Interest Rates

[McDuck]

Salaries were going up 15-18% pa.
And we were paid double time if we worked Sundays.

As a very young man, I got into property and faced such rates.
Mostly because some older friends were interested in it.
I faced those sorts of 18% plus Mortgage rates.

It was a quiet walk in the park for me to totally pay off a house in a year and a half.

Strong unions ment I got almost twice normal pay because I worked lots of overtime and the penalty rates ment the pay was well worth it.
Competition for good employees ment that the base pay rate was great and this made me work hard with great dedication and enthusiasm.

There was a sense of fairness and organisation to getting things done practically,
As much as bosses hated loosing some of that profit to the employees, employees were educated and there was a right way to do things, conventions passed on from older workers to younger ones.

Although I felt like a bit of a lightweight compared to the older guys, who had their organisation skills forged in the furnace of real wars,
and the older employees, who had hand made the tools they worked with.

There was a nice balance between the hot air of the management and the cool steel of the people who actually made things work.

[Wayne]

Salaries were going up 15-18% pa.
And we were paid double time if we worked Sundays.

Correct - and double time after 3 hours on a Saturday.
When I brought my 1st house it was a stretch to pay the mortgage until the next pay rise. A real pay rise unlike the 1-2% stuff now.

[Meehole]

Correct - and double time after 3 hours on a Saturday.
When I brought my 1st house it was a stretch to pay the mortgage until the next pay rise. A real pay rise unlike the 1-2% stuff now.

I guess those opportunities were there in some jobs ,however my husband was a civil servant and I was a stay at home mum so we just sucked up the high interest rates grateful that we had our first home.
I have only become educated with regard to investing in property later in life and now look back and wish that I had been able to learn what I know now earlier on.
My dad was a builder and him and mum flipped the family home quite frequently but now aged 80 the decisions to buy in the worst areas or streets has done them no favours.
He had the ability to turn a sows ear into a silk purse but didn't understand the 3 p's.

[Wayne]

I guess those opportunities were there in some jobs ,however my husband was a civil servant and I was a stay at home mum so we just sucked up the high interest rates grateful that we had our first home.
I have only become educated with regard to investing in property later in life and now look back and wish that I had been able to learn what I know now earlier on.
My dad was a builder and him and mum flipped the family home quite frequently but now aged 80 the decisions to buy in the worst areas or streets has done them no favours.
He had the ability to turn a sows ear into a silk purse but didn't understand the 3 p's.

Choises eh!
I was working for the Post Office at the time.
The 1st home was one for me rather than an investment property.
A few flatmates - life seemed pretty good really.

[primal]

What are people's thoughts today regarding interest rates. Large banks increased their fixed rates.

If refinancing, should we split fix.

[Nick G]

It's all down to your position. I fixed most of my debt for 5 years a few months ago. The rest is short term of floating (offset).

Do you need the extra half a point today vs being 1-2% under the main rate a couple of years from now?

[primal]

It's better to fix long-term at better rate because the rate is moving up plus 60% LVR restriction.

[Nick G]

:-) I agree it also gives you 5 years to adjust to anything that might happen in turbulent times.

[Don't believe the Hype]

The main numbers are your actual numbers, not my assumptions Garry. Over the past three years i added 5 properties to my protfolio. Last three i added this year yield 8.4% with cashflow of $4,120 per month (assuming $100 a month maintenance). The two i added last year yield 8.64% and give me $2,617 cash per month. Cashflow figures pre tax of course and based (like yours) on 100% borrowing of the purchase price. So, plenty of opportunities in the market in the last three years, and right now. Have a project for next year which will yield approximately 7.7%. Haha?

I do not criticise your approach Garry and i do wish you the best of luck. But i think that as an educator you owe it to your students to say in your signature something like:
Gary Lin,
Property Investment Coach With Experience only in a market that goes up at record rates and with record low interest rates

Any idea who this Gary Lim guy is they've been quoting in the NZ Herald... Ha ha ... All this blow up last week about getting your name wrong... Maybe the paper is following this discussion?

http://nzh.tw/11755007

[Judge]

I doubt it. If the paper followed this thread they should have been able to work out that there are investors with better experience than Gary to consult about what's happening in the market. I reiterate that i have nothing but respect for Gary, who did really well and i am sure he worked hard to get to the point where he is now (and as i made clear the misspelling was accidental). But he has not experienced a downturn yet, and therefore perhaps his view of the market does not have the same depth as views of other investors who have experienced different market conditions (and to repeat the point i made before, perhaps when coaching others he should be disclosing this fact).

[big fella]

yes I am sure there are investors on this forum who have been in the market a lot longer and have a lot more experience than Gary.

however for Gary who started off with 200k to have 14 properties worth 10m is quite remarkable really given he is only 33 years old.

I personally don't agree with everything Gary says either (particulary the issue of having a revolving credit as a cushion) but I will give him his dues he has can survive the next market downturn he will pretty much be laughing before he even hits 40 years of age.

[big fella]

sorry typo in last paragragh...mean to say if Gary can survive the next market downturn he will be laughing before he hits 40

[Don't believe the Hype]

if Gary can survive the next market downturn he will be laughing before he hits 40

you're right... Big risk for a big reward... I hope he does make it through too as anyone with property will benefit...

As Judge says if you take a risk with your own cash its your decision but if you encourage others to take risks without disclosing them is a major concern to me.

[McDuck]

yes I am sure there are investors on this forum who have been in the market a lot longer and have a lot more experience than Gary.

however for Gary who started off with 200k to have 14 properties worth 10m is quite remarkable really given he is only 33 years old.

I personally don't agree with everything Gary says either (particulary the issue of having a revolving credit as a cushion) but I will give him his dues he has can survive the next market downturn he will pretty much be laughing before he even hits 40 years of age.

Oh sure.
He's like that kid you go cliff diving with.
The one that goes to a higher ledge than everyone else.
Everyone is bound to warn him of the danger, and we love the entertainment.
We all clap if he survives the stunt. He's a hero.
But if it all goes wrong, we all walk away and wonder why that kid was so stupid, and he's left alone to deal with what's left.

[Don't believe the Hype]

Oh sure.
He's like that kid you go cliff diving with.
The one that goes to a higher ledge than everyone else.
Everyone is bound to warn him of the danger, and we love the entertainment.
We all clap if he survives the stunt. He's a hero.
But if it all goes wrong, we all walk away and wonder why that kid was so stupid, and he's left alone to deal with what's left.

the real danger is that he's trying to encourage others to follow him to these heights. I guess when you're not buying on fundamentals you need to rely on he greater fool theory... That theory requires lots of high profile 'success stories' and shiny suits even your name in the paper to encourage more and more fools - without them you can't close out your position.