March 2012 saw the Reserve Bank of Australia (RBA) leave the overnight cash-rate target at 4.25 percent. While this news should be encouraging for those involved in real estate investment, the fact is that many banks have decided to set their rates independent of the RBA’s decisions.
In February 2012, Australia saw 45 financial institutions ignore the RBA’s interest rates hold decision. The major banks chose instead to raise their standard variable rates by 6-10 basis points.
Within 24 hours of the RBA’s March bulletin, the Bank of Queensland was the first to announce that it would be applying a 10 basis-point increase.
Australian businessman, Rick Otton, known for his creative real estate investment strategies, believes that such decisions by the big lenders reinforce his teachings and business models that include how to buy a house without a bank. He believes this illustrates why people have become disillusioned with traditional lenders and are embracing his proven methods for home ownership – without bank involvement.
“People can employ property investment strategies that do not involve applying for a bank loan” explained Mr Otton. “By learning about lease options, sandwich leases and installment contracts, a whole new world of property investment opens up to them.”
“And these are the strategies that the banks don’t want Australians to know about, because they are not directly involved in the deals” continued Mr Otton. “They lose the element of control that they would otherwise have over a mortgagee.”
For more than two decades Rick Otton has been investing in property in the US, UK, New Zealand and Australia, without bank loans and with no equity. He believes the traditional home purchase process, via bank mortgage, disenfranchises large sections of the community, particularly the self employed and those without large deposits.