Learning from mistakes

Pissed my 20's up against stainess steel, ran away to the (Formula One) circus for a couple of years in my 30's, various overseas trips, about 20 cars, knocked back a Bondi beachfront (102 Campbell Pde) unit in 2001 for $400k, bought a yacht instead (my pinnacle, that one), now aged to 45+ before I figured out the doom-and-gloomers were all full of s$$t, probably just in time to work towards spending several hundred grand to prove them (eventually) right.

Better late than never, I hope. Still saving (and waiting for rugrat #2 in a few weeks) so next year is crunch year. I'll let you know when I buy a house so you'll have at least a day's notice of the next downturn.

If I knew then what I know now. :/

DontSailBackwds said:

Pissed my 20's up against stainess steel, ran away to the (Formula One) circus for a couple of years in my 30's, various overseas trips, about 20 cars, knocked back a Bondi beachfront (102 Campbell Pde) unit in 2001 for $400k, bought a yacht instead (my pinnacle, that one), now aged to 45+ before I figured out the doom-and-gloomers were all full of s$$t, probably just in time to work towards spending several hundred grand to prove them (eventually) right.

Better late than never, I hope. Still saving (and waiting for rugrat #2 in a few weeks) so next year is crunch year. I'll let you know when I buy a house so you'll have at least a day's notice of the next downturn.

If I knew then what I know now. :/

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Bet you won't look back at your life at the age of 60 and wonder if you wasted you life though?

Sounds like you've had an awesome time - living for today needs to be just as important as tomorrow. Who knows, today may be all you've got?

Edit: My biggest mistake was simply going too conservative when I started. Bought one @ 80% LVR, in hindsight I should have tried to find two at 90%. Also I listened to someone regarding an area I was looking to buy - even though I'd done the research and they hadn't.

Finally - missed out on one killer deal as I didnt have my finances sorted in time to make a strong offer.

Biggest mistake to date was buying an OTP studio for my first IP.

DontSailBackwds said:

I'll let you know when I buy a house so you'll have at least a day's notice of the next downturn.

:/

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Story of our lives too.

I do have a couple of regrets if I think about it too much...

My first is starting SO late... at the age of 30, I finally bought my first #IP. I know of others that start in their early 20s.

I met with a mortgage broker when I was 25 and was looking at purchasing a 2 bedroom apartment in Armadale VIC for 280-300k. That's a regret, not fighting to purchase that place as it'd be worth 400+ now.

Instead, I decided to travel for 6 months around SE Asia and spent all of my deposit.

At the same time, I feel as if I'm much more educated now about property. I have this great forum behind me. I probably would've signed up for the wrong loan back then (I&P), too. And of course, I take away wonderful memories from all of my travels to Asia and Europe...

Hi everyone, this is my first post and I thought this is the perfect thread for it.
Mistakes! yeah I have made my share. Back in 1999 we sold a 2bdr unit in Box Hill, Melbourne for $106,000 and only owed $86000 on it. We bought a 3 bedroom house in Blackburn North which was a nice step up. Everyone was saying keep the Box hill unit as an investment. The bank even gave the green light for the Blackburn North property without the need to sell the unit. I was stubborn and kept making excuses to sell it like what if the hot water unit packs in, what if the carports need replacing (there was body corporate talk at the time about updating all the carports, 15 years later nothing has been done ) etc etc. That unit would have been positive geared from the start and is now worth more than $400000.
Second mistake was buying a 2 bedroom investment townhouse in Forest Hill for $267,000 back around 2005. Kept it for 2 years and then sold it for $317000 now worth $500000 plus. I wanted to demolish and rebuild my home and didn't want the stress of an investment property as the home mortgage was going to be large.
If I had kept the 1st property as an investment the extra cash flow from that rent would have made keeping the second investment possible and looking back now I probably could have kept the 2nd property anyway but the debt scared the hell out of me. I have been out of the investment market since with no desire to get back in until recently.
I'm now in the process of buying OTP in Ringwood, a 2 bdr apartment, ground floor 82sqm in size with 84sqm courtyard for $428,000. It seems expensive but the market is that at the moment and from my research I'm not paying a premium for OTP as current sales for established 2 bedroom apartments are thereabouts with one selling for $455,000 which we almost bought..
What I figured out is no matter what mistakes you make (we all make them) don't let it stop you from what you want to achieve in life.
I'm soon to be a property investor again I'm excited and scared but happy to be an investor again.
lifes good. Oscar

Choosing a house with water views over an older style pair of flats/duplexes. Both were good investments but the flats have outstripped the house for capital growth x 》double.

Who says units don't pay?

I regret not having developed an industrial site but sold it to the sitting tenant. In the light of the market at the time it was a good decision but in hindsight.....

Lost my life savings in the Estate Mortgage collapse of C 1990. Fortunately I was only ~ 18 and that was a few grand.

Lesson:
With higher return normally comes higher risk.
Research where you put your money. If you don't understand don't invest.
Don't put all your eggs in one basket.

It's very hard to know if an investment move is a mistake, until in hindsight. Even if you see the same circumstances, the outcome may be different this time.

Tyla said:

Not setting up the loans correctly when we bought PPOR. Now we will not get tax benefit if we ever convert it to ip.

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How did you do that? surely if you rent it out the interest is tax deductible?

tj22 said:

How did you do that? surely if you rent it out the interest is tax deductible?

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I suspect the usual mistake of paying off all or a big part of the PPOR loan, then needing to draw down on the money to buy the new PPOR (in which case the interest can't be deductible).

The Y-man

tj22 said:

How did you do that? surely if you rent it out the interest is tax deductible?

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Exactly as Y-man said. As FOH, we aggressively paid off the principle a lot. Although it's available as redraw, if we convert it to IP, all deposits would be considered as debt paid off, so interest on that won't be deductible. If you think about it every $100k you can't deduct will cost you 5k tax deduction (ie 1500 if you are on 30%). To make matters worse, we borrowed 90% and paid LMI too. Put extra cash in redraw facility in case we needed to invest soon.

Had we structured it with offset facility, we would have been able to draw it and the full loan would have been tax deductible.

Lesson: before you do anything, find a very cluey broker

My first, and only property I have had the joy of buying so far after doing all my research and the property was listed at $269,000 then slashed to $259,000 the I wanted to offer $240,000 but when I went to write the offer the real estate fella convinced me to offer another 5k then long story short it was accepted but I'm quite sure I could have got it for $240K,
Next time sticking to my guns and then finish with negotiation!
I still love this property though
Cad

antistar said:

That's an interesting statistic Richard. Do you know whether it relates to Australians owning the properties in full or 'owning' the titles (but potentially LVRd to the neck)?

Always curious with these types of calls and research data

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That was for IPs held, not unencumbered ones. I think there would be the smallest fraction of a percent of people with 3+ IPs totally paid off, though I haven't seen data on that.

No such thing as a bad decision.

Every decision is the right decision at the time based on the information you have at that time.

Research.

I never make the same mistake twice... I make it 5 or 6 times just to be sure

I have a long list - but no time right now. Ill post actual examples later.

Blacky

Richard Feynman said:

That was for IPs held, not unencumbered ones. I think there would be the smallest fraction of a percent of people with 3+ IPs totally paid off, though I haven't seen data on that.

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Cool, cheers. Good to know

pier1 said:

No such thing as a bad decision.

Every decision is the right decision at the time based on the information you have at that time.

Research.

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Learning through experience is the best type of learning. Research helps but nobody has gone 100% without mistakes in their investment careers.

The more examples we share here, the more we can learn from each other's experiences.

Cheers

Here's one. Think big, don't chase the time consuming small stuff like working, and do it early.

Bought ip and renovated prior to having it tenanted. Bye bye majority of $40k worth of deductions over the next number of years.