property investors - what are they thinking

Residential landlords, as investors, are certainly not sophisticates - but instead rely on a blind faith of almost religious proportions that owning rental houses will somehow serve them well in the future. Perhaps they're right, although it's a tortuous path they've set out on.

They measure their success in the number of properties they own rather that in the equity they could have created through astute purchasing or market movements - indicative of their investment naivety.

Their specialist publications, such as Australian Porperty Investor magazine - a 100-plus page glossy monthly, love recounting success stories measured this way: "Four years ago David was a warehouse manager. Today he owns five properties and his ambition is to get that up to ten properties in the next three years." It's a common line in their approach and the underlying financial ignorance exhibited when they are asked to provide the specific monetary details of their purchases is, at times, sad.

Personally, I'd rather boil my head in oil that be a residential property landlord, which in many of its practical implications, as well as its poor income returns, I find decidedly unattractive. In a country in which two-thirds of the population are home-owners, a large percentage of the residential tennent market are either no-hopers or young singles. Either category would be a nightmare to deal with, other than with a horse-whip. We should all be grateful to naive residential property investors for taking on these burdens, which in my view no sane person would entertain.