http://www.abc.net.au/4corners/special_eds/20070917/subprime/default.htm
Above is the link of the four corners program … the under lying problem is most people think that they are going to become RICH from investing in real estate and hence BORROW too much.
We have said this many times b4 on this site and all the young investors here have not experienced a CRASH ie; under 37 years old … interest rates are rising.
The only question when buying a property now is if I buy this thing when am i guaranteed it to double, or can i change the concept of it and on sell it for a profit.
What do you think.
D.
Before i bought my IP i thought the whole idea of property investing was as follows.( Back when i had no idea)
A Buy house
B Pay off with assistance of rent
C In years to come you own the house outright with a tenent paying half of the purchase costs.
Capital gain was not how i thought it workedAs i researched more i saw that borrowing the full amount and paying off nothing was another option as long as the capital gain is good.
With the current climate i believe its best to hold on to my IP and pay off say $60,000 to make it just CF positive with out tax return.I am not expecting any real capital gain for a while)
My focus is going from making money quick to protecting my self and possibly setting my self up to purchase a bargain in a few years.
So my goals are Reduce PPOR debt to very low level.No personal debt. and make IP neutral so not to be a financial burden
It could go any way and the severity of a slump can also vary so i am building a plan for both scenarios.Oh and continue enjoying life. No point living in fear of what can happen, just dont be to shocked when it does.
I like the way you're thinking Devo!
To allow me to sleep at night, I try to stay around 80% LVR for my entire ppty portfolio.
It's sometimes lower, sometimes higher but 80% is the compromise I feel comfortable with. It allows for significant growth w/o overextending myself.
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