As we head towards the end of 2024, it’s safe to say that there’s so much in the way of news, rumours and opinions when it comes to the property market here in Australia.
And it can be enough to impact your decision making, and make things quite overwhelming, no matter how much you want to take that next step into the market.
A big problem here centres around the fact that a LOT of the info out there centres around some key misconceptions.
So, let’s break them down so you can feel more confident and knowledgeable when it comes to looking after your financial future.
Misconception 1: You must be super wealthy to invest.
With all of the talk about cost of living and interest rates, it can be easy to count yourself out as a buyer.
But, rather than cancelling yourself out of the property investment equation altogether by saying ‘There’s no way I could invest in property – I don’t make 600K per year’…
Instead, it might just be the perfect opportunity to get into the market before prices skyrocket again. Here’s our checklist to help you really understand if you can invest in property.
- Can you afford a Deposit?
We often say that the smaller the deposit, the better – and even 5 or 10% can work. This is because it leaves you more equity to continue growing your portfolio and work towards those long term financial goals.
- Can you service the Loan?
Paying off the mortgage of the property is typically assisted by your income, as well as rental income.
- Do you have a Cash Buffer?
We typically recommend $20-$30K as a liquid buffer of cash, just to ensure safety should a family or financial emergency arise.
It’s as simple as this – you don’t have to be making unreasonable amounts of money to be able to enter the property market!
Misconception 2: You can only buy property where you know.
We tend to trust the things that we know – and our town, city or region is no different. After all, we’re all human.
But the thing is, it’s a form of bias that can have a major impact on your decision making as a property investor.
Looking at the property market as a whole is SO important. Working to find property to suit your unique goals and circumstances is far more important than buying a place across the street.
So, when it comes to building your tailored property investment plan, looking far and wide might be your best option to ensure you’re meeting the criteria that actually suits your circumstances.
It might just be that your ideal property is situated outside your home state or city. In fact, we’re working with more and more clients in this exact situation, for example, Brisbane or Gold Coast based couples purchasing on the NSW North Coast, or Sydney locals investing in South-East Queensland.
Misconception 3: You need to wait for interest rates to drop.
You know what they say…
The best time to invest was yesterday!
We’re seeing The ANZ-Roy Morgan Consumer Confidence figure continue to grow upon 18 month highs, as well as inflation slow, and indications by the big banks that interest rates are predicted to be at, or near their maximum level.
What are these indications? Well, banks have already lowered their variable rates!
To be more specific, back at the end of August, CommBank announced that any loan with more than a 20% deposit would see a 0.25% decrease to their interest rate, and any 3 year variable loan would see a decrease of 0.7 percentage points.
And it’s not just CommBank that’s making this change – NAB and Westpac have also shaved at least 0.6% off variable rates.
And, what’s more, if you’ve been hanging out with us at InvestHer for a while, you’ll know how much we love talking about supply and demand. Despite it being a relatively simple economic concept, it provides a huge amount of insight into how the markets will react – especially our favourite, the property market.
What does all of this mean?
Well simply, demand for property will continue to increase off the back of these inflation and confidence numbers. And with a dire supply situation that we’re currently facing in Australia – this can only bring price growth.
So by waiting for the RBA’s rates to go down, you might just be passing up a great opportunity to make the most of the market – before it rises on the back of this supply and demand landscape.
If you have any questions about these misconceptions, or would like to chat more about how we can help you achieve your financial goals through property investment…
We’d love to help!
Give us a call on 0455 223 865, or get in contact HERE!
