Investing in property can be a great way to build wealth over time, and adding an investment property to your portfolio can provide a solid return on your investment. However, recent interest rate hikes may make you hesitate to take the plunge.
While it’s true that national property prices have dipped and higher interest rates can reduce your borrowing power, there are still good reasons why now may be a good time to buy.
For starters, the current market is a buyer’s market. With rising interest rates and inflation, there are fewer buyers in the market, resulting in properties sitting on the market for longer periods of time. This can provide an opportunity for buyers to negotiate a better price, particularly if you target properties that have been on the market for a while.
In addition, rental tenancy vacancy rates are at record lows, with a high demand for rental properties across Australia. This means that if you have a solid investment property, you may have a number of good tenants putting in applications.
Investing in property also allows for flexibility in location. You can look to buy in areas where property prices have already dipped, leveraging the current buyer’s market to negotiate, and purchasing in an area with a healthy demand for rental properties. This can increase your chances of having a good tenant in your property sooner.
Finally, buying an investment property can be more affordable than buying a property to live in. As an investor, you can be more flexible with the property’s features and amenities, allowing you to look for more affordable options that may not have all the bells and whistles that you would want in a home you would live in.
If you’re considering property investment, it’s a good idea to speak with a financial professional. They can help you evaluate your financial situation, determine your borrowing power, unlock existing equity, and find the right loan for your needs. Keep in mind that this article is presented for informative purposes only and is not intended to constitute tax or financial advice. Before taking any action, it’s important to consider your own particular circumstances and seek professional advice.
