It’s no secret that countercyclical acquisition is the right way to profit massively especially for instruments where you are betting on capital appreciation. However, the element of fear lingers on the minds of investors and you may end up not doing anything. What you may have missed are hordes of opportunities to profit from the current situation.

Last week, a mate of mine was thinking of property acquisition in Australia. We spoke some 5 months ago and he wasn’t really ready then. However, this time, he is ‘armed’ and ready to take advantage of the current situation. He asked a very good question and I am sure many of you may have the same question in your mind.

What happens if I acquire properties now and the value dips?

It’s a valid question. If you have been a regular reader of my blog posts, you would have known that I am not a property trader. I don’t encourage anyone to trade/speculate properties in Australia for capital appreciation. The tax system is not in your favour in the short term. Rather my focus has always been structuring the finance in such a way that maximized cashflow for your entire property portfolio.

The risk with any property portfolio is the ‘HOLDING COSTS’. It’s defined as the amount of money that is required for you to continue to hold on to your entire portfolio. Just focus on the cashflow/holding costs and you’ll be fine. There are enough instruments/options for you to leverage on. Regardless of conditions in the market, as long as you keep up your mortgage/interest repayments, you should not be unduly worried.

So focus on the cashflow in your property, instead of focusing ‘what happens if value dips…’Nobody can predict where the market is going at the moment. I am not bold/silly enough to do that. All that I can say is if you keep your portfolio, the values will be better off than what they are today in 10, 20 or more years’ time…

Drop me a line or two with your comments, EMAIL me…have a great working week ahead!