Originally Posted by
troyvdh
Dear fungus....I agree with about gearing.However not so your other comments.
Without intending to appear somewhat a "know all" it does frustrate me when folk talk about the "NZ house market"-in my mind there are many many many "markets" i.e. location-which city and where,flats,constuction type,batches etc.
I have always been loathe to accept one explaination re the wisdom of investing in houses.You say (and your probably right) that how a family can afford.......so what do these families do then......rent perhaps ????.
Fungus ...can you imagine if those tens of thousands of folk (often elderly) had not been sucked in by those flashy ****er types with there glossy pamphlets had in stead bought the place next door ?.
Ah hhh your probably thinking what about all those who got caught in those property buying schemes that eventually fell over....but hold on if folk seriously understood the principle " of it sounds to good to be true......" many would not have been caught.
Ive been in res. property for more than 30 years-nothing really flash....Ive a mix of properties.A block of flats bought 20 years or so now is debt free and returning about 18 % on purchase price p.a.
What does also intrigues me is peoples perception/expectation of what making money involves.For example many folk have seen there houses increase (at times) by as much as 20-30-40-50 %.....then a following period where there is no change or perhaps a small drop. Now you and I probably agree that such an increase over a period years ..be it 4-5-8...that this is an acceptable return and that a long term view is required.
I also doubt that many people understand the scale of this "leaky home" fiasco.The CHCh earthquake .....say $20 billion...I read estimates of the "leaky" issue between $20-$40 billion !!!!!!!!!...whats more they are still being built,bought and sold !!!!!!
Another consideration that I believe needs to be made is the "lag" extending now for probably a few years where house building numbers have stalled...and will be needed to be made back up.
I also may have quite a different philosophy about investing....sure handling tenants can be a pain....but if it was easy...everyone would be doing it.Also making money aint rocket science....and currenty in todays world I believe that if your managing to hold what youve got ...your doing alright.
cheers.