Q. What If Interest Rates Rise?
The Reserve Bank of Australia (RBA) raises interest rates to curb inflation. In an inflationary period, rent often goes up by more than usual, which helps to compensate you for any effect on cash flow.
Q. What If Negative Gearing Is Abolished?
When negative gearing was abolished back in the 1980s, rents sky-rocketed and unemployment in the building and allied industries soared. After 18 months, the Government re-introduced negative gearing and it’s doubtful it will be abolished again. Although the topic is often revisited, it is well recognised that the government needs to encourage investors into the property market to stimulate housing construction and provide subsidised (negatively geared) rental accommodation
Q. Is There A “Good” Or “Bad Time” To Invest In Property?
Throughout history there have always been ‘bad times’ to invest in property. Despite this, an analysis of property price growth over many years reveals that historically, prices generally rise between 2% – 4% above the prevailing inflation rate. No one can predict future values, however history shows that property prices in Australia will double over a period of time. Viewed as a long term investment, quality property in selective locations overrides the short term “bad times”
Q. What If I Can’t Find A Tenant?
Keeping your property rented is a high priority. Our Leasing department helps you source tenants quickly by liaising with multiple external property management agencies.
Q. Why Should I Borrow Money To Invest When I’ve Been Taught Not To?
The wealthy get wealthier by ‘leveraging’ to buy assets that increase in value, so why shouldn’t we? Borrowing to invest in appreciating assets (such as a well-located property) is considered ‘good’ rather than ‘bad’ debt and provides legal tax minimisation benefits. It is much easier to create wealth using careful borrowing and investment strategies compared to saving your hard earned after tax income
Q. How Do I Know If I Can Afford To Hold An Investment Property?
The first step in starting an investment portfolio is to gain a good understanding of your financial situation and the likely costs to hold a typical property in your price range. Our suggested strategy is designed for people on average incomes (or above) but is self-paced and progresses as and when you can afford it. Invest Hibbards will help you assess the likely costs to buy and hold a property using our cash flow analysis software, and our approved finance brokers can advise on your lending ability. It’s important that you feel comfortable with the financial commitment before you begin investing.
Q. What If I Can’t Work Or Lose My Job?
The possibility of losing your job can create the fear that prevents you ever investing and getting ahead. There are insurance options available that can replace your income if you stop work due to accident or illness. Job Losses from redundancy are often only short term. However, if this is a concern we can recommend strategies that may help you through such times. Ask your consultant for more information.
How Will I Be Able To Hold My Investment Property?
Look for specific investments with good tenant demand and rental returns without overburdening expenses so that they are suitable for average income earners. The properties we select for our investors are carefully researched to ensure minimal cash outlay. We can show you how to hold your investment properties without biting too much into your regular income. By setting up an appropriate finance structure, claiming your tax deductions and maximising your rents, your investment property could pay most, if not all, of the bills. Your consultant will show you estimated cash flow on your selected property using our analysis software. This program helps you see the expected weekly out-of-pocket costs. This free service helps you analyse the true costs of holding the property and assists you to build your portfolio wisely
Q. How Are Areas Chosen For Good Rentals And Capital Growth?
We research the rental market and target high-density areas with the lowest vacancy rates. Rental returns and property price growth is largely driven upwards in areas where demand exceeds supply. Invest Hibbards understands the economic principles of supply and demand, avoiding areas where oversupply may stall, or even drive prices down. By following Invest Hibbards’ established selection criteria, capital growth and rental increases can be optimised.