Buying Rules advice

[NovInvestor]

If you say floating at 6%, and 1 year at 6.5% (BNZ latest rate)

Then if the floating rate increase to 6.5% after 6 months, then 7% after one full year.

You will be making $0 savings at this scenario between fixing 1 year, and floating.

Personally I don't think floating will increase that much in a year, hence I don't fix that long.

[Bob Kane]

Originally Posted by alliantGTR34

Just out of interest, how do you determine market value? If everyone is out there hunting for a property and only buying if it is 20% under market value, doesn't -that- constitute the market value?

I just read the answer to this question in the latest Property Investment mag (from memory):
"If you can sell a property tomorrow for more than you bought it today then you've bought it for under market value."

[alliantGTR34]

Originally Posted by russ20

all the first home buyers who 'fall in love' with their one property - they are all sure to purchase at full value..

I'd have to disagree on this one; most first home buyers I know (who are not and have no intention of being property investors) are savvy, do their research and know it is a buyer's market.

[Meehole]

Originally Posted by alliantGTR34

I'd have to disagree on this one; most first home buyers I know (who are not and have no intention of being property investors) are savvy, do their research and know it is a buyer's market.

First home buyers unless they are exceptional are generally all about emotion. They may be aware that its a buyers market but if they want the property enough they will generally meet the vendors asking price.
That's not to say that the property hasn't been on the market for a while and has now dropped their price to be more realistic.
My 24 year old son and his partner are hoping to buy their first home next year and I will trying my hardest to get them to think like an investor when they do.