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Taking advantage of australia's low interest - blugm.com

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Taking advantage of australia's low interest - blugm.com

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Taking advantage of australia's low interest - blugm.com

  1. 1. Taking Advantage of Australia’s Low Interest rate environment The Reserve bank of Australia has kept the base interest rates at 0.75% but what does that mean everyday Australians? Many savvy investors are considering different means of conserving their wealth as they investigate options as far away as they can from the traditional savings account. The banks are not going to pass on the cash rate onto mortgages because they are focused on profit for their shareholders, but this does not mean you are going to have a hard time securing a good rate. The lower the cash rate the more room there is for negotiation on introductory rates. If you are a property investor on a variable loan or negative geared, now is a good time to consolidate or buy another property. People are moving away from their savings accounts and into other methods of investment to protect their wealth, so why shouldn’t you? By purchasing a property, you are buying into one the most stable and lucrative savings account’s there is. Focus on placing your rental income and additional savings from your paycheck into your offset account in order to pay less interest and lose less of your money to inflation. That should be your goal, to beat inflation of a bare minimum. Most rental properties will achieve a stable 3-4% income yield, so by making additional payments and accruing equity, you can take advantage of these low interest rates and rapidly build your property portfolio. Make the most of your portfolio before property prices skyrocket due to their demand or even run the risk of the Reserve Bank adjusting interest rates higher, meaning that you will lose out on a good deal.
  2. 2. Many savvy investors are going to be interested in investigating their options when it comes to sourcing a strong investment, so make sure you are doing the same. This website is full of guides and idea’s that get you in the right direction. Whilst this is a good time to get in the property market and buy up as much as you can, make sure you do as much research as you can to make sure that it’s a good investment for you and won’t run up costs. Avoid lemon properties as much as you can and if you are planning on going on a spending spree try to avoid properties which require renovations. You want to avoid as many unnecessary costs as possible as the interest’s rates are volatile and you’d want to manage your investment risk by mitigating costs.

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