Directors Cut – Seeing Opportunity
With the current Coronavirus crisis hitting all economies at the moment, things are very uncertain. But, for those that can see through the uncertainty, can see the opportunity, they will be the ones who flourish after this Pandemic has run its course.
When investing in property, your decision should be long term; particularly if you are investing for rental purposes. When this current pandemic has run its course, there will be an ever increasing need for rentals; as WA has less than a 2.2% rental vacancy rate at the moment. Also, with interest rates at historic lows, most rentals will be positively geared whilst providing you with a depreciation schedule for any new or near new properties. This should mean any income that you receive from the rental of your new property could be tax free.
Looking at the long term, say 10 years plus, do you think that your property price will be higher or lower than they currently are? I personally think that all properties will be considerably higher in 10 years time due to supply and demand in WA and also considering that all Governments are pumping billions and trillions into the world economies. This will no doubt trigger inflation and most countries will likely go on an infrastructure boost so that economies recover quicker. I believe that this will create a massive demand for natural resources including iron ore; of which WA is the worlds largest supplier. Additionally, with the weakness of the Australian dollar, other countries will look at Australia as excellent value for money.
I know you have probably heard this many times but there has truly never been a better time to build your next investment property in WA. Prices are low, holding costs are low and the demand for rentals is very high. You will also be helping the WA economy recover as every dollar spent on construction has a massive flow on effect in the economy.
Just think about that for a minute. Property is generally considered a stable investment. There is a continued demand for quality rentals and the current low interest rates mean that your rental property is likely to create positive cash flow. Well that’s the opportunity I see and that is why I will be taking advantage of the current market conditions to help set my family up for the future.