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Old 14-01-2008, 01:15 PM
SmartTrader---
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The assumption that leveraged properties investment are safer because the value will be retained is not true. It is not well known that if you buy a private property and the market value drops, the banks are obliged to ask you to pay the difference (this is their way of reducing bad loans). And also, if the leverage is very high, if you buy at the wrong end of the curve, the buyer may end up paying for losses for the next 20 years of their lives. The $800K Bishan executive flat sold a few years back come to mind.

Of course, if you read the timing well, the money earn can be a lot. The high returns comes with high risk due to the high leverage of 400% as stated in the Engineer's case.

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