re: the economist and the housing -sue My 2 cents worth on...

re: the economist and the housing -sue My 2 cents worth on property.

I live and invest ( long term ) in WA.

Land is the component of a property that appreciates.
Buildings depreciate.
If the land component is worth 70% of your total initial investment you have passed the first hurdle.

I do not buy apartments.( no land component ).

You cannot fail to make capital gains on property over any ten year time frame in the above context.

NEVER SELL.
PAY INTEREST ONLY, and fix for 5 years if interest rates cause you heart palpitations.

Borrow against the equity in the property for a dabble in equities,a new car, boat,whatever,Just Don't Sell.

Invest in inner city residential real estate if you can come up with the not inconsiderable readies.
High fuel prices,lifestyle choice of inner city amenities that life stylers are after will ensure strong demand for this type of property.

No matter how high the price of a property may seem in your estimation,there is always someone who has the buying power.
This can be witnessed by the exponential increase in Singaporean,Malaysian,Indonesian and just about every other SE Asian demographic purchasing Australian real estate for country risk and lifestyle diversification.
Who would not want to live in Australia?

Income Tax benefits from neg gearing are there for the taking.

Ensure that you have quality tenants even though you may achieve higher rental returns by letting 5 Uni students run amock in your investment.
I have a tenant who does not pay top dollar,but has been my partner in holding this property for 8 years and counting.
I still owe the original purchase price on this property,but with his contribution, and the ATO I have an unrealised but leveraged paper gain of 100% over 8 years.

Property is about time and to a lesser degree demographics.

It is the same as running a small business.
In my circumstances ( 49, kids left home, I have not "worked" for ten years ).
My "job" is to manage a property portfolio,and it is in my best interest that I do it for my future benefit rather than getting 40 k in wages managing someone elses portfolio.

Property is dull and boring.
You literally are watching paint dry.

The dynamics of an equities market that can give you 20% returns in a day are sorely tempting for those who are inclined to have a flutter at the pokies.

Those who were there in 87 will still remember the associated pain when that correction came.

Everyones arguing that property is heading down the s..t chute because of grossly askewed valuations.

I propose that you should have a look at equities growth over the 3 years since GWB kicked off the New World Order and you will find an asset class that I propose is on the precipice of the abyss.

Been an interesting thread, thanks to all the contributors.