5 Tips for Structuring Your Property Investment Portfolio

  • Posted 02 Mar
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5 Tips for Structuring Your Property Investment Portfolio

If you’re in the market for increasing your property investment portfolio, you may want to think about forming a company around your portfolio.

Why?

When a company entity holds your investments, it ensures that the shareholders will have limited liability. This means the shareholders (that’s you) are only liable in terms of the amount they’ve invested. The shareholders are protected against everything else, and taxes will be less when the investment begins to gain momentum.

Here are five tips to keep in mind when it comes time to structure your portfolio as a business.When should you move your property portfolio into a business structure?

Structuring your Investment Portfolio at a Business

1. Do Your Research

Like any business enterprise, your success is going to be based on the body of knowledge you have on this subject. In terms of property investment, make sure your information comes from reliable sources, not the general media.

As an investor, you need to have a wide-ranging view of the market that can only be gleaned by consulting with experts in the field. Seek out independent advice. Don’t rely on the information you read in the papers or hear on TV.

Be proactive and seek out the knowledge of the experts in your particular property area of investment.

2. Focus on Returns

As a business owner, all your decisions must be rational, not emotional. You will conduct research so as to find the growing markets and emerging areas for property investment. You want to make the best decision that will provide you with the best return on your investment.

This may mean that investing in a property in a suburb is a better decision than buying in downtown Sydney or Brisbane, even though the latter may seem better emotionally, or perhaps more desirable.

Again, do your research, and focus on where you will get the greatest return on your investment. Remember, you’re not living in the property, so it should be a purely return-focus decision.

3. It’s All Connected

Your decisions must take into account the entire scope of the strategy of your business and portfolio. You need to consider such things as taxation and financing of the property.  How is this investment going to affect the rest of your portfolio?

4. Know Your Finances

When it comes to pulling the trigger on a potential investment, or adding to your portfolio, you need to ask yourself: Is my financial portfolio flexible enough to handle this not just now, but five years down the line?

Know what types of credit you have available to you. Research the difference between various loans and lines of credit. Be master of your financial kingdom and assets.

5. Go with a Specialist

In setting up your business, employ the services of a property specialist. They will be best able to help you strategise for the long term.

Just as you would hire an accountant to do your taxes, hire a property specialist to help you strategise and build your business as a property investor.

Take these five tips to heart. Implement them, and you’ll find you’ll be on a far better path to developing your investment portfolio.

Ready to take the first step? Talk with one of your team to discuss your needs and the best way to move forward on your property investing journey.

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