Buyer’s Agency urges property investors to focus on individual strategies
With the New Year’s celebrations well and truly behind us, property market predictions for 2018 have started to dominate the headlines. Forecasts on interest rate movement and price growth in capital cities are in vogue. There is also no shortage of advice on top performing suburbs for capital growth and rental return. So how should property investors really digest all this information?
With the strengthening Australian dollar, some economists predict that a rise in interest rates is imminent, suggesting that a slight rate increase, combined with more APRA restrictions, will likely discourage investors to enter the market.
Sound Property Group, a Sydney based Buyer’s Agency specialised in property investment, is urging investors to focus on their individual strategy first and foremost. “Investors are left to contemplate these predictions and often generic statistics, but in reality, there are different markets doing different things at different times”, according to Andrew Cull, Sound Property’s Director and Founder.
Mr. Cull welcomes the APRA changes, signalling that a market full of highly-leveraged investors, that may not be able to repay their loans, only increases the risk for everyone else in the market. When estimating cash flow, property investors should “overestimate expenses such as interest rates, and underestimate income. This will safeguard the investment against a possible interest rate rise”, he said.
“The starting point for anyone entering the property market, is to look at their own individual strategy and cashflow requirements. An investor’s personal circumstances and needs will most certainly change over time. For instance, a young family looking to grow their equity will require a different type of investment property, compared to someone close to retirement looking for cashflow. A long-term strategy will ensure these lifestyle changes are counted for” said Andrew.
Sound Property encourages clients to engage accountants, financial planners and mortgage brokers in the process, in order to obtain a holistic view of the investment. “Start with a tailored strategy, get a good team in place, buy in established areas with a proven track record, and finally don’t just buy into other’s predictions. These predictions may suit their needs, but may not suit yours”, Andrew recommends.