Most people know the need to invest, to build financial security for now, and for retirement.
Effective property investment strategy is all about holding as much asset value as possible, for as little risk and out of pocket cost as possible. This way, you can continue to build a portfolio, that gains in equity over time.
Cashflow is a key in ensuring your strategy will be repeatable and therefore net you good results over the long term.
Investing in highly attractive blue-chip suburbs sounds great when talking to friends, but the reality is blue-chip suburbs are usually the first to fall when markets cool, and they fall furthest. This is simply due to supply and demand – there are less people able to afford mortgages and rents on the expensive properties, compared to cheaper properties. If there is more demand from people that can afford to rent your property, then you are likely to have good rental yield and cashflow.
Interest rates will influence the overall market, often having the effect of pushing prices up at the affordable end, and prices down at the expensive end. Whilst interest rates are one factor to consider, the bigger picture that should be assessed is, “what is the demand vs supply in the Market and Area I’m looking into? “
With a record of more than 40 thousand visa applications approved in June 2022, demand is going to continue to increase. When people move to Australia, they initially enter the rental pool. With the increased cost of living pressures, demand in affordable areas will continue to increase. As rental vacancy rates are under 1%, and pushing rents up rapidly, those that can get a mortgage, will buy. First home buyers will often buy in affordable areas, supported by government incentives that favour lower priced properties, pushing up demand and prices.
At OpenCorp, we have never seen anyone succeed financially by doing nothing. Having a proven investment strategy, investing in the right areas, and setting yourself up for ongoing, repeatable success is far more important than the ups and downs of interest rates.