Developing a property investment strategy that works for you

Property ObserverNovember 4, 20140 min read


Property investment is still the most popular and major vehicle for wealth creation in Australia.

Many Australians have most of their wealth within their family home. As many retirees have seen their superannuation fund plummet during the global financial crisis many have expressed the desire to diversify their portfolio to include direct property once again because of it's general stability and predictability.

Although it has long been the darling of the Australian investment scene, property investment is not as easy as it might first appear. It would be glib to suggest that an investor with sufficient equity in his or her own property can simply purchase an investment house, sit back and wait for the riches to pour in.

It takes a much more measured and professional approach to develop a suitable property investment strategy that reflects not just the likely financial gains, but also one that is tailored to your individual circumstances.

Many people simply jump on the web or look around their local neighborhood for another property with the idea of 'I can keep an eye on it'.

Whilst this gives emotional comfort and familiarity, it is not a scientific or business drive approach and can be an inferior decision. Each investor should consider whether they have repeatable methodology and what impact the property they are choosing will have on additional purchases.

Here are some of the elements you should consider when developing a strategy:

  • Asset growth projections

    This involves a detailed analysis of the value of investment properties in most regions of Australia and then choosing a property profile that suits your personalised budget and cash flow projections. You should not limit yourself to an area simply because you think you know it well enough. There are plenty of opportunities in all areas of Australia and only a specialist analysis can reveal these.

  • Aligning your capacity

    Essentially, your plan should incorporate a steady pattern of acquisition in line with your personal capacity. This means monitoring your cash flow position at every stage of your life and making adjustments so that you can continue to acquire property in line with your investment goals. There are times when you may have only one income due to family planning.

  • Arranging proper finance structures

    The financial market is awash with a raft of products that can be massaged and tailored to suit your individual needs. Investment loans and other products like deposit bonds can be coupled together to provide you with adequate cash to proceed with a purchase whenever your plan allows. When working with a specialist property service, finance preapprovals can be obtained to give you the peace of mind you need.

  • Administrative processing

    Every astute property investor knows that as your portfolio grows there is an increasing amount of troublesome paperwork that needs to be processed, not to mention tax returns and other financial reports that you need to keep a track of your investments. That's why aligning yourself with a specialist property service can take these worries out of your hands so you can get on with the tasks for which you are better equipped.

  • Tax effectiveness

    In line with the above points, making sure you take advantage of the taxation regime that applies to your individual financial circumstances is a vital part of any investment strategy. Property research and sourcing services are in the best position to provide you with a full suite of support options that make property investing a professional and streamlined process.

Take advantage of a specialist and professional property management service is the only way to go when it comes to managing your property investment plan.

Sam Khalil is director - marketing and development with Direct Property Network.

Direct Property Network provides clients with an end-to-end property investment solutions from selecting the right property, all the way through to settlement and beyond. We help clients establish affordable and profitable investments by researching and sourcing wholesale property.

This article first appeared on Ezine Articles.

Property Observer

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