What Is Property Investment?

[Perry]

I wonder if 'symptom' is too kind?
Are they more of a consequence?

[Badger]

And it will continue to be so, as the current crisis shakes out the speculators, the old money will re emerge, and the people that have always been better at feathering their own nests will again rise to the top.

No problem.

Speculators have nothing to do with the current crisis.

Speculators are a symptom not cause. Loose credit and artificially low interest rates for too long creating a bubble are part of the housing problem...

The people who feather there own nests have never left the top. In fact many second tier elites are recieving billion dollar perk packages, care of tax payers.

[Asterix]

And it will continue to be so, as the current crisis shakes out the speculators, the old money will re emerge, and the people that have always been better at feathering their own nests will again rise to the top.

No problem.

[Badger]

Thats what property has always really been about for centuries tpr2.

How many uber wealthy families buy and sell the castle for a quick profit?

Even the Hohenzollerens still have retained their ancestral lands and castles.

Landlord is a ancient profession...

[tpr2]

Just thinking out loud for a moment or two here so the idea has not been developed yet but it occurs to me that Property Investment has changed significantly over the last 2 or 3 decades.

21 years ago when I bought my first property there was no such thing as Rent by Room, Sandwich Leases, Wraps, Contemporaneous settlements, Rent to Own, property finders, RM, PIP's, no money down, off the plan and a multitude of other strategies for "investing" in property (Actually all those things were around but they were not "known about") .

Generally you bought a property and rented it out. End of story, nice and easy great.

Just like the banking system though we seem to have created all sorts of "strategies" for making even more money out of property than there was before and perhaps like the banking system that suddenly had all these derivatives appear, property has all these derivative strategies, and, as with any derivative of an underlying asset risk is multiplied.

As risk is multiplied returns to offset this risk increase and prices head upwards until .....pop.

So for me property investing has always been old school. Simple and low stress.
I find a property that I can afford to keep, I borrow some money to buy it and I let the tenant pay it off for me.
Over the long term property has proved to be a good store of value and hedge against inflation, the return on investment is high due to leverage and eventually the property is paid off providing a nice little residual income stream.

Of course I have also entered into other forms of property investment (trading, developing, JV's, off the plan etc,) which I prefer to call speculation because that's what it's defined as when you do your financial planning papers to become a CFP

[Badger]

The 'trick' is to get someone else to pay for lunch.
That way, it's 'free' to at least one diner.

Thats quantum eating...

[Perry]

For every action, there is an equal and opposite reaction. There is no such thing as a free lunch, or a free house.

The 'trick' is to get someone else to pay for lunch.
That way, it's 'free' to at least one diner.

[Green Fish]

For every action, there is an equal and opposite reaction. There is no such thing as a free lunch, or a free house.

McDuck made the mistake of wandering off into "the Law". That's quantum physics.

[McDuck]

Better try and get this thread back on track,
What is property investing to me.

Property investing, to me, started out as a strange idea told to me, by a get rich quick friend, way back when I was still at school.

Now anytime anyone tells me I can have something for nothing, in this case a house without having to pay for it, I become suspicious immediately.

Because I know that Newton’s laws of conservation of energy apply to every single thing in the real world.

And usually when someone comes up with a “perpetual motion machine”, a mechanical device to get free energy for nothing, it proves to be a fake.
And after a bit of looking you can find the quirk that makes the trick appear to work.

Now this idea of a free house struck me as a financial form of perpetual motion machine, and because of the complexities of the financial and legal systems, it took me many years to figure out the trick that made it appear to work.

But I finally did.

And I just tried to explain it to you.

but you are right, it’s way too complicated to be discussed on a forum about the simple practical ins and outs of property investing.

What was I thinking!

Apologies.

Duck out.

[orion]

Never mind....what you are asking is similar to asking what fermentation has to do with wine making, everything, but you can make wine without knowing how it works.

Hi McDuck, got it, I understand now. Yes, it's like not needing to know how electricity works, but I can still use the toaster, or asking the pilot how the plane flys before getting on board. As long as it all works, I don't really need to know why or how.

Regards
Graeme Fowler

[McDuck]

Hi McDuck,

I really still have absolutely no idea whatsoever what you are asking or trying to say.
Maybe someone else can translate it into English for me. Why can't you just say or ask me something, instead of all these little sentences which mean nothing. Are you just having me on or what?
This is the last one I reply to unless you can just tell me in English (or someone else can) what you are asking or trying to say. What is all this stuff about Property Rights have to do with the thread??

Regards
Graeme Fowler

Never mind....what you are asking is similar to asking what fermentation has to do with wine making, everything, but you can make wine without knowing how it works.

so forget it.

as you were.

[orion]

Hi McDuck,

I really still have absolutely no idea whatsoever what you are asking or trying to say.
Maybe someone else can translate it into English for me. Why can't you just say or ask me something, instead of all these little sentences which mean nothing. Are you just having me on or what?
This is the last one I reply to unless you can just tell me in English (or someone else can) what you are asking or trying to say. What is all this stuff about Property Rights have to do with the thread??

Regards
Graeme Fowler

[McDuck]

McDuck, 100% of the profit? You might have to explain a bit more. You mean cash flow after it's paid off, or lend you the money while you are taking all the risk, and they still own the building?? Are you talking rental properties, or all properties? Does it work the same if a finance company lends you money for a car? Do you think the finance company should own the car when you have paid all the money back plus interest?


Other rights??

Regards
Graeme Fowler

Hi Graeme, This reply of yours goes outward like an explosion of ideas.
so I will try and reel it all back in.

but we need to get some common ground first.

Did you know the three (sometimes four) rights of property?

here they are.
Traditional principles of property rights includes:

control of the use of the property
the right to any benefit from the property (examples: mining rights and rent)
a right to transfer or sell the property
a right to exclude others from the property.

http://en.wikipedia.org/wiki/Property_rights

[orion]

Socratic: Of like following etc
Socrates Gk philospher 339bc
Socratic ELENCHUS irony pose of ignorance assumed in order to confute others by enticing them into display of supposed knowledge
ic method dialectic, procedure by questions and answers .......

Thanks Badger, the answer to that is no then.


Regards
Graeme Fowler

[Badger]

Hi McDuck, not sure what socratic means. No, I want to understand what you are wanting me to understand or answer, as I really have no idea what you are talking about, apart from something about property ownership.

Regards
Graeme Fowler

Socratic....

Socratic: Of like following etc
Socrates Gk philospher 339bc
Socratic ELENCHUS irony pose of ignorance assumed in order to confute others by enticing them into display of supposed knowledge
ic method dialectic, procedure by questions and answers .......