How to begin your property journey

Talking to host Phil Tarrant, Mr Kingsley touched on everything from education, to asset protection, to knowing your end goal. Below, he explains how he began his investment journey and reveals what he learned along the way.

Determining your end goal
Mr Kingsley advised investors to first consider the end goal in their wealth creation efforts as this would determine both the starting point of their journey and the steps to follow along the way.

He told The SPI Show that when he was young, money was often a topic of discussion in his household as his father worked as many as three jobs in order to make ends meet.

This, he said, spurred his own wealth creation journey with the end goal of attaining financial security for his own family.

“The quick backstory is that money in our household was discussed heavily and tightly fought over,” he explained to host Phil Tarrant, adding, “There was always this budgeting debate going on.”

The biggest takeaway Mr Kingsley gleamed from his experience as a child was “that money causes anxiety in households”, something he “never ever wanted to argue about” in his own household.

Get educated
When he began his wealth creation efforts, Mr Kingsley said he researched various avenues down which he could begin his wealth creation journey.

However, his “lightbulb moment” occurred when he realised residential property was “an essential need” and something he could add value to in the years to follow.

“I understood that traditionally, it’s low in volatility and I could put some gear in. When someone showed me the slide on ‘cash on cash’ returns, I’m like ‘I’ve found it’ – I finally worked out how I can do this,” Mr Kingsley said.

He noted, however, that property investment was not a one-size-fits-all scheme, and that the number of properties an investor accrued in their portfolio was only relevant to their long-term plans.

“I don’t know whether it’s relevant if I’ve got six or I’ve got eight or I’ve got 12 properties – all I know [is] that back when I was around 35, I set myself a target and that was to have $150,000 passive income by retirement,” he explained.

“Once you get to three or four properties, the question is, how many more of these things do I need? How do I retire the debt out? How does all of that look together in combination?”

The advisor’s “journey of education” taught him a variety of tips and tricks to achieve investment success, which he later shared with the podcast.

“Get the cash flow management right, borrow when you can borrow [and] make sure you don’t overextend yourself,” he explained of his learnings.

“[Then] buy assets that are effectively scarce in design, high on occupier appeal, and just ride the long-term gain.”

Adhere to secure practices
Mr Kingsley continued to say that it was essential for investors to ensure they were adhering to the correct financial practices to safeguard themselves against financial upheaval.

“I still believe in asset protection if you’re in a risky environment,” he said.

“A lot of [my] portfolio is in my wife’s name, there’s one in my name and then there’s a couple in the self-managed superfund. But again, I don’t want everyone to go out there and set a self-managed superfund up.

“It’s for a sophisticated investor [and] it’s quite detailed. You carry all the responsibility [and] you can outsource some of that responsibility, but ultimately, the risk is with you,” he cautioned.

Mr Kingsley also warned against tax saving schemes and noted that while there were many “complex ways to save tax”, that the unschooled investor could do more harm than good to their portfolio.

“I got some great advice early on from a very good accountant friend of mine,” he began.

“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 [was], ‘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,” he said.

Mr Kingsley concluded by saying investors should avoid getting “caught up in the now” and seek the appropriate financial advice before making complex decisions.