Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (15804)	3/23/2007 2:30:12 AM
From: Snowshoe	Read Replies (1) \| Respond to of 218166

Things are warming up here barely in the nick of time. We had a nasty cold winter and the frost is 9 feet deep. Some water mains are breaking and causing flooding. Alaska continues to do well economically because of high oil prices, but production is declining and trouble looms. My assessed valuation is up 11%, but I'm not sure about actual selling prices. Do you get involved in foreclosures? Some of our local lawyers really cleaned up on those during the big real estate crash 20 years ago.

To: Ilaine who wrote (15804)	3/23/2007 2:55:22 AM
From: elmatador	Read Replies (1) \| Respond to of 218166

Is D.C near Virginia? let me get a map here. I can even visit CB while in D.C!!

To: Ilaine who wrote (15804)	3/23/2007 6:41:44 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 218166

In New Zealand, housing prices are like Wile E Coyote, in suspended gravitational effect over a cliff, with interest rates, incomes, rents, capital value of houses and exchange rates out of kilter. Returns on investment are going to be lower than historical levels because of increased life expectancy, which means people are more prepared to defer spending and accept lower interest rates for their savings because they consider the likelihood of living to enjoy their profits and savings to be pretty good. But that's a small factor in the current very low returns from rent for houses in NZ compared with plain old money in the bank. A $1 million house can be rented for something like $600 a week, or $30,000 a year, out of which needs to be taken rates of $3000 a year, insurance, wear and tear, depreciation, rent default, management and legal expenses, hassles, maintenance costs and damage. Let's assume the owner has no borrowed money. Here is a real example for 26 Rewa Road, Three Kings: Value = $650,000 aucklandcity.govt.nz Rent = $450 a week as per trademe.co.nz Here it is on the map and you can inspect it via satellite photo there: zenbu.co.nz $22,000 a year rent. $1,600 rates. 2% depreciation on the house = $170,000 x 2% = $3,400 per year. Insurance, painting, carpets, garden maintenance, this, that, and the other = $2,000. $7,000 a year out. That leaves $15,000 a year profit. $15,000 on $650,000 = 2.3% return on investment. After tax at 33% that leaves $10,000 per year which is about 1.5% per year return on investment. The house price and rent will move up with inflation, so we don't need adjustment for that. $650,000 cash in the bank gets 7.3%. Take off tax at 33% leaves 5%. Take off inflation of 3% or 4% leaves ... hmmm ... about the same as investing in a house. But there's less hassle with money in the bank. No buy/sell transaction costs either. On the other hand, governments turn fiat currencies to zero one day and they don't announce that they are about to rob savers. So there's a currency risk. Perhaps Wile E Coyote is still on solid ground after all in NZ. Maybe there won't be a big property crunch. Presumably the rents are being paid by real people with real incomes, so the system must be nearly in balance. So much for that theory. There is quite a trade deficit, so perhaps that will force some changes. The government has a tsunami of cash swamping in, so they are okay, though old geezers in 10 or 20 years might find the pension being trimmed. Maybe I won't sell the house after all. I still need somewhere to live. Return on shares = rotten Return on cash = rotten Return on property = rotten Return on farms = rotten Gold? Silver? Hmmmm.... Mqurice