Your Guide to Smart City Investing for Major Capital Growth
During the first quarter of any new year, it’s a good time to look back, reflect and see what we learned in the previous 12 months that can help us keep moving forward. As property investors there was a lot to take away from 2020.
The impact of COVID-19 on the economy, falling interest rates, a drop in foreign investment and a stall in new-build construction all collided to make 2020 one of the most challenging years in real estate we’ve seen in decades.
But with every challenge, comes opportunity. Taking what we learned and saw in 2020 and making it work for us this year (and into 2022!) is what makes smart investors successful portfolio profiteers.
Let’s look back and see what we can learn from last year to propel our goals and outcomes that much faster in 2021.
A DISASTER CAN HAVE SILVER LININGS
There’s no denying that the global impact of COVID-19 has been disastrous for many countries and economies. Aside from the health toll, the loss of economic stability will take some regions years to recover from.
But, if we look only through the lens of an Australian investor, it’s fair to say we weathered the storm better than most.
Record-low interest rates, combined with injections of cash and Government stimulus packages into the economy, and suddenly becoming a property investor has become a new reality for people who it may have been out of reach for in the past.
Borrowing money is cheaper than ever. If you’re in a position to buy, this is the year to make that step and start your journey to becoming a successful property investor.
MARKETS DIP THEN RISE
While property prices and capital growth held more steadily than predicted in 2020, we did see a softening in rent rates in places like Melbourne and Sydney.
However, we also saw a dramatic rise in rents across other major cities as the liveability factors of those regions soared.
Rent rates will recover and any drop will level off eventually. Living with the knowledge that markets rise and fall over time reassures us that staying in property investment for the long haul is always the right move. Selling a great quality property, with a high walking score, close to infrastructure and growth, just because the rent rates have dipped a little, isn’t what smart investing is about.
Remember we need to give our properties up to 20 years to fully reach their growth potential. Buy well – never sell!
HAVING A CLEAR STRATEGY WILL NEVER FAIL YOU
While 2020 was at times shockingly unpredictable, that uncertainty made us appreciate even more the value of a clear and well thought out property investment plan.
Things like having financial buffers – both for each property you own and personally – and a 10 to 15 year plan for cash flow and capital growth, will have protected many investors from significant loss during 2020.
Being clear about what phase of property investment you’re in – acquisition, consolidation or lifestyle – allows you to keep on track and keep moving towards your ultimate outcomes and goals.
This year will no doubt throw up its own curve balls as we recover from COVID-19 and start to discover the domestic and global new normal of economy, travel and investment.
Make sure you keep your mind open to all of the opportunities these challenges can present and make 2021 a year to remember for all of the right reasons.
2021 OUTLOOK AND BEYOND
Given the current landscape that we are in, and the changes that are taking place in the Australian property market – there several key factors to consider in order to get your long-term investing strategy right.
There has never been a better time to buy, but without the right team in your corner it’s easy to buy wrong. Set yourself up for success.
Book your spot now and find out what you need to know about the current market environment and how you can make it work for the ultimate wealth creation opportunities.