What Is Property Investment?

[annaspanna]

ha
Well i hope its before then as i will be 71!
Surely he wont be living at home at 40, he will be in one of his own properties?
This can be my personal challenge I will report back on the outcome on his 20th birthday.

[orion]

This can be my personal challenge I will report back on the outcome on his 20th birthday.

Sounds good, I will put in my diary in case you forget.
Are you buying in HB? I think it was you in another thread about Maraenui was it?

Regards
Graeme Fowler

[annaspanna]

O.K thanks. I wont forget. I'm hoping to be able to report the outcome ahead of schedule.
Looking at something there. Just waiting for the bank to call.

[tpr2]

Hi Graeme

I will keep an eye out for the revised edition then.

Just a thought...or how does it go...thinking out loud..... Who would be up for a think tank on how you would go about things today if you were starting out.

I know one of the questions in your original book was how long would it take you to become a millionaire again if you lost it all which is a good question. This has had me thinking about what I would do and not only that but in todays market when banks are re-assessing borrowing policies every 5 minutes.

The opportunities are certainly there now to get great properties with great cashflow and positioned for potential growth over the long term, the question is if banks are not lending then how do you borrow to get the great bargains.

I have idea's but they are only theories at the moment.

[orion]

I will keep an eye out for the revised edition then.

Should still be in most book shops, or just PM me to organise one.

Just a thought...or how does it go...thinking out loud..... Who would be up for a think tank on how you would go about things today if you were starting out.

Maybe, for what purpose?

I know one of the questions in your original book was how long would it take you to become a millionaire again if you lost it all, which is a good question. This has had me thinking about what I would do and not only that but in today's market when banks are re-assessing borrowing policies every 5 minutes.

Yes, my answer changed in the updated one as did most others from memory.

The opportunities are certainly there now to get great properties with great cashflow and positioned for potential growth over the long term, the question is if banks are not lending then how do you borrow to get the great bargains.

Yes, it does seem to be a good time to buy (I bought one earlier this week as a reno), but it depends on your strageties. To me, it has always been a good time to buy and probably always will be, because I don't ever try to guess the market. It may or may not be a good time to buy if you are hoping (like most investors) for capital gain. Most people seem to spend more time concerning themselves about some stupid 'where the hell are we clock' and is 'the market at the bottom', or 'is it at the top' crap etc etc, than actually doing something.

It really amazes me the amount of posts here on PT (and has amazed me since I joined about 5 years ago) about prices, theories, indicators, drivers, clocks, ecomomics and opinions that go on forever, to me totally irrelavent garbage that has no real meaning at all. But very few investors have actually said here 'what they think property investment' is. I guess most people like to live in the world of procrastination than taking any action.

Regards
Graeme Fowler

[Gatekeeper]

It really amazes me the amount of posts here on PT (and has amazed me since I joined about 5 years ago) about prices, theories, indicators, drivers, clocks, ecomomics and opinions that go on forever, to me totally irrelavent garbage that has no real meaning at all. But very few investors have actually said here 'what they think property investment' is. I guess most people like to live in the world of procrastination than taking any action.

It obviously has no meaning to you, but your brain may just be wired differently.
I like using these things, (economics, psychology etc) and it's stood me in good stead, but I don't think it's for everyone. I've only ever bought properties in a slump, starting in '81, last buy in 2000.
To me it maximises your investment not to buy just "whenever", especially if you are a "mum & dad" investor and won't be wheeling & dealing. In the meantime we just got on with it, saved the next deposit and worked hard at our jobs.
In our thirties we had kids and we could afford to have one of us at home. In our late thirties, we sold off one, paid off the others and stood back from the PAYE world totally and sold our own business (very labour intensive).
For the past four years we've lived off the cashflow from properties (we only have two), plus we have our home. It means both of us are home for the kids every day, and we can both get into our hobbies and interests. Lifestyle is much more important than how much I earn or how many properties I own.

Property is just the vehicle I got here in and it continues to pay out well.
I'd like to buy more, but it's just not feasible and why would I risk a life in which I'm content and with no debt the world is my oyster!
In these times I reckon it's more about preservation than expansion.
We're even managing to save.

So for all you Mum & Dad PI's, you don't have to buy and buy and buy to make it. You just have to be a bit clever about it IMHO. Patience is a virtue

So Graeme, just because you aren't running around buying (taking action), does that mean you are procrastinating? I spend a huge amount of time researching, but that's what I enjoy.

If we were all the same life would be very dull, no?

[orion]

It obviously has no meaning to you, but your brain may just be wired differently.

No meaning whatsoever, maybe it is.

I like using these things, (economics, psychology etc) and it's stood me in good stead, but I don't think it's for everyone. I've only ever bought properties in a slump, starting in '81, last buy in 2000.

I guess if you like economics, that is fine, but I don't think the majority of people on here that I'm talking about are that into it, they just constantly try to predict the housing market which is impossible.

To me it maximises your investment not to buy just "whenever", especially if you are a "mum & dad" investor and won't be wheeling & dealing.

At the end of the day, you can do all the research in the world, and still get it wrong - if you are looking to time the market.

In the meantime we just got on with it, saved the next deposit and worked hard at our jobs.

Excellent, that is they key that a lot of people miss I think.

In our thirties we had kids and we could afford to have one of us at home. In our late thirties, we sold off one, paid off the others and stood back from the PAYE world totally and sold our own business (very labour intensive).

Well done, good to hear.

For the past four years we've lived off the cashflow from properties (we only have two), plus we have our home. It means both of us are home for the kids every day, and we can both get into our hobbies and interests. Lifestyle is much more important than how much I earn or how many properties I own.

I agree entirely.

Property is just the vehicle I got here in and it continues to pay out well. I'd like to buy more, but it's just not feasible and why would I risk a life in which I'm content and with no debt the world is my oyster!
In these times I reckon it's more about preservation than expansion.
We're even managing to save.

Good to hear!

So for all you Mum & Dad PI's, you don't have to buy and buy and buy to make it. You just have to be a bit clever about it IMHO. Patience is a virtue.

No, that is very true. It all comes down to what you want in life I guess. I like nice things and travelling, especially doing cruises and other overseas trips. To me, it would be quite easy to live on say $3,000 a week, if you had that income forever. You could spend $1,000 on food, a $1,000 on travel and a $1,000 on accommodation, you don't really need much more than that, unless you have expensive tastes. If you are happy with less than that, that is perfectly okay as well. I truly believe we can all be, do and have what we want in life, but a lot of people sell themselves way short, and settle for far less than could have.

So Graeme, just because you aren't running around buying (taking action), does that mean you are procrastinating?

Not always, no.

If we were all the same life would be very dull, no?

Indeed it would be.

Regards
Graeme Fowler

[Badger]

With out understanding economics in regards to property than you perhaps shouldnt be investing at all...

I can think of a few thousand suckers who didnt bother doing there home work on economics and simple monetary theory, and where are they now? Over at the blue chip thread, with no savings left...

[orion]

With out understanding economics in regards to property than you perhaps shouldnt be investing at all...

So Badger, what you are saying is that someone like me who has no understanding or interest in economics, should not be investing? Can you please explain why, and also do you think I should sell everything now beacuse I don't understand anything about economics?

I can think of a few thousand suckers who didnt bother doing there home work on economics and simple monetary theory, and where are they now? Over at the blue chip thread, with no savings left...

There is a difference between economics and common sense & due diligence.

Regards
Graeme Fowler

[ecoeco]

It obviously has no meaning to you, but your brain may just be wired differently.
I like using these things, (economics, psychology etc) and it's stood me in good stead, but I don't think it's for everyone. I've only ever bought properties in a slump, starting in '81, last buy in 2000.
To me it maximises your investment not to buy just "whenever", especially if you are a "mum & dad" investor and won't be wheeling & dealing. In the meantime we just got on with it, saved the next deposit and worked hard at our jobs.
In our thirties we had kids and we could afford to have one of us at home. In our late thirties, we sold off one, paid off the others and stood back from the PAYE world totally and sold our own business (very labour intensive).

I can identify with this as what property investment means to me. It meant that I could opt out of my career and work as a volenteer overseas from ages 27 - 31. It meant that I could live in a mortgage free home at 30 (but chose not to) and can realisticlly expect to not have to work as an employee beyond age 40. Its all about the ability to choose what one does with one's time. For some the choice will be to continue to build a property empire, for others travel and for some to spend a lot of time with the kids.

When I made my first plan, in 1997 at age 21, I was young and stupid. I focused entirely on having 10 properties by 30. These days when I update the annual plan I do it based entirely on income, I don't care about how many properties I own. My needs are a house to live in, $50,000 net pa to live on, and enough surplus to keep the equity growing. That's a house and a few rentals.

[Badger]

So Badger, what you are saying is that someone like me who has no understanding or interest in economics, should not be investing? Can you please explain why, and also do you think I should sell everything now beacuse I don't understand anything about economics?

Didnt post that, I posted perhaps. Why are you investing? In what economic enviroment do things work and dont work? How fast can trends change? How do you make profits if you're unable to distinguish buying low times and selling high times? With out some semblance of economics to back up due diligence and common senese theres nothing to base those assumptions on....

There is a difference between economics and common sense & due diligence.

Regards
Graeme Fowler

I tend to disagree on that, everything is connected in a dynamic way...

[orion]

Why are you investing?

I enjoy it, and the tenants pay for my rentals.

In what economic environment do things work and dont work?

With the property investing that I do, it works in all markets.

How fast can trends change?

Who cares? And why does it matter - unless you're a buy and hope investor?

How do you make profits if you're unable to distinguish buying low times and selling high times?

Profits on what??

With out some semblance of economics to back up due diligence and common sense theres nothing to base those assumptions on....

Wow, I can see you probably do very little investing Badger, would that be correct?

I tend to disagree on that, everything is connected in a dynamic way...

How surprising that you disagree on that too.

Regards
Graeme Fowler

[Badger]

I enjoy it, and the tenants pay for my rentals.

As long as current economic paradigm keeps them employed...

With the property investing that I do, it works in all markets.

What exactly does all markets mean?

Who cares? And why does it matter - unless you're a buy and hope investor.

Thats a oxymornic statement isn't it? If you dont care or it dosn't matter then that is buy and hope investing is it not?

Profits on what??

On investing! I think thats the point, Id class income as profits from a investors point of view.

Wow, I can see you probably do very little investing Badger, would that be correct?

Full time private investor 24/7 - property, stocks, options, Forex, Metals...

How surprising that you disagree on that too.
Regards
Graeme Fowler

Just a different point of view.

[tpr2]

Hi Graeme

If I can't find the book in my local store I will drop you a line.

It sounds like you may have already covered a couple of things I was asking about in the new book anyway.

As to my reasons why I asked, I like seeing what other successful people are doing. Just because my way has worked for me doesn't mean I couldn't do things more efficiently.

Even Badger has been a help...thanks badger.

[Bob Kane]

Yes, it does seem to be a good time to buy (I bought one earlier this week as a reno), but it depends on your strageties. To me, it has always been a good time to buy and probably always will be, because I don't ever try to guess the market. It may or may not be a good time to buy if you are hoping (like most investors) for capital gain. Most people seem to spend more time concerning themselves about some stupid 'where the hell are we clock' and is 'the market at the bottom', or 'is it at the top' crap etc etc, than actually doing something.

Nicely put.
It ties in with my observation in the gold thread:

Pursuit of specific and narrow areas of interest is one of the most striking features. Individuals may collect volumes of detailed information on a relatively narrow topic such as dinosaurs or deep fat fryers, without necessarily having genuine understanding of the broader topic. For example, a child might memorize camera model numbers while caring little about photography.

Some people just love detail and property has ample opportunity to play with figures - the immigration figures, sales figures, unemployment figures, median and average price movements, rental increases, interest rate changes, you name it - it's been plotted on a graph somewhere and Bernard Hickey will give you the low down on what it means.
It's just that no property investor ever made money by drawing graphs.
You have to go out and buy something and keep it long term.
This reduces your risk to almost nil.