What is SUCCESS in residential property investing?
Success occurs when the investor obtains a result which meets the expected outcomes in his/her wealth creation planning.
Because the plan has been developed with expertise offered in the development of objectives, strategies and action plans;
- Financial advice
- Borrowing strategies
- Property research and education
- All who can make it happen – family
- Because the plan is based upon conservative estimates
- Because the plan sets objectives based upon financial capability both short and long term
- Because the strategies included the choice of properties specific to chosen locations
- Because the locations were selected consequent to stringent research and testing
- Because the developments and the builders were chosen as the result of due diligence
- Because the plan included a risk management process to consider events which may affect the outcomes and to develop fall back positions where necessary
- Because the plan was reviewed bi-annually asking the question “What is the gap now between what we need for a comfortable retirement and what the plan is currently producing – what steps are necessary to keep the plan on track?”
- Because all who were involved expressed commitment and practiced discipline to stay with the plan
- As a result of their commitment and discipline I have watched clients reach their objectives without the strain of uncertainty about current or future market conditions.
- They made informed choices.
- A top class developer with a reputed builder in a location supported by current and future planning for infrastructure plus a location with all of the services and access to employment tenants will require.
- House and land including dual income, built to owner/occupier specifications and inclusions.
- Professionally landscaped and attended by a landscape gardener twice yearly to maintain the appearance and quality of the property.
- Apartment or townhouse, concern for the maintenance of grounds and common areas – checked out the performance of the property manager (if on site) for this property or previously.
- Set a limit on body corporate charges by selecting properties with well engineered air conditioning and swimming pools or avoided them entirely.
- Recognised how important to successful outcomes the property manager is, through the screening, selection and management of tenants.
- Aligned with our principles of maintenance and care for the property.
- Working with the landscape gardener and the tenant to ensure that the appearance of the property is always ‘one of the best in the street.’
- SUCCESS achieved through ensuring that the investment presented as one of the best of its type in the area, competing favourably at the time of sale or perhaps bank valuation.
- SUCCESS achieved through recognition of the numbers e.g. what is the overall cash outlay for this property after tax?
Note: In most cases the tenants and taxation allowances paid up to 90% of the cost of the investment.
Sure, there can be interest rate hikes and there can be economic depressions but the ‘buy and hold’ principle these investors used carried them through the dips up to the peaks.
The principles of successful residential investors
- Have a plan developed with the help of those most likely to ensure the right direction.
- Review the plan every two years.
- Lose all emotion – remember it is a numbers game. Stick to the plan. Practice discipline.
Buy and hold
- Repay interest only – using all positive cash flow for future investment – have an offset account to reduce interest costs and provide equity. Use surplus cash to pay off other mortgage.
Using leverage on equity created
- Take pride in your investment – meet your property manager and your tenants.
- Act quickly on any repairs or emergencies affecting your investment
Buy quality – sell quality
To develop your plan contact us. There is no charge for our services
Don Duncan F.A.I.M.
Don is the Principal Consultant at Meredon Consulting, with over forty years experience in developing successful residential property investment strategies, and extensive experience in the financial sector, Don is uniquely qualified to provide you with the best property investment advice available. He is supported by experienced property investment consultants in both Brisbane and Sydney. Don is a Fellow of the Australian Institute of Management, and a qualified Trainer of Trainers. In addition to this Don has also been an active member in the community, he was a member of Rotary International and Past President Toastmasters Territorial Council of Australia.