The best way to predict your future is to create it – Abraham Lincoln
For most of us, the futures we seek to create don’t quite match those lofty ambitions pursued by Lincoln.
In last week’s blog post, I shared my ‘why’ of property investment and how I intend to create my future by leveraging off the asset class. Absent a plan of action, however, your ‘why’ will likely languish in the too hard basket, amid dreams lost to procrastination.
What’s stopping you from taking action? Now, I don’t profess to be a mind reader but I can guess some of your concerns include:
- Is it the right time to invest?
More often than not, Australian investors don’t use the property cycle to their advantage; instead, they invest in high demand markets, opting to be one of the many sheep instead of the shepherd. Why? It takes more courage and foresight to be a shepherd than it does to be a sheep. Our capital city markets, although correlated, tend to lag one another with Sydney historically leading the pack. This leaves opportunities to be exploited during most points in a national property cycle.
- What about that property bubble?
The first thing I’ll point out is that the Australian property market has a long history of steady performance. For that perpetual talk of a bursting bubble to fall true we’d need no less than an economic meltdown, drastically higher interest rates, loss of jobs and an unprecedented evaporation of demand. The probability of one of these is unlikely, let alone all in unison. There hasn’t been a property crash in almost 130 years (since 1889), and yet it wouldn’t be hard to find 130 headlines that warned of an impending crash in the last six months alone! It seems as though some in the media have no qualms with being consistently wrong.
- Isn’t it too costly?
For the holding costs on a $500,000 property to be as they were in 2012 (when rents were at their highest), current rents would need to decline by 40%. Such is the effect of falling interest rates on your costs. It’s all about getting educated, really.
Don’t allow fear to stop you from creating your future. Get educated, establish a support network and take action.