I am still thinking of some way to do it under 5%, maybe through some kind of business loan.[/quote]
Yeah thats what i thought - maybe look at starting an Investment/Development company and get business loans for places. I should point out, the intention for my original post is not to buy a place to live in but to buy a place to invest in.
I’m aware of the bubble talk in aussie real etsate. The other investment places I have are in the lower end of the market and not in the major cities. The reason i bought these ones as i feel that there is always poor people that require the cheaper housing rentals, plus being out of Sydney, Melbourne and Brisbane, my tennants are those people who are escaping the major cities due to the rising cost of living. The bbubble talk is in the cities - not the regionals.
I must have done something right as my current investment places are positive geared.
But I do want to expand my portfolio with the same type of properties. So i may also explore the possibility in starting a Taiwanese based development company. Use our existing apartment in Taipei as collateral.
There’s no financial logic in what you just wrote, just self-justification. Assumptions-
- What worked before will work now (most people just ride the wave of trends). Has ANYBODY lost money investing in property in Australia over the last 10 years…I doubt it. Will everbody lose money in medium term on their investments in real state in Australia from 2005-2010, very possibly.
- Poor people will be able to afford my place at the rate that will pay my mortgage
- Out of the way places will hold up better and there is no bubble in those places (I have seen that NOT to be the case in many situations). You should also take into account employment in that area, plus transport links and costs if oil goes up.
As Mr He said, FX changes alone could kill your investment, they could also work to your advantage. However it’s just gambling. Although one thing for sure, there is a huge bubble in Australian real estate right now. It’s easy to tell because of the affordability index. Rates will probably go up more and exports of commodities will slow or bust once China pulls back on its crazy construction boom. So there is much more downside risk than upside.
The scheme you are using is one that Europeans used to buy houses in their own and neigbouring countries i.e. Latvians, Lithuanians etc. They lost evertyhing when their currencies devalued. It’s is also similar to what many Chinese, Japanese, Taiwanese and Asians are probably doing in Australia right now. In general it’s a good idea due to the low interest rates in Taiwan but it needs those rates to continue and also assumes massive currency risk.
Finally why are people escaping the cities…high costs. What happens when the cost of property comes down, central areas become more popular again! Ultimately it depends on employment opportunities for your tenants or if the local government will cover their rental costs to a certain level.