Everything you need to know about investment property strategy, all in the one place.
Strategic Property Portfolio Plan
A strategic portfolio property plan (including either residential or commercial real estate) is a comprehensive and strategic guide, meticulously designed to steer each individual investor, a couple or partnership, through the complexities of building a diversified and profitable property portfolio. The strategic portfolio property plan is built to align with your distinct investment objectives and risk appetite. This may include direct property or other asset classes. Whether it’s to buy established property, buy to renovate, sell or hold, buy off the plan, develop or subdivide, a strategic property plan is tailored to your unique situation, circumstances, at your specific point in time, including a guide to assist you along an investment journey. A portfolio property plan serves as a critical tool, aiding investors in navigating the complexities of property investment, making better informed decisions, tracking progress against set goals, and maximising your return on investment.
Below is a guide (only) of a strategic property plan and includes the following important steps:
- Clearly Outlining the Investment Objectives: Necessitates the investor to firmly define their financial aspirations, both for the short and long term. This process is integral to determining what the investor is aiming to accomplish, be it attaining a specific income level, retirement age, or achieving a designated net worth.
- Detailed Financial Analysis: Continues to delve deeply into the financial dimensions of the investment, covering aspects such as budgeting, forecasting cash flows, expenditure, savings, evaluating expected rental and income returns, assessing the potential for capital appreciation, growth projections and understanding the tax repercussions.
- Risk Management Strategies: Assess the investors risk appetite and identify potential investment risks and outline robust strategies to mitigate them, addressing issues like market volatility, vacancy rates, unplanned maintenance expenses, average interest rate, buffer rates, including defence strategies (income protection and insurance) and more.
- Criteria for Property Selection: Here, the document specifies the types of properties that align with the investor’s financial capacity, risk tolerance, and market conditions, factoring in preferences regarding location, size, type of property (e.g., single-family homes, new, established, multi-family units, etc.), and the price range.
- Legal and Tax Implications: It ensures a comprehensive understanding of property laws, regulatory requirements, and the tax implications of property investment.
- Exit Strategy: This section outlines the conditions under which properties will be divested from the portfolio, potentially driven by achieving a predetermined property value, elapsed time, or shifts in market dynamics.
Not to be overlooked, but given the ever-evolving nature of the property market and one’s personal financial situations, it is imperative for the plan to undergo regular reviews and updates.
This is not financial advice. Financial services and products are complex and the specifics often depend on individual circumstances, so it’s essential to seek professional financial advice from a qualified accountant or financial / wealth adviser to understand and advise on your specific situation and circumstance.
How to find a Financial or Wealth Advisor
Here are the best ways to find a financial or wealth advisor in Australia:
- Referrals from Trusted Sources: Ask friends, family, or co-workers, particularly those with similar financial goals or circumstances and who may have recently had a similar experience and ask if and who their Financial or Wealth Advisor was. Personal experiences are often the most reliable insight into a Financial or Wealth Advisor quality of service and value for money.
- Professional Associations: Look into professional organisations like the Financial Planning Association of Australia (FPA) or the Financial Advisers Association of Australia (AFAA). These organisations often have searchable directories of accredited advisors.
- Online Research: Explore the websites of financial wealth planning businesses, to determine if they have wealth and financial planners as part of their team. Reach out to the firm and review the online profiles, platforms of each financial wealth planner. Contact these services and scrutinise the online profiles of each planner. Larger organisations may provide a variety of wealth management professionals and additional services, encompassing financial planners with a wide array of specialisations, expertise in different geographic areas, and knowledge of local markets.This online research typically yields information regarding their experience, and client testimonials or reviews.
- Financial Publications and Websites: Check Australian financial publications like the Australian Financial Review, MoneySmarts, Money Magazine, or Business Insider Australia for lists and reviews of top advisor firms. Websites like Finder and Canstar also provide comparisons and reviews of different financial advisors.