Progress in small Doses
The worst situation that you can find yourself in when the market turns is carrying too much debt. Too much debt does not mean that you own a house on which you have borrowed 120%. What it does mean is that you cannot meet the cashflow after any downturn in rents or increase in interest rates.
It is better to buy only one or two properties a year and be able to cover any shortfall from your own personal income than to buy millions of dollars worth of property and be continuously worried and stressed. Yes, it is good to leverage or gear yourself and have little problems, pushing yourself to growth with slight pain, but it is extremely uncomfortable to be constantly looking over your shoulder for bad times which might pounce on you.
High interest rates are not always a negative factor for the property investor. High interest rates stall the developers who cannot be sure of selling. They also hold back prices; in many cases they even reduce them.
The number of people who are able to afford homes is also restricted. All of the above affects you as an investor; however let's look at the other side of the equation. We see building plans being shelved, more homeowners having to rent and the prices of homes dropping.
