Important Considerations

There are a multitude of important considerations in


making an appropriate investment decision


A qualified Property Investment Advisor will work to provide advice tailored specifically for you.

Your circumstances needs and preferences should be the basis on which any strategies are formulated, and recommendations presented.

Firstly, to know you and your needs, the Advisor will need to analyse many important considerations and criteria specific to you and your situation – importantly, the information needs to be both qualitative and quantitative.

A FACT FIND should be completed to determine for the investor:


Once the situation, needs and preferences are clear, the Advisor is then able to formulate a strategy and property recommendations that fit the ‘brief’ that has been identified in consultation with the investor.

Some of the critical considerations in selecting properties for review include:


Investment advice is about knowing the client, their needs and taking into account all the critical criteria and parameters to formulate an appropriate strategy and to present a well researched shortlist of property options.







Buyer Beware

There are no tricks to property investment!


Beware of those who make sweeping statements, offer guarantees, use pressure tactics, don’t acknowledge the risk, and avoid questions or concerns.

There are no rabbits to be pulled out of hats!

But it’s not rocket science either!

As with any purchase, the onus is on the buyer to be aware.

The best way to be aware is to be educated and know the right questions to ask.

Understand that there are no guarantees. A qualified, honest property professional will make evidence-based recommendations that meet your needs (not theirs)

Understand that ‘life is what happens while making other plans’ and so your circumstances may change over time.

It is therefore important not to over-commit and to invest sustainably for the long term and to ‘stress test’ your cash flow figures.


Go into it with your eyes open:


Resilience planning for economic downturns

If this past month has taught us anything, it’s that good times can turn bad quickly.


In December almost every property commentator was salivating at the thought of markets on the rise. After price retractions in Sydney and Melbourne, the turnaround was beginning to gain momentum. Markets such as Brisbane were seeing long years of dormant performance coming to an end with early February 2020 indicating a bumper year was in store for the Sunshine State’s capital.

Cue forward four weeks and who could have imagined the picture before us with the COVID-19 pandemic. Millions unemployed, tenants provided a moratorium on evictions and banks offering a freeze on repayments.

Of course, the full force of the economic tsunami is yet to be seen, because the property market’s strength is directly linked to confidence. If convincing solutions to the crisis can be found quickly, then the market will return in force. Prolong the pain and the recovery will likewise be extended.

But of course, the big lesson for everyone from political leaders to entry-level workers is simple – planning pays. Here what we can all learn as property investors from the Coronavirus (COVID-19) crisis about surviving the ups and downs.

Know your path

Advisors in our network follow a 14-step process to help clients build a portfolio… and the first eleven of those step having nothing to do with property selection. So when it comes to beginning an investment journey, don’t get caught up in researching real estate straight off the bat. Instead, carefully plan your path.

Recognise your starting point and defining your goals.

Write down your current asset base and income and work out what you want them to look like eventually. Think about how long you want to take to get there and layout your prospects for future income growth. Also, consider what life events may be before you. Are there kids in your future? Is a move interstate or overseas for professional advancement likely? You won’t know all the answers with 100 per cent certainty, but most people can sketch out a reasonable idea of how they’ll get from beginning to retirement and the types of considerations that need to be added to the mix. By setting out your path, you have a reasonable plan to follow to reach your endpoint.

Assess your risk tolerance (Stress Test)

This is important because long-term investors must be able to deal with market ups and downs. It’s essential to understand how you relate to risk so you can select the right composition of property types for your portfolio. For example, you may be an average wage earner with a family that needs the surety of shelter, education and other essentials. As such, you might seek assets that compromise a little on value growth potential but provide a stronger cash flow position. Conversely, you might be a young professional on good income who can invest a bit more and bear the cost of having to tip in a little extra each month to support your investment, knowing that it has great potential for value growth. Understanding your risk tolerance means you can travel with confidence and avoid panic if the market takes a hit.

Understand your finances

It is essential to have a handle on your finances. This includes home budgets, asset balance sheets and your borrowing and loan servicing capacities. This is where an experienced mortgage broker and property investment advisor are essential. Your investment advisor can help guide you through the key numbers to make sure everything is up to date. Great advisors also implement a regular audit of your figures to ensure they’re always current. Mortgage brokers will help you seek the best loan terms and give plenty of advice on what to do to improve your chances of gaining approval. This could be for a new purchase, or when refinancing under changed circumstances.

Buffers are essential

Perhaps more than anything else, those who are most successful at riding out the market rollercoaster are investors who have buffers in place. Make sure you are not overextended continuously in your loan capacity. Similarly, ensure you can comfortably meet loan repayments and other portfolio operating costs. Finally, work toward having a pool of available cash you can draw on in emergencies. This usually is best kept in an offset account to help reduce your interest bill as much as possible. This buffer – which should cover at least three months’ worth of outgoings – means you can hunker down and ride out most unexpected hits. This buys you the one thing that we all need in a crisis – time. The buffer lets you make plans without fear and can help deliver you to another side, a downturn intact.

While maintaining personal and physical safety during these events is your primary goal, the importance of planning for financial hits can’t be ignored.

Applying the principals outlined above will help you ride out the storm.

Author: Richard Crabb | MD ASPIRE Network | PIPA Board Member


There is no simple answer!


Smart property investment involves identifying assets that offer growth potential coupled with a sustainable level of rental return.

This combination is the basis for long term wealth building.

Australia is a vast country and opportunities exist in different states and different locations within those states. Even within the same suburbs, various types or styles of property present different opportunities.

The best place is the place that meets the investor’s specific situation and strategy.

One thing is for sure, the best place is not necessarily, the place you live in now! Many novice investors make the mistake of assuming that the ‘devil you know’ is the best way to go.

Looking over the back fence of an investment property is not only unnecessary but ill-advised. The investment property is an investment vehicle and should be chosen devoid of emotional attachment.

Concentrating on your work and income earning potential and leaving the management of your asset to a carefully chosen property management professional is the wiser approach. ( the benefit of specialisation is higher productivity)

This is particularly appropriate when you build a property portfolio. The logistics of managing multiple properties is beyond the scope of most people unless it becomes your full-time job!

Choosing a location to invest in ought to be a well-considered decision, based on your situation, budget, goals and time frames as well as an analysis of the demand side drivers and the supply side constraints prevailing in different places at different times.

The factors influencing demand and supply in any location are multi-layered and don’t always conform to textbook models.

Perfect competition requires perfect knowledge. To get the lowest price for bananas, you need to know who is selling them, where and at what cost at any time point in time.

Likewise, perfect knowledge and mobility in the housing market do not exist.

It is unrealistic to expect that the price of accommodation, either house prices or rents will be met with a ‘perfectly elastic’ responses on both sides of the equation.

For example, despite rising rents, families may not be easily mobile across locations in search of lower prices. Access to employment, transport options or the lack thereof, family ties and established links to schools, sporting and friendship groups make moving home tricky. It can also be prohibitively expensive.

Likewise, the timeframes involved in new supply limits the ability of the market mechanism to work as efficiently as it might otherwise.


It’s important to understand that Monetary Policy is what’s known as a ‘blunt instrument’, that is, it affects all sectors of the economy generically and it’s not possible to selectively target just the ones you want to dial down or the ones you want to stimulate.

The effect of macro drivers for demand, such as interest rates is not location-specific. For example, the RBA was not able to increase interest rates in Sydney and Melbourne alone to slow house prices during the past expansion phase without collateral and unintended damage to other property markets. So, while record-low interest rates now are designed to provide a stimulus to the economy and to ‘soften the landing’ of slowing activity, they do so generically.

You can’t assume all markets will grow as a result of increased consumer optimism and confidence – it’s crucial to look at the specifics and to match a location to your particular needs before arriving at a decision.



Knowing your risk profile, assessed borrowing capacity and importantly, your comfort range will be the starting point for establishing your property investment strategy:

Influences on the choice of location include: