Thinking of that Beach or Ski Bach?

Have you got lots of discretionary income/spending available to you at the moment?

Times are good?  Job going well?  Your house value has increased considerably?  Want to ensure you don’t miss out on getting into the rental property market at today’s prices?  Thinking about that beach or ski getaway/Bach?

Many years ago, we owned a piece of land on the coast.

We had plenty of discretionary funds at the time.  We didn’t have kids.  We were risk takers.  It was exciting to be purchasing a section by the water to build our dream holiday home..

Life changed.  We had kids (3 in fact).  We moved cities, changed jobs.  Times were a little tighter.  We needed to sell our land and consolidate our mortgage.

But the GFC hit in between us buying and wanting to sell it……..

It took quite some time to sell, we stressed a lot and, in the end,, although we managed to sell it, it was a long drawn out process and the buyer was firmly in the box seat – and they knew it and capitalised on it!

But, it was a valuable lesson.  I am glad I learned it then and not in the future……

I studied economics back when I was a young lad – I am sure I understood what liquidity meant – but it’s clear I had to gain a practical understanding to complement my theoretical understanding…

So, as much as it’s exciting to be able to afford that beach/ski/holiday house, flash boat, flash car etc now – be mindful of liquidity and whether indeed that purchase now (property, cars, boat, land, shares/investments) is of an appealing enough nature to enough people in the future such that you can, if you need to, sell and get your money out fast.

It’s been a sellers’ market over the past few years – no question – but as the tables turn, it’s even more important to buy carefully and be mindful that having a property with features that appeal to the largest number of people will be the most likely way of realising a fast sale for the best price when there are lots of average, unique properties on the market.

Have an awesome week and remember – call me to make a time to review your lending – don’t put it off, don’t pay more than you need to.

Cheers Paul

p.s. this article was originally posted in 2018 and is reposted now as a reminder that the message remains the same!