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Rob D

Episode 113: How to survive a property crash

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roperty investment is great when everything is chugging along nicely…but what happens when the economy takes a turn for the worse? A crash may not happen soon, but we know it will come at some point - so what can we do to prepare ourselves?


In this episode we cover:


  • Looking to history to see what the next crash might look like…what must we prepare for
  • How the 18 year property cycle can help you anticipate what’s coming

  • 5 ways to prepare…none of which require drastic de-leveraging

Although we try to be measured and sound a note of caution whenever we get excited about investment, leverage and growth, we thought it was well worth dedicating a whole episode to protecting your downside. This is a real must-listen…and although the subject matter sounds grim, we think you’ll go away realising that you have a lot more control over the situation than you might have thought.


 


Listen to the episode now: http://thepropertyhub.net/crash


 


We’d love to hear your views on this one. What do you think of our suggestions about how to survive a crash, and do you have any of your own to add?


 


Join in the discussion below!


After playing with the spreadsheet, how would your portfolio fare?


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Hi, I'm the chap who was inspired by the Property Podcast and made a contribution to the show.  Well done Rob & Rob for an excellent podcast this week!

 

I will be watching this to add to the discussion as appropriate and please do ask questions.

 

Rob, running the spreadsheet for my own portfolio .... I don't go bankrupt but do make serious losses after forced sales for the 1973 and 1980 recessions.  But if I change the "Moderate the interest rates .. " from n to y, it looks pretty rosy: I have to sell in 1979 but by then prices have risen a lot.  Selling my 2 low LTV properties early also sorts it out.

 

This outcome is partly due to the selling another LTV property which is going through now.  It was partly motivated by the concern to increase my cash reserves as discussed in the podcast.

 

Cheers, Ed

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Rob, running the spreadsheet for my own portfolio .... I don't go bankrupt but do make serious losses after forced sales for the 1973 and 1980 recessions.  But if I change the "Moderate the interest rates .. " from n to y, it looks pretty rosy: I have to sell in 1979 but by then prices have risen a lot.  Selling my 2 low LTV properties early also sorts it out.

 

 

 

Thank you again for putting the spreadsheet together. I love how it bridges the gap between theory and practice, and shows that all this "property cycle" stuff isn't just a geeky academic exercise - you can use knowledge of the cycle to make adjustments and seize control, rather than having to worry about what's in store.

 

Although there's a fair dollop of pure geekiness in there too, of course :)

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Ed, thank you for a fantastic contribution with such a comprehensive report  and the spreadsheet  you created  - genius work. It is amazing how a slight change on the mortgage deal changes the entire game. I wonder how other people's properties survive the crashes.  It did make me realize that it is important to have money in the bank to survive a recession although I would have been forced to sell in the late seventies.

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Yes it would be great to get hold of this spreadsheet, the link mentioned in the old show notes has 404 error.

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Hi, I have found the spreadsheet on my PC and put it on my shared google Drive.I hope you can all access it.

 

https://drive.google.com/file/d/1wVgQDIiHUjA2S1EjfVet4cP97Yqkz0zT/view?usp=sharing

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