Property Investing – Where do you start?

  1. Start with the end in mind….have a clear picture of what you want to achieve. For most people this will be financial freedom/wealth and it matters little if you are an employee, self-employed or a business owner. What matters is that you have a clear objective or goal to achieve from your investing.


  1. Have a clear strategy to achieve your goal. Your strategy will depend on what your goal is and what your personal circumstances are. You could select investment properties against criteria of:
  • Buying below intrinsic value (e.g. an ex-rental house with no “owner-occupier/cute price premium”, or a distressed vendor situation)
  • Buying into location with superior capital growth prospects (e.g. CBD 5km ring, planned major infrastructure)
  • Buying to manufacture capital growth from renovation or redevelopment (e.g. splitter block, creating multi-tenancy)


  1. Your circumstances, tax strategy and financing strategy
  • Are you seeking tax benefits from negative gearing to reduce tax payable? In which case properties to maximise depreciation deductions and lending with maximum leverage will suit
  • If your tax strategy is for positively geared properties then choose a financing strategy of no-cross-collateralised loans
  • Interest only loan or principal reductions, fixed or variable rates, depreciation, yield versus growth?


  1. Type of property
  • Based on the above you will now be able to start a selection process….without knowing the above you will be guessing. This is why the majority of investors never progress from owning one property as they start with the type of property without considering the first three steps
  • Old/New building, house/unit…the what and where only comes after you know the why


  1. Advice for the journey
  • Seek out advice from experts at each stage, and make sure they are both experts and are also independent and not spruiking a sale. This includes property, tax/wealth, and lending professionals
  • Approach investing as a journey. The property investment itself is just a means to an end and you will also need to progress and learn along the journey. You have to start at the start and then take each step. Jumping in at the property selection phase without first considering your goals, strategy, tax and financing is like jumping in the car and driving off without knowing your destination or how much fuel is in the tank.