A Lending Boom Is Coming Are You Ready?
Tick, tick, BOOM! How to prepare for the lending explosion
After a lot of bad news over the past 12 months – thanks a lot COVID-19 – it’s nice to be able to kick off 2021 with some good news. There’s going to be a lending boom which, if you have your property investment strategy in place, is going to make your life a whole lot easier so you can build your property portfolio faster and cheaper.
WHY IS LENDING SO IMPORTANT TO PROPERTY INVESTORS?
Most property investors need to borrow money to be able to invest. High-interest rates can make borrowing cash an expensive thing to do.
But with interest-rates at a record low, and predictions keeping them there for the next few years, suddenly investing in property is more accessible to more people.
WHY IS PROPERTY THE RIGHT HOME FOR MY CASH?
Once upon a time, high deposit rates meant our grandparents could bank their savings and watch the dollar amount go up and up. Those fairy tales died out years ago. Deposit rates are woeful now and having your cash sitting in a bank is pretty worthless.
The property market is a better place for your cash because, when done right, it can generate an income. The more properties, the more income, the better off you are.
BORROW AND BUY – BUT BUY THE RIGHT PROPERTY!
Combined with the lending boom we’re currently in, we also have a supply issue in real estate. Partly due to foreign investment being cut, and repercussions of COVID-19, there is a lack of new builds available.
The danger in this is that with cash being cheap to borrow and lending being a new opportunity for many, people are subject to panic. They don’t want to miss out on the lending boom, so they buy an over-priced property that doesn’t have the liveability factor, the walk score, or the Third Space it needs to be an income generating investment.
In short, don’t just buy anything. The rules of property investment still apply. Buy property close to burgeoning infrastructure, good job opportunities and industry. Buy a property in an area with desirable liveability factors, such as green space and social areas. Buy a style of property that is in demand in the area and buy good quality property that’s been constructed by a developer and builder with good credentials.
GET READY AND GO FOR IT
While we expect to see low interest-rates for some years, the property market is an ever-changing, fluid thing, and things can shift quickly. Don’t just watch this space, get yourself ready to act. Seek out property investing experts, start researching what areas are booming, get your numbers in line and be ready to buy good property and hold it for a long time. This is the time to act and not look back in three to five years and wish you’d bought into the market when you could afford to borrow the cash to do it.
HOW TO ESTABLISH A CLEAR STRATEGY
Talk to the experts at Positive Real Estate, who together have decades of experience, about how to borrow and buy in the current market.
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