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A friend of mine just sent me this article that I thought you might be interested in. It was written By Bill Zheng, the founder of Investment Direct. Here it is …

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For property investors, 2009 in my opinion will be a very exciting year, a few unusual opportunities will arise during the year and it is definitely worth starting your preparation early in the year.

Here is what I can see the major changes coming in 2009, and they are surprisingly all good news:)!

1) Interest rates will probably drop further for a few months, probably to the point that many investment properties will experience positive cash flow for the first time.

Average interest rate in the last 30 years is about 10%, so interest rates ever get below 4%, it will be for a very short time, so you need to time it right and make sure both you and your lenders are in the position to lock in competitive fixed rates with good valuation figures.

2) Property investor’s income will increase further.

While we are not building enough houses mainly due to lack of finance and low developer confidence, we will see rental vacancy disappear and tenant’s willingness to pay more for each square meter.  In other words, this is the year you need to put some focus on how to increase your rental income and reduce cost.

3) We are entering a time when un-conventional property transactions will be more common.

This will enable property investors to pull off profitable deals that are less likely to be done during good times.  When traditional finance (from institutions) is less available or harder to get, it creates a market for non-traditional finance (from private individuals) if people still want to buy and sell properties.

In a climate that unconventional property transactions are more acceptable by vendors and real estate agents, active property investors can find themselves in a gold mine to make money with or without much of their own money.

4) A narrow window to sell properties at better than 2008 prices.

The global economy will be in severe recession for at least a couple of years, so the 2009 outlook is not optimistic around the world, but I will not be surprised to see a short rebound of property prices in certain areas in 2009.  For those who tried to sell some of their properties in 2008 for whatever reason but couldn’t, you may find another opportunity to do so in 2009.

In our April 2008 seminars, we predicted that Australia still had a few bullets to fire to prevent property prices drop significantly for another year, some of those bullets such as interest rates cuts (almost gone), budget surplus (gone), commodity boom (gone) and high Aussie dollars (almost gone) have already been fired, almost exactly to the script.

In 2009, I believe that we will be forced to fire the remaining of our bullets very fast in the first 6 months to keep the economy alive, these will include further interest rate cuts (at least 2% more), budget deficit (tax cut & government expenditure), public debt (government borrowing to offset the drop of private sector finance).

If the bailout packages in US and Europe can stop the bad news from coming for a few months, and no major institutions fall over in Australia in the first half of 2009, I am hoping that our 2009 bullets can create a rebound of property prices for those who failed to exit in 2008.

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This article was written by Bill Zheng, founder of Investors Direct, an award winning Mortgage Company specialized in strategies and finance for residential property investors since 2001.

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