In the world of personal finance and future planning, it’s widely understood that financial planners create personalised financial plans, which often encompass tax, estate, investment, and retirement planning. However, you might not be aware of a similar professional service dedicated exclusively to property investment.
Property wealth planning is a specialised field separate from traditional financial planning. It can be described as ‘Financial Planning for Property,’ a domain often overlooked by financial planners.
A company that offers Property Wealth Planning typically provides a one-stop solution, including Specialist Mortgage Broking, Buyers Agency services, and strategic planning. This comprehensive approach simplifies the process of building a successful property investment portfolio, offering a more cohesive experience compared to engaging multiple professionals individually or going directly to a lender for property investment financing.
So, what is Property Wealth Planning exactly?
Similar to the comprehensive planning you need for your various financial goals, successful property investment requires a well-crafted strategy. A Property Wealth Planner (PWP) is someone with the experience, skills, and qualifications to help you understand how to build and leverage equity, enhance returns, minimise risk, and employ specialised property investment finance techniques.
Ideally, your PWP is a qualified investment property buyer’s agent with expertise in researching the entire Australian property market. It’s preferable if they are also a qualified property investment advisor certified by PIPA (Property Investment Professionals of Australia), which is the industry body dedicated to raising professional standards among those serving consumers in property investment.
What does Property Wealth Planning cover?
- Equity Planning: This involves determining the necessary cash or equity for each property investment and strategically retaining cash or equity as a safety buffer for unforeseen circumstances.
- Cash Flow Management and Planning: Effective cash flow management is vital in differentiating a good property portfolio from an exceptional one. Proper management enhances portfolio performance both before and after retirement, significantly impacting wealth accumulation and lifestyle. For instance, we recently helped a retired client increase her net retirement income by 260 per cent by selling an underperforming property and investing in markets and properties with higher rental incomes. Incorporating such cash flow management can markedly improve your portfolio’s performance, reduce risk, and boost capital growth.
- Property Market Research: This involves identifying property markets poised for substantial growth, assessing potential returns and rental yields, and advising on optimal investment and divestment timing across major Australian cities. Some property markets can outperform others by tenfold in a ten-year period while offering 2-3 times higher net rental returns. It’s essential to ensure your property advisor can provide research nationwide, with at least the capability to advise on capital cities.
- Portfolio Planning: This focuses on creating a diversified property portfolio over time, balancing investments in multiple properties versus a single high-value property to achieve long-term wealth accumulation. This approach should be integrated effectively and safely into your overall strategy.
- Risk Identification and Management: While property investments are generally considered low-risk, it’s essential to identify and mitigate potential risks through strategic planning.
- Debt and Mortgage Planning: Implementing advanced mortgage and investment finance techniques can significantly boost returns while minimising risk, potentially resulting in returns in the hundreds of thousands or even millions of dollars over your property investment journey.
- Retirement Planning: To fully or semi-retire, it’s crucial to calculate the optimal number of properties, buffer amount, cash flow position, and other assets required. This will help you understand your savings goals and lifestyle options.
- Tax Planning: While not a substitute for an Accountant, a Property Wealth Planner (PWP) possesses essential knowledge of tax implications related to property investments, including income tax, capital gains tax, goods and services tax, and land tax, as they can impact both cash flow and net wealth creation. A PWP also collaborates with your accountant and other advisors to ensure their advice is integrated effectively.
Property wealth planning combines these elements into a comprehensive strategy, enabling you to prepare for and prosper during both favourable and challenging times.
Starting with a modest financial foundation, a skilled Property Wealth Planner (PWP) can safely guide you to multiply your net wealth by five to ten times each decade, ultimately achieving a retirement fund equivalent to one to two times your current income within 15 years. This strategic approach ensures your financial future through savvy property investments, revealing a wide range of opportunities for financial growth and stability.
Discover the path to financial success with inSynergy. Take the first step towards securing your financial future through expert Property Wealth Planning. Contact us today for a personalised consultation and unlock the potential of your property investments.