Some Say HNY! I Say Happy Life...
No one knows what is going to happen in the next 12 months, never mind the next 12 years. And if they tell you they do, run a mile! We don't have crystal balls.
But what if I told you there are opportunities to invest in property that will be secure regardless of the end game?
There are 3 common opinions about what may or may not happen:
- A "V" shaped recovery. This is where we see the bottom of the market and then a sharp recovery. These supporters will say we have already seen that begin, and we have. But will it continue?
- A massive depression mid-year once the government withdraws all of its fiscal support. This could also be impacted by off-shore conditions which are in far worse fiscal shape than we are.
- Status quo with the recovery already finished and now we will see normal market conditions.
All of these scenarios have merit and are possible. Or it could be a mix of each of the theories. This is my thinking as each market and each asset class will be impacted differently.
I also believe that regardless of what likely scenario plays out, investing in a Class 1B rooming house (or studio homes, co-living, NGBH, what ever you want to call them) will put you in the absolute best position to insulate yourself against any future market conditions and fluctuations.
Here's why:
Scenario 1 - You will ride the tsunami of capital growth and increased rent with everyone else. Only your rental increases will be 5 - 9 times greater than everyone else.
Scenario 2 - Affordable accommodation will ensure perpetual demand for this type of lifestyle. These will replace 1 and 2 bedroom apartments for many. Worse case scenario you can align yourself with NFP organisations who have huge waiting lists with tenants able to pay between $180 - $220 per week rent, government guaranteed. Tonight there will be 1200 people sleeping rough, and they make up just 5% of the homeless as the rest take up spots in refuge or emergency accommodation or are couch surfing.
Scenario 3 - Right now my clients are replacing their incomes with just one or two of these investments, giving them the financial freedom to choose how they spend their life. That's everyone's end game isnt it?
That's my 2cents, I would love to hear yours!