With rising property prices and very low interest rates, now could be the time to unlock the equity in your current properties and secure a new rental property.
Should you sell your rental or buy an investment property?
The normal rule with property investment is to buy when most are selling.
This strategy does require some nerve, however it’s important to keep in mind that many Western Australians are returning home and moving back into their rental properties, or are electing to sell their rental property for various reasons. This means the rental demand from tenants in a low supply market is just growing and growing. This tightness in the market has and will continue to push rent prices higher and higher.
Is now the right time to invest in property?
Already we are seeing some rental properties in the Rockingham area achieve a 7% to 8% return on investment pre-borrowings. Even with banks now offering a higher interest rate on property investment loans, it’s still well worth running the numbers.
Real estate investment has always been a long-term thing. Some say 5 years minimum, although others would argue 10 years minimum. All aside, the most attractive thing about real estate investment is that it’s bricks and mortar and it will always exist. Unlike other investments which can just disappear, never to return.
Take a long-term approach to property, ride the highs and lows, and at retirement age, you will have a very nice nest egg.