With one interest rate cut under our belts already this year and another one expected sooner rather than later, it’s time to take a look at your investment finances and ensure you’re making the most of these record low borrowing rates.
Rental yields on good investment properties are pretty close to current fixed interest rates and this has great cash flow implications for landlords. However, it’s not just about breaking even on rental income and interest rate expenses, now is also the right time to take a wider look at your portfolio. Ideally, you should also take advantage of the accumulated capital gain in your properties if you are repackaging your loans. Consider structuring your refinance package to keep aside enough cash or drawdown ability to give you the flexibility to buy another asset in the year ahead.
Although it’s too early to call the speed and prevalence of this year’s price gains, we are seeing some early signs of slightly softer prices for surplus stock left over from last year, including in Sydney, which might signal some good buying opportunities ahead.