Deciding to invest and own properties in another country is not a decision one should take lightly. You do a lot of thinking, analysis, research, and consulting of experts, before you make any decision. Especially if you plan to build your business around it. This means purchasing not just one property but more.
Do not become of the many who failed because they made the mistake of diving in to real estate investing in Australia and executing without going through proper planning. Know your options. Talk to experts.
One of the experts that you should start hearing more about is a property investment strategist. It is not a very common term. It is not as common as your broker or your property manager. This is because a property investment strategist has an entirely unique role in the real estate industry.
Here, you will learn more about them and how they can help you.
What is a property investment strategist?
In very simple terms, a property investment strategist is someone who can help you in selecting and buying Australian properties for investment or business purposes. The difference they have with brokers is that they cater to clients who:
- Do not live in Australia. These investors are not residing at the place where the properties are but they still have the capacity to visit and reside in Australia from time to time. However, this also means that these investors are frequently remote and would need someone who is an expert and someone they trust to do a lot of things for them.
- Would buy more than one property. These investors intend to buy properties and make these their source of income. These investors plan to gain financial freedom by applying the right property investment strategy.
Their sole purpose is to help investors go through the process of developing and executing their property investment strategy, and assist in sustaining these for long-term business growth.
How can a property investment strategist help you?
Where do you start? It is important to know what things to consider ahead of time, especially, for long-term and multiple-property investments.
Your property investment strategist will guide you through this process but it is important that you know what to expect and what questions to ask.
Defining your requirements
What are your requirements? This is always the first question.
You can break this down into the following questions:
- What is your goal?
- What do you plan to invest in, houses, land, or both?
- Are you starting from scratch or are you improving an existing property?
- When do you plan to start? How does your timeline looks like?
- What is your risk appetite?
- How much is your budget?
- How does your intended market look like?
A property investment strategist will sit down with you and discuss these. Your goal is to be very clear with your strategist about what you want. Why? Because this first step will define a lot of the following steps. Getting this right and clear will make the process easier and more efficient.
A good investment strategy advice should be based on careful and comprehensive research.
If done right, this study must be able to cover all the major and minor market-related factors such as, but not limited to the following:
- Amenities in the area
- Business opportunities and other economic activities
- Current market trend (for residential rental properties, what is the average rent based on location and number of rooms?)
- Zoning and rezoning considerations
- Accessibility and transport options
- Types of existing houses and dwelling types
- Price range for these different types
Developing your property strategy
Going more detailed now. You will work with your property investment strategist on what exactly is your vision for the property based on your budget and other factors.
Your investment property strategist will walk you through the different things to consider in selecting your property.
There are different types of strategies, depending on what angle of the business you want to look at. Here are some types:
- Buy and lease - Many investors buy properties, and then have the units rented.
- Buy and hold - Instead of leasing, some would hold the property for future selling. If you are thinking about going this route, make sure you know the current state regulations regarding uninhabited residential properties. Some states have penalties for residential properties that are uninhabited for more than six months. This is called the Ghost Tax. Read our guide on Foreigner Stamp Tax to know more.
- Renovate and sell or lease - A different strategy is acquiring existing properties, renovating these, and then selling or renting the properties for a higher price. Renovating a property is a common option because of the opportunity to maximize the the potential of a property. This would allow you to increase the price or rent of the properties.
- Renovate and hold - After renovating, some would hold the unit for selling at the right time and for the right buyer.
- Purchase and split - This strategy occurs when you buy blocks of land, and then splitting them into smaller ones.
Location and valuation are two key factors in developing your property strategy. Your strategist will advise you on states or locations where there is demand for property or house rental.
Timing is also something that can be leveraged on. How prepared are you to purchase or to start renovating?
Deciding on your finance strategy
A major part of your overall plan is coming up with a sound financial plan. There is an overwhelming number of factors that you need to consider in this area. This process can be time consuming.
These are the questions that you and your property investor strategist will be answering:
- What is your overall budget?
- What is your financial income goal?
- What kind of financing do you want to employ? Do you plan to avail of bank financing?
- What are the risks?
- Do you have all the requirements?
- How can you minimize taxation that are within the rules?
What are the borrowing regulations for Chinese investors in Australia? Your investor strategist will guide you on how to get your loan approved.
You will find this assistance useful because of how challenging it has been recently for Chinese individuals to apply for loans. This occurred when big banks started imposing stricter rules to stop the increasing instances of fraud.
Remember to discuss and understand what the requirements are. What kind of papers do you have? Do you have the required investor papers? Do you need to show proof of income? What is the minimum amount needed?
How do you go about accounting and tracking your earnings and expenses? Foreign investors have certain tax obligations, which your strategist will also explain to you during your planning discussions.
At this point, take time to plan and create your portfolio, too. If you have an existing one, you can review it with your property strategist.
Making a portfolio involves research and study of what existing investors are doing so that you come out competitive without losing your profit. Do you have the right set of assets? Your goal is be able to come up with something that will give you financial freedom in the long-term.
Acquiring the property
Before making your decision on which property to buy, it is important to work with your investment strategist on doing an actual visit to the potential sites. Make sure that this is done not just once, but many times at different times of the day.
The reason for doing this is to understand the environment of these sites. How does the neighborhood look like in the morning, at noon, and in the evening? The information you get from these trips are vital in making your decision on which property is most conducive for living.
For example, is there a playground nearby? Who usually passes by the area? Is it safe in the evening?
You can use this same info later to market the property.
As soon as you are sure about the property, discuss with your property investment strategist on your acquisition plan. Aside from the financial sourcing, work with him or her on the needed documentation and paperwork.
Your investment strategist will help you from consultation or planning up to the completion of the project. This is specially important for someone like you who is not at the location to see all these things happen.
Project management also covers handling the communication between and among all other players. This includes the broker, property manager, accountants, architects, consultants, and other real estate professionals. Your property investment strategist is your liaison and link to everyone.
How to find the right property investment strategist?
Now that you have a better understanding of the things that you need to consider, have you reflected on your needs and goals? Have you decided on a strategy? Which one will give you the gains and profit that you want?
Given the breadth and importance of this process, as you have read so far in this page, selecting your property investment strategist and proper planning then becomes a high priority.
Get in touch with us to start planning and talking to a property investment strategist.