If you bought this property today – over the next 15 years – you’d top-up the property by $70,686 at today’s high-interest rates
If you bought the property at the same time last year when interest rates looked lower, you’d have to top-up the property by $125,429. That’s using last year’s interest rate projections.
Here’s the trade-off:
A property bought 1 year ago – when interest rates were lower – was expected to have:
- Better immediate cashflow, but would be
- Negatively geared for longer
Whereas that same property bought today will have:
- Worse initial cashflow, but
- will become positively geared more quickly
A trade-off of short-term pain but long-term gain.
So even though interest rates are nearly double, lower property prices have a long-term positive impact on cash flow.
But there’s no use having a better overall picture if you can’t get through the more challenging cash flow.
Remember, there are strategies you can use to help weather the storm during these higher-than-usual interest rate years.
Have a read of our last edition of private property or our article: 7 Strategies To Manage Your Investment Property Top Up