NZ 1st homebuyers are ScReWeD...

[duncan macgregor]

quote:Originally posted by Shrewd Crude

No one in the history of the World has ever been able to find an investment yielding 10% per year for 377 years.... not even mackdadunk who thinks Property yields 10% over the long term........
8D]
.^sc

SHREWD CRUDE, Property does yeild 10% pa at least as long as I have played the game. Infact it has yeilded a lot more than that from my own experiance, which is some what shorter than your quoted 377 years.The cost of compliance has increased more than your 10% pa which makes the cost of new buildings is rising faster than inflation. Macdunk

[George]

Hi SC
I remember from past posts of yours that you may trade the markets and wait for the downturn in property.
Well, I tried that, and failed. With my share of a divorce plus savings in 1999 I didn't want a bar of ownership and was happy to rent, thinking I would make money in the markets.
I didn't, and was further frustrated by the property boom thinking what a little do-up would have been worth now. It's also the money lost from income, investment etc. that one needs to account for. After having learnt a bit about trading the sale of that house now could have been put to use in the market, but perhaps I may have been a bit wiser by then?
The fact is, for most people, property is forced savings and they will reap the benefit in time.
I am in no doubt that I may have bought a house at the top of the market, but if we look like getting tight with money the solution is simple, just work longer hours and cut costs. This would be money I would not have made in the first place because I wouldn't have HAD to. Also, just got our mortgage documents and we have the option of paying an extra $600 a fortnight if we so wish in addition to the 5% each year.
We can't do this yet but the potential is to pay a quarter million off in 7-8 years - there seems to be amazing flexibility and options with borrowing for property now compared to the 80's when I last bought.
As this is for our home, garden, etc. that's hard to put a price on, but 5 mins from a Mall and Rail with a view over city and ranges I feel will hold value over 10 years which may be when we wish to move on.
SC, you are young, but with probable limited experience in the stock market I wish you well and hope you have enough left over for your first house.
George.

[Crypto Crude]

ok mackdadunk,
you win...
97quadrillion here we come...
[8D]
.^sc

[Crypto Crude]

quote:George-SC, you are young, but with probable limited experience in the stock market I wish you well and hope you have enough left over for your first house.
George.

hey George, cheers for posting, I love to hear other storys...
I have been in shares now for 4-5 years...
started out with my first play of 3k on CUE energy back when I was 18 and now have over 30k invested mostly in ASX stocks... all oil.... all spec... and all undervalued...
NWE,NZOOD,TEX.... most on NWE...
Well Theres no way im even thinking of buying a house here ATM...which will lock me in for 30 years...
the only chance is if we get a flat market for 5 years or so, I get share price growth...
and I cut that loan in half...
Oherwise I'd rather go overseas and not have imagine how my life would be when im 52 and have only just payed the house off...

In your post you are completely right that home ownership is forced savings...
For the average investor this most appropriate...
but remember I am the shrewd one..., and becoming a saver and maintaining it has never been the issue...
it is the 30yr loan that has been the issue...
[8D]
.^sc

[Crypto Crude]

with a loan of 300k and 10% floating interest rates...
thats 30,000 dollars per year in interest only...
what the point in that...
need 10% house price growth just to break even....

it would be the worst decision of my life....
[8D]
.^sc

[duncan macgregor]

quote:Originally posted by Shrewd Crude

with a loan of 300k and 10% floating interest rates...
thats 30,000 dollars per year in interest only...
what the point in that...
need 10% house price growth just to break even....

it would be the worst decision of my life....
[8D]
.^sc

You have forgotten one little item SHREWDY and that is rent. Someone has to pay rent. It is either your self who has to live somewhere, or a tenant, it is not important to the debate.
Let us presume you paid 25% deposit to have the rent cover the mortgage, and expences. You have invested 25% to get a capital gain of 10% on 100%. The capital gain more or less equals interest to the bank. Then take it further down the track, your rent increases along with your capital gain, giving you a much better return as the years go by. You need to stop and think it out for a change, most people that i know have got rich doing just that. Macdunk

[srotherh]

quote: You need to stop and think it out for a change, most people that i know have got rich doing just that. Macdunk

Macdunk
Is your theory by experience or is it just people you know?
How many residential rentals have you aquired ?

[Crypto Crude]

quote:mackdadunk-
You have forgotten one little item SHREWDY and that is rent. Someone has to pay rent. It is either your self who has to live somewhere, or a tenant, it is not important to the debate.
Let us presume you paid 25% deposit to have the rent cover the mortgage, and expences. You have invested 25% to get a capital gain of 10% on 100%. The capital gain more or less equals interest to the bank. Then take it further down the track, your rent increases along with your capital gain, giving you a much better return as the years go by. You need to stop and think it out for a change, most people that i know have got rich doing just that. Macdunk

in my decision making, I weigh eveything up and leave out nothing... I look at it from my point of view, I look at it from yours...
and my view is correct...
your view is biased because you have been on property for along time and a swing downwards would be stuff all for you... for me its different...

with the whole rent thing what do I do?....
I want to have a wife some day and little shrewdys running around...(all searching for the next spec oiler to explode etc)... ...
but how am I going to pass my good genes on when I need the kids room for the DOE...
Do I make wifey pay rent?...
and then make the little shrewdy front up for the doe when hes 18? hehe....
kinda like an IOU system.... hehe...
you see my point mackdadunk.... how good is the rent thing, when yourve the family in the house...

currently 100dollars a week in rent (5k per year) is far better than 30k per year in interest....Im not even woried about the house thing... its no biggie for me to go overseas... go and work in China for awhile or something...

the only other option I had that is now gone was to buy that house that Cantab was offering back on page 10...
the 175k bullet ridden decapated jail cell, where gansters fire strays at your crib and all...
think its been sold now, cant find the house on that link...

I understand your arguement that with price growth and rent growth that your gains compound... your yields could quite possibly be 20%, if you got your houses at a super cheap price huh... my yields would be less than 5%...

quote:srotherh,Macdunk -How many residential rentals have you aquired ?

srotherh, mackdadunk is already on his way to a quadrillion...
he probably has so many that even he cant accurately count them all......
[8D]
.^sc

[cantab]

quote:Originally posted by Shrewd Crude
the only other option I had that is now gone was to buy that house that Cantab was offering back on page 10...
the 175k bullet ridden decapated jail cell, where gansters fire strays at your crib and all...
think its been sold now, cant find the house on that link...

Shrewdie, that was a bargain, looks like they've gone up, however this one is only $190,000, just needs a bit of TLC.

http://www.realestate.co.nz/478772

[Crypto Crude]

when my father was growing up Hampshire street was the most dangerous street in Christchurch by far...
gang shootouts, stabbings, robbery...
[B)]
.^this sort of activity...
[8D]<sc