We're living beyond our means...

[Boob Johnson]

There's no doubt that investing in real estate is one of the most lucrative and secure investments you can make, provided:

1. The economy is growing, not receding.
2. You buy it with money that you actually have.

Not the case ma man. More than one way to skin the proverbial property cat.
If you are geared (particularly highly) then yes it requires you to be in a strong growth cycle if you have bought the conventional way but you can make money on property in any cycle. Dolf de Roos has heaps of sneaky lil tricks up his sleeves, pop down to Borders & take a look if you are interested to learn more.



No deposit, negative geared with positive cash flow is a thing of considerable sexyness

[Winston001]

If you are geared (particularly highly) then yes it requires you to be in a strong growth cycle if you have bought the conventional way but you can make money on property in any cycle. Dolf de Roos has heaps of sneaky lil tricks up his sleeves, pop down to Borders & take a look if you are interested to learn more.



No deposit, negative geared with positive cash flow is a thing of considerable sexyness

You weren't by chance, mebbe, perhaps......involved with Blue Chip?? Cos that's the spiel they laid out to me one day in my office and it was mighty impressive. All the numbers ran the right way, very slick cutting edge accounting......loss attributing companies, pay yourself deductible management fees, depreciate the gib board linings, loss on your own home borrowings as well etc etc........very sexy........


.....until Dr Cullen changed the rules........


Yes I know it can be done but personally I think you have to be young and single and not afraid of bankruptcy. Just my 2c.

[Boob Johnson]

You weren't by chance, mebbe, perhaps......involved with Blue Chip?? Cos that's the spiel they laid out to me one day in my office and it was mighty impressive. All the numbers ran the right way, very slick cutting edge accounting......loss attributing companies, pay yourself deductible management fees, depreciate the gib board linings, loss on your own home borrowings as well etc etc........very sexy........


.....until Dr Cullen changed the rules........


Yes I know it can be done but personally I think you have to be young and single and not afraid of bankruptcy. Just my 2c.

Ive been out of the industry for over 3 yrs now. Was involved in Australia back in the hay day & here also & am happy to say I never had a single thing to do with Blue Chip


You don't need to be young n single at all, in fact its much harder unless the single person has a decent income. Obviously every investment won't suit everyone, its just property is something we can all relate too as we all live in one, bit like commodity trading ie sugar, coffee etc etc, easy to relate too.


Changed what rules? Gearing & depreciation are still available, LAQC companies are still available & extremely unlikely to ever change. The "grandfather" law is meant to protect governments law changes effecting those that have already started something, otherwise who would invest not knowing what the next government will do?? The other reason is the government cannot afford to provide all of the state housing. The property market would fall flat on its face if they messed with gearing as the average person wouldn't be able to afford to invest in property.



Buying a brand new state house & leasing it to the government can be a good investment for the sheepish or first timers, ive sold a handful of those. 10 + 5 year leases with guaranteed rent. The houses are solid as a rock, the bloody contract for the building is bigger than the sale agreement


In Auckland they have them all over the place, I sold a few in Botany Downs, bloody good area

[firefighter]

A solid argument JR........as always. But what the good man is getting at is there is a HUGE amount of wastage goin on. It all comes down to priorities. There are SOOO many ways to save a few $$$ & when put together make a significant differnece.

pretty much yes, I just get peeved when people earning twice my income with the same sized mortgage go on about how hard it is, wer'e doing 'ok' and certainly not struggling with bills.......

[firefighter]

What an odd statement to make.

I, f'rinstance, have spent my entire working life talking the rest of the world into giving me money in return for writing computer programs.

What I do with that money has no effect on the worth of the programs I write, and therefore no effect on my ongoing income.

mmmmm, yes and no, I do realise that if you earn good money it doesn't necessarily mean that your good with it, BUT quite typically those who are smart with money or at least don't waste it/respect it tend to be higher earners.

[scumdog]

pretty much yes, I just get peeved when people earning twice my income with the same sized mortgage go on about how hard it is, wer'e doing 'ok' and certainly not struggling with bills.......

Sounds just like me.
Have you any idea of how much it costs to run a mortgage, feed about 18+ litres of Dearborn V8, two Harleys, overseas trips AND buy 12 year old single malt whisky?? - and assist a couple of improvident post-teen off-spring.

I bet you don't.

Some of DO struggle matey.

[jrandom]

quite typically those who are smart with money or at least don't waste it/respect it tend to be higher earners.

I dunno, aye. I have a feeling that those who've always been on a tight income learn the value of money better than those who've never had to worry about the pennies.

[alanzs]

It's interesting looking at overseas markets. In a lot of cities, its unusual to own your own property. Mainly cos it's cheaper and more convenient to rent. I think it's the NZ mentality that you have to own your own home. I know several people that don't own the house they live in.

You can, if you do it right, get a more consistent return from other investment year-in year-out. (of course, you want to stay away from finance companies at the moment....)

Very well said. Remember, who profits from the property market and the "myth" that owning a house is the best way to make long term money? Yes, over the long term, many times property is a great investment, but timing is everything. The housing market has always been cyclical, so again, timing is ever important. Great thread.