Why “Middle of the Road” Property is a Safe Investment

Working from home for the past few weeks, as many of us are now doing, has surprisingly been my busiest period for some time.

An unusual number of cash buyers have made contact looking for somewhere safe to put their money as they see property as being that safe haven, and we are still offering guaranteed rental returns (which further reduces risk).

Many have been advised by their accountants or financial advisors that they need to safeguard their funds and are advising them to buy property, or so I am being told.

With this in mind I want to give you an overview of how I see the property market and why bricks and mortar might be a great option for your money – now more than ever.

I wasn’t sure about whether now was the best time to send you this update with everything going on in the world, but in the end I think it could be helpful to some of you but of course not all….

Whether you’re thinking of borrowing in this extremely low interest rate environment, or you have cash or a SMSF and want to purchase a physical asset such as property, either scenario would safeguard your money and if you’re not sure, ask your accountant or financial advisor for their opinion.

As you know, cash in the bank for many years has not offered great returns but it’s always felt safe.  Now, it’s offering virtually no return and we’ve also got to wonder is it as safe as we always thought?

My views on what we will see in the local market with the benefit of 35 years’ experience and past crisis time performance.

Analysis:

• High-end property prices will fall as some high nett worth individuals sell off their holiday palaces and some even their waterfront mansions as millions are lost in the share market.

• Some commercial real estate will come under the hammer as businesses and manufacturing companies shut up shop and default on their lease payments.

• High rise, high end apartments in holiday destinations which are popular with overseas visitors like the Gold Coast and Cairns may also start to fall in value as they did in the GFC (Gold Coast apartments were the only major property class which suffered losses in the GFC and took 3-5 years to recover)

Because of the basic fundamentals of the housing market, one class of property will NOT be affected:  middle of the road residential property.

What I mean by ‘middle of the road’ are the houses which are in highest demand on the property curve for a specific region.

These middle of the road properties are not over (or under) capitalised.  This profile is ALWAYS city, suburb and even land-estate specific.

The profile of a middle of the road property will change depending on where you are looking to invest.

The power of middle of the road bricks and mortar

For example, for the Sunshine Coast ‘middle of the road’ property value is between $430,000 and about $600,000.

This is where the return on investment and rental yield is at its maximum.

Much lower than this and you’re buying the worst house in the street; much higher than this then you have probably over capitalised - which is okay if it’s your home and you want all the bells and whistles…but not if you want to maximise your financial returns.

 In challenging times like this the safest place for your savings could just be middle of the road property.

We have been building homes and investment properties in SE QLD for over 35 years so we know what works and what is secure.

So, we can help you get fast answers to all the common questions, such as:

• What areas in SE Qld are safest based on performance?
• What types of property are best for specific areas?
• Which developers and which specific estates are positioned to deliver maximum returns and the maximum growth for investors in a volatile market?

And the big one:  What should the middle of the road investment look like for me?

We are so confident in our product we offer a fully transparent 3-year rental guarantee that comes with no fine print or hidden costs.

 If you have any doubts, and think this is some kind of gimmick, pick up the phone and call me so I can explain - or this video might also help (insert link to 3-year rental video)

With guaranteed rental returns of 5%, why would anyone keep the cash in the bank?

Stay well,

JD