In today’s complicated economic climate, many investors are sitting on their hands and waiting to see where the chips fall.
I can understand why.
Times aren’t what they used to be, there's talk about a world recession and the "R" word is also being used about the Australian economy.
Sure some housing markets have turned the corner, but some segments of the property market (particularly the high rise off the plan and house and land sectors) are still suffering badly.
And banks are still under pressure to slow investor activity.
So investors want to know: how should they proceed safely?
These concerns are valid, but they aren’t a reason for sitting still.
Waiting for the climate to become more investor-friendly is like waiting for snow in Alice Springs!
Instead of hoping, you can start preparing yourself now – then you’ll know when it’s safe for you to act.
Here are some solutions to help you move forward with your property investing goals, even in uncertain times:
If you’re worried about property prices or servicing a mortgage, the best place to start is a health check of your finances.
Sort out a budget, and visit a finance broker who can give you an idea of your borrowing capacity, mortgage repayments and even organise pre-approval.
As part of your budget, start bumping up a buffer fund and a decent deposit.
With investor lending criteria still tight, you’ll possibly need some extra cash to get your loan over the line.
A bigger buffer will also help offset potential cash flow surprises.
But spend it wisely – in research.
Research costs little to nothing, but it’s almost impossible to buy a successful property investment without it.
Once you know your borrowing capabilities, you can start pinpointing regions in that price range.
Then, start drilling down to specific suburbs.
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- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Here’s how to avoid these 12 common reasons property investors fail to build a Multi Million Dollar Property Portfolio
- Also read:Heat comes out of the housing market as values across Melbourne dip and Sydney slows | Corelogic Home Value Index
Talk to local agents, visit 100 properties, and get to know how the market is operating and who it appeals to.
Then, when the time is right, you’ll know which property to pounce on.
Times of uncertainty can actually be great times to buy, when other investors are less active and sellers are looking for quick handovers.
During your research, you’ll need to know more than just yields and median prices.
You also need to focus your search on finding properties under market value, or in areas with future plans that will boost the value of surrounding properties.
For example, look for suburbs with new infrastructure that shortens commuting times, or the additions of hospitals, major shopping centres or airports (ie employment hubs).
Gentrifying suburbs with evolving economic circumstances can change the demographic it attracts, and improve the suburbs overall appeal and desirability.
The people who assist you through your property purchase – and the management of it afterwards – can actually make or break your success.
That's why more and more investors are turning to the team at Metropole who have no properties for sale, but take a wholistic view on your wealth creation.
Property prices will always go up and down.
Interest rates will always fluctuate.
Property cycles will always keep you on your toes.
Waiting won’t help, or make any of these potential problems go away!
However, when you start preparing yourself financially and gather some knowledge about different markets and their peaks and troughs, these issues don’t seem so alarming anymore.
Remember: people have been investing for decades, through global financial crises and sky-high interest rates, and still came out successfully the other side.
Be prepared, and build your confidence about moving forward, and you’ll begin to view uncertain times as being par for the course.
Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.
Why not get the independent team of property strategists and buyers' agents at Metropole to help level the playing field for you?
We help our clients grow, protect and pass on their wealth through a range of services including:
- Strategic property advice. - Allow us to build a Strategic Property Plan for you and your family. Planning is bringing the future into the present so you can do something about it now! Click here to learn more
- Buyer's agency - As Australia's most trusted buyers’ agents we've been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective - that's something money just can't buy. We'll help you find your next home or an investment grade property. Click here to learn how we can help you.
- Wealth Advisory - We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.