How to skilfully attack the current market
Property investors that skilfully attack the current market could cocoon themselves from future market changes, including interest rate hikes or macro-prudential measures, an expert has said.
While some of today’s decision could negatively impact property investors in the future, others could act as shields against any impending market changes.
“Today’s circumstances, if you attach this right and construct it correctly, could potentially hold you in a better position at that moment in time when things start to taper off or if rates go up or if the handbrake is pulled,” Steve Waters from the Right Property Group said on a recent episode of Investing Insights.
According to Mr Waters, a planned approach is key when looking to build that extra layer of resilience that could protect you from future turbulences.
“A plan isn’t just a straight line. There have to be moments in time when you’re going to pivot a few degrees to take advantage of different opportunities.
“But if you go into this chasing nothing but growth, you’ll be the victim,” Mr Waters said.
He also warned first-time investors to keep their expectations in check.
“The thing with most investors in real estate when they’re starting out is that they’re actually looking at it from a month-to-month scenario, and the more growth we have in today’s environment, then they’re expecting to see this 2 per cent per month, or whatever it may be. But when that stops happening and you can’t measure it because it’s not in the media, the first reaction is, ‘Well, I’ll get out’.”
“And you go back to 2017 or the GFC and history will repeat itself. But if you’ve already got the cash flow within your own parameters, then the pulse of the market, whether it’s up 2 per cent or down 2 per cent, kind of becomes irrelevant, because you’ve got a larger time frame where you know where you’re going,” Mr Waters said.
He opined that “it will only be those people who can’t control the cash flow that will be the problem”.
For more tips from our Investing Insights trio, tune in to the latest episode here.
More from this writer:
-
Major bank says inflationary pressures on the way up
-
Housing markets brace for ‘tricky’ territory, but a rapid snapback could be on the cards
-
Australia’s build boom could end in 2022 as lack of migrants bites
-
Australia’s preliminary auction clearance rate just fell to a new low
-
Property market told to brace for more frequent natural disasters
-
Westpac warns of sharp economic contraction
-
Pioneering buyer’s agent reveals his secrets to building a fruitful property career