The current state of the market both in Australia and the US is always a big talking point when I meet and chat to investors. Just this week, we held a workshop in Brisbane (great to have met a lot of you!) and I was asked if investing in rentals was still a good strategy if the market is starting to soften.
My personal opinion is “Absolutely!” From what I have found over the years is that in a softening market we have a number of factors at play. Firstly home owners can sometimes get nervous, particularly if the softening is also being accompanied with rising interest rates (which is what is happening in the larger markets in the US). These homeowners can then sometimes sell, and rent for a while, waiting for the market to improve and didn’t want to get stuck with a home that the value had dropped and/or couldn’t afford (the GFC has made many Americans very gun shy on owning homes). This puts more people in the rental market often increasing the demand and therefore, rents.
Second factor is that as some of the areas soften, the cost to get into rentals can get cheaper, more affordable as well, and with rents rising, this gives even more increased ROI on your investments!
Here is an article written recently by Abhi Golhar from Forbes Real Estate Council on this exact topic…Enjoy!
For any more information on this or if you have any other areas you would like me to cover in these newsletters, feel free to book a call with me to chat!