When Is a Good Time to Start Property Investing?

From providing a steady stream of passive income to capital growth and offering tax advantages, there’s a stack of reasons why investors like to add a property or two to their investment portfolio. But when it comes to property investment, the trick to maximising your returns often lies in when you enter the market. 

Follow our guide to help you find the best time to buy an investment property.

When should I start property investing?

When it comes to picking the prime time to purchase an investment property, there are no hard and fast rules. Instead, finding the right time comes down to your financial circumstances, the market conditions and your investment goals. Ultimately, you want to make sure you’re in a position to be able to comfortably afford to buy and maintain an investment property. But snagging a property at a good price never hurt either… 

Before you get stuck into analysing whether or not now is the time to invest in property, it’s important to first understand what your long-term financial goals are. Are you looking to generate rental yield or are you aiming for capital growth? By understanding your goals and objectives, you can find an investment strategy that works for you, which will ultimately help to guide your decision-making. 

With that said, here are 5 important factors that you should consider if you’re trying to find the best time to invest in property.

Your financial position

One of the most important factors to consider before investing in property is whether or not you can actually afford to do so. Even if all the other factors indicate that it’s an ideal time to invest, there’s not much point in getting the ball rolling if you don’t have the funds to follow through with it.

When it comes to reviewing your financial position, there are a few points to consider, like your income, expenses and debts. As it so happens, these are also some of the main factors that banks and lenders will assess when it comes to determining your borrowing power and whether you’re a suitable candidate for a home loan. 

Essentially, you’ll want to make sure you’ve got a stable job and a steady stream of income. You’ll also want to do your best to minimise your debt and practice responsible spending habits.

You can read more about the factors that impact your borrowing power here. Otherwise, you can use our borrowing power calculator to get a better idea of how much you might be able to borrow. 

From here on out, all the other factors are outside of your control.

Market conditions

The property market is cyclical. It goes through periods of growth, stability, and decline. If you’re looking to get your foot in the door of the property market, it’s often worth trying to buy during a downturn to take advantage of lower property prices. But that’s not to say you shouldn’t pull the trigger on an investment property during periods of growth if you’re in a position to buy.

Ultimately, you need to do your research on the real estate market conditions. Keep an eye out for signs of growth and increasing property prices. But remember, just because one area is experiencing growth doesn’t mean that everywhere is. 

Future developments

More often than not, property investment is a long-term game, so it’s important to consider the current market conditions as well as the potential for future growth. If you’re interested in an area, it can be worth looking into future infrastructure developments. These types of developments can help to improve an area and potentially lead to capital growth later down the track.

Interest rates

Interest rates are constantly fluctuating which then impacts the cost of borrowing money to purchase an investment property. When interest rates are low, it means that borrowing costs are lower, which could potentially increase your return on investment, making it a more appealing time to buy. On the flip side, higher interest rates lead to higher borrowing costs, which could make it more difficult to enter into the property market.

With that said, it’s also worth looking at the overall economic conditions in Australia. A stable and growing economy often correlates with a healthy real estate market.

Rental market strength

For many property investors, rental yield is a key factor in their decision to invest, so keep your eyes peeled for areas with high rental demand. If you’re planning on following the rental yield route yourself, look for areas with low vacancy rates and high rental yields. 

It can also help to do your research on the rental market demographics. This can help guide you in your choice of property. By purchasing an investment property that appeals to the local tenant pool, you’re more likely to have better luck renting it out. A property in good condition with modern features, good security and energy efficiency is often more appealing to tenants. It’s also worth looking at its proximity to amenities, like public transport, schools, and shopping centres.                        

When it comes to property investment, there’s no right or wrong time but rather whenever you’re good and ready. Ultimately, your investment decisions should align with your overall financial plan and goals. Investing in property doesn’t come without risk, so it’s important to do your research before making any investment decisions. You might even want to consider consulting with a financial advisor, mortgage broker or tax accountant for more tailored advice based on your circumstances. 

If you’re looking to refinance your home loan to fund your investment property, check out what’s on offer at Unloan. From competitive interest rates to an annual loyalty discount, there’s plenty to love about an Unloan home loan. Check your eligibility or apply today. 

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval; satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000. 

Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

There are no fees from Unloan. However, there are some mandatory Government costs depending on your state when switching your home loan. For convenience, Unloan adds this amount to the loan balance on settlement.

* Other third-party fees may apply. Government charges may apply. Your other lender may charge an exit fee when refinancing.