13 PROPERTY INVESTMENT TIPS FOR COUPLES
If you and your partner are considering property investment as a couple, there are several things to discuss before you get down to the nitty gritty. Just like your relationship with each other, property investment requires commitment and compromise to make it work. Here are some of the dos, the dont’s and the don’t even think about it’s to consider when planning your property investment strategy.
TALKING ABOUT INVESTMENT
Do be open with each other
It is important to start your property investment journey together with a detailed and open discussion about what you hope to achieve in the future. Whether you have been together one year, or twenty, it is essential to lay bare your hopes and dreams and negotiate any conflicting priorities you may have.
Do show mutual respect for each other’s opinions
You may want to settle down and start your nest egg for the future, but she wants to spend more time travelling. He may want to pour his money into super, but you think property is a better investment. Compromise and mutual respect are two of the most important keys. Try to see things from your partner’s perspective. If you can’t reach an agreement together, maybe you both need more time to think.
Don’t waste your time arguing
This is easier said than done but true nonetheless. You may have agreed to invest, but can’t agree on location or property type. Don’t waste your time arguing about these matters. It’s more important to assess your current financial capacity, the likely trajectory of your relationship (such as marriage or children), the needs of your family, career prospects, retirement needs, and where you both think property investing will fit into all of this. Map out your future together the best you can, remembering to take into account the possible variables of an expanding family and change of income or career.
And, if you are thinking of investing against your partner’s will – don’t even think about it.
Do scrutinise your finances
“You can’t know where you are going, if you don’t know where you are coming from,” says Nathan Birch, the other co-founder of Binvested. At just 31, he helms an investment portfolio more than 200 properties strong – a feat that took just 13 years to accomplish. He developed his strategy based on what he could afford at the time – which wasn’t much since he was just 18. By using a budgeting tool, like the Binvested Budget Lifestyle Calculator , you and your partner will have a clearer idea of your finances.
Do synchronise your goals
To be successful in investing, you must start with clearly defined objectives. As a couple, it is essential you are on the same page. Discuss both your partner’s and your own aims in investing and merge them together into one end goal. Our Exit The Matrix Ebook is a great tool to get you and your partner thinking about your goals in relation to property investment.
Do map a plan of attack
Nathan says, “I treat my goals like a to-do list.” Beginning with an end goal, he works backwards, breaking his goal down into steps. Once you and your partner have defined an end-goal, break it down into a list of ‘to-dos’ that you must achieve.
Do attend a Map session together
Attending a property strategy and education session, such as a Binvested Map Session will allow you and your partner to find out the best way to structure your portfolio and the right types of properties for your needs. When looking for a property strategist they should review your personal situation and goals and encourage you to get a second expert opinion. Beware of anyone who only recommends a particular strategy or type of property, such as overvalued off the plan packages.
Don’t invest just for the sake of it
Some people buy an investment because they think it will pay off, but have no strategy backing them up. Knowing what you want to achieve, and why, will keep you focused and increase your chance of success.
Fluking it – don’t even think about it
If your home has doubled in value over the last five years, don’t assume you will have the same success by investing in the same neighbourhood now. Base every decision on thorough research, calculated planning, and a well thought out property investment exit strategy.
HOW TO FIND THE RIGHT PROPERTY
Do remember these 3 key things
Buy below market value, in a good growth area with a neutral to positive cash flow – these are three principles you should always follow when investing. The first two will help to reduce the risk of negative equity and the third will ensure the investment will pay for itself if you suffer reduced income.
Do buy in line with your situation
If you are young and just starting out, property millionaire and co-founder of Binvested.com.au Daniel Young says, you should focus on affordable properties that will help you build capital. If you already own your home and are approaching retirement, looking to establish a strong cash flow may be better. There are many variables to consider when deciding what type of property to invest in, such as, the amount of capital you own, your income goals and how soon you will need to consolidate your portfolio.
Don’t picture yourself living there
Invest based on the numbers – not on whether you would live there yourself. This will prevent you from paying too much and keep you focused on investing as a business strategy.
Buying overpriced off-the-plan, retirement or student accommodation – don’t even think about it. Nathan says he avoids these investments as they are more likely to lose value rather than grow.