It is worth pondering exactly when is the appropriate time for someone to enter the investment property market (specifically NRAS)?
My answer has always been – when you can afford it.
I realize that is a somewhat simplistic response but in the many decades of being involved in the finance industry I have seen too many clients procrastinate over investing in property or worse – try and time the market around “the perfect time to invest” (whatever that means?).
I have seen just as many clients years later that regale stories of “woulda , shoulda, coulda” or commonly “if only I would have bought an investment property 10 years ago”. I’m sure that sounds familiar to many of you (of course I have my own stories of “if only I knew then what I know now!”)
The realities are its impossible to predict what is happening with capital growth except to say that over a reasonable period – it will be achieved. Look at the many (many!) economists nationally that tell us what interest rates are likely to do over the next 12 months and then when the predictions fail – its due to “unforseen circumstances”!
Someone should actually do a story on interest rate predictions V outcomes from these economists over the years. The %’s of accurate predictions would be low but yet we hear nothing about these predictions 6 months after they are made.
There are so many factors that affect both prices and capital growth potential but historically property prices have always gone up and as demand continues so will prices – simple.
All an investor can do is look at what they are buying and make sure location etc ticks all the appropriate boxes for potential capital growth (ie transport, schooling, hospitals, local infrastructure etc).
It is also a timely reminder that property should be considered a long term investment. Anyone entering into the property market right now and expecting massive capital growth in the next 2-3 years are kidding themselves.
All of this adds up to NRAS being a hugely attractive option for investment remembering
- It is a 10 year term for all the government benefits it provides
- The properties are all approved in high demand growth areas – determined by the government
- In most cases they are cash positive tax free!
- Vacancy rates of NRAS are and always have been close to ZERO
So the question is – when should you look to invest in a NRAS property.
The answer is if you can afford it – do it today.
If structured properly the investment will run itself and any capital growth will be achieved courtesy of the government with little or no financial input from yourself.
So where will you be in 10 years looking back – as an investor that took advantage of the NRAS government incentives or another story of “if only…”?