Growing your investment portfolio

It doesn’t matter if you’re a first time landlord, have one property or 30; if you want to grow your portfolio, now is the time to do it. Here’s why…

A recent survey by property information group RP Data found that house prices have fallen 5.3% over the past 12months. This makes it an ideal time to start or develop your investment portfolio - ‘strike while the irons hot,’ so to speak. Buyers are finding bargains in all kinds of suburbs across South Australia, with vendors getting desperate to sell and properties on the market for lengths of time, it’s the perfect opportunity to snap up a deal.

Property purchasers need to be brave and shun “the herd mentality,” McGrath’s CEO maintains.

“Markets have a herd mentality and following the crowd gives people a much needed sense of security, especially in this time of economic volatility,” he said. “Buyers need to be brave - this is exactly the type of market they will look back on and say, ‘I wish I’d bought in 2012’ ” (McGrath, J, 2012).

With increased pressure on the Reserve Bank of Australia for more rate cuts, property owners will continue to reap the rewards.

It is said that the intended effect of recent policy actions (to cut rates) is certainly not to pump up speculative demand for assets. The rate cuts would benefit mortgage holders by allowing them to pay down their home loan more quickly (news.com.au, 2012). Maintaining that the rate cuts will not help increase property prices, but will assist owners to pay off mortgages quicker and having a tenant in your property will certainly help.

A report from Real Estate Business Online states that “landlords continue to hold the upper hand over tenants with new data showing little movement in already tight residential vacancy rates” - this is great news for landlords across the state! Adelaide’s vacancy rate increased 0.2 per cent to 1.6 per cent, which is relatively small compared to other capital cities across Australia.

“We believe that until the property sales market begins to pick up, we will not see substantial relief for renters, and most capital cities (with Melbourne and Hobart being the exceptions) will remain a landlord’s market for the time being,” said Louis Christopher, Managing Director of SQM Research.

An abundance of properties perfect for rental are on the market right now, so if you are a landlord or thinking about becoming one, don’t wait too long - go out and grab a bargain!