There has been a lot of doom and gloom talk about the market. If you get too much into the drama, you risk missing the opportunities and that’s what I want to talk about today.
Every cloud has a silver lining
Before I get into that, let’s get one thing straight. There is no ONE market. Every street in Australia is its own little property market , every apartment building, every suburb or town.
Some areas have been hit harder than others and some have not been affected at all.
A well respected property researcher when asked if it was the right time to buy, said: “ the question should be – where is it the right time to buy?”. Such is the nature of the property market, if it is doom and gloom in one area there will be boom somewhere else.
Those who have bought in Sydney and Melbourne in the heat of the market might be finding it hard to see the silver lining just yet but for those who have been struggling to get into the market, now is your time.
While it is harder to get finance, vendors are much more open to creativity such as vendor finance so put your thinking cap on and see what you can produce.
One of our JV teams recently purchased a superb little doer-upper in Edgecliff. If they had bought it 12 months ago, they would have paid around about 20% more.
So being able to buy at that lower price certainly makes the viability of the project much more comfortable and builds in a nice little buffer.
Theres a newer and much more profitable plan B
A dip in the market is a harsh reminder that you are playing with the devil. So if you have completed a project ,your timing sucks!! Don’t worry, you are not alone, mine does too!!! However, I have good news. In the past your best option was to rent the property out while you ride out the storm. This was always problematic as handing over your masterpiece to a tenant is never a good feeling and with yields also in the doldrums, you’re probably paying for the privilege.
Short term rental has turned this on its head. Now you may have the option to list on short term market and enjoy much higher returns enabling you to cover your costs and have ongoing access if you need to show potential buyers through. Incidentally, higher vacancy rates make some landlords more open to sublet which opens up great opportunities for those who don’t have sufficient cash flow to generate cash using other people’s property.
Flick the mindset switch
The great opportunity of a drop in the market is that it forces you to think outside the square, to step outside your comfort zone and to go where you might not have gone before.
It’s easy to be successful when you are riding high on the market. Comfort kills creativity and drive. It takes pressure to make a diamond and I wholeheartedly believe that adversity is the path to greatness.
So if your are challenged by the state of the market, try flicking the switch on your mindset.
Swap out those feelings of disappointment and frustration to gratitude and curiosity. Take up the opportunity for creating greatness that adversity brings.