Big Opportunities Ahead for Rental Property Investors

Posted On Monday, 02 November 2020 21:35

2020 has caused massive upheaval and change across Australia. The property market is undoubtedly one of the many economic sectors that have been affected by the COVID-19 pandemic.

Those who are keen to break into the market have been encouraged by the drop in local property prices, with experts further predicting a 10-15% decrease in the coming months. However, it’s important to understand that this doesn’t necessarily mean it will be easier to buy property, or that now is the right time to do so. You should base this decision on your personal circumstances and financial security—if these factors are favorable, you could be in the ideal position to invest in a rental property.

Predictions for the Australian Housing Market

Many Aussie realtors are expecting a breakthrough for first time home buyers in 2021. This is not a guarantee, but depending on your circumstances, it’s definitely possible. Thus far, drops in property values have been slow and steady, but that’s not the only facet to consider.

The housing downturn should only bring cause for celebration if you have a steady income and are confident you can sustain your earnings in the future. Property prices are set to decline nationally over the next year or two, and if you are financially comfortable, now could be the time to make your move. Interest rates have also plummeted, with some lenders dropping their variable mortgage rates as low as 1.99%. 

With that said, even with all the projections available on how the downturn will play out, you should bear in mind this will affect everyone differently. Those who have the ability to buy a home will enjoy their pick of more affordable housing options, despite the reasons behind these decreased prices being somewhat concerning in the long term.

Why You Should Buy a Rental Property Now

So, we’ve determined that the market is uncertain at the moment—but what if you can afford to make a property purchase nonetheless? A smart, solid investment move for those who are able is to invest in a rental property.

It’s no secret that the price of rentals has taken a hit in 2020. Closing international borders had a massive impact on rental demand, including short-term holiday rentals and longer-term leases. However, as lock-downs ease and life returns to normal, that demand will begin to pick up. If you own a rental property, that could put you in an excellent position to take advantage of the uptick in demand, regardless of whether you plan to offer long-term leases or Airbnb-style accommodation.

An investment in affordable housing now could put you in good stead to earn a consistent and secure source of income in the future. As rental demand increases, you could potentially request higher rental prices to counteract the costs of your purchase. This will allow you to pay off your rental property sooner than expected. If that turns out to be the case, it could cost you less in interest and earn you significantly more in net income.

Risk-Free Investment Opportunity Research

The first wave of the Covid-19 pandemic may have peaked, but it’s still risky to investigate property investment opportunities the traditional way. Luckily, there’s a more convenient and safer alternative at your disposal.

As a potential investor, it has never been easier to check out would-be investment opportunities and properties. You can do so at your desk in the comfort of your own home by using the internet and many local websites as your guides. You’ll be able to effortlessly narrow your searches according to property type, value, and location to spare you time and minimize risk.

Taking Advantage of Technology

Another factor that could compel you to purchase a rental property is the sheer simplicity of the process. People used to avoid investing in rental properties due to the hassle and stress that came with leasing and managing the homes.

Years ago, investors had just two options available: hire a property management consultant or do the job themselves. Property managers can charge a huge cut of your monthly rentals, which could end up negating any benefits you otherwise would have enjoyed from leasing your property. On the other hand, leasing and managing everything on your own can be incredibly time-consuming due to the hefty amounts of paperwork and bureaucracy involved.

Today, things are different. 

There are so many online tools at your disposal to assist you, save you time, and money, and almost completely automate the rental process. You can use software to handle everything from finding and screening tenants to signing digital leases, applying for landlord insurance, collecting rent money, and managing property maintenance. 

If you make an intelligent property investment now, and use technology to manage your rentals instead of paying a property manager, you could essentially pocket the difference, and make your life easier at the same time.

Real Estate Market Resilience

According to Julien Leclair-Dionne at Forbes, real estate is one of the best investments to make during difficult economic times. The reason behind this is the sheer resilience of the real estate industry. 

You may have noticed how volatile the stock market can be, losing massive portions of its value within weeks or even days. Real estate prices and values, however, remain fairly consistent, regardless of temporary fluctuations. 

In short, even if you purchase a rental property in a buyer’s market, the property’s value should stabilize over time, leaving you sitting on a proverbial golden egg. 

The Bottom Line

Is now a good time to invest in a rental property? If you have the funds available to do so, then yes. The Australian real estate market is currently positioned to offer investors competitive purchase prices, mortgages with low interest rates, and good odds of earning consistent rental income in the near future. 

If you are indeed financially stable, there could be a rare opportunity knocking at your door.

Rate this item
(0 votes)

Agent Resource

Limited time offer - 50% off - click here

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.