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How To Invest For A Crash

Brayden Currey

Do you see a possible crash in the near future?


I’m personally not interested in predicting the future of the market to buy at the lowest point. It’s time in the market rather than timing the market for me. Even when I do think things are pointing towards a crash I don’t know when it will occur.


How I would invest for a crash: Use larger deposits for a healthy loan to value ratio and keep down my repayments – lower loan amount. Buy below average property with opportunities to add value. Add value through renovation. Increasing the value and rental return. A higher rental income will mean I’m able to hold for longer and whether a larger drop in rent (it’s worth noting when prices fall, the rental usually market performs well as homeowners sell to rent and increase supply on that side) or increased holding costs. I would leave the equity in the property.


Assuming a 20% Deposit and 20% increase in market value (through renovation). If I do get whipped out and am forced to sell. I can afford to sell at up to a 40% reduction in the market and not carry forward any debt. There’s nothing worse than debt that doesn’t produce income. I don’t mind starting again from 0, but it gets many times harder when there’s debts to pay and nothing to show.


This approach is very similar to how I would invest for a boom – the difference being I would withdraw equity in the property during a boom and use it as a new deposit for the next purchase ASAP.


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The information contained on this website is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

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