Investing Once The Moratorium Ends
The vaccine is here and there is hope on the horizon. So what does this mean for property investing once the moratorium ends?
If you already owned rental investments in your property portfolio, there are now a few choices to make. The economic fallout of the pandemic meant that many landlord’s were either locked into rental payments or even in the position where their tenants were unable to pay rent at all. Now that the moratorium on rents has ended, coupled with a rental shortage in Perth, there is the option of going for gold and increasing rents in order to recoup losses and even make a profit. As the saying goes ‘make hay while the sun shines’!
But we also need to remember the human side of this crisis. There would be many tenants out there who have now been dealt the double whammy of the moratorium ending and JobKeeper also being discontinued. Staring down the barrel of increased rents and being at risk of losing your job would be incredibly stressful. So where does this leave landlords?
In all our years of investing, we have always worked on the premise of win-win; making sure there is always something in it for all parties involved. In this case, it might mean a small rent increase for now, followed by a review in a few months once things have settled. Keeping in mind that it’s always better to have some rent coming in than none at all!
If you are just looking into starting or building your rental investment portfolio, now is the time to get the ball rolling! The Federal & State building grants have caused a flurry of activity in the owner/occupier sector that will probably last for the next 18-24 months. Yes, this has also caused material and labour price increases but we are also seeing significant increases in capital growth. Building a new investment property has multiple benefits including adding a more desirable product option to the market as well as depreciation and taking advantage of low interest rates. Given that the preliminary process of sourcing land, settlement, subdividing (if applicable), concept designs, planning and finance approvals are taking months, this will put you in the position of starting to build once the initial ‘rush’ from the grants is starting to taper off.
Whether you already own a tenanted rental property or are looking to build a new investment, things are looking on the up for Perth property investors!