I think many people not seeing financial markets as viable due to GFC may be looking at property.

The jump back and forth between the two supposedly happens alot, like a see saw.

Im not familiar with your specific area and the market conditions there but anyway:

If i were you i wouldnt even think of considering options A) or C) thats why i think most people are saying so.

sell? why? market values go up and down all the time but it doesnt really make any change to an existing loan.
Doesnt it only really matter if you are actually refinancing, buying or selling at the time of any down/upswing?

If it is cash flow positive, rental demand barely changes, the balance sheet on such a property is only going to get better….
(let alone this housing crisis which has seen rents remain high through property market downturns) plus you'll be up for max CGT cos you havent lived in any of them?

I wouldnt want to sell anywhere near a property market downturn and would only really want to sell in the end curve of an upswing and even then i wouldnt really want to sell at all unless maybe i was trying to level out a portfolio or put it into posative or something…. or if i wanted the money for something else.

Ok anyway… if i was you, i would do whats been recommended. Put the investment properties onto IO soon as possible, pay down the expensive debt faster with the re-couped money if possible.

Sure i mean if the market is up and you sell and then if the market goes down you could then buy again and get in front.
I dont think it really works if you dont buy again in better conditions or get a better performing investment.

However your money isnt going to be performing while you wait for this 'downturn' and there is fees and all the like when both selling and buying.

A market downturn is supposed to be the best time to buy.

Why not keep what you have got, do your best to imporve the margins on everything as best you can and then if there is a market downturn you will be in a good position to aqcuire something at a good price?

As soon as the consumer debt is handled, you could try and get cash from your existing equity, for the upfront costs of buying again. That would get you in a position to buy sooner, perhaps within this downturn you are foreseeing?

first you say you can only borrow x amount because of your existing debt obligations…
then you say you want to try save up the money you need?

So is it your serviceability that is constraining your borrowing power? or is it the deposit? or both?

Sounds like its the serviceability.
Has your lender/brokers calculations included the potential rental income from your old unit?
You could do some research on rents in the area, find out if the average rent would add enough borrowing power.
then you can move to mums, get it rented out, get the rental income counted in your borrowing power.

if it is deposit constraining you well then its a different story.

moving back to mums and renting out for a bit will allow you to save more.
If you have contributed more to your existing home loan you could redraw the extra back and use it in the deposit if you dont need it bringing down your debt and increasing your servicability….

theres also the equity path, you could try and draw cash back of the equity in your unit to boost the deposit.
Or you could directly use the equity in the old property to secure the new loan (i wouldnt want to do this though).

also who is this person you are seeing? which institutions do they broker you with?
you could try aussie, wizard, st george etc etc any of the non bank lenders, often they will lend more than a bank will.

Yeah I wouldnt really trust any broker/agent who is overly interested in bending and breaking rules.

Aside from the _obvious_ point of doing important life level financial business with an untrustworthy person……
They may saddle you up with more debt than you can actually handle just to secure thier own commision.
Its your purchase, so its your hide if it all goes sour.

Varsky

I am hoping to buy again quite soon. I think the conditions are favourable. (regardless of how attractive other investment avenues may well be due to this 'global financial recession')

Prices are on the slide now, near bottoming out. If i get everything moving now I should still be in favourable conditions at purchase time.

With current interest rates it makes finance aquisition easier as well. With the cash rate at 3.5 i dont see how the reserve bank can continue to make huge 1.0 slashes. most predict that further slashes will be more modest, in the .5 and lower range.

Once rates bottom out i will be looking to fix anyway.
By doing so i can still take advantage of lower rates after i have bought.
(depending on if the financial institution offers this ability on the loan)

I agree, a PPOR has many benefits, the least of which is monetary. It is such a long term investment, i think it is almost always a good time to buy a PPOR if the person is smart about it, especially due to the nature of capitol gains tax favouring owner occupiers.

With rates how they are though, i would want to make sure not to borrow to the extent of my capapbility, for when rates go back up (and they will) servicing the loan will become harder. either that and/or have a fixed rate or the ability to fix the rate.

I know many will be tempted to enter the market by the current favourable conditions and could be in for heartache in the years to come if they dont make sure they enter in a solid fashion and stay smart about market conditions.