2021, Is it the Best Year to Buy Property?
Have you been looking into the idea of becoming a landlord – but then 2020 happened, and all of your plans went out the window?
It’s true that 2020 has delivered a number of challenges to property owners, particularly those investors who had non-paying tenants who they legally weren’t allowed to evict.
The moratorium on evictions has now ended, and balance is not just returning to rental markets and in many cases, rental markets are booming.
But it’s not the only reason; there are plenty of other factors that mean 2021 is shaping up to be an attractive year to purchase an investment property, and it includes:
The Fact That Investment Loans Have Never Been Cheaper
We are getting mortgage deals for our clients that are the most competitive that we ever seen, and we have been in the finance industry for over three decades.
Landlords who were paying over 4% for their investment home loans this time last year, may now be eligible to apply for a residential mortgage as low as 1.99%. Not sure what’s available or how munch you could save? Get in touch with our friendly team for an obligation-free appraisal,
The Fact That Now is the Ideal Time to Negotiate a Bargain
Did you know that the government is estimating up to 500,000 jobs will be lost, once the JobKeeper and JobSeeker programs are rolled back in March?
When this happens, it’s possible that mortgage defaults will increase for everyday mortgage holders. It may also be the case that investors who are struggling to manage their investments or their businesses, may offload their properties.
This puts you in a prime position to negotiate a good price on the investment property you have your eye on.
The Fact that You can “Rent-vest” to Access Grants and Incentives
First-time buyers can access a number of government incentives that are not available to investors.
But that doesn’t mean they’re totally inaccessible. If you’re a first homebuyer, then you may be able to use a reinvesting strategy that allows you to leverage these grants and schemes to buy a home.
You can live in for 12 months, to satisfy the rules of each program and incentive, then rent it out as an investment, while you live somewhere cheaper. You may be able to access tens of thousands of dollars worth of first homebuyer grants, incentives and discounts this way.
The Fact That You May Be Able to Borrow More Than You Thought
With record-low interest rates in the market, which look like they’re here to stay for at least the next few years, right now it is the most affordable it’s ever been to get a loan and you may be able to borrow more money from banks than you were eligible for in the past.
This time last year, your borrowing power may have been $600,000. Now with interest rates so much lower, it could have jumped to $700,000.
Frequently Asked Questions
Why is 2021 Considered a Good Year for Property Investment?
2021 is considered a good year for property investment due to several factors such as low investment loan rates, the end of the eviction moratorium, and opportunities to negotiate a bargain due to economic changes.
What is "Rent-vesting" and How Can It Benefit Me?
"Rent-vesting" is a strategy where first-time buyers can access government incentives by buying a home to live in for 12 months and then renting it out as an investment property. This allows you to leverage grants and schemes.
How Have Lower Interest Rates Affected Borrowing Power?
With record-low interest rates, you may be able to borrow more money from banks than you were eligible for in the past. For example, your borrowing power may have increased from $600,000 to $700,000 due to lower interest rates.
What Should I Do if I'm Not Sure I'll Qualify for an Investment Property Loan?
If you're unsure about qualifying for an investment property loan, Zippy Financial can review your situation and provide pointers about changes you could make, such as consolidating debts or rearranging credit cards, to improve your financial position.
What are the Risks of Investing in Property in 2021?
While 2021 offers several advantages for property investment, there are also risks such as market volatility and potential changes in government policies that could affect property taxes or interest rates.
How Can Zippy Financial Assist with My Property Investment Plans?
Zippy Financial offers professional guidance to help clients make informed decisions about their property investments. They can provide insights on whether to go for a fixed or variable rate, how to leverage government schemes, and other strategies to maximize your investment.
You don’t know unless you find out!
So, for those of you who can see the potential financial rewards of investing in property in 2021, get in touch today. We can help you assess your borrowing power and give you an understanding of how much a bank or lender might be willing to lend to you.
If you are not sure that you’ll qualify for a loan for an investment property, we can review your situation and give you pointers about changes you could make, such as consolidating debts, or rearranging your credit cards, to improve your financial position.
Phone: 1300 855 022
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
