What’s your leverage % today

LMFAO. Good luck to you. If you took out margin loans for stock trading your going to get margin called and lose a crap tonne unless you are some kind of Einstein 1 in a trillion person that can actually do it and do it right every time.

Goodluck in your investment journey paying cash for your RE investments. Think about what you just said for a minute and why not using leverage is an amateur move. Really really think about it.

 

For the record, there is nothing wrong with investing in a deal with a low LVR. You seem to believe one absolutely has to max out leverage on every transaction. I have plenty of friends who are cash heavy in deals and do just fine. All depends on your portfolio size, risk tolerance and goals.

I've done quite a few deals now using well below 50% LVRs. There are advantages using less debt if you are financially able to and it meets your goals.

Leverage is a fantastic tool when you're building your portfolio. Once it reaches a certain size, most investors I know will be more willing to be less debt heavy in deals.

Eventually Murphy will come for you when you least expect it.

Risk minimisation is #1.

My 2.5c.

 

Property sitting at about 44% LVR and am about to start period of developments to build the asset base a bit more and also pay down a bit of the debt I no longer want.

 

I'm at 25% on property. 18% overall.

 

I am now at 12%. When accumulating many years ago would have been over 80. I used leverage on everything when wife saw I knew what I was doing. Used it, feared it, then reduced the hell out of it. In 25 years never had a margin call so maybe others are still on the learning curve. My wife sleeps much better with our low lvr and all offsets full in 3 years as we can, not that we need to.
If I was young now with current rates I would be even more into stocks then I was at the crazy rates of yesteryear. Maybe I was lucky and the high rates kept me a little sane. While I did buy property (as that's what people do - right) I made waaaaay more money on the markets. It to is just a numbers game, it just had a different learning curve.
To the younger crowd who I don't think have posted, be respectful of your borrowings and be sure you and your partner can sleep at night. My wife hates investing, it's just not her cup of tea. She knew I was a numbers guy and trusted my calls. She is now very happy if somewhat amazed that all my bs seems to have worked for us.
Happy investing.
Doing Ok.

 

At 28% today...will increase as I do new builds..but selling some expect to be at 0-10% by 2024...depending on how things pan out. With values increasing in states outside of Sydney..I would be lower without paying down.

Risk for some is they might be at say 30% LVR if they hold mostly in Sydney but if market comes off...depending on what they hold they could be back up to 50%. as values drop.

I have developed this new strategy called less is more via consolidation of a large portfolio. Where you own less properties but hold higher value newer properties with good yields. So instead of 30 places I will hold say 18-20 places and they are worth on average say 850-900k (probably median in OZ by 2024 so realistic) paid off. That means you have 15-18m in properties say returning 500-600k plus in rents. Even after paying costs you will still keep 300k and depreciation knocks off the tax hit...not all but most...where you pay about 40k. Pay 27.5k in super via post tax sacrifice and you can get it down to 30k. By redeveloping part of my portfolio and with some investments made recently...i could be holding 5-10 places worth at least $1m by 2024

 

65%. Just purchased. Finished accumulation. PPOR at 50%.

 

62% but if I sold shares and included the offset money I could bring it down to 55%.

Not looking to accumulate more properties and just save cash to plan for any increases in mortgage rates.

 

What is the point of having all of your offsets full?
Wouldnt that money be much better spent in the sharemarket paying an income dividend rather than reducing tax deductions in an offset account.
Even if your offset accounts are full your loan repayment amounts are still being taken out in full until the loan is completely paid off years down the line and only then can you live off that rent.
Is there an opportunity cost of not being invested in the market with spare cash versus increasing your own tax liability by reducing tax deductible interest?

 

Maccs74 not quite like you think. All my investments are IO so filling the offsets was multi faceted. Effectively pays off debt fast but has money available if we need it. Already have lots in shaes etc as that's been very good to us over the last few decades when housing was not as strong. Plus it makes the wife happy. We could be debt free today but I am killing these slowly while rates are low. When we pull the pin and retire we can be debt free, tenant free and with my new accountant (old one retired) looking over our plans possibly completely debt free.
Happy wife beats all the other reasons.

 

Last bit should have been tax free. Not sure how but happy if it is.

 

0% - not optimal, but I sleep like a baby

 

Leveraged at 45% in real estate.
But net position is 10% overall.

Started 2021 with net 30% leverage, so I am very happy with current position.

 

8% and wanting to take advantage of these low rates but maxed out lending at the moment.

 

46%. And I'm very comfortable with that. I was already very comfortable with 60-70% so I should be fine with sub 50% even if rates double.

 

Zero.
And it is optimal if not better.
I've had my best returns and made more per year with zero leverage.
Still have an LOC at 4.6% I can draw on anytime.
In RE high leverage is a great long term tool or solution.
If you wanna move fast, it's an anchor.

 

If any new investors are reading here, they would be very confused.

I think to be clear it must be pointed out everyone in this thread is at different stages of their investment journeys. I find it very hard to believe most of them got to where they are without leverage. I'm sure a few did, but a large majority of those cases would be irrelevant (e.g. came into an inheritance or something, which is something you can't exactly follow, hence why I'm calling it "irrelevant" from a learning perspective).

They are towards the second half or end of their journeys and therefore don't need as much leverage, if any at all. This is why there's a difference in perspective.

That being said, I don't understand why there's this prevailing attitude that the journey didn't matter. Why they're so dismissive of it the road that they took to get here and taking the "mightier than thou" attitude, snubbing noses at anyone who dares to take on a bit more risk. I would have expected to see more commentary along the lines of "I started with a fair amount but I'm trying to deleverage now.", whereas I'm mostly seeing "leverage? ha, I barely have any, gg noobies". A little humility is needed IMO.

 

Well as for me, I did state a few times I've used large amounts of leverage while building my portfolio and I'm at a different stage now. I do think the vast majority of folks who made decent gains in resi RE would have at one point used as much leverage as possible to expand their base as big and as quick as possible.

 

Yeah I know, as I said I find it hard to believe that 99% of people didn't take the same path, other than a few outliers who got a huge inheritance or something.

But if you were to read the responses here, as a new investors, you'd be very confused.

All I'm saying is don't be confused: almost everyone took the same path, even if some people are more reluctant to admit it. They got their hands dirty. They took on risk. Let's not pretend like they didn't.

 

Agreed. Cool thread though - eye opening, now I know when I read most people's comments they're likely not that young, have been around the block and seen a cycle or two and the perspective is totally different to someone just starting out.