What Is Best To Buy?

[Winston001]

Agreed Bob. I've been through 2 real estate cycles in Central Otago - lucky enough to have a crib. I've no doubt the market is softening and there will be buying opportunities in a year to 18 months. Subdivisions are still being completed so there is going to be an oversupply soon.

Being patient is the hard part. I find that once you start looking and find a possibility, it is very hard not to buy it. Yet logically the choice will be even better in 18 months.

[nelehdine]

I'd buy a piece of land in Central Otago with a heap of gold under it , then figure out a way to get it out ...

[Sideshow Bob]

Don't know where you are Winston, but the ODT had an interesting article on page 9 with the headline 'Weekend Auctions mostly Fritless'. Guessing by the fact that you have a 'crib' and not a 'bach' then from the southern part of this fair land.

Couldn't find the article, but something similar from the Southland Times:

http://www.stuff.co.nz/stuff/southla...2a6011,00.html

Gotta love those real estate agents!!

If you have been through 2 booms in Central, then think you should be able to time it at the right time.....

Can anyone post a chart on Central Otago property prices![]

[trackers]

quote:Originally posted by Capitalist

Originally posted by duncan macgregor

WINSTON001, Different strokes for different folks.
1. Buy 2-3 sections in central otago is not to exciting an idea to me. Rates come off for starters plus selling cost against likely profit margin.
2. Buy a large section with a view to subdivide is not for a novice. Unless you know exactly what you are up against, dont even think about it, you will be shocked at all the unexpected cost and crap involved.
3. Buy a geared commercial property that is already up and running is your easiest option. You can do all the sums work out profit margins etc etc.
4. Buy industrial property. Be carefull of what it is Factories have a habit of closing down do your homework on what it is.
5.Bare land and build not if you are a first timer you must be experienced for this.
6. Property is the easiest way to make money. Look at mortgagee auctions,remember you are a cash buyer only buy a completely checked out bargain. Get it up and running first, then do your sums. Work out rent, rates, upkeep expences, against what you can borrow on the property so that the property is self supporting keeping in mind that you dont want to show a profit. When you worked out the sums borrow that ammount and buy your next one.
If you buy right you will get about 90 pc of your money back, do this over, and over again. All you want is a capital gain when you sell, which you do next time the market peaks. Doing it that way with enough cash in reserves for a rainy day is the easy way to make money. BE a cash buyer that insists on a bargain. To make real money you must use the banks money. macdunk

Coupla questions if you don't MacDunk...

1. Lets face it, earning money through residential property (rent, not capital gains) is dead...surely? Personally, even factoring in being able to pick up a 'bargain', finding a place where rents = mortgage payments, is just a thing of the past(personally am waiting to pick one up, but am waiting for a rise in average rents)

2. Mortagagee sales - My take on this was that this is nothing more than just a pie in the sky theory? Whereas in the past the bank would flick the said property off to whoever wanted it (for a semi reasonable price), nowadays it goes to an aligned property company and auctioned off (i.e chance of getting a really good deal is the same chance as any at auction?). Please correct me if im wrong

quote:
Property is the easiest way to make money - no doubt about it. All the wealthy people I know have made their money on property - it beats the sharemarket hands down.

I agree... My returns on property are only like 15-20% pa, whilst share trading is 70-80% (yes, this is on a smallish amount of money) - Guess which makes me more money? ahh leverage, gotta love it

[duncan macgregor]

TRACKERS, Property is long term investment buying at the right price.
Mortgagee auctions the banks are caught between a rock and a hard place, and will only try to recover what is owed regardless of what the property is worth or what the owners equity in it is worth. The average person thinks that leverage in trading shares as something of extreme high risk, but feels happy about leverage in property.
What you fail to understand is that after a couple of years you can refinance, and get your total deposit back, on a self supporting property that doubles in price every ten years. You cant do that with shares my friend. With property you are still in business the whole cycle. Shares you will go under so fast levering in if it all hits the fan. macdunk

[rmbbrave]

quote:Originally posted by duncan macgregor

a self supporting property that doubles in price every ten years.

Here we go again Duncan,

"Doubles in price every ten years" is just garbage.

[Winston001]

quote:Originally posted by rmbbrave

quote:Originally posted by duncan macgregor

a self supporting property that doubles in price every ten years.

Here we go again Duncan,

"Doubles in price every ten years" is just garbage.

If this has been debated before I've missed it. My experience of watching other people own property since 1980 is that the doubling in 10 years is a fair statement. Horses for courses. I live in Invercargill and the gains aren't anywhere near that.

But in Queenstown and Wanaka, some properties exceed the doubling. Same for Tauranga, Taupo, parts of Auckland, Christchurch etc.

It's a matter of picking the right spot. Hate to say it but Location Location Location seems to work.

[duncan macgregor]

quote:Originally posted by rmbbrave

quote:Originally posted by duncan macgregor

a self supporting property that doubles in price every ten years.

Here we go again Duncan,

"Doubles in price every ten years" is just garbage.

Better than that RMBBRAVE If you had been where i have.
Shares versus property for MR AVERAGE.
SHARES average = rise or fall in the market plus dividends over a period of time. Do better than that makes you above average with some one doing worse to make up for it. I would think if you buy a property get it self funding over a less than average time of four years refinance and get your own money out with your deposit back leaves your shares for dead. Incidentely RMBBRAVE my property is worth four times its cost in 12 years my neighbour has done exactly the same with a bare paddock. Its a funny thing all the self made rich people that i know did it with property, perhaps i move in the wrong circles. I know very few share investors in comparrison most of them gave it up in the eighties crash when i was doing property.
macdunk

[trackers]

quote:Originally posted by rmbbrave

quote:Originally posted by duncan macgregor

a self supporting property that doubles in price every ten years.

Here we go again Duncan,

"Doubles in price every ten years" is just garbage.

My my we all have differing opinions don't we... I fully subscribe to the doubles in price every 10 yrs theory, but write off the "self supporting" one in the current climate (current meaning several years)

[minimoke]

My my we all have differing opinions don't we... I fully subscribe to the doubles in price every 10 yrs theory, but write off the "self supporting" one in the current climate (current meaning several years)
[/quote]

Except with "Investor" Shares you just put your money in once, go for a ride, and hopefully collect dividends along the way. With Property you are constantly putting money in and lots of it – excepting of course DM’s bare block of land.