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The Answer Is!
There is nothing you, I or anyone can do if the property market goes
down.
So what are your options? You can sell your property and make a loss or
you just hold on to it, remember property investment is not a get rich
quick scheme.
You know what your repayments, rent and your tax benefit are, so nothing
will change.
Plus if you look at the history of the property cycle you should know
that it should bounce back.
Property Growth... Has the market increased that much?
Ever heard of a false property increase?
There are people that put their property up for sale at some silly over
priced amount.
Now the normal personal watching the local real estate magazine would
think that the prices have gone up considerably in the area, but have
they really?
I find people doing this all the time and then when they realize the
they cannot sell at their asking price, they start to drop the price
until they start getting some bites in the market, but everyone else
thinks that the market has started to fall.
I'll give you an example- A property I know about was purchased for
$359k approx 5 years ago.
Last year it was on the market for $790k, I believe it had a buyer for
$675k but eventually couldn't get the finance, it has slowly dropped
back to $565k. And it was sold at a price of $520K.
 So tell me did the
market fall back that far, or was the owner just been greedy and asking
too much right from the start?
Don't get greedy with property, work with the numbers.
Don't fight it and try to be smart.
The man who was selling the property also purchase another property
before he had the 1st home sold that took approx 2 years to sell
and to top it off he had a bridging loan.
Either he has too much money to spare or he was just plane stupid.
Why didn't he rent out the 1st house and get some cash in to support the
repayments for the 2 years?
If the market goes down, you simply do nothing and just keep on living
and forget about it.
But I will also say that you keep on investing if you can.
Just make sure your property is always rented and sometime it is a
good idea to fix your investment rate so you know what the repayments
are every month.
This can give you peace of mind, but be careful how long you fix it for,
the banks may charge you a breaking fee or a penalty if you decide to
break the loan for some unknown reason.
I remember back in the early 2000 when the banks started increasing the
interest rates and many people panicked and decided to fixed their
loans, but then not too long later that same year the banks reduced the
rates much further than what everyone fixed them at.
Everyone wanted to break the fixed loans to the new rates but much to
their surprise the costs to break out of the loan was not worth the
exercise.
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