Investors who have been in the market for a long time will tell you that there is always an opportunity to make money in any market if you have the resources and know what you are doing. Whether the market is up or down, there is a strategy to make money. However, sometimes there is an opportunity that is so great that it has to be taken advantage of—today’s interest rates are that kind of opportunity.
There has been so much publicity about interest rates being historically low that many would-be investors have become desensitised to the news. The record low rates are something that may never come around again. When combined with the very real possibility that the next fifteen years may see record rises in home prices, possibly even pricing some out of the market, we cannot be any more firm in our belief that now is the time to invest in property.
In as little as a year from now, investors who missed the boat will be talking about how they wished they had taken advantage of the low interest rates to buy now. Today’s record low rates represent an unprecedented opportunity to procure assets which can provide future wealth.
We urge anyone interested in investing to pull out all the stops and purchase as much rental property as possible. Between a housing market that hasn’t topped out yet and a rental market that is producing very good revenue, it is possible to achieve positive or neutral gearing on rental properties with interest only loans.
In normal times, the long-term rate for a home loan will fluctuate between 6% and 8%. Right now, many investors are procuring loans for less than 5% on a variable rate and less than 6% for a 5-year fixed rate. Many lenders are offering fixed rates that are on a par with variable rates or even below them. With a strong likelihood that variable rates will begin to rise toward the end of 2014, a 3- to 5-year loan at a current fixed rate would be a very good strategy.
Call us at Purely Finance: (08) 9453 8888. Our financial planners and mortgage brokers can help you invest in a Perth property before rates rise.