06 Jul How To Kickstart Your Property Future
In writing this article I realise it will be read by new property devotees looking to get a leg in the market and by some gun operators scaling up the property ladder.
For those starting out, I have some tips to get you started safely and get traction. For some others who have started but are spinning tyres, it might be an opportunity to stop, rethink, and get your foundations right. For the gun operators, many of whom I know from having done my mentoring program, it is confirmation that they got it right.
Choose Your Strategy
Whether it’s a reno, dual occupancy, splitter or bigger, you need to choose your strategy and narrow your focus. Trolling the market ‘looking for a deal’ will end up in disappointment and worse still, you might give up, and that would be a tragedy.
Yes, that means spending money or more specifically investing in your future. Why would you want to spend years learning by trial and error when you could buy those years back upfront at a fraction of the cost?
Don’t make the mistake thinking you can learn everything for free on the internet. If you were writhing in pain with a ruptured appendix and you had two choices:
- One is a doctor who has 15 years’ experience (education) at university, as an intern then as a surgeon and it will cost you $10,000
- The other is a well-meaning friend who volunteers to have a go for free
Which would you prefer?
Know What You Can Afford
It’s a good idea to know upfront what you can afford to do financially. That will have a lot to do with the strategy you choose and the scale (size) of your choice.
Of course, it doesn’t mean it is game over if you come up short – even very short. There are always creative strategies you can learn to do deals with little or none of your own money.
Get Yourself Structured
I’ve seen some real stuff-ups made in this area and they could easily have been avoided by taking the right advice upfront from an account well versed in business tax structures and specifically in property.
The purpose is to minimize tax and add flexibility, add asset protection, and offer succession planning if required.
It can be an expensive business undoing one structure and replacing it with another, particularly in the areas of stamp duty and capital gains tax. Get it right the first time.
Choose Your Patch
This is particularly important if you live in a large city. For instance you might refer to the Sydney market but that could easily consist of 30 submarkets. Each one differing in regard to location, value, and product type.
You need to choose an area (perhaps near where you live) and become a local expert in order to make fast, ‘expert’ decisions before some other ‘local expert’ steals your deal while you are procrastinating.
You’ll need to know the top agents in your patch, land values, selling prices, zonings and what you can do, hot spots near transport and in-demand school zones and much more. This is the fun part.
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