How to start investing in property – The Ultimate Guide for 2022

How to start investing in property? this guide is written to help you appreciate that buying a real estate investment – as with any investment – requires specialist knowledge.

However finding the best retirement investments is an important element of any retirement planning strategy, so you’ll want to get it right.

And this knowledge readily distills into four elements – the tenant, the asset, the location, and the packaging.

best type of investment property
Image by Nattanan Kanchanaprat from Pixabay

How to start investing in property – A Professional Shares 30 Years of Acquired Wisdom

I have been doing this work for over 30 years, and in virtually every case, my clients have become – and remain – personal friends. The reason is that my rationale for a property investing guide has always been that I would never have to make another sale, ever, if clients understood what are the ingredients required to achieve the best real estate investments.

Let me summaries 30 years of learning – your best investment is a brand new (pre-sale) stand-alone family home in an established suburb in a growth corridor adjacent to a major and diversified economic zone (i.e. where the jobs are). This is the heart of any reputable property investment guide. Anything else is a sales pitch.

And I’ve incorporated property investment as part of my personal retirement plan which I’m happy to share with you.

Element 1 – the Ideal Tenant

My property investment guide starts with identifying “the ideal tenant” i.e. the basis of your rental income.

In our view, the ideal tenant is a young couple with children at elementary school (because they might stay four or five years) so we encourage them to stay by providing them with what they aspire to – a brand new family home in an established family suburb with good amenities and schools.

Element 2 – the Investment Asset (30% of your success)

Without question, the best investment asset is a (pre-sale) single-story, air-conditioned, four-bedroom family home with a double lockup garage, on its own title – I describe these as “a display home without the furniture”. This offers maximum taxation benefits to the investor and appeals to the ideal tenant.

Some of the important considerations for the purchase of a successful residential property investment are internal and external inclusions, correct funding, the tenants-in-common legal structure, your tax refund every payday, the quantity surveyor’s report, etc. however its long-term performance depends on the vehicle’s ability to attract a succession of long-stay, high-quality tenants, paying a relatively higher rental, and located in an exciting growth corridor in a low land-tax jurisdiction.

The pricing should be up towards – but just under – the median price. You don’t earn more rent (proportionately) for a more expensive real estate investment, and by staying just under the median you will have the broadest possible market to exit into when the time comes to realize on your investment.

And this property investment guide also tells you what to avoid:

  • Existing housing stock
  • Apartments (either high rise or low rise)
  • Serviced offices or serviced apartments
  • Student accommodation
  • Cluster housing and/or gated communities
  • Defense force or social housing
  • Locations distant from a capital city
  • Factories or commercial office space
  • Zipcodes that the banks dislike
  • Locations dominated by one industry e.g. mining, tourism
  • For a major economic zone suburb, not adjacent

As each of these “opportunities” carries hidden problems that slow the accumulation investment program.

Element 3. The Best Location (this will be 50% of your success)

We locate your investment in a growth corridor close to a cluster of solid jobs in a well-established, and well-diversified, economic zone. What else would you expect from any premier property investment guide?

how to start investing in property
Image by Arek Socha from Pixabay

By a continuing process of worldwide research and elimination, my focus comes down to Australia. The economic system and political stability are similar to the United States, however, Australia is dominated by a small number of very large cities, so the small town issues that were the root cause of the Global Financial Crisis don’t exist there.

And the one city that – for geographic reasons – can only grow in one funnel direction is Brisbane – the capital of the state of Queensland.

So you need a brand-new (pre-sale) family home as an investment in established family suburbs in the vicinity of Brisbane’s southwest economic zones. In these suburbs, there will always be long-stay, quality tenants – because of that mass of broad-based jobs in the adjacent light-industrial precincts.

My view is that investors will have a better exit strategy if they acquire under the median price – currently around $450,000 for houses in Brisbane. For such investments, they will be able to sell, when appropriate, into the broadest possible market i.e. families.

So on the basis of a modest entry-level, highest rental income, lowest contributions and strong capital growth, Brisbane is the undeniable logical choice. You may question this, but after 30 years of looking internationally for the best property investment guide, this is my distilled wisdom.

Element 4. The ideal Packaging (20% of your success)

The typical investor does not understand – because they don’t have access to any form of a genuine property investment guide – is that premium packaging i.e.

The support services that you need, is vital to ensure that you have the most efficient and hassle-free investments to deliver financial security.

My role is to support all of my private clients with total and complete packaging –

  • Information,
  • accredited investments,
  • Location-based on sound investment criteria,
  • Advice from a funding strategist,
  • Specialist accountancy support
  • Specialist legal support (including the optimal ownership structure as well as powers of attorney and updates to both wills),
  • Insurances that will pay out without hassle, should you need to claim
  • The quantity surveyors report,
  • Rental management,
  • Portfolio diversification etc. etc.

So already you know that How to start investing in property, and all you need to know about the ideal tenant, the ideal asset, the ideal location, and the ideal packaging.

Feel free to incorporate this new knowledge into your retirement financial planning.

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