Should property investors be worried about a recession?

More and more people seem to be talking about an incoming recession in 2020.

Australia has not had a recession since 1990-91 however Australia’s GDP growth was only 1.4 per cent in the 2019 Financial Year.

The formal definition of recession is, two consecutive quarters of negative GDP growth.

Technically we are not in a recession but clearly, economic conditions are pretty weak, even after our population growth has been taken into account.

So what do the experts say property investors should do, to help insulate their portfolios from the weakening conditions?

We asked some of the most successful investors that we know and here are there tips:

·       Focus on high-yielding properties( don’t worry about capital-growth)

·       Only look for positive or neutral cash-flow properties and get rid of negative cash-flow properties

·       Invest in properties and areas with vacancy rates below 2% (like the short-term market)

·       Invest in markets that haven’t reached their peak

·       Look for suburbs/markets with long term demand

·       Don’t over-leverage and make sure you have a long-term strategy

·       Buy below market value- never above

·       Always consider a property’s highest use and its’ potential to manufacture growth

·       Build a strong buffer and try boost your cash-flow

·       Avoid speculation and most importantly, ditch your over-paid property manager and manage your property with RealRenta, for less than a quarter of what a traditional property manager charges.

Start your Free Trial of RealRenta here: https://app.realrenta.com/Signup.aspx


Jason Gwerder
Monday, 4 November 2019

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