What LVR are people sitting at now?

In times of rising interest rates, it'll be interesting to see what LVR people have gotten their portfolios down to in this last hurrah of the boom. We could be seeing rates at 5% for investors very soon, a slowing market/flat growth/inability to refinance any more money, and significant negative gearing for newcomers. For some of the more experienced investors, have you sold any, and how have you managed this huge debt on your balance sheet?

And how do the people who've borrowed at 85% LVR in Sydney with 2.5% yields plan to service their debt once it goes to 5-6%?

For the record I sold a few places between 2015 and 2016 (and also bought a few in other countries), and LVR is now around 25%, with a few sites debt free.

From family perspective, they've been very conservative this last 18 months and I think they have less than 5% LVR.

 

I haven't sold anything and have no intention to do so.

Holding 2 properties in Sydney (purchased 1998 & 2009) with overall LVR approx. 14.8%.

LVR at level to cause no concerns through periods of relative volatility.

Yields not that attractive but that is one of the reasons for diversifying balance of funds into other asset classes.

Properties purchased for the long term and intend to ride the waves and the troughs in a market that I believe has significant long term potential.

It is a long term game for me. Consequently, the current apparent turning of the tide in the market / media doesn't appear strongly on my investment radar. The SANF for me does not change.

Best to all

 

Last time I checked it was around 33%.

 

105%

 

4 IP's with 0% LVR. Soon to be 5 IP's with 13% LVR (latest purchase in SEQ will yield around 6%, one block back from Broadwater). Nice CG to come with Gold Coast going well

 

does lvr even matter? If you can service the debts and have plenty left over what's the issue?

 

sounds good, I think GC is going to go gangbusters from what I have been reading... House or unit??

 

It does matter because the value of the property can also go backwards when markets change and there is a risk that you can not sell if the debt is higher than the value of the property. This is common when markets tank and investors are way too highly leveraged

 

65% ish.

 

Sure can go backwards. But this will also depend on timeframe and where your at. Someone that recently bought at a high lvr wouldn't be selling, another near retirement most likely will be lowering lvr.

 

Currently rearranging finances which will put LVR just over 10%.
However, will be looking to pick up a nice commercial for cashflow so the LVR will rise to whatever we can get it up to.

 

3br Townhouse (block of 4/5) - almost 2 sets of duplexes . Still good depreciation on it. Houses have risen higher in GC , and units are riskier in the Gold Coast market (oversupply/towers going up), unless it's a smaller unit block (more land component).

Matters when you want to use equity for other investments. Matters, when banks look at your debt levels (someone on 90% LVR, could go to 115% LVR with a market correction).
Matters for piece of mind. Emergency in family, and you need to sell. You may be able to service now, but what if a partner (2nd income) gets sick, etc.

 

+1
matters big time if you want to reduce risk

 

don't assume this for one minute? what happens when interest rates go up?? you will always get distressed investors?? this happens all the time, people/ investors over commit and have to sell at a loss if they can not meet their financial commitments....... also life happens, sometimes you must sell ie health, divorce, job loss etc.
We have had a number of investors who posted scenario where they needed to sell but values dropped.

Also don't assume rents always rise they also fall back, dependent on supply vs demand, this could impact dramatically on servicing debt combined with interest rate rises a perfect storm to go under.

All I am saying is that LVR does matter big time and it is far risker when investors are only buying in one market and the boom has been going on for years

 

Works the other way as well, those with high lvr that have purchased in areas that are growing and continually grow, if they can service debts and keep moving forward maybe they don't need more borrowings. LVR on its own is pointless, you need to factor everything else into the scenario.

 

There's no issue. It's just a simple question.

What it does show though is how much firepower people on this forum could have in a downturn.

 

are you looking in your own backyard? Just curious

 

See the problem with these sorts of questions is that it will never give you a true indication of where people are at, what they can service, if their in trouble or just barely floating. Those such as yourself, mrt, and ace and many others we all know have cash to splash when the times right to buy. But others that are in trouble which probably aren't even reading this thread or aren't on property chat, won't tell you they are.
But if it helps, 38% lvr, selling one now, down to 30% when complete.
800k sitting in offsets and loc's, and can still borrow more, and can service 12% if needed in current state.

 

Your not going to get a real indication by asking these questions is what I mean.
You need to know what they earn, what they can service, what their family expenses are, how much they currenly owe, future plans etc etc.
Someone single aged 20 that just bought one house on a 60k income leveraged at 90% on a 300k purchase just starting their investment journey is going to be completely different to a 50 something family with one working partner, income of 120k with 80% leverage on a portfolio of 2mil.

So many factors come into it, that lvr without the full story behind it means nothing.

 

Investment total around 65-67%
Owner occu is 40-45%