banks ready share holders for price crash , page-12

The Govt doesn't pay half your loss.

It all depends on your tax rate and legitimate operating expenses. You have to be on a very high income to achieve 50% rebate. Most are on 30% or thereabouts.

But what happens if your capital shrinks? Say your investment dog box goes from $600k to $300k? You may have geared 50% into this property. You've done your $300k! Or you lose your job at Ford or Holden or one of the Banks or a telco or a restaurant or at Harvey Norman?

So now you have this massive capital loss. Its no good to you at all unless you can find a better investment to offset it in the future.

If you can find a way to make up this loss elsewhere maybe u should have invested there in the first place.

Property now is for those who have come lately to the scene. Those of us who have seen multiple cycles know this one was the biggy, pumped to prime levels with late night infomercials from the dude "John" something who told us 'the starting is what stops most people'......lol.

It was a ponzi scheme for the past 15 years built on cheap money from the USA and derivatives and exotic property swaps that turned owning a home into a commodity to buy and sell. Plenty of very smart property developers have come unstuck. They are no mugs and didn't just buy a house to rent, they bought land to leverage into homes but now are bailing out all of the country.

By all means. Buy another property based on 9 times your income. In the eighties we got them for 2.5 times our average wage, and we got prime inner city terraces in Fitzroy, Collingwood, Kensington, South Melbourne, Albert Park, Middle Park, Prahran etc.

Now, if I had a loan for 9 times my income then someone owns me for life and my future relies on me being able to flip this property sometime soon so that I can make a small profit.


Sorry, I couldn't sleep if I owed nine times my income and my investment was looking as sick as property does for the next generation or so.