Whether you’re an active investor seeking to step up your game, or an aspiring investor looking for the best place to start, you need to determine what you want to achieve before you can find the strategies that best suit your current circumstances…and the sooner the better.
That’s why you should think about the type of property investor you are, and where you are on your property journey, as this will clearly define the range of strategies available to you. You might even be surprised with the advanced strategies you can use…starting right now!
If you’re just getting started, you’re probably intrigued by the passive income possibilities of property investing but not sure where to begin.
Alternatively, you may have been told you’re too young (or too old), or you’re being disadvantaged by the banks because you’re a business owner rather than a salaried employee, or any other reason the banks might not consider you a suitable candidate!
Yes, your age, income and savings will impact where you can start and what strategies you can use, but it may still be possible to get onto the property ladder if you have access to the correct advice and support.
For example, living in your own home and pursuing a sustained buy and hold strategy is a great long term goal, but to get started then rentvesting might be a better fit for you right now, where you rent a property that suits your lifestyle to live in, and purchase an investment property – maybe even in another city altogether – to kick start your portfolio.
Likewise, perhaps you’re trying to build a deposit, and it’s going to be some time before you’ve accumulated the required amount. The savings you do have could easily be parked for twelve months or longer, so you need to get this capital working hard for you while you’re saving the rest of your deposit. This is where access to advanced tools and strategies such as peer to peer lending can help you to invest your funds and achieve a far better interest rate than standard offset or savings accounts – without the volatility of the share market.
It’s exploring considerations like these that can help beginners get their property investment career off to a flying start.
If you’re a seasoned investor you (and your financial advisor – yes, you should have one) should have a solid understanding of investment fundamentals like positive and negative gearing, and the implications of each scenario on your future portfolio growth.
You may already have one or two properties under your belt, but need to find alternative ways of accelerating your savings or shortening the time to your next investment. Likewise, you could easily find yourself maxed out from a loan serviceablity perspective and limited in terms of how much you’re able to borrow for your next property – your income simply won’t allow you to borrow further funds, but you have tens of thousands of dollars, or more, just sitting idle.
Peer to peer lending can help here, or you likely you have some capital sitting in a self managed superannuation fund that could be better utilised building additional wealth via property. It’s worthwhile exploring your options to purchase property through limited recourse borrowing or your SMSF.
This is also the stage at which you should be surrounding yourself with a team of trusted professional advisors – such as accountants, mortgage brokers, financial planners, solicitors, financial advisors and more – who have the specific industry skills and knowledge to provide you with ongoing and results-driven professional advice.
If you’re a sophisticated investor you should already have your team of advisors in place, a talent and passion for property, and a growing number of investment properties in your portfolio. But, likely you’re also more than ready to seek out new and clever ways to diversify and build your portfolio, your knowledge and your wealth…through property.
This is where exploring the use of alternative investment strategies – such as small-scale private offerings and wholesale unit trusts – can see you improve your cash-flow by sharing in the profits of a truly passive investment vehicle.
By investing with other results-focused property investors you also benefit from the uplift in value created for the fund through significant bulk buying discounts and exclusive off-market opportunities, and learning more about exciting projects involving small scale residential and backyard subdivisions, strata-titling, renovations, land subdivisions and commercial property.
Best of all, wholesale unit trusts can also be suitable for those who can’t access traditional lending, investors who just don’t want to take on further personal debt to grow their portfolio, or those wishing to invest via their self managed super funds for accelerated returns.
If you’re a super investor, you’ve either maxed out the strategies you’d like to explore on your own, or you’ve retired (early) and you’re looking for something to occupy your mind and your time. Property is probably your passion.
You’re thinking about how you can access developer-like profits, but don’t have the expertise or the time (or deep enough pockets) to do so on your own. You need to grow your team and expand your network, and seek out like-minded investors who can help you take the biggest steps of your property journey to date.
It’s highly advisable to seek out larger scale co-investment opportunities with property professionals – industry experts who have the time and the knowledge (and the patience) to run development projects like the full time business they are – and then co-invest with them in small to medium sized residential or commercial developments. This allows you to access developer-like profits without taking on the same risks…and build your skillset at the same time by leveraging the knowledge of your growing network.
As you can see, the type of investor you are, your unique circumstances and where you are on your property journey clearly defines the range of strategies available to you. One size definitely doesn’t fit all, and your best fit may prove to be something you would never have considered on your own, without the objective guidance provided by a trusted mentor and a team of dedicated professionals working by your side.
So whether you’re an experienced master of the property market or a first-time property investor, contact us here at The Property Mentors so that we can help you achieve – and ultimately surpass – your investment goals.
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