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  1. #1

    Default why investment property now?

    Should you buy investment property now?

    Are we all going to look back in a couple of years time and kick ourselves for not grabbing the property investment bargains that are out there today? Looking back at some of the property we have bought its quite likely. To give you a bit of back ground we made a lot of money on our first house, it was that rush when double allowance was being stopped, starter houses like ours were going up a grand a week. We bought a larger house then we sold it we just broke even losing all the money we had made on the first place. We then played it safe for a few years until our circumstances changed and it made sense to buy an additional property because of work commitments. We found a great place bought it and within 6 months the value of it dropped by 4% and its not a good feeling, however that particular mid nineties recession ended and the value of the property went on to increase.
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  2. #2
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,586

    Default

    It all depends on your personal situation, but YES, I think now is a great time to buy. But you need to

    1) Look long term, say 10-20 years - AND be in a position to be able to hold for this period. Property investment is not a short term investment
    2) Buy right - this isn't actually necessary but it does make your feel good, plus may allow you to buy the next property quicker
    3) Buy a positive cashflow property. Say you buy a property for $250,000 with 100% finance, and it breaks even every single year for 10 years (so no top up needed). Chances are (and I wish I had a crystal ball) that the property will be worth significantly more in 10 years. To be conservative say its worth $300,000 in 10 years time.
    So with no money down (obviously have to use other assets as security), no top up, the investor would have gained $50,000 tax free. Where else can you invest nothing to make a reasonable return!
    Even if the property is still worth $250,000, you haven't lost anything!
    4) All the good investors have a strategy. For example recently in the property magnizines there was an investor who purchased apartments or town houses with separate kitchens, then ripped out the kitchen, put it in the lounge, then converted the old kitchen to a bedroom to add rent. I'm not saying this is a good strategy or that you should do it, but at least this investor has a strategy, an idea to improve cashflow, and a way to focus on an area where they feel they can make wealth.
    5) I personally think new properties are better due the better tenants, lower repairs and higher future capital gains.
    6) Location is still key. Tenants and future buyers want schools near by, bus stops (with petrol getting more expensive), parks, shops and safety.

    Overall I think now is NOT the time to go crazy and over stretch yourself, but it is also a time of opportunity.

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  3. #3
    Join Date
    Sep 2009
    Posts
    90

    Default

    I agree with that; I would also have thought that it would be a decent time to invest at the moment. As I am fairly new to this however, I was wondering about the profit that you would make when selling a second home? Is it tax free? I have often been told that the govt takes a large percentage of it from you, not to mention all the fees and things that you have to pay?

  4. #4
    Join Date
    Feb 2010
    Location
    Bangkok, Thailand
    Posts
    24

    Default

    The recession almost ends, and the real estate industry continuous to recover as the value of the properties also continues to increase its rate. It is good to invest in property nowadays because it can give you great opportunity to win back your investments in a good amount.
    __________________
    bangkok leased office | bangkok office for rent


 

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