Property investors who are worried about COVID-19’s impact on their returns should think long-term and take advantage of the market if they are in a position to do so, an industry expert has advised.
In a recent episode of The Smart Property Investment Show, Pure Property Investments director Paul Glossop explained how property investors can still get their finances in order through government assistance for workers who have been made unemployed.
“This is most certainly going to be something that takes a lot of navigating. There is no textbook or study that prepares anyone for what has happened over the last three months and what might happen in the next three months,” Mr Glossop said.
The property expert highlighted investors who might go through a difficult period that it is only for a short period of time as the economy reopens.
“This is very temporary. In all reality, this isn’t the new norm, this is somewhere between a three to six-month time frame,” Mr Glossop said.
He also said that landlords who have done the right thing by their tenants in the past are less likely to be impacted by rent reductions.
“I’ve always advocated to landlords to be accommodating within reason so your tenants become considerate of you as your landlord.”
“What that ends up doing is creating an ecosystem of a give-and-take situation,” Mr Glossop said.
“In these situations, when you have a little bit of hard times, you don’t get these requests saying, ‘Bugger you, you’ve been a bastard, and now I’m going to stick it to you’,” he continued.
Mr Glossop also explained that the conversations he is having with clients is changing, with investors looking to build wealth and capitalise on a lower cost of debt.
“There is an amazing situation in which I’m seeing some of our clients all of sudden become opportunistic about maximising their cash flow and looking at next investments,” Mr Glossop said.
“That’s our role. We catch up with clients every six months for the life of the property. That is part of the service we have to provide. And that is whether they are having a child, have been made redundant from a role, looking to build a portfolio to the next investment right through to developing granny flats and selling, there’s so much to discuss,” Mr Glossop said.
Mr Glossop advised investors who are looking to improve their position to start by looking at the structure of their mortgages, with the opportunity in a low rate environment to save thousands of dollars.
“I think the first thing I would be doing right now is look at where my debt sits right now. Understanding debt structures and understanding the next steps with the finances, that is the opportunity right now,” Mr Glossop concluded.