the Rent or Buy thread

[HamaTime™]

Information presented here is of general nature and you should consult a registered investment advisor before making any decisions.

This is why I cannot take a specific part in this thread to be honest.

 

[Reaper]

I'd suggest seeing a Financial Planner. Most banks have have one. Good luck!

I'd suggest **never** going to a bank or any other "free" financial planner. I'd recommend an independent planner that will charge you a set fee for advice. That way you can be more sure you are getting true independent advice and not just the range of products that may suit the advisor.

Reaper

 

[minux]

I'd suggest **never** going to a bank or any other "free" financial planner. I'd recommend an independent planner that will charge you a set fee for advice. That way you can be more sure you are getting true independent advice and not just the range of products that may suit the advisor.

Reaper

I cant speak for all branches, but the CBank branch we deal with in Altona has an independent financial planner and she is actually quite good. We sat down with her when organising the latest home loan etc. She on sells both commonwealth products and others. I was rather surprised. You are right though, in most cases they will be pushing the banks products, which in a lot of cases are not that bad. My wage insurance is with C Bank and it is one of the best I come across.

 

[Reaper]

This is why I cannot take a specific part in this thread to be honest.

Of course you can. Just be sure to put the disclaimer on the top of each post and don't give specific advice as to "you should invest in x".

Reaper

 

[nathanVY]

Of course you can. Just be sure to put the disclaimer on the top of each post and don't give specific advice as to "you should invest in x".

Reaper

Yes and please do so Ham, would like to hear your thoughts..

 

[HamaTime™]

I'd suggest **never** going to a bank or any other "free" financial planner. I'd recommend an independent planner that will charge you a set fee for advice. That way you can be more sure you are getting true independent advice and not just the range of products that may suit the advisor.

Reaper

Bingo Reap. Financial Advisor's at Bank's are pushed to sell the bank's products, even when they may know that your situation calls for a service they do not provide, or do not provide as well as a more specialised firm. A bank is a bank, they are not personal investment specialists.

I cant speak for all branches, but the CBank branch we deal with in Altona has an independent financial planner and she is actually quite good. We sat down with her when organising the latest home loan etc. She on sells both commonwealth products and others. I was rather surprised. You are right though, in most cases they will be pushing the banks products, which in a lot of cases are not that bad. My wage insurance is with C Bank and it is one of the best I come across.

Needle in the haystack then minux

Of course you can. Just be sure to put the disclaimer on the top of each post and don't give specific advice as to "you should invest in x".

Reaper

Fair point Reap.

Yes and please do so Ham, would like to hear your thoughts..

I have suggested to you before Nath to go and see a financial adviser. I still highly recommend it. The services we (my company and others like it) aim to tailor your finances/investing to your life goals.

 

[nathanVY]

Yeah I still have the recommendation you gave me a few weeks ago, will likely go and see him in the next few months.

 

[ari666]

As i said earlier, with negative gearing, running at a loss is not a problem while you have other people paying for your property. It also benefits your income.

yeah this is the general feeling of most buyers ATM, but i feel its incorrect. i can ONLY base what i am saying on melbourne metro current market values. if you are lucky enough to land a house like darren did for 250k and still have good rental prices then its a perfect system.

sadly rental prices in melbourne are such that the interest on your home loan would not be covered by renters "paying your house off" in the current market you would need to suppliment your rental payments with your own income to make your monthly payments. and by quite a lot too. using my house as an example the owner would need to suppliment our rent by around 10-13K a year (very very very roughly)

i am by no means saying that buying a house isnt a good investment, and that paying rent is not a HUGE waste of money. what i am saying is there is too much demand in melbourne metro ATM, not enough supply and the going rental price is too low.

but that will change:

you see, everyone is so keen to capitalise on the market boom that they are building and ivesting in apartments all over richmond and the outer suburbs. each one of these can take 5 years to finish and what people dont see is most of them will get completed at the same time. all of a sudden BOOM, too many propertys become available, not enough people to fill them. demand gets outweighed by supply. market gets saturated by quality apartments and property values melbourne-wide decrease.

anyone who bought their overpriced house in the last 5 years and has slogged to pay for it is in for a nasty shock.

 

[Fekason]

My experience over a long time has been that first home ownership is only "available" to most people within restricted windows of compatiable price/income/interest rates. I let two windows go before I actually bought, and missed some very good returns.

However, I believe that for the first home buyer there is another element, something like an insurance policy. Once in the market, you are in, If you are not in, you very well may not be able to get in when you want to or when a great opportunity is in the offering.

 

[Reaper]

yeah this is the general feeling of most buyers ATM, but i feel its incorrect. i can ONLY base what i am saying on melbourne metro current market values. if you are lucky enough to land a house like darren did for 250k and still have good rental prices then its a perfect system.

sadly rental prices in melbourne are such that the interest on your home loan would not be covered by renters "paying your house off" in the current market you would need to suppliment your rental payments with your own income to make your monthly payments. and by quite a lot too. using my house as an example the owner would need to suppliment our rent by around 10-13K a year (very very very roughly)

Unless you are in the top 2 brackets of marginal tax (very few are), these days negative gearing is not as effective as it used to be. The advantage comes when buying new or near new property where you can depreciate off the capital assets (ie buildings). This will greatly increase the amount of tax you can claim back. It should be noted that negative gearing is equally applicable against borrowings for many other asset classes such as shares and bonds for example.

i am by no means saying that buying a house isnt a good investment, and that paying rent is not a HUGE waste of money. what i am saying is there is too much demand in melbourne metro ATM, not enough supply and the going rental price is too low.

but that will change:

you see, everyone is so keen to capitalise on the market boom that they are building and ivesting in apartments all over richmond and the outer suburbs. each one of these can take 5 years to finish and what people dont see is most of them will get completed at the same time. all of a sudden BOOM, too many propertys become available, not enough people to fill them. demand gets outweighed by supply. market gets saturated by quality apartments and property values melbourne-wide decrease.

anyone who bought their overpriced house in the last 5 years and has slogged to pay for it is in for a nasty shock.

Being directly in the building industry I get the quarterly statistics etc from various industry bodies. Victoria has been in under supply of dwellings for 5+ years now and is only just starting to catch up. With the way of the world for the for seeable future still being somewhat depressed I don't see a building boom any time soon. There doesn't seem to be any shortage of buyers for the apartment blocks being constructed at the moment in Vic although other places (such as the gold coast for example) it's a very different story. At worst I would see values drift sideways for a few years but expect modest appreciation in most cases.

Reaper