Hey….in the US…you can buy them for $0 US.  Seriously they won't go that low in Australia as we don't have an oversupply of houses…yet.  Once the financial crisis tsunami hits Australia you will see prices start to fall much more than they are doing at present as employment and migration drops (depends on China recovering).  This is particularly going to be so in low demand for housing areas which you seem to be in.  If you still have a mortgage on your home sell your investment and pay off anything you make off that loan or put it into the bank/good stock.  If you own your own home then seeing you're so keen about keeping this investment house then keep it……the only condition is that you have to wait a number of years (perhaps 15) before it starts to make capital gains again and perhaps during the period become overly stressed.  I doubt whether it will gain much even over that time period.  The big question is can you continue to support this property and live with it in peace and calm?   People have to realise that even before the credit crisis housing prices in Australia were overpriced….7.5 times your income to buy a place (it used to be 2.5 times) so on top of that we have the credit crisis which has yet to hit.  Your problem is that your debt is far too high which personally I think you have to get rid of to prepare for what's ahead.  Especially as you seem to have employment problems.  Housing is not the only way to invest….the prices on the stock market for good stock is very low and to be sure this is the best place to invest if you're prepared to put what you can into it and just wait for 15 years and you'll be fine. 
All of the above is on the assumption that you do have your own home (you keep failing to tell us) and the debt is paid off .  If you still have a debt on it then forget the stock market and put everything into reducing the mortgage as nothing is better than seeing your home mortgage eliminated ……and there is no better investment. 
Carpe

Hi Beth et al

Bear in mind that house prices in Australia are  at an extreme in terms of income to cost ratios.  It is (or at least was) up there with the US, Spain and Britain.  Not so many years ago you could buy a house in Australia for 2.5 times the level of income and these days you pay more like 7.5 times income.   In the earlier days you could not borrow from equity so I guess it kept the lid on prices.  Once this changed then more investors entered the market which was good as it created jobs and boosted the economy.  In my view things started to deteriorate when it became ok for investors to take on more and more debt relying on escalating prices to cover their debt and provide them with more oportunities to buy additional properties.  On top of that it became  fuelled by the opportunity to borrow even beyond the price of the property (includes money for new car).   They were happy days (for some) but it left in its wake for the people behind who had to borrow more and more for the same property that someone a few years before bought for a song.

So the above path we were on was on the basis that house prices would still keep rising notwithstanding the high price/income ratio we had reached.  The bubble had to burst and it will burst a lot more than it has today….although unlike the US it will more subtle (won't go to $0 price tags).  In some ways the credit crunch in the US (excess house debt and oversupply of houses) has no doubt put the world into a financial spin and perhaps Australia will be spared less the drama of worse off countries but at least in terms of house prices it has brought us down to earth perhaps softer than it would've been had more years gone by when the burst would not have been so subtle).   Regardless of the economic woes coming towards us to be sure there will always be a property market available to astute investors.  Houses at the lower end of the market will always be in demand wherever there is employment and a shortage of housing.  Likewise, in urban areas in good locations where demand exceeds supply and of course in pristine/elite areas and areas where land itself is short in supply for future developments.  The capital growth of properties in general  is going to be off the boil for a long time but for long term investors the bargains are still there and always will be.  Good investors try to keep the level of debt to a sensible level ……for me (and I have done very well based on simply land and location) never let overall debt become higher than overall equity ie no less than 50% total equity in your property portfolio. 
Regardless of the prevailing world financial crisis, the bubble on house prices had to change re the points I made earlier on income/price ratio hikes.  House prices are already spiralling downwards in the other countries like Britain and will probably get worse now that it is in recession and we know Australia house prices will be impacted further as we approach the door of recession regardless of our more secure economy (based on China). 
Any investment has risks (our stock market!) but if the property is good and in a good location that at least provides a guaranteed rental yield then it could make for an excellent long term investment.  Not a time now for the short term capital growth hunters in my view.
Cheers  Carpe

How things can change.  3 years ago I had a serious illness so much so I had to discontinue my career.  I was also a property invester with 5 properties but the debt on 2 was so high relative to my cash flow I was forced to sell 2 of them 2 years ago.  They went for relatively bargain prices but I still made significant capital gains to reduce the debt on one other.  I've done very well overall as my debt ratio to the properties I own is very low at around 15%.  Taking such action was painful at the time (good properties that I liked a lot) but it immediately eliminated the stress of trying to service a debt through an illness and I'm so glad I did it.  I know there is much information out there that the housing prices will stabalise soon but I don't agree.  To be sure Australia does not have an oversupply of houses like the US (so much so that you can now buy houses there for $0) but Australia like the US, Spain and Britain has a very high house price to income ratio.  House prices in Australia at the moment are 7 times the income that you earn .  It is only a few years ago when the ratio was at 4 times the income you earned.  Seriously it was less than 5 years ago I bought a house in the inner suburbs of Canberra for $280k and up to the credit crunch it had a value of $650k ( so 7 times the income of $90k).  A postion paying 90k today was probably earning only 60k so you can see how the prices have escalated beyond buyers reach unless they are prepared to go into risky high debt and continue to speculate that prices will keep climbing.  It will be some time before prices will take off again as notwithstanding the demand exceeding supply, unemployment rising and shrinking migration will impact.  I still think there are gains to be made on property.  However, you have to weigh up the plusses and minuses of your position:
1. Poor cash flow (unless you're prepared to take on extra jobs and diminish the joy of general living without overworking/stress)
2. Risk of employment income dropping (very stressful)
3. Very high debt ratio (seriously, if your total debt divided by the total value of your properties is higher than 50% you are in  high risk mode)……it would be horrible to struggle for 5 years and not much gain made.
4. If you have a home mortgage this is the one we shouldn't have.  Always a joy to see it eliminated.
5. high uncertainty about capital gain on this high debt investment property.

If it was me I would be focusing on reducing your debt but this is not advice to you on what you should do.  It is your decision and I wish you well on what you decide.

Cheers Carpe

Hi KP
You're doing well and good on you.  Just because minerals are in the ground it doesn't mean they continually will be mined.  Mining booms come and go (at least they used to unless things have changed!) as does the unwise who don't spread their investments wider than mining shares…..and excessive property investment in risky mining areas. It's a  double whammy risk and hence one does need to be particularly cautious in case the bubble bursts…as is to be expected one day (my view).  An investor might have the interest payments covered by secured rental for some extra years but as soon as any crash occurs property prices are at risk of entering a downward spiral if employment in those areas tumbles in sync with mineral demand falls.   I'm not trying to block people on taking risks as I have done plenty of that myself and have done very well overall including some losses but rather suggesting that newer property investment people should consider carefully their investments as one big sour investment can be disasterous…..as history also tells us.
Carpe
 

Hi Woodyvale
The important thing in life is to follow your dreams and take some risks to achieve them.  We can always block ourselves by finding things to put us off.  So go for it if this is what you both sincerely want to do and are both committed to sharing the blame if things don't quite work out.  Your debt is around 40% and grows to 50% if you borrow 100k which might be the limit given your situation.  If things get difficult down the track then you could always then sell the IP.  All the best…
Carpe

Hi
I think you've answered your own question respective to your particular financial case.  You have laid out the two extremes of property investing……so your target must be for something in between and certainly not one that jeopardises a reasonable standard of living for yourself and family etc.   As a successful property investor I prefer to have a few good growth properties than a mass of properties that might one day pay the interests on the loans but you still have the debt unless 'real' growth is a definite.  For me the same rule applies to the stock market.
Carpe

If it is seriously going into the legal network for sorting out then you have to make the decision on whether you can accept the pain for possible gain though with probable delay or bailing out and don't look back as you move forward.
Carpe