Heading Into a Severe Local Recession.

All my Data tells me that Darwin is heading into a properly painful recession. Similar to what Townsville is going through now.

I've got about a year left to prepare. A bit like a squirrel getting ready for winter.

So with the gift of hindsight....what should I be doing?

More importantly, how best to profit?

Would love to hear from some of the more experienced people here.

I've already got the basics covered- have no debt, renting, a chunk of cash in bank and a super-solid job. I'm after some creative ideas, or potential issues that only the experienced will know about.

Help?

 

Have you considered hammer time?

 

Only sign six month leases if you feel rental prices are on the way down. Then negotiate at every renewal.
Marg

 

I don't know too much about Darwin market, but understand its in a downturn cycle same as Perth. When did it start falling?

Once the market starts falling and more stock comes on the market prices generally continue to fall due to oversupply and rents also falls back. Property takes much longer to sell and of course its a buyers market.

Am I correct it would be too late to sell anything now????? too much stock on the market???

If it were me ---- and if you have made significant gains on property I would be offloading a few, reassessing the portfolio and tweaking to improve cashflow and bring capital back to the table.

I would use this capital to reinvest in other markets that are either rising or about to rise so you continue to make money. This will also increase serviceability and reduce debt. I hate holding stock in a falling back, so like to rationalise to reduce risk, its just dead money and your assets are falling so you are actually losing money.

I understand you have your bases covered, that is smart, so that is a great fall back position.

MTR

 

It is in same boat as Perth except for one huge gas plant construction still propping everything up.

Once that plant moves to production phase in a bit over a year, the real recession should kick in. It's a bit of a blessing in a way as allows me to predict the future and prepare....hopefully even profit.

 

Blasphemy ! On a property investor forum !

 

I think @Marg4000 meant to only sign short leases if you are a tenant. The landlord would be thinking in the opposite manner.

 

I was replying to the initial post, said presently renting!
Marg

 

@Marg4000 ... ah... indeed ! I missed that bit !