's about it. And they aren't highly priced or new properties either. I purchased them for $85k and $92.5k respectively in Nov 2003, and now they are worth about $210k each and rent for $160pw each.
We bought our own house four years ago and are only now doing some renovations. Its exciting! The inside of the house is being painted and next we're getting the floorboards polished, then new curtains/blinds etc (haven't decided yet). Already it looks a lot better.
Our initial outlay of roughly $13k (approx $20k minus $7k first home owners grant) to buy our home has now grown to about $440k of equity between the three properties, in just four years.
Property has been very good to us and that's why I'm quite passionate about it.
Our two major financial goals are to own our home outright and have investment income more than cover our living expenses. Its very satisfying to make progress towards those goals.
We've lived a modest lifestyle compared to what it could be, because those goals are more important to my wife and I than having flash cars and other "doodads". I drive a car worth $3.5k while most of my work colleagues drive BMW's etc.
Anyway, gotta go. Hope this has been helpful and encouraged someone.
Hi Vivins
I did as you suggested, here is the link http://www.filefactory.com/file/f4ab34/ I originally made the spreadsheet in Excel 2000 and it works fine on my old machine, but does not like Excel 2003 on my laptop when I tested the link. If you are familiar with Excel you can probably fix. Have fun, lets know what you think.
Cheers
JK
edit: Thanks Trackers, I think the filefactory thing will work
WNS, Initially we did our own rental property manageing, now we use Professionals. You mention 7k home grant so I presume you are talking Aust. We used to have such assistance about 40 years ago but no more. I did buy 2 properties in Blenhiem unseen a few years ago, and took my wife down a couple of years later to auction. It was a real fun weekend, getting (well!) paid to do the Marlborough wine trails after property auction.
;)) JK.
HEY! Mick/McDunk c'mon guys take a breather!
I guess the 80/20 rule applies anywhere. 'Cept with the sharemarket I'd avoid 99%+. But that 1% can do nice things...Quote:
quote:Originally posted by cantab
The same thing could be said about the sharemarket.
One thing that I strongly believe in is to not profit from family or friends... and to not get into business to sell to family and friends...Quote:
quote:
Mick100
Advanced Member
New Zealand
1657 Posts
Posted - 26/01/2007 : 8:25:25 PM
Seems I'v hit a raw nerve macdunk. I sometimes read your posts and I get the feeling that something doesn't add up. Years ago you wrote (on numerous ocassions) about buying a property from housing corp and selling it to your daughter at a profit
joeking, does that mean vivins gets your wrap calculator for free?
[8D]
.^sc
<center>Kiwi flies on rates decision </center>
the promise of a March Interest rate rise has pushed the NZ dollar up against its major trading partners... This is despite almost a year of threats, but no action from the RBNZ....
THE MARKETS ARE NOW PUTTING THE CHANCE OF A MARCH INCREASE BY THE rbnz at 90%...
He also warned the govt over its spending, saying it could push up inflation, house prices and consumer spending this year and next...
quoted from the chch press
I will have to crunch some numbers but Im easily on track to double my share market portfolio within two years... from janurary last year...
some of you talk as if returns on housing are guaranteed... there is NO such thing as a guaranteed return... no such thing as a sure bet on any investment....(guarantees in housing are less certain than ever before)
the only business that guarantees returns is the TAB (they win if any team wins or loses or draws)...
ask the British what their returns have been for the last 10 years on houses....
we had a friend who could not give their house away (almost I say).... they had an open home and no-one turned up....
There has been great storys, but factual info and guarantees in the same sentence is bull....
If I felt it was guaranteed then I would sell the shares buy a house... and not care too much about a short term falling market....
I hope very much that the likes of JK, and others are here in 2.5 years so we can go through where I will get my first house...:D
[8D]
.^sc....
Marc Faber suggests that all asset prices may decline this yr including shares, housing and commodities
http://www.financialsense.com/transc...2007/0120.html
MARC: I think that all asset prices have gone up dramatically since, you know, depending 2001, 2002, 2003, but basically we’re up everywhere. If I look around the world there are very few assets that are not expensive. And the big surprise for this year could be that liquidity tightens even if the central bank tries, say, to keep monetary policy easy, because if you look at the Middle East, suddenly all of the markets are down between 50 and 60%. There’s still plenty of liquidity. But the issue there is that liquidity growth slowed down – it didn’t accelerate anymore. And if I look at international reserves in the world they’re still growing at 18% per annum, but they’re no longer growing at an accelerating rate. So it could be that at some point in 2007 liquidity tightens.
I’d also like to make the point that when markets go up they create liquidity because [when] an asset goes from, say, 100 to 200, it increases the borrowing power of the owner of these assets. And when asset prices go down (and we’ve had an appetizer of that in April, May 2006 when suddenly the markets went down – suddenly liquidity dwindled)…And I think the big test for liquidity will come once there is a correction. And I think we’re by historical standards in one of the longest bull markets, which began in October 2002; we’re in a bull market that by historical standards is about average length in terms of magnitude; and since July 13th 2006 when this latest leg in the bull market started we haven’t even had a 2% correction. Now, I lived through the 70s. In the 70s the markets moved sideways but every year the Dow went up and down by about 25%. And here we are and we haven’t had a 2% correction since last July. Something big is going to happen one of these days. And I would not rule out that markets may continue to go up, but as a buyer the risk now is actually quite high compared to the potential reward. It’s as John Hussman recently wrote that there are so few bears (from converting these very few bears into bulls) that the market will not get a lot of ammunition on the upside. But if suddenly so many bulls turn cautious or negative then obviously the downside can be quite substantial because people will liquidate their positions. [8:56]
JIM: Marc, it’s interesting though you’re talking about this liquidity and some of the disruptions that we have seen in various asset markets, the well respected Bank Credit Analyst in their forecast issue for 2007 has the headline which is Another Year of Riding the Liquidity Wave. Can central bankers pump out enough liquidity that maybe we can postpone this for another year or do we really get that lucky?
MARC: Well, I’m just writing about this in my Gloom, Boom & Doom report because basically the theory of the Bank Credit Analyst is that we are in a debt supercycle. Let’s say you take the debt supercycle you could say started in the early 80s when debt to GDP was 130%, we’re now at 330%, and this would be by accounting standards of the government – let’s say private accounting standards would put the debt of the US government at much higher levels because of the unfunded liabilities. But let’s say we’re at 330% - yeah, it’s possible we go to 400%, maybe to 500%. My point is – and I have here to also point out to another report that was written recently and titled Apocalypse Now. This report makes the point that this year we are in one of the most dangerous financial situations and that we could experience very serious setbacks: a) in the global economy and b) in asset markets. And to that I have to say, I don’t know when the supercycle in debt and credit will end. It will end one day. And one day you will have apocalypse. So if someone came to you and said, “Look, the brakes on your car are going to fail one day you have the option: do you want to fix them or doing nothing about it.” My view as an investor is it gradually doesn’t pa
We are in the final phase of the Bull market - [u]rampant speculation phase</u>
http://www.smh.com.au/news/investmen...330826284.html
Listing gone! Block construction, tile roof, not surprising.Quote:
quote:Originally posted by cantab
Amazing, a 3br house in Christchurch on a 837m section, street facing, for neg over $175,000!
http://www.realestate.co.nz/363612
The funny part is they can talk increased prospects of asset value meltdown and then tip which shares to buy... [:0]Quote:
quote:Originally posted by cantab
We are in the final phase of the Bull market - [u]rampant speculation phase</u>
http://www.smh.com.au/news/investmen...330826284.html
Its a good topic to sort the wheat from the chaff. We have the lot on this thread. Business minded people, other mens lackeys, no hopers, genuinely interested people plus the what have you got jealous brigade. The last lot are probabely all living in another mans house:D:D:D. I must admit that the property that i live in i placed in a family trust, but then thats another story. The cream always rises to top, i feel sure that young SHREWD CRUDE will take on board who the winners and losers are and go from there.
macdunk
Gotta love demographics.
The pro property "winners" here are mostly Boomer or older. Perhaps unsurprising that I'm also an X'er althugh I've probably been share and business investing longer than many Boomers. Also worth remembering that the pro property opinions voiced in this thread are from those in the business of property rather than those who just want to occupy their own home. The economics are very different when one stance makes you cash and the other costs you. Something their arguments failed to address is Shrewd's original question focussed on "1st homes". The bulk of 1st home buyers are owner occupiers. And don't let me start on tax policy. A flick of the switch and it could be all over red rover. Boomers beware when the X'ers are in charge. Just maybe the old imperatives will not have the same pulling power.
Halebop, you've mentioned on this topic that you're sitting on a pile of cash many times the average house price, so I'm guessing $1m+. And from memory you're about 35 years old or so??
I'd be interested to hear some specifics of "your story" - what you did and what you invested in to be in such a position.
To get those sorts of returns on such cheap purchases I presume you live in a WA mining town! Great timing.Quote:
quote:Originally posted by wns
I get maybe four calls per year from my property manager to discuss a maintenance issue, that's about it. And they aren't highly priced or new properties either. I purchased them for $85k and $92.5k respectively in Nov 2003, and now they are worth about $210k each and rent for $160pw each.