Investment tips By Whittaker Hamilton

[whitt]

Hi. As some of you may be aware I have written an article for PropertyTalk members on investing.
Lead Article of the Week for 27/June/2005
http://www.propertytalk.co.nz/content-195.html

This article is also available in an Ebook format.
Should users decide they would like a copy I can email them one. Just Private Message me with your Email and mention you would like a copy of the EBook.

[janesco]

Well done Whitt

I have just read your article. It's great.

Covers the basics quite well and gives newbies who have heaps of questions the info they need. Those same questions now appear to me to be so simple. Yet it wasn't that long ago they weren't.

So again I say well done

[muppet]

Great stuff Whitt, Thank you.

Have transferred a copy to Library Links where it will be easy to track down at a later date.

Regards

[Julian]

Great article Whitt,

You have omitted the secret ingredient - probably saving it for another article - and if I may be so bold as to hint at the topic of your upcoming article. It is the one thing that differentiates the small time investors from the success stories. It is the one thing that turns problems into successes. It is the one thing that unlocks the really good deals. Most of you know of it. Many of you have it.

It's passion! That's what keeps you going when others have given up.

Look forward to the upcoming article, Whitt - and don't forget to call in if you're down Rotorua way.

Julian

[Oopsick]

Hello

Whitt, thank you for the article

You are talking about serviceability there. I have a slight idea on what that is but I am afraid I do not understand it fully yet. I would really appreciate if you (or someone else) could help me to find some more information on that subject (other articles or books).

Thank you

[Josko]

Julian,

Its ions ago since we engaged thoughts.

My friend, your dedication to being a positivist is recognised and appreciated.

I to felt that passion was the secret, until recently when it moved me of its tracks, passion that was.

The fact is there is no one word that encapsulates the secret.

My Best Regards,

[Josko]

Hello Oopsick,

I trust you are keeping well.

I’ll try to define serviceability, others will add to it I am sure.

Serviceability is a reference the relationship between the amount of borrowing, the amount of income that you can proportion to repay the interest or interest and principle for the borrowing and the risk you and the lender are willing to entertain in the transaction.

Warm Regards,

[whitt]

Thankyou for your words team.
I was thinking a while back about how to best position ones self for the next boom. And came up with the point that certain suburbs tend to move first in a property cycle. It is these suburbs which we need to secure a few long term properties in I beleive.

I would be interested in other peoples comments with regards the points I disscuss at bottom of article My 2 Cents.

[whitt]

Hello

Whitt, thank you for the article

You are talking about serviceability there. I have a slight idea on what that is but I am afraid I do not understand it fully yet. I would really appreciate if you (or someone else) could help me to find some more information on that subject (other articles or books).

Thank you

Yes Ivi is correct.
I am refferring to a persons overall borrowing ability LVR and DSR included. If you are aware of your current status at all times then if the market changes you are better able to react.

At certain points in a property cycle there may be times where it is unwise to be Maxed out with your borrowing ability, incase a slight market correction occurs.

[Oopsick]

Thank you Josko for your description

Thank you Whitt
Here is quote from your article

At the end of a property boom it is probably better to have a lower servicing level. That way if prices drop you are more protected.

Could you please explain the above in more detail?

certain suburbs tend to move first in a property cycle. It is these suburbs which we need to secure a few long term properties in I beleive.

Whitt, would you like to name these suburbs?

Thank you

[fudosan]

Hi Whitt,

Well done for a good overview on property investment.

If values do not increase much in years to come they will quickly run out of serviceability and find they have to wait quite a while.

Can you explain the logic here? I always understand serviceability is affected by income (rent and others) and interest rate, but not the change in values of your properties.

[whitt]

At the end of a property boom it is probably better to have a lower servicing level. That way if prices drop you are more protected.
Could you please explain the above in more detail?

I was mentioning that it is probably an inappropriate time of the property cycle to be maxed out with your borrowings. That way if there is a slight market correction you can sleep at night.

would you like to name these suburbs?

The main Areas and suburbs tend to move first then the price wave( ripple) moves out. To include outer suburbs of main cities and other small New Zealand towns. Take the current point in time, Certain suburbs in AKL have slowed down again whilst small NZ towns are still booming.

[whitt]

If values do not increase much in years to come they will quickly run out of serviceability and find they have to wait quite a while.

Can you explain the logic here? I always understand serviceability is affected by income (rent and others) and interest rate, but not the change in values of your properties.

I possibly have used confusing terminology here. I am refferring to a persons overall borrowing ability LVR and DSR included. If prices dont go up much they will have to wait for there borrowing ability to improve.

[Propoholic]

Hi Whitt

I think its great that you've put the time and thought into creating this article & Ebook.

This article will be a great first point of call for any new or less experienced investors wanting the 'whole story' or a more complete picture.

I must admit, I've started getting a bit tired of hearing answers to first time investors questions being flavoured or fortified with 'The deal of the decade comes along once a week' or 'anytime is a good time to buy' or 'they're not making any more land'. Personally, I've had a lot of enjoyment and fun from property investment and like to think that any new investors get the same long term reward without being tripped up at the start line.

Unfortunately at this stage of the property cycle there is a lot of conflicting and commercially biased information available that does not necessarily give a novice investor the best starting point. Yours is a very good & timely article!

[donna]

This article will also be migrated across to the New Zealand region on our new site going live in July.

Whitt - we can also put your e-book in our 'bookstore' too - just let me know if you want it there.

Cheers,

Donna :P