Comments on: What Type of Borrower Are You?

By: DeanCollins

DeanCollins — Sat, 12 Dec 2015 23:17:56 +0000

As an expat living in the states its hard for me to make accurate assessments however…..Sydney is booming at the moment with construction (both private and government), its about appropriate if you compare it to how other economies are operating eg usa or Europe.

By: Jason Staggers

Jason Staggers — Fri, 11 Dec 2015 04:09:46 +0000

Point well taken Ray. If you wait for perfect circumstances you’ll likely never start.

Can I ask… what year did you start investing and what were your gross yields like in the beginning?

By: Ray

Ray — Fri, 11 Dec 2015 04:01:57 +0000

I get the lesson, however if i followed this line of reasoning i would of never got into property investment.
That said i started of as a Pozzi borrower and through both the passage of time and growth in the marked has made me a Hedge borrower.
Know the risks and gamble what you can afford to loose but don’t procrastinate. As you cannot win a game if you do not participate. Nearly every young home buyer goes through the same process on the only difference to me is they live in their investment.
Ray

By: Jason Staggers

Jason Staggers — Thu, 10 Dec 2015 06:11:07 +0000

It will be interesting to see how long the party lasts. As you say, with each new dollar printed, the chances of a soft landing aren’t getting any greater.

By: Jason Staggers

Jason Staggers — Thu, 10 Dec 2015 06:06:00 +0000

Probably not. But whether the surplus goes toward paying down principle or into an offset account, the heart of the issue is how much rental income is left over after paying interest.

By: Jason Staggers

Jason Staggers — Thu, 10 Dec 2015 06:01:07 +0000

It certainly isn’t a flattering title!

By: Dmitry

Dmitry — Thu, 10 Dec 2015 05:05:14 +0000

Let’s hope that the whole system implodes, the sooner the better as with the current property prices and debt level the whole system is a house of cards propped up by the paternal government. In other countries you can build a whole house in double brick for $50k where in Sydney $50k is a rounding error in the price of an old dump.
What most people do not understand is that our national debt has been increasing by 40-50bn every year since 2008 which combined with the record commodity prices have allowed Australia to escape the recession and prevented the bust in the property prices. The game can definitely go on for much longer as government can add an extra 200-300bn in debt quite easily without anyone noticing which means that some of the so called Ponzi and Speculative investors probably still have time to get in and get out.

By: Colin Rice

Colin Rice — Thu, 10 Dec 2015 04:55:28 +0000

“These are the real estate investors with principle plus interest loans on a positive or neutral cash flow property. The rental income generated by the asset pays the borrowing costs and also reduces the debt” – Minsky

I dont think offset accounts existed in Minsky’s time?

By: Coatesman

Coatesman — Thu, 10 Dec 2015 01:58:10 +0000

I always knew my strategy but it was never succintly put as this article has done with the 3 types of investors.
I’m sure many would be quite opposed to being “Ponzi” Borrowers – however they are at least legal in doing so, but should be aware theirs is a house of cards!