Bought two investment properties 8 and 4 yrs ago (one in outer Melbourne suburb and one in a northern Victoria regional town respectively) both at periods when borrowing rates were 2 to 5% higher that they are today. Initially both houses were neutral but they are now positive, thanks to a combination of low rate and paying the mortgage down. We live in a fairly cheap rented house in a great inner city suburb so that we don’t have to carry the extra burden of an owner occupier. We decided on having one investment in the city and one in the country because of cyclical nature of property market between these two location i.e when city prices pick up, prices in country slow down and vice versa. This way we are not too exposed and win either way. We have decided to stop at two for now until these are paid down enough to be able to sustain themselves fully and take care of a new one without us doing much stretching.

By not over-committing ourselves, things are working out alright so far. These are our ‘two cents’ worth of contribution to the post.

You can refuse to p[ay crazy over the top sums and continue to put cash away and pay down debts on your existing IP’s and keep your powder dry until prices/real investment opportunities return.

In the example I posted the buyer will be cash flow negative for the next 6-10 years, if you spend the next year paying down debts/increasing your equity and getting prepared for the market to be more reasonable you may (and note I said may) blow past the people who overpaid in 2015/16 and regret taking on such debts in a sideways or downward moving market.