Investor shares his approach on ‘asset protection’

What is it that worries you about your portfolio? What is it that keeps you awake at night that makes you question whether or not you’re doing the right thing?

Ben Kingsley: Look, there's very little in my portfolio because it’s not a big portfolio. I think there’s six properties in there at the moment and they’re all relatively blue chip. I’ve gone for that sort of inner city locations: Alexandria, Flemington, Moonee Ponds. There’s a couple of more speculative ones there. One in Cairns which I bought about 18 months ago – a three-bedroom, two-bathroom townhouse for $150,000. It’s yielding a 10.8 per cent gross rental yield. I was doing a research trip up there to see what’s going to happen in northern Australia around lower Australian dollar in the tourism story, and the scarcity that's going to come of that. Because the fact of the matter is that market is tanked big time. That was a little bit more of an aggressive play and that’s in the self-managed superfund.

How do you approach asset protection?

Ben Kingsley: From my point of view, I’ve always bought properties in my personal home. I got some great advice early on from a very good accountant friend of mine, Quinton Young. I’d read all the books on the property investment trusts and these hybrid trusts and all these complex ways to save tax. His great advice to me: "Mate, the taxman will catch up to you. He will block this type of play." Now I’m hearing stories of people that have got these hybrid trusts that can’t borrow any money and they’ve got to reverse all their portfolio out of it.

I still believe in asset protection if you’re in a risky environment. A lot of the portfolio is in my wife’s name. There’s one in my name and then there’s a couple in the self-managed super fund. But again, I don’t want everyone to go out there and set a self-managed super fund up. It’s for a sophisticated investor. It’s quite detailed. You carry all the responsibility so you can outsource some of that responsibility, but ultimately, the risk is with you. If you stuff it up, it’s on your shoulders and you can’t blame anyone else, even if you’re outsourcing most of the pieces. So it’s not for everyone.

You know one size doesn't fit all. There’s strategies everywhere. There’s probably 100 different ways to slice the cheese, so I think it’s really important that you learn about these different opportunities, and then you tailor what’s right for you.

What is your advice for people who want to be better property investors?

Ben Kingsley: Well, the game starts and stops. We’re big on the ABCDs. It’s [asset] selection, borrowing power, cash flow management and defence ... Making sure that you’ve got all those pieces and that's the professional piece. For me, the total game is asset selection. It’s the science of picking the right properties ... that the value of your portfolio is going to be the value of your properties over time.

Tune in to Ben Kingsley's episode of The Smart Property Investment Show to find out more about how he plans to achieve his financial goals for the future.

Tags:

• Investor stories

Share