So, in real terms, you may actually not experience a lower net return on your property.Posted by Beyond Property Management Pty Ltd on Thursday, May 14, 2020
Today, Heather Jopson from Beyond Property Management asks the question ‘is it better to sell or rent in the current COVID-19 environment?’
Watch the video to find out more.
Transcript for: ‘Is It Better to Sell or Rent in the Current COVID-19 Environment?’
Hi, I’m Heather Jopson from Beyond Property Management and I just wanted to give a little bit of perspective and reassurance today to landlords out there who are experienced a lot of panic about their rental return in the current COVID-19 environment.
So, let’s just have a look at some numbers. These are not predictions, they’re just numbers to provide some reassurance and perspective on investment properties out there.
So, if you have a $500,000 house and if, this sales market experiences a 10% downturn; Then you will cash up or realise a $50,000 loss compared to what your property used to be worth.
If, the rental market experiences a similar downturn, then you may face, on a $500 per week property, a $2,600-year loss over the coming 12 months. If you chose to rent out a home instead of sell it.
There’s way that you can offset that as well. You can go to your bank and negotiate an interest rate reduction because interest rates a really low at the moment.
So, in real terms, you may actually not experience a lower net return on your property. So, I hope this gives some perspective, some potential numbers without this being a prediction of any sort but just to help people to start thinking in a numbers-based, investor-type mindset again rather than in the chaos and panic out there.
We hope that’s been helpful.