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How to secure a strong prospect in a stalling market
If you are looking to purchase property in the current downturn, there’s a number of ways you can ensure you are making a sound investment decision, a buyer’s agent has told nestegg.
How to secure a strong prospect in a stalling market
If you are looking to purchase property in the current downturn, there’s a number of ways you can ensure you are making a sound investment decision, a buyer’s agent has told nestegg.
Director of Australian Property Scout Sam Gordon has highlighted that “there may never be a better time than right now to pick up that next property you need for a discounted price compared to what may have been possible even as recently as the start of this year”.
He’s urging punters: “Don’t let the fear of the market and the media stop you from pulling the trigger if you have the ability to purchase property right now.”
And while it’s not a decision to take lightly, those who have a stable job and solid buffers are at a distinct advantage.
For anyone who is considering taking the plunge, Mr Gordon outlined the steps investors can take in the current climate to ensure they are only purchasing the best possible rental prospects, noting that “there are many ways to ensure you are making a sound investment decision” and ensure a return on investment or the safeguarding of future cash flow.
Some of these considerations include:
- Reviewing the tenant and where their income is coming from;
- How much disposable income they have based on their employment and current income;
- How long the tenant has been in the property, and
- Whether or not the tenant had any problems with arrears before all this mess, which can be found on the rental ledger.
Where a property is currently vacant, Mr Gordon recommends negotiating an extended settlement “so you have longer to source a suitable tenant for your property”.
But how long can you expect current market opportunities to last?
nestegg also asked Mr Gordon how he expects the market to change in the next six months, to which he revealed the belief that there’s one of two ways the property market could go.
He did forewarn that “this is really crystal ball gazing” and will depend on the ongoing COVID-19 situation.
“If it prolongs into more than the next several months, there will be a moderate depression in the housing market I believe, [but] if it clears up before that, the market will bounce back in a strong way.”
“Say the market clears up coming out of the Aussie winter into spring, which is predominantly when people go to market and people look to move or upgrade, if this coincides with a lot of people flooding back into the market with returning confidence, prices could spike very quickly,” Mr Gordon offered.
He observed that a lot of growth markets have stalled around Australia, which has opened up “the opportunity to pounce with fewer buyers around”.
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