Investors snap up bargains

Investors snap up bargains

by 0 comments

While first home buyer numbers are down, investors are taking advantage of the current market to find cash flow positive properties, according to Smartline.

“While there is widespread talk of a lack of consumer and business confidence, we are not seeing this at all,” said Smartline’s executive director, Joe Sirianni.

“The combination of very low interest rates and growing rental income returns has created a favourable environment for investors and we are experiencing plenty of activity in the investor segment of the property market.”

With variable interest rates sitting at around five per cent per annum, Smartline said it is now relatively easy for investors to find cash flow positive properties that almost pay for themselves.

Mr Sirianni said variable interest rates have decreased by 2.20 per cent since late 2010, representing an interest saving of around $6,000 per annum on a $300,000 mortgage.

“$6,000 a year, or $115 a week, is a considerable sum of money and would take many investment properties from being cash flow negative to positive,” he said.

“Removing the cash drain opens up opportunities for an increased number of investors to make the move for the first time, and the scope for some investors to add to their existing portfolio.”

However, Mr Sirianni was quick to highlight the volatile nature of interest rates.

“It needs to be remembered that rates won’t stay at these record lows forever,” he said. “Investors need to ensure that the numbers add up on their property investment in the face of rising rates and that they can continue to afford their investment if it does become cash flow negative in the future.”

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
Learning from the best led Michael Clarke to success

In this episode of Secrets of the Top 100 Agents, number four-ranked agent, Michael Clarke, returns to the studio to explain why he’s less...

View all podcasts

How difficult is it to maintain a good work/ life balance?

Very – if I’m having balance my competitors are working
Not – I schedule the time into my calendar in advance
A little – It’s scheduled, but something always crops up
Work/ life balance – what’s that?
Do you have an industry update?