NZ Herald 2 July 2005
Q&As: Should woman buy a home now, despite Economist warnings?; A couple explores housing options; House prices falling in Australia.
Q&As: Should woman buy a home now, despite Economist warnings?; A couple explores housing options; House prices falling in Australia.
House prices should worry reader. I’ve just re-read an email from a reader, and it concerns me — especially in light of a recent Economist cover story. The reader put $80,000 into two rental properties six years ago, and it has turned into $255,000, “with very little effort on our part.”
Q&As: Paying extra for using a credit card; Distortions when considering how good an investment your home is; First home buyers should probably wait.
The inherent differences between property and share investments. There’s a fundamental difference between investing in shares and property, a reader says in an email. “With a stock there is always the risk of bankruptcy of the entity you invest in, and the investment you make becoming worthless,” he writes.
Gearing can boost returns, but also risk. Gearing — which happens when you borrow to invest — comes at a price. And I’m not only talking about interest. While gearing makes a good investment better, it also makes a bad investment worse. People who gear boost their risk.
Rentals not necessarily as good as they seem. Rental property is sometimes an excellent investment. There, I’ve said it, for all those who reckon I’m anti-rentals! Often, though, rentals are not quite as good as people think — and not just because the tax breaks are over-rated, as I said in my last column.
Rental property tax breaks don’t amount to much. I don’t get it. Politicians and economists have been complaining lately that rental property has tax advantages over shares. It’s hardly a new claim. But what are these advantages — beyond depreciation, which is vastly overrated?
Q&As: Young couple take a break from work; Some other options for the couple in the column two weeks ago.
Q&As: Where to from here for 56-year-old rental property owner?; Should rich people be writing this column?
Q&As: Man with many rental properties does it the right way; Why do economists bother to make foreign exchange forecasts that are often wrong?