I know this is subjective, but what is your definition of over extending yourself financially for RE commitments?
We are just coming out of a lean period (due to another investment being a dud) and I am trying to write out operating paramters to avoid hitting a lean zone again.
Do you put aside x dollars per investment property? Or just have a certain percentage of your assets as cash (if so what percentage?). Or use somethinge else such as percentage of salary?
I guess I would like to know how to be agressive without over extending?
Cheers
Hi Goanna Girl,
This is really an individual thing, but it should be treated as any other business. You must have a certain level liquid assets or immediate access to cash to meet current and known future obligations.
I always have redraw/ loc equivelant to 3-6 months of all Interest and Expenses. I only have a few properties, and this may not be feasible the more properties that are owned.
Mal
Getting out of your comfort zone, can help you become comfortable
Hi Mal,
Thanks for the response. Yep we only of a couple of properties ourselves right now, and 3-6 months would be similar to what we would put aside. But with a larger number of properties, it seems that this may not work longer term. Another option I guess would be to refinance to draw down equity for emergencies, although I would prefer not to have that as part as a strategy.
Cheers
You must be logged in to reply to this topic. If you don't have an account, you can register here.
