CAN YOUNG FAMILIES INVEST IN PROPERTY?
For a young family, investing in property can help to bolster financial security by building a strong asset base and a passive income stream – but only if they take the right steps along the way. Without proper structuring, without using the right lenders, and without devising the right strategy, many investors become stuck after one or two properties; stunting their family’s potential for greater wealth and reducing their chance of a work/life balance that leans closer towards life than the daily grind. Nathan says, for property investment to work, it is essential to lay down the most solid foundations. How do you do this? By seeking advice from the right people before taking action with the best strategy for you and your family.
DON’T SKIP THE IMPORTANT FIRST STEP
Say you wanted to travel by car from Sydney to Perth. How would you plan your trip?
Most would begin by studying a map. This would allow them to chart different routes before researching them in terms of distance, time it would take and scenery they could visit along the way. Depending on their circumstances – their interests, finances, and amount of time available – they would figure out the best route to travel before preparing for the trip.
Others may skip the research, but still get a map and let their gut instinct direct them to the best route. But, would anyone just get in the car and start driving – without a map, without research and without having prepared for the journey?
Property investment is just like this trip from Sydney to Perth. The more time you invest in research and planning, the more likely you will succeed in getting to your destination – without getting lost along the way. Yet, despite this, so many people jump into property investment without any idea of what they are doing or where they are going. By attending a Binvested Map Session, you will be able to identify your family’s financial needs and preferred destination before figuring out the best route to get you there.
SHOULD INVESTORS BUY THROUGH A TRUST?
Whether or not you decide to structure your investing through a trust will depend on your family’s circumstances. What is really important, says Nathan, is to seek the advice of an accountant who is an expert in property investing. Unless your accountant is sophisticated with investing, you will probably not get the most comprehensive advice for your needs. The same rings true for your broker and solicitor – unless they have adequate expertise in property investing, you will miss out in the advice and service they give you.
CAN YOU BUILD A PROPERTY PORTFOLIO ON YOUR PPOR?
Nathan says, there are hundreds of thousands, if not millions, of Australians who have the potential to build a property portfolio but don’t know how to get started. Without the right knowledge, they don’t take action and thus miss out on the opportunity to build an asset base and earn enough passive income to retire early. Others may take the wrong steps, or underleveraged themselves to buy one or two investments that cost too much to maintain or have limited potential for growth; thus putting their financial security on the line without reaping the full rewards. He says, if you purchased your family home five years ago for $350,000, and it is now worth $600,000, you may have around $200,000 of untapped equity that you could access in order to buy three or four investment properties that have a neutral to positive cash flow and are located in an area with good growth potential.
There are so many potential routes in life, but before you decide to go on your journey, make sure you talk with the right experts so you can plan the best way forward for you. Bon Voyage!
Have you decided to invest through a trust? What were the main reasons you decided on this structure? Please share your experiences in the comments section below.