Discussions about residential property often descend into a debate about values. Fans tell us that demand outstrips supply and prices will continue to rise. Detractors point to lofty valuations, a history of property crashes and experiences overseas.

For the record, I think property is overvalued and it's all down to mortgage volumes as to whether we have a long, slow return to reality or a fast, painful, ugly one. But before you even get to valuation, the question you should ask yourself is: do I have enough money to invest in property?

I'm not talking about buying your own home. That's mostly a consumption decision, and one we make for emotional, not financial, reasons. But it's a critical question when considering an investment property.

Let's say you're not the gambling type. You want some diversification, with your savings allocated across a range of asset classes and individual investments so you're not overly exposed to any one of them.

If you had $200,000 in super, it might be invested in cash, bonds, Australian and foreign shares, property and infrastructure. You might even have a small allocation to private equity, absolute return funds and market-neutral strategies (check your next statement if you don't know what these are).