Here’s what happened to me. In 2021 my husband and I bought not one, but two investment properties in Auckland. It was right at the top.

We bought for all the right reasons: 

• Auckland looked undervalued
• The bank was willing to lend us the money
• Cashflow stacked up at the time.

But then:

• Our two properties dropped in value by $500,000
• The cashflow tanked and we had to put in over $1,500 a week (across 4 properties) of our own money
• One of our other properties suffered a rent fall from $730 to $650 a week.

So if you’re sitting there thinking you made a huge mistake – I get it, I really do.

But beyond the financial pain, it was the mental load that hit me the hardest.

My husband wasn’t fully on board with buying those extra two properties. 

So when things started to slide, I felt like I’d failed – not just financially, but in our relationship. Our dream of retiring at 60 suddenly looked like wishful thinking.

I felt hopeless, like I was throwing money into a pit.

More from Opes:

• The emotional rollercoaster of investing (you didn’t see coming)
• What's happening with NZ house prices right now?
• The fears that stop people investing – The market

Did I make a dumb decision? (Forecasts vs reality)

It’s easy to look back, knowing what you know now and say: “That was a really dumb decision.” 

But you made the decision with the information you had at the time. And at the time, house price and interest rate forecasts were solid. 

The Reserve Bank thought house prices would go up a bit and then gently drop back a tad. 

In reality, they fell off a cliff.

At that point, ANZ thought interest rates would peak around 4%. Instead, the went over 7%. 

Most property investors who bought in late 2021 weren’t reckless or stupid. 

They made their decision based on the forecasts available at the time, but it turns out those forecasts were wrong. Really wrong. 

So, if you’re questioning whether you made a bad call … try to forget what you know now and think about what you knew then. Would you still have bought?

Most people say “no”, but that’s hindsight talking. 

The truth is that if you went back knowing exactly what you knew at the time … you probably would have made the same decision.

Should I just sell and cut my losses?

In property investment we often talk about the concept of a top-up. 

It’s when the rent doesn’t cover all the costs from your property, so you have to top up the rent from your own pocket. 

When interest rates were low, the top-ups were small. But, if you took out a big mortgage at the top of the market, you got stung when interest rates shot up. 

Your top-up ballooned and some investors were just scraping through each month.

If that’s you, it’s easy to think: “I just want out.”

Trust me – I’ve been there.

But as a financial adviser, I also know The only way to guarantee a loss is to sell and lock it in.

If you hold for the long term, you’ll generally come out better off.

I recently met two investors who had also bought at the peak of the market, except they didn’t buy in 2021,they bought a rental property in Hamilton back in 2007. That was the last peak of the market. 

One year after buying, their property value was down 13%. That hurt. 

Three years after buying they were still down 10%.

Five years in, they were still negative. Their property was still worth 12% less than they bought it for. 

At that point many would have said: “This is never going to recover. I need to cut my losses and run.”

They didn’t do that. They kept holding. 

And 10 years in their property was worth 46% more than they bought it for, and 15 years in their property was up 123%

So although it can look really scary today, once you zoom out over 10 or 15 years you can often find yourself doing quite well. 

Would you buy in 2021 again?

If your crystal ball had told you, “Your property is going to drop in value and your costs will skyrocket,”you probably wouldn’t have bought.

But you can’t go back now. You did buy, and now you have that property.

So let’s reframe it:

Your property price has gone down …  and that’s OK. 

You make the decisions with the best information you have and sometimes you get it wrong. That doesn’t mean you’re a failure. It doesn’t mean you're an idiot. It doesn’t even necessarily mean that you made a bad decision. 

Being an investor is hard when things go wrong. Nobody talks about their financial failures. We all share the highlight reels, never the lowlights.

But I’ve had dozens of clients reach out in the past year – angry, confused and ashamed. They say: “I feel stuck. I’ve lost so much. I don’t know what I’m doing.”

To them I say: 

1. You made the best decision you could with the information you had
2. The only way to guarantee a loss is to sell now
3. Time in the market matters more than timing the market.

And most importantly – know that better days are coming. Maybe not tomorrow, maybe not next year, but they are coming.

Because I’ve lived through the worst, and I’m still here.

And if I can make it through, so can you.