10 reasons to invest in real estate right now

Feb 2020Karen Millers

According to recent reports, house prices eased in 2019 but are on the upward slide in 2020 as markets rebound.

If you’re in the market to buy an investment property, you should make a move now. Here are ten reasons why you should pounce on an investment property right now.

1. Record low interest rates

The official RBA cash rate is at 0.75% and holding – a record low in Australian financial history. If you’re waiting for interest rates to fall, don’t hold your breath; there aren’t any clear signs they’re set to drop any lower.

2. Property investor experts say there’s no better time

Peak property investment body Property Investment Professionals of Australia (PIPA) in their Annual Investor Sentiment Survey, says that 82% of investors believe now is a good time to invest in residential property, up from 77% in the previous year.

3. No cap on investment loans

In July 2019, The Australian Prudential Regulation Authority which has a hand in regulating the lending industry removed the cap on the number of investment loans an individual can take out. If you’re looking to go for more than one property, now is a great time.

4. Waiting longer can cost you money

If you’re waiting for the perfect ‘time’ – don’t. It can actually cost you in the long run. PIPA research in September 2019 showed that investors who attempt to ‘time’ the market could lose an average of $140,000. So don’t wait, move!

5. A buyer’s market – while it lasts

Since house prices have fallen slightly over 2019 (but may climb back to the record peaks this year!) you should put on your negotiation cap and look for an absolute property bargain.

6. Lower outlay; higher returns

It also stands to reason that if house prices rise back to their peaks this year, you’ll reap a greater return on investment than if you waited. So, if you have the capital lined up, move now or regret it later.

7. More competition in investment loans

In the wake of the Royal Commission into the Banking Sector last year, Savvy CEO Bill Tsouvalas says non-bank lenders and brokers have driven more competition in the sector: ‘Applications with the Big Four banks could slide by as much as a third, which may indicate non-bank lenders are driving home more competitive rates. If you’re going to buy an investment property, it’s worth looking into.’

8. Negative gearing

Since the Coalition was returned at the last Federal Election, changes to negative gearing proposed by the Labor party will not come to fruition. That way you can still take advantage of tax breaks through negative gearing if you decide to buy an investment.

9. Secure your retirement

If your superannuation isn’t anything to write home about, an investment property now can help you secure a comfortable retirement. The extra cash flow or an eventual sale of an investment property could net you extra cash when you’re not working.

10. Supplement other investments

If you already have investments in shares or money markets, diversifying your portfolio with an investment property is one way to spread risk and create another stream of income. That way, you can pocket the rest or use it to fund further investment.

Weighing up these ten reasons can help to inform your decision on whether investing in property is the right move for you in 2020. So why not start hunting for the perfect investment property today?

Bill Tsouvalas, Homely, 17 February 2020

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