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Old 03-12-2018, 15:39   #31
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Re: US property

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Originally Posted by belizesailor View Post
Interesting contrast I became aware of as a result of recent travels down under.

Im most familiar w the Austin, TX market as I used to live there and have bought/sold/currently own rental properties there. Its a great market (and a great place to live). Just last year I was lamenting with other brokers/investors how hard it was to find good buys in the Austin market...then I spent a little time in Sydney...holy moly! The Sydney market is radically upside down. Property valuations are extremely high compared to rent revenue.

Example, we stayed a few nights in a small 2 bedroom flat via AirBnB in an upscale area of Sydney. Rents for units like this one were around AUS$2,600/month, but valuation is about AUS$1.2M. Wow, no way to make good cash-on-cash return on those numbers!

By contrast Austin is a dream! With a bit of effort you can still find properties there where valuation is supported by rents.

Sydney is an awesome city, but I dont see how the real estate market there is sustainable. I expect to see a really ugly correction there in the not too distant future.
I owned in Austin.....rent was good but the outrageous property taxes ate into my revenue. My Vegas house did better......rent was a bit less but the property taxes were about a quarter of Austin's.

Unfortunately I have NO idea where I would invest now......tick tick....Standing by for the correction.
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Old 03-12-2018, 16:43   #32
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Re: US property

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I owned in Austin.....rent was good but the outrageous property taxes ate into my revenue. My Vegas house did better......rent was a bit less but the property taxes were about a quarter of Austin's.

Unfortunately I have NO idea where I would invest now......tick tick....Standing by for the correction.
Yes, can be very stiff in Austin. I managed to have property taxes successfully contested and reduced for many years, but finally the City got the upper hand and DOUBLED them because the property valuation had in fact more than doubled. It was a good time to sell.

Ive used, and still use, Texas ProTax, to contest property taxes. They work on a commission only basis based on what they save you. Ive got them set up to automatically contest every year. Been pleased w their service.

https://texasprotax.com/
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Old 03-12-2018, 17:05   #33
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Re: US property

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it underperforms the S&P500 with regards to cashflow but greatly outperforms the S&P500 when if unrealized gains are considered.
fixed that for ya
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Old 03-12-2018, 17:33   #34
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Re: US property

Trailer parks are cash cows. I know someone that owns a couple. Tough to buy cause no one wants to give them up cause they make $$$
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Old 03-12-2018, 18:03   #35
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Re: US property

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Trailer parks are cash cows. I know someone that owns a couple. Tough to buy cause no one wants to give them up cause they make $$$
I met a cruising couple who funded their cruising on trailer park revenue.
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Old 03-12-2018, 18:27   #36
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Re: US property

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...

I also own multiple properties localy and look after everything myself, which is really the way to go .......but obviously not while cruising. ...
Yeah, just ask Vallejo property owners when the Mare Island base was closed.
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Old 03-12-2018, 20:29   #37
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Re: US property

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The moral of this story ... it underperforms the S&P500 with regards to cashflow but greatly outperforms the S&P500 when if unrealized gains are considered.
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fixed that for ya
I think you meant
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if unrealized gains are considered
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Old 03-12-2018, 23:22   #38
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Re: US property

Once again thanks for all the replies. To many to reply to.

Without being to gloom and doom I do expect a big bust, not just in Australia but also the States. I actually expect the prices of my current and future property to tank! But, what I currently own are owned out right and I'll be a cash buyer if I buy another.

My reasoning is this, I do not believe we have recovered from 2008, structural problems have not been addressed. We have had a ten year economic expansion brought about by loose monetary policy which includes historically low interest rates. Interest rates around the world are still way below historical norms, money needs a price. More debt does not solve a debt problem.

During a downturn (and I expect it to be a big one) fundamentally good income returning property should be fine, price may go down but the rent should keep coming in, people need roofs. I apply the same lodgic to fundamentally sound companies that provide dividends.

The below is a quote from a famous Austrian economist:

There is no means of avoiding the final collapse of a boom brought about by credit expansion. *The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

Ludwig von Mises,*

Real estate in Australia has mainly been driven by easy credit not supply and demand fundamentals.

Here's an eg. My dad purchased the house I grew up in for $8,000 in 1964. His electricians wage was $2,800/year, thus income to house price ratio was under 1:3. He sold that house two years back for 960k, the same electricitian would need to be earning over 300k pa for the previous ratio (historical average) to be met. BTW it's not a particularly nice area or house.

What I'm attempting to do is to postion myself well for what I believe will happen. Currently I'm leaning towards sitting on my hands until I see a deal I'm comfortable with.

Here's an example of what I think is insane. Below is a link to a mobile home, thus a portable home that is in a caravan park (think nice trailer park). You do not own the land, you pay approximately $200/week to have your portable house on a site. It's a nice little trailer home BUT?

https://m.realestate.com.au/property...oint-129732218
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Old 04-12-2018, 05:01   #39
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Re: US property

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I think you meant
OK, so "if potential gains are realized"
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Old 04-12-2018, 05:03   #40
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Re: US property

Our whole global financial system is a very fragile and precarious house of cards, propped up by hope, delusions and magical thinking
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Old 04-12-2018, 05:39   #41
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Re: US property

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Our whole global financial system is a very fragile and precarious house of cards, propped up by hope, delusions and magical thinking
IMHO this is spot on. It runs on trust, trust among thieves is my take. My taKe is the 2008 crisis was about loosing trust, enough folks saw the fake boom and were ready to sit pat while the ship sank. That got the money folks to create a bunch of fake money, it restored trust the game was not over. Yet. The next time will likely be tougher to restart the game smoothly.

Many of us are at risk because our pensions/401k (USA retirement set aside) is forcibly in the stock market.

We have 3 sources of retirement income:
Social security
Retirement savings/investments
Rental income

All would be affected by a crash, but in different ways. But also, by being diversified, we should be more resilient than most others. I think that is important. If 75% of folks are hurting worse than you then there should be opportunities for you to take care of yourself. Not in the manner you are accustomed, but survivable.

Not something I look forward to, but keeping a weather eye.

The bigger problem is if, through the course or the “adjustment” the big cities loose civil control. That could be very nasty.
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Old 04-12-2018, 07:59   #42
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Re: US property

Quote:
Originally Posted by john61ct View Post
Our whole global financial system is a very fragile and precarious house of cards, propped up by hope, delusions and magical thinking
IMHO this is spot on. It runs on trust, trust among thieves is my take. My taKe is the 2008 crisis was about loosing trust, enough folks saw the fake boom and were ready to sit pat while the ship sank. That got the money folks to create a bunch of fake money, it restored trust the game was not over. Yet. The next time will likely be tougher to restart the game smoothly.

Many of us are at risk because our pensions/401k (USA retirement set aside) is forcibly in the stock market.

We have 3 sources of retirement income:
Social security
Retirement savings/investments
Rental income

All would be affected by a crash, but in different ways. But also, by being diversified, we should be more resilient than most others. I think that is important. If 75% of folks are hurting worse than you then there should be opportunities for you to take care of yourself. Not in the manner you are accustomed, but survivable.

Not something I look forward to, but keeping a weather eye.

The bigger problem is if, through the course or the “adjustment” the big cities loose civil control. That could be very nasty.
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Old 04-12-2018, 10:25   #43
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Re: US property

All the goods required for most people's survival have super-fragile far-flung just-in-time supply chains.

Neither government nor the free market will be able to save most of the population if (when) those are disrupted.

People are entirely right to trust neither, although of course they do, as long as the question remains below the conscious level.
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Old 04-12-2018, 11:47   #44
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Re: US property

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All the goods required for most people's survival have super-fragile far-flung just-in-time supply chains.

Neither government nor the free market will be able to save most of the population if (when) those are disrupted.

People are entirely right to trust neither, although of course they do, as long as the question remains below the conscious level.
The supply chain is generally shorter the less first world and less urban the venue.

Im amazed how far removed my friends in the USA are from direct sources of anything...like life in the Matrix...in a collapse they are screwed and have not a clue how to survive out of the Matrix.

We half jokingly talk about our place in Guatemala as a good spot to ride out a collapse...its remote, off grid, the village gets no government services (no police, no firemen, no medical, nada), self governing (incl: collectively well armed for self defense), very small population (maybe 200), good people in a tight knit community who are used to being self sufficient (in fact, in stark contrast to the typical 1st worlder, they know no other way). Both the USA and Guatemalan governments could collapse and little would change there.

Our place in Panama is in the Chriqui province, the agricultural center of Panama. We get all of our produce, dairy, meat, fish, etc, direct from the source or only a step or 2 removed. There is much more infrastructure there, but food should not be an issue. Larger population so likely more source of trouble in a collapse.
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Old 05-12-2018, 06:28   #45
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Re: US property

Yes, no joking, that is a more amenable type of location if SHTF.

Not requiring fossil fuels or other working high tech is definitely a plus, warm climate and working subsistence agriculture, maybe even some wild foods locally available definitely helps increase the odds.

But only if the the community accepts you as part of "us", rather than a "them" to be plundered.

Skills useful to them in that context that can be bartered ongoing, of course helps a lot.
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