With home loan rates exceptionally low, interest rates on savings returning less than 2 per cent and overseas travel money still sitting in the purse, property investment is proving attractive.
Jack Childs of Think Investment Realty remembers the years when he was paying up to 16 per cent home loan interest.
He argues that with the current low interest rates, now is an excellent time for the younger generation to get into bricks and mortar.
“If you haven’t got a home now, you should try harder,” he says.
Mr Childs says many people are buying into property using equity.
“If you want to invest $500,000 in something else you have to come up with that money,” he says.
“With property you can invest in a property with as low as 10 per cent or even less sometimes and then you take advantage of the growth.”
The younger generation are also seeming to make smarter property decisions.
Mr Childs is noticing those younger people, who a few years ago were first-home buyers, are now getting into their first investment property.
“For those that haven’t done it as yet, they are setting their goals,” he says.
And when it comes to buying, Mr Childs adds, “the growth on the Coast in the last 12 months has been nothing short of marvellous.”
But it’s not a ‘get rich quick’ scheme.
“You need to have time in the market,” Mr Childs recommends. “A good property might take five to 15 years to mature.”
While we hear about successful investors in their 20s or 30s, retirees are also getting into the investment market eagerly looking for better returns on savings that traditionally they would hold in cash in interest-bearing bank deposits.
Help keep independent and fair Sunshine Coast news coming by subscribing to our free daily news feed. All it requires is your name and email. See SUBSCRIBE at the top of this article
Scout* at 71 has taken her spare cash out of the bank and put into two investment properties.
She had $850,000 on term deposit earning 2.7 per cent interest. “Then it went down to 0.2, like nothing,” Scout says.
Rather than dipping into her capital to live, Scout is now earning enough from the two rental units to match about a single age pension.
“Years ago, my mother said to me it’s all about bricks and mortar,” Scout says.
The cautious investor feels far more comfortable with this type of investment with their long-term tenants.
“Capital growth may not be important to her, but at least her money isn’t going backwards,” Mr Childs says.
*Name changed for privacy.