Summarising the last six months

This last few months have shown some extreme sides of real estate, with the ebb and flow of things in the market.  It does prove that hanging on in the market is vital when things go "pear shaped" and keeping patient to weather the hard times.  All markets eventually twist and turn, and panic can be the worst thing to do. Of course any investor who is under capitalised will feel the brunt more, whereas the person who saves to have a buffer in case of a downturn, or change of circumstances, will ride the "storm" with less pain.  When a downturn is apparent sit tight and not be fooled by other bargains.  No kidding, by making the right decision can save thousands of dollars in the long term.

A bit of luck comes into this also, and being patient for the market to turn around can be nerve-racking. So the interest goes up, and it comes down sometimes, when the economy is healthy.  Circumstances are not always in our control, that is, to expect the value to keep increasing, to hope the rent will increase, to expect a tenant will be able to accept the rises, and so on.  To panic and sell is often not the right decision in the long term, especially knowing you have a good property that must eventually increase in value over a few years.  Think of other ways to defray the costs, for example, take in a boarder.

Always keep yourself financially informed, and keep a clear head.  I recommend a "brainstorming" session with other like minded people before acting prematurely.

Refer to Chapter 6, Page 18.