Mortgage Interest Rates in Oz & Possible Property Boom

[Guest guest30038]

I don't get the logic of flogging your guts all of your life so that you have 9 houses when you retire. What about the rest of your life (younger) that you've just wasted, working yourself into the ground? I have rellys like this who work like Trojans (to the detriment of their relationships), miss out on holidays, spend less time than they should with their kids, move every 6 months in an attempt to cash in on or cheat the market, are constantly stressed by juggling their finances etc etc. They might have some extra cash when they're 60 but their life now, and for the last 10 years, has been wasted. Pointless.

 

Fully agree, but if you look at the Grey Nomads here, they're much younger than UK pensioners. Many Tradies who flog their guts out to buy investment properties are doing it to retire at a much earlier age when they can enjoy the fruits of their grafting. I know of quite a few who have retired before the age of 50.............even my next door neighbour who was an electrician and bought his first house when he was 21 is retired, and he's only 46. :shocked:

 

kev

[Guest chris955]

That seems to be a very generalised statement.

I don't personally know anyone who has retired under 50, weren't they saying recently that people are having to work longer to make up for recent losses to super ?

 

Fully agree, but if you look at the Grey Nomads here, they're much younger than UK pensioners. Many Tradies who flog their guts out to buy investment properties are doing it to retire at a much earlier age when they can enjoy the fruits of their grafting. I know of quite a few who have retired before the age of 50.............even my next door neighbour who was an electrician and bought his first house when he was 21 is retired, and he's only 46. :shocked:

 

kev

[Guest guest30038]

That seems to be a very generalised statement.

I don't personally know anyone who has retired under 50, weren't they saying recently that people are having to work longer to make up for recent losses to super ?

 

It may be generalised in regards to the population as whole, but the whole haven't got into investment properties and retired early via that, which is what I'm talking about. I've had 3 camper touring holidays in Oz in the last 2 years and most of the grey nomads I met were too yound to be grey:biggrin: In fact, I think I was the only one :rolleyes:

 

As for the media hype about Super. Yes, some have got burned but my wife's super shows $326 negative in the last 2 years and over the last 10yrs 8% positive. Super, like property, is a long term investment (obviously)

 

 

kev

[Guest SO,DIZZY]

OK, I'm no financial wizard but my understanding of the basics are this: Negative gearing is a means to reduce your personal taxation. Tax benefits arise from showing a loss on investment. You can borrow money to invest in property, shares, or other investments. A tax allowance is provided if the borrowing costs from your investment exceed your income from that investment. Look here: Borrowing money and negative gearing - Australian Securities and Investments Commission

 

No astute investor would show a loss unless there is an expected profit later down the line. The moment you profit, is the moment you commence to pay tax as opposed to receiving tax beneits, so you then set yourself up for a further loss, by borrowing to purchase more property or shares, again, with a view to eventually making a profit.

 

If you continue to do this, one may ask, where is the profit? The profit is in the (sale of the) capital (less capital gains tax) when you retire or when you think the market is right for capitalising on your purchases. Considering that investors continue to "indulge" in negative gearing via property, (on advice from their accountants) it is pretty safe to assume that they expect a long term profit when they sell their capital (houses or shares purchase price less than sale price). This should indicate that property is a safe long term investment...........but...........in a capitalist sytem...........nothing is assured.

 

kev

 

 

How do you pay of the loan payments inbetween and how does rental cover the rent if they are supposed to show a loss?? wouldnt you have to rent for a lesser amount than morgage repayments.. you would have to be earning a bit to cover these costs i would immagine... or am i of the scent..