What to do next in the face of bad economy? 1 PPOR & 4 IPs

I think I've finally found the right section to post this...

Situation:
- My husband & I are in our early 30s with a combined income of $220K - $300K p.a
- We have about $60K savings.
- Our own mortgage is about $1800/month
- We bought our PPOR in 2010 & 4 other properties subsequently.
- In this 5 years we have accumulated enough equity to pay off the PPOR & nearly 1 other IPs (haven't sold anything as of yet).
- The current equity I guesstimate is around $650K market value.
- All IPs averages down to break even mortgage/rental in high demand areas.

Question:
Given the current economic climate, which is getting crappier by the minute with rising unemployment rate & downward dollar.

Would you
1) Continue to take equity out to further invest in more IPs or
2) Use savings to invest or
3) Don't do anything at all

Thank you :D
 
I wouldn't sell if that was what you're alluding. if property is the vehicle for you to accumulate wealth then it is a long term play. if you intend to keep accumulating then perhaps think of other states that may be in a better part of the cycle to suit your risk profile.
 
If you concerned about your employment/business incomes then be conservative for a year or two.

Perhaps you could put your surplus income into the offset account on the PPOR, this reduces the undeductable interest and gives you a cash buffer to carry over any dips in income in the future.

If the IPs are in Sydney I would be trying hard to keep them and ride out any hard times by being prudent now.
 
Sounds like you dont have too much to worry about as your IP rental income covers the mortgages.

However, if there is concern regarding employment you can play it safe and sell a couple to reduce debt which may place you in a cash flow position, cashed up ready for the next boom cycle. If the properties are all in Syd and you purchased around 2010?? then you rode the cycle, well done.

Cycles don't go on forever, we go boom and then we go bust, and I have now been through at least 5 property cycles and when we go bust, property does fall back and that means blue chip as well.

It is totally dependent on your strategy, if you want to be an aggressive investor you sell down and trade and upskill, passive you buy and hold, however this will take longer to achieve financial freedom.

MTR:)
 
Thanks everyone for your feedback.
Yes we planned the purchases and they are indeed in Sydney.
We do have our savings in the PPOR's offset account.
I think I will have a think about what our strategy is. I think we are stuck between aggressive & passive....
Anyways, thanks for food for thought.
 
I cannot think of any logical reason to sell unless there is the possibility of becoming a single income family with a dual income budget or lifestyle.
You have strong incomes with a savings buffer, I can't see why you shouldn't continue to hold.
Interest rates are falling so holding costs are improving but it is likely that future rental growth might be slow.
When others are fearful opportunities appear
 
Yes, I wasn't intending to sell. They have done well and still have some legs in them yet. My question was really around whether you guys think that we should hold tight for now or continue to invest using equity or cash?

I think we are more conservative and don't like to take toooo many risks so the buy and flip might not suit us but we are quite keen to continue at a steady pace.
 
Sounds like you have answered your own question.

Get the properties revalued and access the equity available to an LVR that suits your risk profile.

Even if you dont buy anymore its best to get the money now while credit is relatively easy to attain so you have buffers in place to either purchase more or for peace of mind.

Wouldnt recomend DIY finance unless you know exactly what your doing so get the right help.
 
must be some great skin care there

ta
rolf

Not necessary, happened within 11 years, as they say timing is every thing, not time in the market.

Just realised its 6, but whose counting:p

Perth 2002-2006 (mother of all booms - due to mining boom)

Melb - 2008 GFC period (Melb was booming, started within inner city)

USA - 2011 - foreclosures 75% drop, boom times - 2013 back to 2007 prices

Syd - 2012 still booming, but think we are close to peak??

Perth again - 2012, started similar time to Syd, now peaked

Melb - 2013 - purchased in rising market, not necessarily a boom IMO but good time to buy, double digit gains to be had for right areas.
 
I think I've finally found the right section to post this...

Situation:
- My husband & I are in our early 30s with a combined income of $220K - $300K p.a
- We have about $60K savings.
- Our own mortgage is about $1800/month
- We bought our PPOR in 2010 & 4 other properties subsequently.
- In this 5 years we have accumulated enough equity to pay off the PPOR & nearly 1 other IPs (haven't sold anything as of yet).
- The current equity I guesstimate is around $650K market value.
- All IPs averages down to break even mortgage/rental in high demand areas.

Question:
Given the current economic climate, which is getting crappier by the minute with rising unemployment rate & downward dollar.

Would you
1) Continue to take equity out to further invest in more IPs or
2) Use savings to invest or
3) Don't do anything at all

Thank you :D
Given that you are 20 years younger than I, earn plenty more in income, have 3 more
IP's than I...

I'd say calm down and stop handwringing.

Even if you lose 1 income, you are still laughing like a fat spider.
 
Haha. Like the fat spider imagery! Too much hand wringing because I take after my dad who is a risk averter. I think I've come a long way already under his influence. :) But you are right I think we can go forth again.
 
I think its time to revalue all properties. Regardless which action you will take, at least you know starting point.

For future decision, imho its better to wait and see. However I will keep an eye to opportunity
 
You'll be right.


Buy some cash flow props to offset the neg geared growth props

Yous earn an awful lot of money to be hand wringing
 
I think its time to revalue all properties. Regardless which action you will take, at least you know starting point.

For future decision, imho its better to wait and see. However I will keep an eye to opportunity

What would you suggest waiting for? There are opportunities in lots of locations outside of a hot Sydney market
 
hang on a sec ...up to 300k pa income? lol. If I was on that sought of dough I would be expanding my portfolio, but that's my opinion. Wish I had a 300k trump card :(
 
If you are concerned about the economy and potential housinig market/rental issues, increasing your cash buffer would be one good step.

300k income and only 60k savings, review your expenditure as that seems very disproportionate
 
Top