Your Opinion - the 2010 Property Market

From the survey questions that you see on the right hand side of this wonderfully awesome blog, your opinions regarding the movement of property in 2010 has shown some interesting results. 23 people voted and overall, it seems we are continuing to be optimistic. 74% of you voted that at least, the property market will stay flat, while 35% overall thought property prices will continue on their merry way and that it will be business as usual.

I suppose the only information that is missing is whether the respondents were in fact home owners or investors or non-investors, or whether the responses were made by mindless bots trolling through the kazillion websites, voting at will, rendering any information derived from such polls as useless. We will never know, but let's for argument's sake maintain that it was indeed humans who responded.

A lot of what happens to property prices is down to sentiment. If we are happy and feel that property is a great investment vehicle, than our good sentiment will flow down through property, through shares, through business, down to the pockets of all Australians as we continue to relentlessly increase the prices of homes in this great, and often dry, land.

I think for quite some time we will see this positive sentiment continue, especially if the upcoming election, inflation rates and RBA decisions go in investors' favour.

Time to stocktake the portfolio

It's the end of financial year 09/10 and it's time for my little "business" to have a stocktake. So, let's see what we have now:

Bought this year:

1. Ingham (north Queensland) 3 bedroom highset. Currently our PPOR.

Continued to hold:

1. Ferny Hills (north Brisbane) 3 bedroom brick and tile. This was supposed to be our PPOR one day. Mortgaged. Rented. CF-

2. Invermay (Launceston, Tasmania) 3 bedroom + sunroom, dodgy weatherboard in an excellent location. Mortgaged. Rented (sort of...in the process of eviction). CF-

3. Glen Aplin (near Stanthorpe, south Queensland), 810 square block in an old small subdivision. Sitting pretty. Not mortgaged. No income.

4. Lachlan (40min from Hobart) 29 acres of splendid mountain/valley/river/town views and about an 8 minutes drive to New Norfolk. Sitting pretty, but looking to do SOMETHING to derive income. Not mortgaged. No income.

Sold this year:

1. Toowoomba (1 hour west of Brissie) 3 bedroom colonial in a historic estate. Was a dog when it came to cash flow.

So overall, our portfolio has entered a "consolidation" phase. By buying Ingham to live in (in town, better for missus and myself), our earlier Toowoomba purchase had to go. Cash flow this year reduced thanks to my beautiful little baby boy arriving and allowing my missus to be a stay at home mum, which far outweighs the benefit of additional cash flow. This does hurt our ability to maintain a negatively geared portfolio though. Balancing act anyone?

So how are we travelling? With the sale of the Toowoomba dog, we are OK. Capital gain (CG) has, according to valuations, dropped, but I am putting that down to the bank being cautious. I think at worst, we have increased our CG by approximately 2% this year. In my day job, I have yet again received a pay rise, so things are comfortable, but that bloody Rich Dad, Poor Dad book is still fresh in my mind. Look out for news around a business I may be buying.

Where to in 10/11? The portfolio is negatively geared and our serviceability is low. There are a number of scenarios, such as further down selling, which could increase our ability to service another property or two, but do I really want to? It would involve selling Lachlan, the block which I think has so much potential. I can't bear the thought of "little short term gain" over the "massive capital gain" that COULD occur. It's all a question of time. I will probably put it on the market, mainly because I see bargains EVERYWHERE at the moment and I want to jump in...BUT CAN'T!!!!! I have found some very good properties, close to CF+ and in great up and coming areas....what to do, oh what to do???

PS. Don't forget to vote on the right, some clear patterns are developing, but it would be great to get a few more people's opinions.

Chillin and chattin...

I've been enjoying a well earned break from my day job and in the two weeks of R&R, I've had a few chats about RE with my family. Not only had my sister and brother-in-law FINALLY bit the bullet and bought a 4 bedder (congrats by the way), but now my parents have began looking for a decent do-er-upper. I on the other hand have SOLD SOLD SOLD! That's right, finally out Toowoomba property has sold, and it was about time too...many delays with finance and banks doing valuations and paperwork and blah blah blah, but finally, it's all finished. So, I have now had a unique experience of owning a piece of property, had NEVER seen it in real life, and have now sold it!!! Did I make money? Not really, but it was a fire sale and ultimately for the greater good. Now the time has come to contemplate the next step, a step into maximisation, either to increase cash flow further, or, spend some dosh on our little Invermay property in Launceston. Either way, good time are ahead for finances for my little family.

My parents are looking for something on the Sunshine Coast that they can quickly kit out and on sell. I hope they go through with it, it will be a great learning experience for them. Dad can do the painting (oh, and if you need any painting done on the Sunshine Coast, give him a call, he is a perfectionist - 0438940634, qualified) and Mum has an eye for style.

Anyway, life is good in investment circles atm...ciao for now.