What to do with All the Equity??

Hi Guys,

Just wondering.. for all the people that have a portfolio of properties built up, and enough equity to access and live off.
Do you keep on growing the portfolio, and sell off one or two when the times are good?

What happens then on? Its all fine and well when the markets and property value keeps increasing. What happens when it goes the other way?
Is it all ok just as long as you can keep servicing the debt?

I understand there is risks associated with all investments, however just like to know what will actually happen when it all goes bad?

Thanks.
 
gee

thats a question with a million options

Much depends on ur personal profile goals, resources, risk tolerance and investment horizon.

Many would look at using the equity to diversify into different asset classes to "reduce" the risk of a melt down.

ta
rolf
 
For me, having 10 years worth of ideal lifestyle expenses in equity available for access is my SANF. Show me a good quality well located property in the burbs of a main land capital where mr & mrs joe average lives, that has not grown in value for 10 years.
 
Rid your head of the concept of lazy equity.

Your aim is to have adequate equity that YOU can be lazy. That equity, by definition, is lazy.

Along the way you do what you can when the opportunity arises. Don't sweat it.
 
Hi Guys,
Just wondering.. for all the people that have a portfolio of properties built up, and enough equity to access and live off.
Do you keep on growing the portfolio, and sell off one or two when the times are good?
Thanks.

It depends on what our long term plans are.

Speaking for myself I wouldn't sell but as I get closer to retirement my investment strategy will change so this could mean that I'll have to sell 2 or 3 properties to pay off the others or to give some money to the kids etc.

Or perhaps I won't sell anything and will just withdraw part of the equity. Note: selling a property triggers capital gains tax and this is a concern for many investors.
 
. Note: selling a property triggers capital gains tax and this is a concern for many investors.


Yes its a concern, but at the end of the day you are operating a business.
The business is ownership of property.

The number one rule of business is cash generation (not necessarily immediately, but its always the end game in one form or another).

So how do i figure CGT into the equation, in a nut shell am i compensated for the GST liability in my selling price (i do this for both property and shares).

In otherwords, do two scenarios: (a) sell cop the liability, (b) hold.
Run the net effect.
 
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