B Invested


If you have decided to ditch the lifetime of daily grind mentality in favour of an income earning property portfolio – congratulations!

You have taken the all important first step towards financial freedom.

If, after making this decision, you have begun to devote all of your spare time to trawling Domain and RealEstate.com.au – stop!

There are several important factors to consider first before you can be sure you are ready to invest in property.

Here is a checklist of things you should do before thinking about making a purchase.


One of the biggest mistakes investors make is to buy without asking ‘why?’.

It is important to be clear with yourself about what you hope to achieve through property investing so you can devise a strategy for success.

Nathan Birch, co-founder of Binvested, who now owns more than 200 properties, says he treats his goals like a to-do list.

After assessing his current position and coming up with an end-goal, he maps out a plan of attack to take him there.

When creating your road map to success, Nathan advises, “have a detailed plan, don’t be too analytical, remain focused and do whatever it takes.” He says it is important to ask yourself, “what sacrifices are you willing to make in order to get to what you want to achieve?”.


Before you can come up with a strategy that will enable you to reach your goals, you must assess your current position. “You can’t know where you are going if you don’t know where you are coming from,” says Nathan.

He says, it is imperative for investors to have a solid understanding of what they are financially capable of, both now and in the future.

Whereas some investors bite off more than they can chew, he says, others underestimate their financial capabilities and sell themselves short by using the wrong strategy.

For example, say you had purchased your family home in Sydney a few years ago for $400,000. If it was now worth $800,000 you would possibly have $200,000 worth of equity that you could use as deposits for three or four properties. “It’s a matter of having the knowledge and having the understanding,” says Nathan.

Whereas some investors would make this happen, others may only take out half that amount of equity in order to purchase one property – bringing only one third or fourth of their capital growth potential into fruition.

Hasitha Perera, Principle Advisor and founder of Dynasty Private Wealth, says it is important to consider possible lifestyle changes when planning your investment strategy. He says, a lot of people don’t consider the “variables” such as, job changes, maternity leave and unexpected loss or reduction of income. “Putting in a plan over all of those variables is really important,” he says.

So is having a plan to protect your cash flow, says Daniel Young, co-founder of Binvested. He advises investors to have a buffer of at least three months’ worth of rent to protect against prolonged vacancies and unexpected repairs.

Make sure your financial position is stable enough that you can ride out any stormy periods in order to hold on to your investments in the long term.


Now that you have a clear understanding of your financial position, it is important to figure out how much money you can afford to invest.

A trusted financial planner will help you assess your cash flow and devise a budget, while also mitigating any risks involved, says Perera. They will be able to help you identify whether you need to make any lifestyle changes in order to maximise the amount of money you can invest in properties – without restricting your budget too much.

It is important to be aware, however, that not all financial planners are the same. Some are aligned with financial institutions, which means they could be biased towards selling the products of that institution.

Others may be commissioned-based, meaning it is more likely they will want to sell you products rather than offer advice.

Dynasty, on the other hand, is not aligned with a particular bank. Its financial planners charge an hourly rate, so you can be sure they won’t spend the whole consultation pitching sales.


Once you know your objectives, your financial situation and how much money you can invest, it is time to find the best strategy for you.

According to Nathan, so many people go to wealth-building seminars in pursuit of that “hot tip” that’s going to make them millions – but this doesn’t exist.

What really counts in any money-making venture, is having a well-thought out strategy in place – and remaining committed to it.

Your strategy should be in-line with your goals and your personal and financial situation.

He says, “At Binvested, we help our investors create clarity in their goals, in their strategy, in their structuring so they can have something to work along to build their portfolios.”

He encourages investors to attend a Binvested Map session, where they can discuss their situation and objectives and come up with the best plan of attack in order to achieve their goals.

Attending a Map session will educate you about the best way to structure your investing, and how to strike the right balance between cash flow and capital growth for your situation. This will then help you identify what type of properties to look for when building your portfolio.


It is always wise to run any financial decisions past a trusted accountant first.

They can go over any tax implications with you and identify how your investing will impact your cash flow.

If your taxable income is reduced as a result of your investing, will this affect your borrowing power? Will you be buying properties under a trust? Will you be receiving a weekly income from the investments or will you be out of pocket until tax-time? It is essential to choose an accountant who is an expert in property investment, such as those at One Path, so you can get your money’s worth.


While it is good to have a 20% deposit, having a 25% deposit is even better.

The extra 5% will cover stamp duty, legal fees, the commission charged by your buyer’s agent, strata (if applicable) and inspection costs – preventing your 20% deposit from shrinking into LMI territory.


Before you go skipping out of the bank in search of the nearest real estate office, make sure the finance you have been offered is conducive towards growing your portfolio in the most favourable and risk free manner.

Not all mortgage brokers are the same. While some will get you the most competitive rate (while nabbing the highest commission for themselves), or max you out on your loan (again, to get the highest commission for themselves), others will have your interests as an investor at heart.

Tim Wong, Finance Manager at Zinger Finance, says a good mortgage broker will partner with you over the course of your investing to ensure you get the best loans for your investing journey.

Graham Turnbull, Senior finance strategist for Zinger Finance, says when choosing a mortgage broker it is important to find someone who can educate you about the best loan structure for your situation and goals – otherwise you may be left maxed out on your borrowing capacity well before you have finished building your portfolio (with expensive exit costs your only option out).


Do you have a trusted solicitor on board?

It is important to run your plan past a legal advisor who can inform you about the purchase process and any potential pitfalls and hazards, as well as your legal and statutory rights as an investor.

They can run through sales contracts at the time of purchase – ensuring you don’t sign anything you shouldn’t.

If you don’t already have a legal advisor on your side, try Zenith Legal. As part of the Binvested Group, they are experts in property law with a proven track record at helping investors successfully navigate the purchase process.


Now that you’ve gotten the strategic, financial and legal aspects covered you can start looking for properties – or can you?

Do you know what makes a good investment? Do you know what areas to buy in?

If you have spoken to the experts at Binvested, then it is pretty certain you have devised an investment strategy tailored to your needs and goals. However, even the most savvy investor can get swayed from the most well thought-out plan.

When considering purchases, remember Binvested’s three step investment strategy – purchase under market value, with an upside for growth and neutral to positive cash flow.

Purchasing under market value helps to reduce the risk that over paying can cause – negative equity.

It also creates ‘instant equity’, so if something untoward happens in your life and you have to sell quickly, it is more likely you will break even instead of making a loss due to exit costs.

Buying with an upside for growth helps reduce the risk of prices going down (negative equity again).

To purchase in a high growth area means knowing the market and what brings value to the investment.

Metropolitan areas are more likely to retain capital value because they have consistent demand.

It is also indispensable to know the location of growth corridors and understand how infrastructure and property developments will impact particular suburbs in terms of population growth, housing demand and property prices.

Having a neutral to positive cash flow means if you suffer loss of income, your property will still be able to look after itself.

If you have a buffer in place, this should cover vacancies or unexpected repairs without your cash flow turning negative.

Buying any investment in an area with low vacancy rates means you will be more likely to attract renters and more likely to achieve optimum rent.


When it comes to choosing properties, do you know what to avoid? Make sure you reduce risk by saying “no” to the following investments:

Off the Plan – not only are you paying a premium price for something that hasn’t been built, its value is more than likely to drop within a few years.

When you sign up to an OTP property, you are usually signing up to fewer exit options and more risk in of delays and setbacks.

You’ve lost your deposit while it is being built, and by the time construction is over, there is no guarantee it will be worth what you paid as the extra supply of new housing could depress the local demand and prices.

Buying off the plan may look appealing, like unwrapping a brand new present, but you should take the emotion out of the equation when investing.

High risk areas such as mining boom towns – there has been a lot said in the media recently about investors who bought several properties in mining towns.

Now that the boom is over, these investors are left with negative equity that they are paying from their own pocket.

Capital value has crashed. Rents have plummeted. Tenants are few and far between.

If you are wanting to invest in regional areas then make sure you can absorb the risk and you are investing for a good strategic reason.

Retirement or student accommodation – Be cautious of any accommodation that attracts only one type of tenant. Student lodgings have a high turnover of tenants resulting in frequent vacancies and higher wear and tear.

They also may not be the best tenants to have – do you remember your own student days? (To be fair, not all students are irresponsible tenants.) In addition these types of residences usually have higher strata fees.


If any of the points above had you second guessing yourself then changes are you might not be quite ready to invest.

Fortunately we are here to help. Daniel Young runs MAP sessions to help investors understand the reasons behind why they are investing, why to invest in a certain manner and how to strategically plan their investment structure, finance and property purchases.

If you would like to know more about our MAP session then contact us today.