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tracker
06-04-2005, 10:50 AM
Many arguments which have been good reading on forum, about property, neg gearing,interest rates,etc etc
The bottom line is if interest rates do start that trek upwards, the reality is the share market is not actually responding in a familiar way
Would like peoples thoughts given that int rates likely to rise short term, what is forums perspective re rental properties that are neg geared atm
tracker

cdt18
06-04-2005, 11:01 AM
Things are going to get ugly, end of story.

whiteheron
06-04-2005, 01:10 PM
Rising interest rates will bring more rental properties on to the market as those with negative gearing throw in the towel as their outgoings increase and the value of their properties trend down

Not a good time to be getting into rental properties me thinks

duncan macgregor
06-04-2005, 01:19 PM
WHITE HERON, I take the opposite view. The best time to get into property or anything, is when people are forced to sell. Never follow the herd you know that. Property wont drop much, but the real bargains will increase. Property will make a great come back sooner or later, what better time to buy when its all gloom and doom. macdunk

tracker
06-04-2005, 01:38 PM
does anyone else find that the share market is not doing what it usually does around interest rates etc, specially blue chips etc
the responses by the share market till now have been ok, but now when pressured it looks lame
tracker
ps tight stops

whiteheron
06-04-2005, 01:53 PM
macdunk

I agree with what you say EXCEPT that I believe that the bite has not yet taken full effect , hence my comment that it is not a good time to be getting into rental properties ie right now

As more negatively geared properties come on to the market I believe that prices will ease back , but property prices never ease back to to same degree as shares
There are likely to be some real bargains coming up resulting from mortgagee sales as the bite of higher interest rates really kicks in

I consider that we are still too near the top at present --- a little patience may well pay handsomely

Time will tell , but I would not be in a rush just yet as there are likely to be more people forced to sell yet and this will open up opportunities for the smart investors

Having said all that , the only way in which we differ is in the question of timing ( in terms of months rather than years )

cdt18
06-04-2005, 04:00 PM
I just think those people saying "things are going well, things are postive in real estate and the only way is up for prices" are going to get a kick up the backside by the market soon enough. There are just too many factors weighing up against property to ignore. I know property is a good vehicle for which to get rich blah blah blah, but with every investment comes risks and we are about to see the risky side of property methinks.

duncan macgregor
06-04-2005, 04:46 PM
I agree different situations different methods. The risk with property is nil with time, and due diligence, if you buy within your means. Every property is worth more in a few years. If you pay to much or at the top of the market a couple of years down the track you sit on a bargain. macdunk

whiteheron
06-04-2005, 06:16 PM
macdunk

But I am a retired accountant and you know the reputation that accountants have !
Probably recognised as more miserable than the legendaty Scots
The most misunderstood profession on earth , but one of the best

To continue my approach ; why pay any more than you need to for a property --- the cheaper you can get it for the better the returns , both from rentals and ( eventually ) from the capital gains
But be very careful how long you keep an investment property , there are depreciation clawbacks on sale and any ( so called ) capital gain is taxable if the property is held for ( I think ) less than ten years and it doesnt need much to be classified as a property dealer making yourself taxable on all property transactions
My knowledge on taxation is general rather than specific so these matters would need to be checked out
No doubt you are familiar with the taxation of properties --- I have included this for the benefit of others

Never pay more than you need to for anything , always buy at the best possible price
Dont be too anxious to complete a purchase , there is always another one just around the corner
That is my motto , but with share trading that sometimes comes unstuck of course

Capitalist
06-04-2005, 06:54 PM
Apart from MacDunk you people are full of sh!t about property. I have never read so much rubbish about property as I have on this forum over the last 3 years. Every last doomster has been totally, hilariously wrong. I-rates have bugger all effect on the property market - that has been proven time and time again, and still the sheeple bleat about it.

As MacDunk says, with property you just have to sit back and wait for your ship to come in. If the market goes down you just have to wait a bit longer. Go back to sleep.

duncan macgregor
06-04-2005, 07:04 PM
WHITE HERON, You are right in what you say, but we talk of people in various circumstances. we should all buy at the bottom, and sell at the top, and understand tax implications of any deal. Some people will never understand whats involved, and it is those people that i directed my statements towards. There is never a bad time to buy a property, time will turn it into a bargain. It is much better to buy a slightly over priced property that you really want rather than buy one that you dont really like because its a bargain. Regardless of the market it is silly not to own a property if you can afford it.
The average persons only savings is mainly in their property.
macdunk

whiteheron
06-04-2005, 08:40 PM
macdunk

I was directing my comments to investment properties as I recall that the discussion was initially essentially about negatively geared financing , assuming a rental property

I absolutely agree that to own your own dwelling is most admirable even if it seems a bit on the expensive side at the point of purchase
I feel sorry for those who cant get together a deposit or find someone to assist them to get started
My wife and I guaranteed the mortgage for my daughter and son in law just on four years ago to get them started and my son in law was quite reluctant as the mortgage seemed a huge committment to him at the time , but boy is he happy now that that the equity has grown from zilch to about $60,000

Different criteria apply to personal residences and rental properties