Monopoly: Debt and Bankruptcy
If you find yourself needing more cash than you have available in your stash, it might be time to mortgage. Mortgaging is borrowing money from the bank based on half the face value of your property. When you do this, turn over your deed and collect your cash. Unfortunately, you may not collect rents on any property mortgaged. (Remember, if you have one piece of property mortgaged in a color group, you can still double the rent on other unimproved property in the color group. However, you may not improve the property or other properties in the color group.)
You may also sell off houses and hotels for half of their purchase price, keeping in mind the restriction that you must maintain a relatively even number of houses on the properties within any monopoly. To later get new houses on the property, you must pay full price. To get any property out of mortgage, the mortgage must be repaid along with 10% of the mortgaged value.
Mortgaging to buy property is a worthwhile project, but mortgaging to improve properties is another question. It may be expedient in certain tactical situations, but generally should not be done as it generally does not enhance your income making potential enough to cover the costs. There are other circumstances when you MUST mortgage. This generally occurs when you land on another player's developed property or get a nasty card from Chance or Community Chest and your cash reserves are slim. It is usually better to mortgage property before selling houses, because the buy-back is less expensive.
Mortgaging is not the end of the world. (Although having to sell houses is usually a bad sign.) In fact a good player will often have his or her resources stretched to the limit in order to improve his or her strategic position. A mortgage of a less important property is actually fairly common.
When do you buy properties out of mortgage? This depends on strategy. Considering only return on investment it is usually better to continue to develop properties rather than to get properties out of mortgage, but if you think you are likely to need the cash again within the next turn or two, it is probably best to do nothing at all. As for which properties to buy out of mortgage when extra cash becomes available? Start with the ones which will gain you the highest rents (Railroads if you own several, and properties within complete color groups).
Debt can be either good or bad. As a fuel to buying more properties, early in the game, it is a good thing. But later in the game when rents begin to sky-rocket it becomes the road to ruin. In Monopoly, ruin is called bankruptcy. It occurs when a player reaches the point when he has no more unmortgaged property and is completely devoid of cash. It generally occurs when a player lands on an opposing player's developed property, but can be the result of something as simple as paying a poor tax of $15. The rules tell us that when this occurs the player going bankrupt must turn over all he or she has of value to the owner of the property immediately causing the bankruptcy. If the property is turned over to the bank it is immediately auctioned off to the remaining players.
As noted earlier another player's distress can be an opportunity to get property on the cheap. In this case, you will want to prevent the bankruptcy of your opponent when all of his or her property is going to another player. Do what you can to get as much of the property as you can by flat out buying it (if you have the resources). If you are the one going bankrupt, you suddenly have the power to affect the outcome of the game. Even though you MUST give the player upon whose property you have landed, all your assets, if you can stave off bankruptcy and have sufficient property, you can deal with other players to either evenly distribute your property or to favor one player over another. If you decide to do this with frequent playmates, you should be very careful about it as it can affect your relations in future games (or in the case of spouses, even your relationship off the board).
Don't forget, when going bankrupt, you may not transfer properties that have houses on them. The houses must first be sold. Once you go bankrupt, your token is removed from the board and you no longer have a direct effect on the game. However, you might volunteer to take over banking duties. Usually, by the time one player goes bankrupt, the game will quickly come to a conclusion as this signals that there are powerful, developed properties on the board that will ultimately be the ruin of all the players but one. Even so, the end game often comes down to two powerful players with considerable resources. Once properties are developed to their maximum the game can seem to come down to the luck of the dice. Yet, strategies pursued the entire game can have a significant effect. This is where the acquisition of the most property, during the game is important. Boardwalk and Park Place alone are not likely to win against a player who owns the light blue and the orange fully developed (roughly equal purchase and development costs). The expensive properties are likely to get "undeveloped" before they get landed on.
Ultimately, the way to win Monopoly is to own property and collect rents. Wheeling and dealing is how you get property. Just don't forget the basic dictum of Monopoly, "buy, buy, buy" and you will do alright.