I think this is a common misconception...

I don’t think you need a certain amount of cash in the bank, you need a constant stream of income.

If you say “right, I got $300 grand in the bank, I’m good to go!”, you’ll soon burn though that cash in no time, if it’s not being constantly replenished.

Property provides a constant stream. Even if the stock market crashes and gold is trading at an all time low, people always need somewhere to live.

rd

I gave my commercial tenants a period of cheaper rent when we had the COVID lockdown here. Didn’t have to, but it was the right thing to do.

Over the last 10 years, they’ve paid me a heap of rent money. A month or two isn’t a big deal in the scheme of things.

rd

I don’t know anything about it ...

But there is a fine line between “living within your means” and being a miserable f**ker. Lol

Don’t be one of those.

rd

That’s all very well if you live out in middle America, where houses are dirt cheap.

If you live in LA, NYC, SF, or any big city, that’s out the window.

The average price for a house here in Auckland, New Zealand, is $1,000,000 NZD. ($725,000 USD). Anything in a good area is way more. Check out the one in the pic below ....

Couples need to both work good paying jobs just to make the house repayments.

Hey, they could move 100km out of town and buy a 350-500,000 house ... but then they have to drive 2 hours to work each day (and 2 hours back). The trend to “work from home” certainly makes this more viable though ...

So the 25%, while a great idea, might not be obtainable for a lot of people. Unless they like sleeping on peoples sofas.

rd

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Hopefully the ghosts will disappear when the house is demolished. It’s probably demolished already! It’s the land that’s worth $1.8m.
There will be a new development built there.

rd

RDs retirement tip #62:

Don’t pay some dude $150 to clean your car when you can do it yourself.

Sorry Rai. Couldn’t resist.

rd

Of course, I was joking with my post ... it was in reference to another thread.

But I wouldn’t pay anyone to clean my car. Or do anything I can do myself. Just the way I was raised, we had no dough so we had to do it ourselves.

Hopefully I’ve passed that on to my kids too.

It’s been a big part of being able to retire young.

rd

Oh yeah.

Always buy property in a recession.

Be brave and buy up big!

Property always goes up long term.

(Unless the town is dying ... then you wouldn’t buy anything there!!)

rd

Ok ....

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As I said before ...

As proven above, with Flint being the only major city in the US that has gone backwards in price over the last 20 years. Buy in growth areas or places with good employment so people want to live there.

Yes! There are always dips. This is the time to buy. 2008-2012 was a great time to buy property.

As I said before.

rd

There will be one. Probably soon!!

Then in 20 years, the graph will still be pointing skyward.

Get your money ready to buy now.

PS ... something to keep in mind, there is always a bargain in every market. You just need to be well versed in prices/historic sales etc to be able to spot them when they arrive.

Example, the property market here is insane. But by using this knowledge I got my buddy a nice 2 bedroom apartment in the CBD for $70k under valuation 18 months ago.

I could see in the photos the renters of the place had shit everywhere, way too much “stuff” in a 900sqft apartment. This will deter most buyers as they can’t see through the clutter. I knew the average for those layouts was 520-540k. I told the guy to offer 400k cash. He ended up paying 450k. We worked together and totally redecorated it for <$10k (new quality carpet, tiles, painting, drapes). Took about 10 days of casual labour on our part.

So, he has a winner. He could sell tomorrow and make some bucks or rent it and do nicely.

I won’t bore you with some of the deals I’ve done in the last 20 years.

rd

That’s a good presentation.

Everything he said is what I did as well.

The only issue I’d have is the 64% .. that would be unobtainable here (or in any big city) due to housing costs.

Unless you lived with your parents... that would be an option. But no way you could save that much due to rent or mortgage repayments. Unless you were on a massive salary .. which maybe he was. He said he worked in Seattle, aren’t the housing costs there astronomical?

Otherwise, a very good philosophy to live by.

rd

Someone posted this on Facebook the other day.

Ironically, the person who posted it does pretty much exactly what the thing says. Lol

When you actually break it down and think about it, it is pretty crazy.

rd

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The quicker you pay it, the less you pay.

If you pay it off 10 years early, you save 10,000s of bucks.

Of course, the rates are so low now ... you can get 3.5% here.

When I bought my first house in 1987/88 (I was 17/18) the mortgage rate was 18.8%. Lollll. Crazy.

rd

https://www.loanmarket.co.nz/calculators/extra-mortgage-repayments

I just inputted a $500k mortgage at 3% over 25 years with fortnightly payments, and an extra $100 voluntary payment every fortnight.

You save $30,000 over the mortgage and pay it off 3 years earlier.

Of course, that’s assuming your mortgage rate will be 3% average over 25 years. I doubt it’ll be that low. When the crash comes, expect it to shoot back up again.

Which of course would make the savings greater.

If you do exactly the same calculation, but change the interest rate to 6% (maybe a better average over 25 years) the savings are $71,000 bucks.

Not bad for an extra $50 payment a week.

rd

<TMI>

For me, that’s the best feeling ever ... living in the house you own, the apartment you own .. and the bank can never come and kick you out on the street.

At that stage, you’re set for life.

rd

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