2.3 million of property

$900,000 in equity doesn't sound like you have been doing it all wrong. How long would it have taken you to earn that? Are any of the properties in need of refurbishment that could bring the rents up?.

If the cost of holding such a portfolio is uncomfortable could you just sell one or two to make you sleep easier.?

Have you thought about a LOC to act as a buffer and buy you time to ride out the dips?

I suggest you put your post over at http://www.somersoft.com as over there you will find different opinions than you would get here.

Good Luck. There are many out there that ould be glad to have your problem.

A couple of small points – LVR is around 60% (usually pretty comfortable), good level of equity.
Gross rent – 4%, pretty low return considering other factors.
As we don't know your full situation and exposure to cgt, risk profile (but assume you prefer lower risk levels) etc would you consider diversification into other types of property which have a better cap rate eg commercial, retail or industrial? To do this, you may consider divesting one property and seeking other opportunities or simply pay down debt.
You could also consider refinancing to a more effective rate (unless you have gone low doc and still can't provide docs).
Are you maximising your 'non-cash' losses eg depreciation?

wow… that's the worst advice I have heard in years : Get more debt in order to finance your debts.
btw : sorry to say, but your properties just lost 20% value. In other words, you lost 460.000$ in about 3 months.
In another 3 months, when you lost another 460.000$, do you think this was a bad investment or will you get even more debt ?

Do you realize that the average house now sells for 50K-100K less than it's "value" ?
You're already too late selling, you won't sell anything for any of the crazy prices you *think* they are worth.
You are the reason houseprices have gone up, sell your houses now you still can. Get back to 0 debt, if you have anything left after that, good for you, if you have more debt than you can sell your properties for, then at least your debt is minimized.

What do you think the banks will lend you ? They're running dry, they're smelling fear, they will foreclose you rather than give you more loans to pay off loans.

What do you think happened in USA ? It's people like *YOU* who caused the housing bubble. And it's people like *YOU* who will *PAY* for it. After the banks and lawyers are done with you , you'll wished you never got yourself into debt like you did. You're a shame for real investors.

Think about what happens to your rent incomes when your renters stop paying because they become unemployed. Oh yes, it's coming. Wakie wakie !

I rarely bother to comment on these posts, but Scamp you are negative, rude and unhelpful. Throughout my investing career I came across many like you and luckily I had a go and went ahead with my plans. The result for me has been very rewarding.
Zebulan has not indicated he is any difficulty, he is merely seeking different opinions from other investors as to his investing options. You speak of the Australian market as one commodity, obviously this is a very limited view from a simplistic stand point.
Scamp I think your comments are unhelpful and unnecarily rude.  Even if Zebulan had got in himself in hot water (Which it appears he has not) you post is not offering anything that could be used constructively.  Nor does he deserve you rudeness.

The investment environment has changed and will continue to change. Scamp thinks that the world as we know it will end. I hope not, as nothing can be done to avoid the devastation that such a scenario would reap.  I will continue to monitor the fundementals of the economy and the property market segement I choose to invest in. I can see a bright future, remember it is always darkest before the dawn.

Zebulan, if you can afford to keep going, keep going and fight on. Review your strategy and adapt to the investing evironment. I suggest you start a detailed planning process as to where you want to go from here. I am not talking about a wish list approach many think of as planning, but a process that involves a situational assessment, an appreciation process and finally a written detailed plan that has a definite goal and strategy.  I suspect that is what you are commencing by asking for a peer review of you current situation and seeking help advice in various option.  Best of luck and don't give up or give in to the naysayers.

JTW

Agree whole-heartedly with Jon, JTW and Mick.

Scamp you are welcome to have an opinion and free to post it here, no matter how negative and pessimistic it is.

You are even free to criticise, attack and rebutt the opinion of others, HOWEVER, you are not welcome to be critical or to attack the people themselves as you did in your very first post and subsequent posts on this forum.

There are not many here with rose coloured glasses and I perosnally do not belong to the pollyana school either. However as well as having conservative LVR's and DSR's with a robust due diligence process to everything I buy or plan to eventually develop, I am positve about my future.

What exactly is your agenda by playing doom-sayer and preaching the "the sky is falling down" ?

Be careful the amount of negativity  and fear you harbour doesn't affect your health. What we continually focus on tends to manifest and expand in our life.

Please do not attack the people themselves. Being rude doesn't enhance the credibility of your views.

Hey Guys,  

I agree with Linar, set up a line of credit to help with repayments if your struggling.
 Your 2.3 million property portfollio will grow more than 30K a yr… I dont believe it will effect you greatly by drawing down 30k  from a line of credit per yr

have a look at a book called "How to achieve wealth for life"

its written by Tony Melvin & Ed Chan it discusses this in more detail..

all the best

seriously is scamp for real or just a troll poster – saying things to get a reaction?  if there is only one message we probably only need to hear it once, we can take it as read after that

Although I don't agree with scamp's approach to his posting, I do agree with the content.

I would be *very* wary of financing repayments through capitalising interest in the current economic enviornment.  I personally don't think house prices will *crash*, but I think that they will coast along for a long,long time without really doing anything – until the market catches up to where it would have been.  To all the people saying that you should take a long view to investing -eg. 20 years, I think 20 year may not be long enough.  If you purchased a house in Australia around 1900, it would have lost value after a few years, then taken until 1950 until it was worth the same as it was in 1900 in real terms.  Thats 50 years, just to break even. 

In that sort of environment, capitalising interest is a very dangerous strategy.  The only way out with no cap gains is to pray your rental income rises faster than your equity falls, otherwise you're forced to sell and face a massive cap. gains tax bill.  If this happens, it would fall like a house of cards.

remember it's better to pay interest, than tax.