How To Protect Yourself From An Australian Property Market Crash.
If you are concerned about an Australian property market crash, or how to protect yourself from a property market crash in Australia, there are plenty of things you can do to protect yourself.
The first step is to educate yourself about the monetary system. Once you have done that, you can take action to ensure you are well positioned to weather the storm.
The current market.
According to Nathan, the current flattening out of the property market is really a financial system issue rather than a property one.
Despite this, there has been a lot of misinformation from the mainstream media.
He says, it isn’t a good idea to listen to clowns who give property advice at sunrise.
Instead, do your own research into the way the monetary system works, and keep ahead of wider economic trends.
Nathan says it is important to be proactive and look for ways to protect your financial position.
There is a lot of volatility and systemic risk in the financial market at the moment, so it is important not too overleverage yourself.
But, at the same time, there are plenty of bargains to be had, with properties in many areas selling at the bottom of the market. Rates are also low, making it more affordable to hold properties. For these reasons, it is also important not to underleverage yourself.
Nathan says he has been actively buying up bargains in the current market in order to maximise his position before the next boom.
Sitting in the stairwell.
Throughout a property market crash, some will run away and others will walk away – but others still will wait in the fire stairs while the authorities take care of the disaster.
It is possible to come out of a crash alive and well – and in a prime position to profit during the next cycle.
Nathan says property prices will start going up again after interest rates drop below zero. Those who act now, and buy when prices are the lowest, will be the ones who reap the greatest gains in the near future. These people will also benefit from falling rates and an ever increasing cashflow.
How can you protect yourself?
Nathan recommends doing the following things in order to protect yourself from a property market crash:
- Make sure you aren’t too overleveraged – remove bad debt and steamline your position
- Make sure you aren’t too underleveraged – have the right balance of debt to income producing asset
- Create a strong cashflow – charge optimum rent on your investment properties
- Make sure you aren’t too exposed – remove some leverage from your position if you are exposed to too much risk
- Have a good, strong budget – don’t spend frivolously
- Reduce any unnecessary expenses – cut out unneeded luxuries and live humbly
- Position yourself correctly to take advantage of opportunities – be deposit and finance ready so you can take action.
Nathan says in 2019 it is possible to buy a two-bedroom unit in Sydney for as little as $250,000. In Brisbane, properties that rent for $260 per week are going for $140,000, while in the Gold Coast you can buy for just $190,000.
With prices like this, it may be possible to get into the market for as little as $30,000.
As always, make sure you recession-proof your portfolio by buying below market value, with a good upside for growth and a strong cashflow. You can book a portfolio review with Nathan Today.
What steps have you taken to protect yourself throughout the GFD? Please share your experiences below.