Are We Heading Towards A Recession?
Have you questioned the future of Australia’s economy in light of the recent global pandemic that has changed our day-to-day lives? With the lockdown of all non-essential services, and temporary ban on auctions and property inspections, many Australians are questioning the stability of our economy. While the unemployment rate is still rising, it doesn’t necessarily mean we are heading towards a global recession. There are specific things to look out for, and no one can quite predict if and when it will actually happen.
The situation with COVID-19, or Coronavirus, has undoubtedly caused a spanner in the works for our economy and many different industries have taken a huge hit, as a result many people worldwide fearing a global recession is approaching. The property industry is one that has had many highs and lows and is currently at a standstill. This has had many investors questioning the future of our economy, and whether or not a financial crisis is in the near future.
While we can’t give concrete advice on the matter, the impact of a recession on the property market will depend on how long the lockdown conditions continue, how deep and how long the recession would be, how high unemployment levels reach and how much the Australian Government will support its citizens. Often what happens is people are willing to sell their properties at a lower rate due to the fear that prices will fall even lower, but it is not something we are seeing now as a result of the halt of many businesses.
Historically, prior to Coronavirus, the property market has been extremely resilient in recovering from economic turbulences. And while there are different housing markets across Australia, every state has responded to each crisis depending on their own economic circumstances.
Like any investment, there are risks associated with purchasing property. That’s why at Logic Property Group, we help our clients prepare for risks, by mentoring them in making appropriate financial decisions when it comes to purchasing an investment property. We are the chosen property investment advisor for hundreds of Australians who trust us in making the best decisions with their hard-earned money.
As leaders in the investment property space, we thought we would shed some light and share just a few of the strategies we use when helping our clients choose the right investments.
Location, Location, Location
It’s a term that even the most inexperienced investor has heard, and it holds high significance when making a decision for your investment property. An important deciding factor is to select a property in a location with the lowest vacancy as possible. A low vacancy rate means that once a tenant has moved out, it’ll be easier to find new tenants as the suburb will usually be in high demand.
In addition, as a landlord to a property in a suburb with low vacancy, it usually means you are able to charge higher rent to the demand in the particular suburb.
High Yielding Suburbs
Knowing how to locate a high yield investment property is essential if you want a high cash flow. High yield investments generate greater income and will therefore assist you in paying off your mortgage and any additional expenses, while still having money left over.
As experts in property investing, one thing we always tell our clients is that no investment should ever affect your current lifestyle.
During a global pandemic and potential recession, many people who have invested their money into property will probably come out stronger at the end. When people are finally ready to take the plunge, they often tell us that they wish they had taken the step when they first had thought about it. The financial situation for those people would be quite secure in a time of job uncertainty.
As a property investment advisor, many of my friends ask me, Sam, when is the best time to buy a property? I always tell them, the best time was to buy a property 30 years ago, but since we can’t go back in time, the best time to purchase a property is right now.
While we unfortunately don’t live in a perfect world, downturns will inevitably occur. That is why you need to ensure that you are best equipped with a property that will bring you a steady cashflow in times of uncertainty. Regardless of the current financial situation at the moment, recessions and downturns are a normal part of economy. Sometimes they last longer and are tougher than others, and what truly matters most is how you’re prepared for the next one.
In light of what is happening at the moment with Coronavirus, thisis the time to really get prepared and to take advantage of the opportunities the market has or will have to offer. It’s a great time to really hash out what it is that you are looking for and think about your long-term financial goals. And if this is something you’ve been thinking about, get in touch with our friendly team today.
At Logic, we are here to be your property investment advisor. We are serious about your personal and financial goals. We know that you want to put your hard-earned money into something profitable, and we are passionate about making your dreams come true.
Just like any service you are seeking, whether it be a hairdresser, plumber or doctor, it is imperative to seek advice via an investment advisor or a property coach. As with plumbers and doctors it pays to shop around to find a service or adviser you are comfortable with and can trust. But it’s worth it in the end. Don’t waste any more time, the sooner you enter the property market, the better it will be for you and your cash flow and securing that financial freedom you’ve always dreamt of.
The information on this post/video is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.