PRESSURE on landlords has been eased by hefty interest rate cuts since September.

The Reserve Bank of Australia's efforts to prop up a stumbling
economy have delivered hundreds of dollars in monthly savings for
landlords battling to repay investment property loans as well as their
own mortgages.

Since September, almost $550 a month has been wiped off the interest
cost of a $350,000 variable rate investment loan thanks to official RBA
rate cuts and the banks passing on most of them.

Last week's 0.75 percentage point reduction in the official interest
rate followed cuts totalling 1.25 per cent in September and October.
Real Estate Institute of SA president Robin Turner said the interest
rate cuts had been  "wonderful news for investors''.

"The attraction of bricks and mortar as an investment is greatly
improved with interest rate reductions,'' he said. ``Rents stay the
same or go up but the holding costs drop dramatically.

"With each 1 per cent fall in interest, the holding costs drop around 10 per cent.''

Wealth For Life principal Rex Whitford said the rate cuts meant
greater cash flow for property investors. "Anything that reduces the
cost structure is a net gain,'' he said.

The flipside for some investors is the tax deduction they receive on
a negatively geared property is reduced, but Mr Whitford said: "If they
invested for a tax deduction, they had their head in the wrong place''.

"I think the Reserve Bank jacked the interest rate up too high in
the first place, because we had the Treasurer running around saying the
inflation genie was out of the bottle,'' he said.

Mr Whitford cautioned investors not to blindly spend or reinvest elsewhere any cash freed up by the recent rate cuts.

"It's best to keep some powder dry,'' he said.

Australian Capital Realty principal Tami Portakiewicz said falling
interest rates gave investors an opportunity to begin or renew a fixed
rate loan at a lower cost.

Mrs Portakiewicz said the recent rate cuts should provide a
much-needed boost to the market after enquiry levels had started to
fall.

"We have needed that shot in the arm,'' she said.