Quote Originally Posted by alistar_mid View Post
Overall housing market crash = not good, would probably have a negative effect on p2p lending
Yeah, not good

One thing I see a lot of people say that they include in their auto-lend (and manual selection I suspect) is 'Owned/Paying Mortgage' - thinking if the borrower can pay a Mortgage they can pay an additional loan. I started out that way, but have now come to the conclusion that a good spread into Rentals is a good choice, exactly because of this reason - if the Housing market drops, my thinking is the 'Owned/Paying Mortgage' group would likely be the higher defaulters, whilst rent would likely drop making the 'Renting' group less likely to default and hence a good diversification choice in this situation?

At the end of the day, I guess the bigger spread you have across most/all types of criteria the more stable your return will be, not necessarily the best return though, if you have the time to ride out any major dips, leaning towards higher risk will give much higher returns.