“More supply leads to a less competitive market.”
Increased investor activity also has the potential to affect rents in other markets, she says. “If more investors enter the market and purchase investments, this will increase supply for renters and may put downward pressure on rents. It will also increase competition and sales pricing.”
What could an economic downturn mean for landlords?
Treasury modelling says Donald Trump’s tariffs will have only a modest effect on Australia’s economy, but it’s worth noting that interest rates generally come down because the economy needs a boost. Sometimes it’s because the economy’s in recession and people are losing their jobs.
Landlords can protect their investments in a slowing economy by focusing on cashflow and the retention of quality tenants, Crarey advises.
“Retaining a good tenant in these more uncertain times is critical to ensure that landlords are getting a return on their investment and reduce the possibility of long vacancy periods. A big part in retaining good tenants is making sure their investments are maintained properly and in a timely manner.”
In what other ways can property investors protect their investments in uncertain times?
Even at the best of times, no one really knows what the future holds for property prices, rents, interest rates or the economy. And in the current global environment, it’s even harder to predict what lies ahead.
This uncertainty makes it vital that property investors take steps to manage risk and protect their investments, Crarey says.
“One strategy for this is ensuring they have a cash surplus to perform maintenance in a timely manner and to cover extra costs that could be incurred, such as a vacancy period.
Investors looking for properties to purchase and wanting to save money should consider those that are low maintenance and have been well maintained.”
It’s a good idea to engage a property manager, Crarey says. “They will ensure your investment property is kept in line with current market rents and meet compliance requirements and maintenance requests.”
Considering landlord insurance is equally important.
“Even with great tenants and an excellent property management team, things could still go wrong,” says Carey. We see tenants lose their jobs and go into rent arrears, and even see accidental or malicious damage occurring. Without insurance cover, these can create financial stress for landlords.”
Terri Scheer is Australia’s leading landlord insurance specialist. For more information, visit terrischeer.com.au.
Insurance issued by AAI Limited ABN 48 005 297 807 trading as Terri Scheer. Read the Product Disclosure Statement before buying this insurance. Go to terrischeer.com.au for a copy. Target Market Determination also available. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.
The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon it — please make your own enquiries.