COVID-19 | Disaster or Opportunity?

Nick Lockhart
Nick Lockhart
March 28, 2020
Property News
COVID-19 | Disaster or Opportunity?

The two groups benefiting from the COVID-19 pandemic:

Jokes aside, never before has a single ‘thing’ been so influential. COVID-19 seems to have impacted every human on planet earth.

We may, or may not, soon learn that this was about more than just halting the spread of a virus but, putting aside any conspiracy theories, it’s vitally important we take the response directions that the government has given us seriously.

MRD takes this pandemic seriously. We are extremely mindful of people’s physical and financial wellbeing and your need to navigate these times prudently.

In a time of much uncertainty, we want to assure you that MRD will continue to partner with and support you on your wealth creation journey.

MRD is well positioned to continue partnering with you through this time

Fortunately, about a year ago, we made significant changes to our business and these now appear to have been a masterstroke (albeit an accidental one, perhaps).

The banking royal commission hurt us, which forced staff cuts. As our lease was up, we also relocated the business to our home, rather than one of our rentals, as we were about to.

After giving notice to our tenants we had an ‘ah-ha moment’. “Why evict tenants paying $500 a week in rent to move the business back in when our home sits empty most days?”

Each day we are confronted with situations, circumstances and/or events that will either evoke a reaction or a response. Reactions tend to be emotionally charged, while responses more considered and thought-through, in theory anyway.

At the scene of an accident you will have first responders, and first reactors.

Responders are welcomed as they are there to solve problems. Reactors are often irrational, incapable of offering support and, understandably, may add to the problem at hand. Successful people learn to respond when the overwhelming temptation is to react.

The COVID-19 pandemic is a direct threat to your health and wealth. Your immediate response will be with your health in mind, while appropriate medium and long term responses will be needed to secure your financial wellbeing.

MRD teaches that property investors are business owners; whether they know it or not! As the CEO of your investment property business you must decide what the most appropriate and timely responses should be. Where we can help you with this, we will. One such area is by securing you a better rate on your home and/or investment property loans; which now start as low as 2.19% - CAN YOU BELIEVE THAT?

The banking royal commission changed the business landscape for us and forced us to reassess our business model, and responded accordingly:

So, our virtual business model - coupled with the changes we made last year - perfectly positions MRD to continue to support you as you navigate this changing landscape to successfully build real wealth with real estate.

Food, clothing and shelter | Essential items

We do not expect a run on real estate as was the case with toilet paper; nevertheless, food, clothing and shelter are all essential items and things people need. Even in times of economic uncertainty, people still need a roof over their head.

As far as investment opportunities go, nothing that has transpired from the Coronavirus has eroded our confidence in well located, permanently let residential real estate. Our strong recommendation is to not make emotional (fear-based) decisions that are based on short term situations.

All Builders and Suppliers are still at work and going hard

After almost two decades in business we have ‘heard it all’ and ‘seen it all’! There are few surprises; albeit the impact COVIOD-19 is having on the entire world being one of them.

We have a very good working relationship with our preferred builders and suppliers and, as far as we know all of them are doing fine, despite all the craziness.

We do not expect any MRD client to be inconvenienced midway through a construction project because of a builder going broke. However, in the unlikely event that were to happen, legislative provisions mean that at worst a purchaser will be inconvenienced by delayed construction that incurs a slight increase in holding costs.

We cannot give ironclad assurances about other businesses, just that (as has always been the case) MRD is committed to partnering with you through your wealth creation journey; in times of ease and/or challenge.

That said, after careful consideration of every current client in the system and each and every home under construction, we anticipate no such challenges for MRD clients.

Even though grammatically incorrect, there is much truth in the saying: ‘in every obstacle is the seeds of a bigger and better opportunity’.

Home loan interest rates from 2.19%

Opportunities are not always obvious and sometimes we just need to look for them. For example, a positive that you can take from the current situation is that you will probably spend less time working and have more of it to hang out with your family.

Another bonus is just how incredibly inexpensive it is to borrow money these days. Of course, those living off interest earned are disadvantaged by low interest rates, but for homeowners and investors with mortgages it’s a huge win!

At the moment MRD can source home loans (for qualifying applicants) from 2.19%!

Just last week a highly valued MRD client called to ask if we could get him a better rate on the investment property that he had bought through us five years earlier.

The finance we arranged at the time was the best on offer (then), but this week James secured him a rate 1.15% below what he was paying.

That’s a saving of $4,600 a year and would pay for an overseas holiday; once travel is allowed again!

Protection for landlords

The National Cabinet is yet to make its announcement on how to protect tenants and landlords from the impact of COVID-19.

The reality of the situation is that with mass unemployment, many people will not be able to pay their rent. The government has to take action to avert the catastrophes that would be caused by either:

Still being at the early stages of this pandemic there are many unanswered questions; but we do not anticipate landlords being disadvantaged.

The government is acutely aware of the need to introduce legislation that protects unemployed landlords as well as unemployed tenants.

Our advice is simple… do not panic!

At the time of writing this, Friday afternoon 26th March, we are expectant of the government to soon announce measures of such mind-blowing significance that they will usher confidence quickly back into the economy.

Fear not. Do your bit and watch this space!

We are not socialists, nor do we subscribe to wealth redistribution.

In this current climate, addressing rental and mortgage affordability is an essential and necessary response from our government. It has nothing to do with socialism or wealth redistribution, but the protection of our entire economy and society.

Can we help right now?

We respect that you may have a lot on your mind and decision making may seem too hard right now. If that’s you then let us know if and when you have the head space to talk with us.

For those who want to have their existing loans reviewed and take advantage of rates as low as 2.19%, or discuss anything else that you feel we can assist you with, click the link below, leave your best contact details and we’ll come back to you within two working days.

Nick Lockhart

Nick Lockhart

MRD Property Expert
Nick is the Founder of MRD. Nick is in his element when he is inspiring, mentoring and teaching safe and responsible finance and investment strategies.

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