Property investor strategies, what's yours?

5 min read | 23 June 2023

A property game plan is simply picking the goals you are trying to achieve with your investment property portfolio and ensuring your home loans are setup in the best possible way to achieve your goals. 

Ensuring your home loans are setup correctly isn’t rocket science, and it can make a massive difference to achieving your financial goals. 

In 2021, 70% of Australian’s who invested in property owned only 1 investment property (ATO). They’re nicknamed Rentvesters as the home is rented out instead of being occupied by the owner.  

Whatever type of investor you are, you should have a game plan in mind. 

In this article we’ll go through how you can create a property game plan as well as understanding your options to structure your investment property loans to work best for you. 

Many people don’t know if they have made the right investment decisions and property investment is a long term strategy that can also have high risks. 

Here are some of the ways you can assess your investment strategy to see how well you are set up to win.  

• Have you summed up all the income and expenses for your investment properties?  

• How much extra do you have to top up your property expenses every month?  

• Are you comfortable with this top up or do you want to look at game plan options to reduce this negative cashflow?  

Have you monitored the value of your property and similar properties in your area to see if you’ve experienced any capital gain? Capital gain is simply if your property is worth more than what you paid for it.  

Property market prices can go up and down, so if it has gone down, it is not yet time to panic, because you’re not losing any money until you sell the rental property at a lower price.  

• If you’re seeing capital losses, you should assess your cashflow position, historical performance for property in your area and consider if you’re comfortable holding out until the value improves 

• If you’re seeing a capital gain, this is good news. You can use this information in the next step, which is assessing your equity 

Capital gains tax (CGT) is a tax on profits made from the sale of assets such as real estate, stocks, and bonds. The CGT exemption applies to properties held for at least 12 months, giving investors an opportunity to reduce taxes on profits earned from the sale of those properties by 50%.

When considering if it is the right time to sell an investment property, always seek advice from a professional tax advisor to understand the impact of CGT on your sale before making any decisions.  

• Equity is the value of your property less any outstanding loans 

• Equity is how much you’d have left after selling your property and repaying all your debts.  

• Useable equity is how much of that equity can be used for additional loans, depending on your borrowing power.  

Your strategy might be accumulating enough equity so that you can sell your investment portfolio and live off the gains in retirement. Or you might be accumulating equity in order to buy more properties or use for other investment purposes.

If this is your strategy then, it is always a good idea to monitor your property value so that you access that equity when the property price is high.  

For example, property prices go up and down so when it goes down, you can access less equity than when it was higher. You can lock in equity by requesting a top up at the right time and having those funds in an offset account, ready to use for your next investment whenever you’re ready. 

Have you sought the advice of a tax professional to review your situation? Professional financial advice is invaluable to make sure you’ve covered all your bases and get the best advice for any possible tax benefits. 

• Depreciation schedules for tax deductions  

• Offset accounts  

• Loan structuring  

• Interest only  

• Negative gearing  

• Debt recycling  

We can’t provide tax advice but once you have the right tax strategy, we have all the tools to help you set up your loan in the best way!

Are you looking to buy your next property? Whether you are selling to buy or keeping and purchasing another property, you should regularly check to see how you can optimise your borrowing power by:  

• Paying down existing loans to reduce outstanding loans 

• Optimise your income to match your buying plans 

You can’t always time everything to perfection but with a little bit of forward planning for major life events, you can try to minimise the impact it has on your borrowing power.

For example, the timing of having a baby, taking a career break or a long holiday, changing jobs – can all impact how you’re assessed for your borrowing potential.  

When in doubt talk to our experienced Investor Concierge who can understand your goals and help you set up your game plan to win.