House Or Car

[AzzurrA]

I've been thinking for a while of selling my skyline and moving to something newer/more refined.

I've found the car i'm after... lets just call it 'Car A' - it is 3 years old (2004 model), majority of them have around 30 - 40,000km on the clock, and to have it on the road, would set me back approximately $50k

to get said car, i would need to sell the skyline and then take out a loan for approximately $35 - 40k (over say, 5 years - i can afford it, and still be putting away some money each week into savings, after all my expenses are paid)

now, i was all set to go, i have advertised the 'line for sale etc, even went as far as comparing loans from the banks and getting insurance quotes on the new car... went and looked at one in a caryard, have test driven one etc....

and last night, for some reason (probably 'coz one of my 'non-car' friends thought i was insane), i just got in my head the notion that it seems silly to spend that much money on a car (2nd hand one at that), and i should buy an investment property instead... and ever since then, my mind has been going round and round in circles, and i can't decide now what i should do....

I'm only 23, so i want to enjoy life/nice cars while i still can, but then again, i also want to be in a good financial situation in the future (i.e. have a couple of investment properties etc)

what would you do in my situation?

[gazza750]

go the house yes property has its ups and downs but long term you will gfain big time just make sure you can still afford it when interest rates rise

[gtrchick]

house

[LBR33]

Remember with investment propertys you need to be able to afford to pay the loan repayments in full if it doesnt rent which isnt uncommon (i have seen new homes sit empty for over 6 months)

[dangaz]

Ive been in your situation...similar age too...I was looking at buying a lotus elise for 48k 3yrs ago which even today would be a good buy.....I bought a block of land instead near my folks house in a beach suburb of Tasmania....its increased two and a half times in value...with that equity into an investment unit in DEC 06...now waiting for something else....

The moral of story is you need to set some goals...Ive blown a heap on cars prior to this time...a heap...ever lost 12k on a car in 6mths??...but at the same time made a shite load off real estate.

It sounds like your on some decent money...ever thought of the benefits a invest prop can give??....

You also only live once...

what kind of car were you looking at?? 34gtr??....maybe I would go for the car!!

[32line]

house.

[AzzurrA]

Ive been in your situation...similar age too...I was looking at buying a lotus elise for 48k 3yrs ago which even today would be a good buy.....I bought a block of land instead near my folks house in a beach suburb of Tasmania....its increased two and a half times in value...with that equity into an investment unit in DEC 06...now waiting for something else....

The moral of story is you need to set some goals...Ive blown a heap on cars prior to this time...a heap...ever lost 12k on a car in 6mths??...but at the same time made a shite load off real estate.

It sounds like your on some decent money...ever thought of the benefits a invest prop can give??....

You also only live once...

what kind of car were you looking at?? 34gtr??....maybe I would go for the car!!

Yes.... my R32 GTS-t owes me roughly 30 - 35k.... its advertised for $16750....

Hrm, don't really want to get a R34 GTR (or any jap car for that matter) as it's simply too old for what i want.... also too many KM....

Car i'm looking at is a Volkswagen Golf R32 (Mk IV) - only 200 sold in Aus.

Yes, it's a step down in performance to my GTS-t, but it's also a step up in style, build quality, refinement etc (hey, i'm getting soft in my old age, and what i want from a car has changed since i bought the skyline )

[justin911]

house...

unless you change the car to a gtr.. then it becomes a hard decision again..

[dangaz]

The volks a good car Ive seen one about my area...theres also an older one which tears up my road at night...there not that bad a choice...better than a saab or similar.

[Link]

You would be stupid to buy a car

Its a buyers market atm for housing - sit on it for a few years, and you can have whatever car you want

[Dirty32]

I sold my GTR to start saving for a house.

Im still only 20 tho so in a slightly different position than you.

Problem for me would be not being able to make repayments or whatever. Im not on great money so, the line had to go. Just trying to start off with a block.

Maybe you should look at getting a block only - can half the loan you would need for a house, and sit on that for a couple of years??? If it works, build or sell up and get a car with money to blow aswell

[Whyallapunk]

Buy a block of land that you can sub-divide. Might have to check with the council. Can make a shitload back when you sell bot blocks.

[andz]

House FTW

sold my 33 GTR 4 years ago to help me buy a land, built a house on it

bared the pain for driving a shitty car for 4 long years, even putting up with Hyudai Excel with 5in exhaust tip showing off. But now im back, finally recovered and bought a R34 GTR

House > cars IMO

[Parker]

Been there, done that. Infact i waited so i could have my cake and eat it too. Saved and saved so i could buy the GTR with cash and then saved and saved and got the house. Thing is, if i'd got the house first i'd be a lot further ahead of the game than i am now. I dont regret what i've done but if i had my time over again i'd have stuck with my old line and got the house as soon as possible.

Go with some sort of property (land, house, unit etc), if you can afford it in the first place (with a safety margin) it can only ever make you money, a car on the other hand.....

[neergnevets]

Australia is a strange place when it comes to everyone's desire to buy property, it is stupidly inflated. Any economist or banker in martin place will no doubt tell you it is wiser to use other investment vehicles.

Why run with a completely undiversified investment, using usually at least 80% leverage and is the least liquid investment you'll probably find? It is just crazy the way people follow the masses.

Put it this way, everyone knows somebody stupid who has purchased investment property, they are everywhere. Everyone thinks they are an expert when it comes to property. It is these people that have inflated its cost. However, this self perpetuation can't continue forvever.

If you like property, why wouldn't you buy $150k worth of shares in a couple of property trusts/managed funds instead? Use your head.

To afford a $50k vehicle you want to be earning around $100k, at your age I doubt you are and buying any car over $25k is stupid regardless of how much enjoyment you get out it.

Just my 2 cents, I'm an accountant, couldn't resist.

Edited February 8, 2007 by neergnevets

[dangaz]

Theres a lot of good tips going around....there is a big stigma of interest rate rises...as mentioned above if you can cover the min repayments your sweet...you can claim interest on the loan, agent handling fees (rental), the difference between your net rental income and your contributions towards that monthly min, any improvements you pay for....then if your in with a creative accountant...gravy.

I keep in touch with a few mates who are agents as well as me oldies who have done well off property...

there are a lot of people out there who bought during the boom...borrowed a lot just to get into the market then borrowed against any equity that they may of had to have the new car, Tv, etc etc etc now that demand has dropped the prices have dropped as well and consumer items depreciate like a brick...these poor folks have negative equity due to consumer items....

This is good for buyers....there are sooo many distressed mortgage sales in my local area. It may sound predatorial but these are the sales you want to find....very negotiable and want out now!!

Ask your local agents and watch a few auctions...they will tell you which ones are desperate.

[32vspecII]

can you actually get into the property market at this time ?

how much do you have as deposit , how much can you spend ?

if its dificult then look at other investment opertunities

do you need a house to live in because you have a family etc or can you easily live elsewhere (rent , share , parents)

if you dont have to take the hit in lower return of investment because you NEED somewhere to live with stability of an owned house then you have to look at the other investments seriously

you would be definetly coming in at the top of the market cycle now for housing so their may not be as fantastic returns in the short term that there have been

but any investment over a car , especially a shit one like a volvo

er volkswagen

[Abo Bob]

House. That's a lot to be borrowing on a depreciating asset without something appreciating on the other side of your balance sheet.

I have wasted tonnes on cars and I started late on property but I own two small places (with the bank) and I paid cash for every car I've owned.

Here's a left field suggestion for you:

Buy an R33 that's had a lot/fair bit spent on it, if not done already get nice seats, new dash, new steering wheel, replace every bush. That's a whole lot of car, that drives like new for not too much. You can do this 6 months either side of getting into property probably.

Just a random thought.

BTW I tossed up the R34 GTR possibilty last year. Decided against it because I would have had to modify it a bit just to go as fast as my GTT.

[Sl!m]

house

[sl33ek]

Keep the Skyline and buy a house.

If you use it as an investment property its even better, you will thank yourself come tax time