What are people intending to do with cash on property sales ahead of the next crash?

[Graham C]

So some long term planning going on here.

 

My plan is to invest hard over the next approx 4 years.

 

I'll probably hang on to quite a lot of the portfolio and batten down the hatches through the next crash but will probably offload a few during the winners curse period.

 

However, with a big property crash may also come a wider market crash - potentially taking down a bank or two (after all, we came very close last time). Given that the FSCS has a limit of £85k in such an event, what are people planning other than keeping cash in bank whilst riding the storm out?

 

I've outlined a few options that I can think of in the poll, but interested in other thoughts.

 

 

[SunnyK]

A mix of all of above for me.

[KatyCampbell]

On 10/30/2018 at 10:29 PM, graham c said:

So some long term planning going on here.

 

My plan is to invest hard over the next approx 4 years.

 

I'll probably hang on to quite a lot of the portfolio and batten down the hatches through the next crash but will probably offload a few during the winners curse period.

 

However, with a big property crash may also come a wider market crash - potentially taking down a bank or two (after all, we came very close last time). Given that the FSCS has a limit of £85k in such an event, what are people planning other than keeping cash in bank whilst riding the storm out?

 

I've outlined a few options that I can think of in the poll, but interested in other thoughts.

 

 

What is the Winner's Curse period? 

[KatyCampbell]

What is the Winner's Curse period?

[Samantha Jones]

Hi Katy,

Check out a podcast episode on the 18 year property cycle (there are several) and it will explain.  It's basically the 'bubble' phase of a property cycle where property prices are at their peak and every man and his dog are getting into buy to let.  I hope this helps

Sam

[Richard Sutherland]

Winner's curse is a phase in the property cycle where confidence is high off the back of a period of strong economic prosperity, banks are more relaxed and happy to lend out money, people are buying anything they can get their hands on for way more than they should be paying, simply because prices are rising so quickly and they want in on the party. Inevitably it is unsustainable, something happens (like the 2008 financial crash) and the house of cards collapses, taking with it property prices which immediately means people are paying off mortgages for far more than their property is now worth. 

 

It's basically the only time you should not be buying property!

[Kerry Chan]

I would probably invest it in something short-term and buy other properties after the crash.  This is on the basis that such crash will be soon (like in a year or two).  Any thought on this is welcome 

[Graham C]

5 hours ago, kerry chan said:

I would probably invest it in something short-term and buy other properties after the crash.  This is on the basis that such crash will be soon (like in a year or two).  Any thought on this is welcome 

 

I'm not expecting a crash any time soon based on historic trends, but I'm no economist. I guess it depends to what extent Brexit is already baked into prices.

 

The mid-cycle wobble does seem to be quite wobbly over the UK - i.e. London feeling it whilst t'tnorth going great guns.

[Graham C]

To the person (1 at the time of writing) who's planning to "Put it under the mattress". Can you PM me your address? 

 

To the person (1 at the time of writing) who's planning to "Blow it in a totally non-responsible manner". How do I get an invite to that party? 

 

To the folks (9 at the time of writing) who're planning to "Invest it in a different property type". What and why?

 

Personally I'm favouring the "gold etc." option with a smattering of cash in the bank. The £85K FSCS got me thinking about offset mortgages and whether they were a thing with BTL - especially Ltd Co. BTL. The answers, Yes and No (for the time being).

 

Folks might find these useful:

• https://moneyfacts.co.uk/guides/mortgages/offset-mortgage120411/#
• https://www.mortgagesforbusiness.co.uk/news-insight/2017/may/limited-edition-offset-buy-to-let-mortgage/
• https://www.onlinemortgageadvisor.co.uk/buy-to-let-mortgages/offset-buy-to-let-mortgages/

[Kuro507]

Why not use the cash to pay off some of the mortgages on your remaining properties?

 

Just because the market has dropped, doesn't make your property worthless. Long term view will see it rise again.

I guess it just depends how long you can afford to wait.

[Graham C]

6 hours ago, kuro507 said:

Why not use the cash to pay off some of the mortgages on your remaining properties?

 

Always an option. Couple of point I would consider.

1. Some products might have charges for over payments, but I guess 10% is normally OK. But crash could happen fast!
2. Once it looks like bottoming out, I'd want CASH available to snap up deals. Refinancing at this stage will be difficult/slow given nervous banks.

[DezzaT]

How come investing in cryptocurrency isn't an option? Or does that fall under the "blow it" option? 

 

[Daryll Foulds]

Leave it in the bank and snap up as much as possible when I think the market bottoms out.

[Richard D]

Don’t forget though that “time in the market is (generally) better than trying to time the market”...

[red22]

18 year cycle in US started in 2006 so 2024 would have been the next crash. IMO covid will have housing for the 2021 and 2022 years count as double years. Im planning on selling in mid 2022 but will sell in mid 2023 if I looks like my timing is off. Would rather sell a year early then try to sell as its going down. The top will be easy to tell just look for a postcard once a week or more in your mail from realtors. The big question is what to do with your money as real estate/stocks tank. My plan when I notice the top/new home builder stocks falling  is. Short Real Estate ProFund (SRPIX), or if you want a leveraged short use the UltraShort Real Estate ProShares (SRS) then after that put it in Dollar General stock (DG) for 2 to 5 years.

[Ian Cole]

I rarely come on here these days, as I'm busy preparing my Plan-B; plus I'm dismayed/disillusioned at how many people are still asleep and just cannot see the macro perspective present (the elephant in the room!).

In case you doubt what I say (or are simply in denial) then PLEASE look into 'bank bail-ins', IF you're keeping your cash in the banks. Obviously under the mattress is risky, but then so is leaving money in the banks! The government is basically broke (under water) and despite the theoretical guarantee of £85k, that is all it is: theoretical! 

Look what happened in Cyprus (and the fact that the government raided saver accounts). Basically world governments are corrupt (we're being ruled by immoral gangsters, who write laws to protect themselves, but not the common man). 

It's a huge subject, but history is destined to repeat itself, except in a way we've never seen before (scale wise). The system is deliberately being destroyed (and no this isn't doom and gloom, but the reality of what we face) in order to FORCE the public (because people are going to suffer hugely from this autumn, when the heating bills need paying, and food prices sky high, plus the cost of living in general has risen dramatically, not to mention fuel prices - which adversely affects everything!) to accept the solution, or olive branch (working on the ‘create a problem, and then offer a fix or way out’): UBI. Very much in line with what the Rothschilds thinking is: “You control the money, and you control the world”. When people suffer (orchestrated deliberately, precisely to steer the public at large into a corner, right where they want us) the government will then provide the solution, and people WILL naturally accept what they offer (UBI) instead of starving. Basically something they wanted all along, but if introduced under otherwise normal conditions, people wouldn’t accept it - so they need to create a problem first.

The population reduction (it's all there, for all to see, on the WEF website - but dare I say 'how’, without being shouted down because of ‘mass formation psychosis’) will SIGNIFICANTLY reduce demand for both housing stock and by default, the rental sector, over time, as people die off (over a period of a few years, and beyond). This, coupled with the totally unsustainable debt burden (especially with the falling tax revenues/collection as a result of the population reduction, even with inflation running rampant, so in theory tax revenues increasing as a result of tax take on those rising-prices also going up) will inevitably result in falling revenues overall, as the population will be decreasing at a rate greater than the increasing tax ‘rates’.

So, I’m afraid that the old school thinking that property cycles will continue as they have in the past, will simply not be the case in future. We should indeed bear in mind what’s happened in history, but never before (unless you’ve been living under a rock) have we faced what we do now, where the whole global elites are running things in step across continents, under the one-world-government aims. This does NOT bode well for personal freedoms, especially as things are being attempted to digitise and apply cross-border standards in order that EVERY single financial transaction can (will?) be recorded, which is the whole reason we all need to adopt the Cash-Friday campaign to force/coerce the powers that be into giving up their ultimate aims (which were born back in 1796).

I can post links to the bail-in news that’s not just an ‘aim’ but already written into law! - if this is of any use? But most people can search online themselves, so I won’t patronise anyone by doing this for them.

So, before ‘investing’ in property, think carefully before doing so in this current bubble. We are perilously close to a worldwide financial collapse, of biblical proportions, so personally I’d hold off buying anything now, as after the crash, you’ll be able to buy more than you currently can - and park your wealth in something like precious metals, that can be liquidated very quickly when things do eventually go pear-shape. We’ve even sold properties in readiness (as have 3 other personal friends of mine who’ve also been in the property game for a long time too). As Warren Buffet says: whatever most people are doing, do the opposite.

I’d rather be 10 years too early than 1 day too late!

 

NOTE…….To back up my assertions (though anyone can check for themselves from multiple sources) here’s a link to the population forecasts for different countries. Scroll down to the UK table to see for yourself that Deagel.com where the population of this country was 66 million in 2017; whereas in 2025 (just 3 years from now) it’s predicted to be just 15 million - that's over 77% fewer people! So it’s clear that this isn’t about depopulation ‘naturally’ over time by slowing or stopping the birth-rate (i.e. slowing or stopping population growth) but actively reducing (culling) the population, as otherwise how are we going to go from 66m down to 15m?

So please, do yourself a favour and look a little deeper than mere ‘previous cycles’ as this totally misses the macro perspective. All this happening at a time while governments are busy printing money like there is no tomorrow. How, HOW on earth are we ever going to be able to service the interest on this debt (fictional as it is in real terms) let alone pay down the capital, with massive inflation AND and a substantially diminishing population? It’s fanciful at best!

https://astediscovery.com/COVID/DEPOPULATION.htm

[liaamsmithh95]

I think its economics